Flagg Energy Dev. Corp. v. General Motors

• Decision Date: 02 December 1998
• Docket Number: No. A98A1143.,A98A1143.
• Citation: 509 S.E.2d 399,235 Ga. App. 540
• Parties: FLAGG ENERGY DEVELOPMENT CORPORATION et al. v. GENERAL MOTORS CORPORATION.
• Court: Georgia Court of Appeals

509 S.E.2d 399

235 Ga. App. 540

FLAGG ENERGY DEVELOPMENT CORPORATION et al. v. GENERAL MOTORS CORPORATION.

No. A98A1143.

Court of Appeals of Georgia.

December 2, 1998.

Smith & Fleming, George D. Wenick, Atlanta, for appellants.

Mark D. Oldenburg, Peachtree City, for appellee.

RUFFIN, Judge.

In this contract case, Flagg Energy Development Corporation ("Flagg"), Kenetech Facilities Management ("KFM"), CCF-1, Inc. ("CCF-1"), and Process Construction Supply, Inc. ("PCS") sued General Motors Corporation for breach of a 1990 settlement agreement. General Motors moved to dismiss the case under the doctrine of res judicata based upon a judgment rendered in a Connecticut court, and the trial court granted its motion. On appeal, plaintiffs contend the trial court erred (1) in dismissing the claim because the Connecticut action and the Georgia action did not share identical issues or causes of action; and (2) in failing to use the doctrine of judicial estoppel to preclude General Motors from asserting "contradictory and mutually exclusive arguments" in the two cases. For reasons which follow, we affirm.

Although styled a dismissal, the trial court's order constituted a grant of summary judgment because the trial court considered evidence outside the pleadings. See Purcell v. C. Goldstein & Sons, Inc., 166 Ga.App. 547, 548, 305 S.E.2d 10 (1983). As such, we must determine whether the movant was entitled to judgment as a matter of law. Moore v. Food Assoc., 210 Ga.App. 780, 781, 437 S.E.2d 832 (1993).

Flagg is the parent company of CCF-1, a company which owns a power plant in Hartford, Connecticut, that was constructed by PCS. In December 1987, PCS purchased from Sulzer Turbosystems, Inc. ("Sulzer") two turbine engines manufactured by Allison Gas Turbine Division of General Motors ("GM") for use in the power plant. Due to dissatisfaction with the turbine engines, PCS did not pay Sulzer for the engines until July 1990 when Flagg and PCS reached a settlement agreement with GM and several other parties.

As part of this agreement, GM assumed all of Sulzer's duties under the original purchase order. At the time that the agreement was signed, Flagg purchased a third turbine engine directly from GM, which it subsequently transferred to KFM.

In 1992, Flagg, PCS, and CCF-1 filed suit against GM in Connecticut to recover damages in connection with purchase of the three turbine engines. According to a revised complaint filed in April 1993, these three plaintiffs alleged (1) breach of contract; (2) breach of express warranty; (3) breach of implied warranty; (4) misrepresentation; and (5) breach of repair and replacement warranty. Although the complaint did not specifically seek relief under the 1990 settlement agreement, it did reference GM's assumption of Sulzer's obligations pursuant to the agreement.

On August 1, 1994, while the Connecticut suit was still pending, Flagg, PCS, CCF-1 and KFM filed suit in Fulton County, Georgia, alleging breach of the 1990 settlement agreement. On August 28, 1995, GM filed a motion to dismiss and a motion for summary judgment in the Georgia matter because of the pending case in Connecticut. GM also sought judgment against KFM, asserting that KFM (who was not a party in the Connecticut suit) was not a party to the 1990 settlement agreement and that KFM had released any claims it had against GM. The trial court granted GM's motion to dismiss without prejudice in light of the pending Connecticut litigation and granted summary judgment in favor of GM against KFM.

On appeal, this Court affirmed the grant of summary judgment against KFM. Flagg Energy Dev. Corp. v. Gen. Motors Corp., 223 Ga.App. 259, 260(1), 477 S.E.2d 402 (1996). However, we reversed the dismissal of the case as to Flagg, PCS, and CCF-1, since dismissal of a claim based on a prior pending action in the courts of another jurisdiction is inappropriate. Id. at 261(2), 477 S.E.2d 402.

On October 3, 1996, the Connecticut court, having previously granted GM's motion for summary judgment as to all claims except CCF-1's claim for breach of the repair and replacement warranty, issued a directed verdict in favor of GM on the remaining count. The Connecticut court also submitted the case to a jury which returned a verdict in favor of GM which the court accepted. After the final decision had been rendered in Connecticut, GM filed a motion to dismiss the Georgia case on April 18, 1997, alleging the action was barred by res judicata. The trial court granted this motion on August 5, 1997, and plaintiffs appeal.

1. The doctrine of res judicata, codified in OCGA § 9-12-40, provides that "`(a) judgment of a court of competent jurisdiction shall be conclusive between the same parties and their privies as to all matters put in issue or which under the rules of law might have been put in issue in the cause wherein the judgment was rendered until the judgment is reversed or set aside.' Res judicata prevents plaintiffs from splitting up claims arising from the same transaction and prosecuting them piecemeal or presenting only a portion of the grounds on which relief is sought and leaving the rest for a second suit if the first fails." (Citations omitted.) Danzell v. Cannon, 224 Ga.App. 602-603(1), 481 S.E.2d 588 (1997). Moreover, "[t]he doctrine of full faith and credit renders the judgments and adjudications of courts of sister states of competent jurisdiction res judicata in this state unless the court lacked personal or subject matter jurisdiction or unless the judgment was procured by fraud." Chrison v. H & H Interiors, 232 Ga.App. 45, 46-47, 500 S.E.2d 41 (1998). "However, for one action to act as a bar to a subsequent action, the two actions must share certain characteristics. First, the parties to the two actions must be identical and, second, the subject matter of the actions must also be identical." Lawson v. Watkins, 261 Ga. 147, 148(1), 401 S.E.2d 719 (1991).

With regard to the requirement that the parties be identical, we note that, although KFM was not a party to the Connecticut claim, it is listed as a plaintiff in the case at bar. In Flagg, supra, however, we affirmed the trial court's grant of summary judgment in favor of GM as to KFM. Consequently, KFM is no longer a party to this case, notwithstanding that its name remains on the appellants' enumeration of errors and brief. Therefore, the parties to the two actions are identical.

Thus, the issue before us is whether the subject matter of the two actions is identical. Plaintiffs contend it is not identical since the Connecticut action was based upon the terms of the 1987 purchase agreement and the Georgia action is based upon the 1990 settlement agreement. This contention lacks merit. Plaintiffs based their Connecticut suit on the premise that, pursuant to the 1990 settlement...