Garrett v. Washington, Docket No. 323705.

• Citation: 314 Mich.App. 436,886 N.W.2d 762
• Decision Date: 23 February 2016
• Docket Number: Docket No. 323705.
• Parties: GARRETT v. WASHINGTON.
• Court: Court of Appeal of Michigan — District of US

314 Mich.App. 436

886 N.W.2d 762

GARRETT

v.WASHINGTON.

Docket No. 323705.

Court of Appeals of Michigan.

Submitted Jan. 13, 2016, at Detroit.

Decided Feb. 23, 2016, at 9:00 a.m.

The Lobb Law Firm, Southfield (by Joseph R. Lobb and Daniel S. Zick) and Law Offices of Larry A. Smith (by Larry A. Smith ) for plaintiff.

Hewson & Van Hellemont, PC, Southfield (by Michael J. Jolet and Grant O. Jaskulski ), for defendant.

Before: RIORDAN, P.J., and JANSEN and FORT HOOD, JJ.

PER CURIAM.

Plaintiff appeals as of right the trial court's order of voluntary dismissal of the claim against Darita Washington (Washington) without prejudice, which followed its order granting summary disposition in favor of defendant State Farm Mutual Automobile Insurance Company (State Farm) in this no-fault action. Because we are bound under MCR 7.215(J)(1) to follow this Court's decision in Adam v. Bell, 311 Mich.App. 528, 879 N.W.2d 879 (2015), we reverse the trial court's decision to grant summary disposition in favor of State Farm and remand for further proceedings consistent with this opinion. However, were it not for this Court's decision in Adam, we would affirm the trial court's decision to grant summary disposition in favor of State Farm. Therefore, we declare a conflict with Adam pursuant to MCR 7.215(J)(2).

I. FACTS AND PROCEDURAL HISTORY

This case arises from a January 4, 2013 automobile accident involving plaintiff and Washington. At the time of the accident, plaintiff had a no-fault insurance policy with State Farm. On June 3, 2013, plaintiff filed a complaint against State Farm that sought personal protection insurance (PIP) benefits, thus instituting the “original action.” The original action proceeded to case evaluation and was ultimately settled by mutual acceptance of the case evaluation award, as indicated in a February 20, 2014 notice of the results of the case evaluation. The trial court subsequently dismissed the action at a settlement conference on April 22, 2014. On the same day, plaintiff filed a third-party complaint in the instant case, alleging a negligence claim against Washington and a breach of contract claim against State Farm for uninsured motorist (UM) benefits in the amount of $20,000. Plaintiff filed a motion to consolidate the original action and the instant action. On May 5, 2014, the trial court entered a final order in the original action, which denied plaintiff's motion to consolidate the two cases and dismissed the original action with prejudice. On May 28, 2014, State Farm filed an answer in this case and asserted, as an affirmative defense, that plaintiff's claim for UM benefits was barred by the doctrine of res judicata.

On June 10, 2014, State Farm moved for summary disposition under MCR 2.116(C)(4) (lack of subject-matter jurisdiction), MCR 2.116(C)(7) (claim barred as a matter of law), and MCR 2.116(C)(8) (failure to state a claim on which relief can be granted). State Farm argued that (1) the trial court lacked subject-matter jurisdiction over the claim against State Farm since plaintiff only requested $20,000 in UM benefits, (2) plaintiff's claim for UM benefits could have been resolved in the original action, and was, therefore, barred by res judicata, and (3) plaintiff's claim was barred under the compulsory joinder rule, MCR 2.203(A). Plaintiff filed a response on July 11, 2014, contending that (1) the trial court had subject-matter jurisdiction since the total amount in controversy against all defendants exceeded $25,000, (2) plaintiff's claim for UM benefits was not barred by res judicata because the claim for UM benefits was fundamentally different from the claim for PIP benefits, and (3) the compulsory joinder rule did not require plaintiff to join his claim for UM benefits in the original action. The trial court held a hearing on State Farm's motion for summary disposition on July 18, 2014. Plaintiff's attorney argued that the trial court had subject-matter jurisdiction over the case because the claims against both State Farm and Washington exceeded $25,000, to which the trial judge eventually responded, “Okay.” The trial court determined that plaintiff's claim for UM benefits was barred by the doctrine of res judicata. The trial court followed the reasoning in this Court's unpublished decision in Graham v. State Farm Mut. Auto. Ins. Co., unpublished opinion per curiam of the Court of Appeals, issued February 18, 2014 (Docket No. 313214, 2014 WL 667512 ), and granted summary disposition in favor of State Farm. The trial court entered an order on July 22, 2014, dismissing the case against State Farm with prejudice. On August 27, 2014, the trial court entered an order of voluntary dismissal without prejudice with regard to the remaining claim against Washington, which constituted the final order in the case.

II. RES JUDICATA

On appeal, plaintiff argues that the trial court erred by determining that res judicata barred his claim for UM benefits. We are required to reverse and remand on the basis of this Court's decision in Adam. However, we believe that Adam was wrongly decided.

We review de novo both a trial court's decision on a motion for summary disposition and its application of the legal doctrine of res judicata. Bryan v. JPMorgan Chase Bank, 304 Mich.App. 708, 713, 848 N.W.2d 482 (2014). “In determining whether summary disposition under MCR 2.116(C)(7) is appropriate, a court considers all documentary evidence submitted by the parties, accepting as true the contents of the complaint unless affidavits or other appropriate documents specifically contradict them.” Blue Harvest, Inc. v. Dep't of Transp., 288 Mich.App. 267, 271, 792 N.W.2d 798 (2010).

“ ‘The doctrine of res judicata is intended to relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and encourage reliance on adjudication, that is, to foster the finality of litigation.’ ” Bryan, 304 Mich.App. at 715, 848 N.W.2d 482 (citation omitted). For res judicata to preclude a claim, three elements must be satisfied: “(1) the prior action was decided on the merits, (2) both actions involve the same parties or their privies, and (3) the matter in the second case was, or could have been, resolved in the first.” Adair v. Michigan, 470 Mich. 105, 121, 680 N.W.2d 386 (2004). “[T]he burden of proving the applicability of the doctrine of res judicata is on the party asserting it.” Baraga Co. v. State Tax Comm., 466 Mich. 264, 269, 645 N.W.2d 13 (2002).

Both parties to this action were parties to the original action, and it is undisputed that the original action was decided on its merits. In any event, “acceptance of a case evaluation is essentially a consent judgment,” CAM Constr. v. Lake Edgewood Condo. Ass'n, 465 Mich. 549, 555, 640 N.W.2d 256 (2002), and “[r]es judicata applies to consent judgments,” Ditmore v. Michalik, 244 Mich.App. 569, 576, 625 N.W.2d 462 (2001). The dispute in this matter involves the third element of res judicata, i.e., whether plaintiff's claim for UM benefits is a claim that could have been litigated in the original action. See Adair, 470 Mich. at 121, 680 N.W.2d 386.

Our Supreme Court “has taken a broad approach to the doctrine of res judicata, holding that it bars not only claims already litigated, but also every claim arising from the same transaction that the parties, exercising reasonable diligence, could have raised but did not.” Adair, 470 Mich. at 121, 680 N.W.2d 386 (emphasis added). Accordingly, when examining factors for the third element of res judicata, Michigan courts employ the broad, pragmatic “same transaction test,” often referred to as the “transactional test,” rather than the narrower “same evidence test.” Id. at 123–125, 680 N.W.2d 386. Thus, while the question whether the same evidence is necessary to support claims “may have some relevance, the determinative question is whether the claims in the instant case arose as part of the same transaction as did [the plaintiff's] claims in” the original action. See id. at 125, 680 N.W.2d 386. Under the transactional test, “ ‘a claim is viewed in “factual terms” and considered “coterminous with the transaction, regardless of the number of substantive theories, or variant forms of relief flowing from those theories, that may be available to the plaintiff[.]” ’ ” Id. at 124, 680 N.W.2d 386 (citation omitted; emphasis added). The Court explained that “ ‘[t]he “transactional” test provides that “the assertion of different kinds or theories of relief still constitutes a single cause of action if a single group of operative facts give rise to the assertion of relief.” ’ ” Id. at 124, 680 N.W.2d 386 (citation omitted). “ ‘Whether a factual grouping constitutes a “transaction” for purposes of res judicata is to be determined pragmatically, by considering whether the facts are related in time, space, origin or motivation, [and] whether they form a convenient trial unit....’ ” Id. at 125, 680 N.W.2d 386 (alteration in original), quoting 46 Am. Jur. 2d., Judgments, § 533, p. 801.

In deciding this case, the trial court followed the reasoning in Graham, rather than the contrary reasoning in Miles v. State Farm Mut. Auto. Ins. Co., unpublished opinion per curiam of the Court of Appeals, issued May 6, 2014 (Docket No. 311699, 2014 WL 1856406 ). Since the trial court decided this matter, however, this Court explicitly adopted in Adam much of the reasoning from Miles. See Adam, 311 Mich.App. at 533–536, 879 N.W.2d 879. The plaintiff in Adam “was injured when she was struck by a vehicle driven by Susan Bell.” Id. at 530, 879 N.W.2d 879. Adam subsequently filed a complaint against her no-fault insurer asserting a claim for PIP benefits and, after settling that claim with her insurer, stipulated to the entry of an order of dismissal with prejudice. Id. Roughly two months later, Adam “filed a third-party complaint alleging negligence against Susan Bell, a claim of owner liability against [the owner of the vehicle involved in the accident],...