Kelleher v. Lozzi, A--103

Citation80 A.2d 196,7 N.J. 17
Decision Date09 April 1951
Docket NumberNo. A--103,A--103
PartiesKELLEHER v. LOZZI.
CourtUnited States State Supreme Court (New Jersey)

Hyman W. Rosenthal, Newark, argued the cause for appellant. Harry Chashin, Bayonne, on the brief. (Marcus & Levy, Paterson, attorneys).

Archibald Kreiger, Paterson, argued the cause for the respondent. (Bluestein & Diamond, Paterson, attorneys).

The opinion of the court was delivered by

CASE, J.

The appeal is from an order in the Superior Court, Law Division, Passaic County, striking the complaint and awarding judgment to the defendant against the plaintiff. It comes to us on our own certification

The case turns on the effect to be given the disposition of an earlier suit arising out of the same state of facts wherein the present defendant was plaintiff and the present plaintiff was defendant. On or about August 18, 1949, there was a collision at a street intersection in the Borough of East Paterson between an automobile owned and driven by Louis Lozzi and an automobile owned and driven by Agnes M. Kelleher, then Agnes Melconian. Lozzi sued Kelleher in the Bergen County Court on a complaint which charged Kelleher with liability in that she negligently operated a defectively equipped automobile resulting in personal injuries to Lozzi and damages to his car. Kelleher filed an answer in which she admitted ownership and operation but otherwise denied the substantial allegations of the complaint. She incorporated in her answer three special defenses charging respectively that (1) Lozzi was guilty of contributory negligence, (2) Lozzi assumed the risk and (3) the accident was caused by the negligence of a third party over whom Kelleher had no control. In due course the case came to pretrial conference where, February 10, 1950, an order was stipulated by counsel and signed by the court setting forth, Inter alia, that negligence and contributory negligence were the matters in dispute and that a property damage bill paid by Lozzi in the amount of $331.50 and a physician's bill for services to Lozzi in the amount of $266 were to be admitted in evidence. On March 17, 1950, a paper of dismissal was signed by the attorneys for the parties plaintiff and defendant and filed. It reads: 'Please take notice that the above entitled cause is hereby dismissed without costs to either party against the other. (Signed) Peter J. Cammarano, Attorney for Plaintiff; Wilbur A. Stevens, Attorney for Defendant.' The consideration for the dismissal was the sum of $550 paid to Lozzi in settlement of the action and a release executed and delivered by Lozzi.

On August 21, 1950, Kelleher filed her present complaint restating the accident, charging Lozzi with liability for her property loss and personal injuries in that he negligently operated his own car and claiming $10,500 damages. Lozzi then moved for and was granted the disputed judgment of dismissal because of the incidents in the former suit.

Several rules of the court are cited to us by one or the other of the parties. They are respectively Rules 3:1--2, 3:12--2, 3:12--8, 3:13--1, 3:41--1(a), 3:41--2 and 3:42--1. The essence of these rules, to the extent of their present pertinency, is:

3:1--2. 'The rules shall be construed to render the civil practice just and simple and to prevent unjustifiable expense and delay. * * *'

3:12--2. 'Every defense, legal or equitable, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim, or third-party claim, shall be asserted in the answer thereto, except that the following defenses may at the option of the pleader be made by motion: * * * (5) failure to state a claim upon which relief can be granted * * *'.

3:12--8. 'A party waives all defenses and objections which he does not present either by motion as hereinbefore provided or, if he has made no motion, in his answer or reply * * *', with exceptions not here pertinent.

3:13--1. 'A pleading may state as a counterclaim any claim against the opposing party whether or not arising out of the transaction or occurrence that is the subject matter of the opposing party's claim', with exceptions not here pertinent.

3:41--1(a). 'Subject to the provisions of Rule 3:23--3 and Rule 3:66, an action may be dismissed by the plaintiff without order of court (1) by filing a notice of dismissal at any time before service by the adverse party of an answer or of a motion for summary judgment, whichever first occurs, or (2) by filing a stipulation of dismissal signed by all parties who have appeared in the action. Unless otherwise stated in the notice of dismissal or stipulation, the dismissal is without prejudice, except that a notice of dismissal operates as an adjudication upon the merits when filed by a plaintiff who has once previously dismissed in any court of the state or of any other state or the United States an action based on or including the same claim.'

3:41--2. '* * * any dismissal not provided for in Rule 3:41, other than a dismissal for lack of jurisdiction, operates as an adjudication upon the merits. Nonsuits are superseded.'

3:42--1. This rule relates to consolidation of actions--when and how accomplished.

Appellant's first point is that the filing of a counterclaim was permissible but not mandatory. When appellant, as defendant in the first action, was served with Lozzi's complaint she was compelled by Rule 3:12--2 to assert each and every of her defenses in her answer. Therefore, if she purposed to assert negligence on the part of the plaintiff and to rely upon that negligence as a defense against liability she was obliged to, and did, plead that element as a defense. The word 'counterclaim' as used in the rule does not refer to a defensive pleading. The pleading is given its place along with an original claim and a cross-claim as a charge or a statement of a cause of action which calls upon the person charged to make an answer stating all of his defenses. To rule upon the point categorically, the filing of a counterclaim was, under Rule 3:13--1, permissive and not mandatory, a Status that was not altered by Rule 3:12--2; but this construction, as we shall see, is not dispositive of the appeal.

Appellant's point two is that the matter presented by the motion leading to the judgment under review is not the proper subject of a motion. The accuracy of that assertion depends upon whether the complaint states a claim upon which relief may be granted under Rule 3:12--2. We shall presently discuss the point at greater length.

It is next said that the dismissal of the prior suit was without prejudice, and reliance is placed upon the provision of Rule 3:41--1(a) that unless otherwise stated in the notice of dismissal or stipulation a dismissal is without prejudice. It is first to be observed that we are not confronted with a bare stipulation to dismiss. There was a settlement of the issues, the payment of money by the defendant and the delivery of a release by the plaintiff. Obviously, that disposition was not without prejudice to the plaintiff and, upon the assumption that the 'without prejudice' provision had the defendant within its purview, the payment of an agreed settlement of the issues served quite as efficiently to remove the defendant from the benefit thereof so far as concerns the issues which were involved in the settlement. The issues were primarily two: First, was the defendant guilty of negligence which was a proximate cause of the accident? Second, was the plaintiff guilty of negligence which caused, or was a factor contributing toward, the accident? If either element had been resolved in favor of the defendant, she would have been not liable and could thereafter have brought suit for her own recovery. Her omission in filing a counterclaim in her adversary's suit would not have shut her off because the filing of such a pleading was a privilege and not a duty. But neither element was resolved in her favor. By her own act in surrendering the contest, making her settlement and as a part thereof taking from her adversary his undertaking to release her from further liability she conceded that she, and she alone, was the wrongdoer.

In contract actions, where the earlier suit has gone to judgment, courts of authority have distinctly spoken. In Massachusetts it was held that where a defendant in the former suit intended to claim more than the amount for which he was sued, he must bring a cross action and apply to the court to have the cases continued; 'he cannot use the same defence first as a shield, and then as a sword'. O'Connor v. Varney, 19 Gray 231 (Massachusetts Supreme Judicial Court, 1857). And in New York it was held that as to a matter that was the real issue in an earlier action which went against the defendant the judgment was conclusive, and the defendant could not set up the same claim in a later cause even though he had earlier asserted it as a defense, merely, and not as a counterclaim. Patrick v. Shaffer, 94 N.Y. 423 (New York Court of Appeals, 1884).

By every fair expectation the question of Lozzi's negligence as between him and Kelleher was settled in the negative by the parties Inter sese. It is difficult to understand how, on sound reasoning or equitable dealing, any other result could be reached. A sues B; the pleadings sharply draw the issues; before getting in the courtroom for trial B yields the fight and by making cash payment acknowledges that A is right and B is wrong, and having paid the price gets A's release. Then B starts suit against A and says in effect, 'True, you sued me on the very same issues arising out of the identical circumstances, and I admitted I was wrong; but that was in Your suit. Now this is My suit, and for the purposes of my suit I was in the right. I have your release which you executed in the belief that I had acknowledged my guilt and that our differences were settled. But as against the amount which I paid you for the release, upon which I...

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