Simmons v. Trans Express Inc.

• Decision Date: 03 June 2021
• Docket Number: No. 34,34
• Citation: 37 N.Y.3d 107,148 N.Y.S.3d 178,170 N.E.3d 733
• Court: New York Court of Appeals Court of Appeals
• Parties: Charlene SIMMONS, Appellant, v. TRANS EXPRESS INC., Respondent.

37 N.Y.3d 107

170 N.E.3d 733

148 N.Y.S.3d 178

Charlene SIMMONS, Appellant,

v.TRANS EXPRESS INC., Respondent.

No. 34

Court of Appeals of New York.

June 3, 2021

Abdul Hassan Law Group, PLLC, Queens Village (Abdul K. Hassan of counsel), for appellant.

McDermott Will & Emery LLP, Chicago (Emory D. Moore, Jr. of the Illinois bar, admitted pro hac vice, of counsel), for respondent.

OPINION OF THE COURT

STEIN, J.

Plaintiff commenced an action against defendant, her former employer, in a small claims part of Civil Court, seeking money damages arising out of the purported nonpayment of wages. Following a trial before a small claims arbitrator, the court awarded plaintiff $1,000 "for unpd. OT," plus $20 in disbursements.¹ After defendant satisfied the small claims judgment, plaintiff commenced this action in the United States District Court for the Eastern District of New York, seeking additional damages based on defendant's failure to pay her overtime wages in violation of federal and state law. Defendant moved to dismiss the complaint, asserting that the prior small claims judgment barred the federal litigation under the doctrine of claim preclusion, also known as res judicata. As relevant here, plaintiff argued that N.Y. City Civ Ct Act § 1808 rendered claim preclusion inapplicable to small claims judgments unless the subsequent action raised exactly the same claim or theory as the earlier action. The District Court rejected plaintiff's argument based in part on the legislative history of section 1808 (see 355 F. Supp. 3d 165, 169 [E.D. N.Y.2019] ), and plaintiff appealed. Recognizing that this Court has never provided an interpretation of section 1808, the Second Circuit certified the following question:

"Under New York City Civil Court Act § 1808, what issue preclusion, claim preclusion, and/or res judicata effects, if any, does a small claims court's prior judgment have on subsequent actions brought in other courts involving the same facts, issues, and/or parties? In particular, where a small claims court has rendered a judgment on a claim, does [s]ection 1808 preclude a subsequent action involving a claim arising from the same transaction, occurrence, or employment relationship?"

( 955 F.3d 325, 331 [2d Cir. 2020] ).

This Court accepted the certified question pursuant to section 500. 27 of our Rules of Practice ( 35 N.Y.3d 966, 124 N.Y.S.3d 627, 147 N.E.3d 1164 [2020] ). We now conclude that, under N.Y. City Civ Ct Act § 1808, small claims judgments do not have collateral estoppel or issue preclusive effect (with one exception), but such judgments may have the traditional res judicata or claim preclusive effect in a subsequent action involving a claim between the same adversaries arising out of the same transaction or series of transactions at issue in a prior small claims court action.

NY City Civ Ct Act article 18 governs small claims parts in New York City courts. Section 1808 provides that a judgment of the small claims part "shall not be deemed an adjudication of any fact at issue or found therein in any other action or court; except that a subsequent judgment obtained in another action or court involving the same facts, issues and parties shall be reduced by the amount" of the small claims judgment.² Plaintiff argues that N.Y. City Civ Ct Act § 1808 limits the preclusive effect of small claims judgments; in plaintiff's view, only those judgments resolving the precise same claim or claims raised in a later action may be given preclusive effect under the statute. In that regard, plaintiff contends that, by enacting section 1808, the legislature intended to abandon our transactional approach to claim preclusion as applied to small claims judgments. We disagree.

"Under res judicata, or claim preclusion, a valid final judgment bars future actions between the same parties on the same cause of action" ( Parker v. Blauvelt Volunteer Fire Co. , 93 N.Y.2d 343, 347, 690 N.Y.S.2d 478, 712 N.E.2d 647 [1999] ; see Matter of Reilly v. Reid , 45 N.Y.2d 24, 28, 407 N.Y.S.2d 645, 379 N.E.2d 172 [1978] ). "One linchpin of res judicata is an identity of parties actually litigating successive actions against each other: the doctrine applies only when a claim between the parties has been previously ‘brought to a final conclusion’ " ( City of New York v. Welsbach Elec. Corp. , 9 N.Y.3d 124, 127, 848 N.Y.S.2d 551, 878 N.E.2d 966 [2007], quoting Parker , 93 N.Y.2d at 347, 690 N.Y.S.2d 478, 712 N.E.2d 647 ). Importantly, the claim preclusion rule extends beyond attempts to relitigate identical claims. We have consistently applied a "transactional analysis approach" in determining whether an earlier judgment has claim preclusive effect, such that "once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy" ( O'Brien v. City of Syracuse , 54 N.Y.2d 353, 357, 445 N.Y.S.2d 687, 429 N.E.2d 1158 [1981] [emphasis added]; see e.g. Matter of Hunter , 4 N.Y.3d 260, 269, 794 N.Y.S.2d 286, 827 N.E.2d 269 [2005] ; Schuylkill Fuel Corp. v. Nieberg Realty Corp. , 250 N.Y. 304, 306–307, 165 N.E. 456 [1929] ). This rule is grounded in public policy concerns, including fairness to the parties, and is "intended to ensure finality, prevent vexatious litigation and promote judicial economy" ( Xiao Yang Chen v. Fischer , 6 N.Y.3d 94, 100, 810 N.Y.S.2d 96, 843 N.E.2d 723 [2005] ; see e.g. Matter of Hunter , 4 N.Y.3d at 269–270, 794 N.Y.S.2d 286, 827 N.E.2d 269 ; Matter of Hodes v. Axelrod , 70 N.Y.2d 364, 372–373, 520 N.Y.S.2d 933, 515 N.E.2d 612 [1987] ).

Although the transactional approach casts a facially broad preclusive net, this Court has taken a pragmatic and flexible attitude toward claim preclusion, recognizing that the doctrine, "if applied too rigidly, could work considerable injustice" ( Matter of Reilly , 45 N.Y.2d at 28, 407 N.Y.S.2d 645, 379 N.E.2d 172 ). Thus, to determine whether two claims arise out of the same transaction or series of transactions, we have held that courts should analyze whether the claims turn on facts that " ‘are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties’ expectations or business understanding or usage’ " ( Xiao Yang Chen , 6 N.Y.3d at 100–101, 810 N.Y.S.2d 96, 843 N.E.2d 723, quoting Restatement [Second] of Judgments § 24 [2]; see e.g. Smith v. Russell Sage Coll. , 54 N.Y.2d 185, 192, 445 N.Y.S.2d 68, 429 N.E.2d 746 [1981] ). Ultimately, the application of the transactional approach to claim preclusion seeks to prevent litigants from taking two bites at the apple; however, "[i]n properly seeking to deny [litigants] two days in court, [we] must be careful not to deprive [them] of one" ( Matter of Reilly , 45 N.Y.2d at 28, 407 N.Y.S.2d 645, 379 N.E.2d 172 [internal quotation marks and citation omitted]).

Collateral estoppel, or issue preclusion, is related to, but distinct from, the doctrine of res judicata. Collateral estoppel prevents " ‘a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party ... whether or not the ... causes of action are the same’ " ( Parker , 93 N.Y.2d at 349, 690 N.Y.S.2d 478, 712 N.E.2d 647 [emphasis added], quoting Ryan v. New York Tel. Co. , 62 N.Y.2d 494, 500, 478 N.Y.S.2d 823, 467 N.E.2d 487 [1984] ; see Schuylkill Fuel Corp. , 250 N.Y. at 306–307, 165 N.E. 456 ). The doctrine applies only where "the issue in the second action is identical to an issue which was raised, necessarily decided and material in the first action," and the party who is being estopped "had a full and fair opportunity to litigate the issue in the earlier action" ( Parker , 93 N.Y.2d at 349, 690 N.Y.S.2d 478, 712 N.E.2d 647 ; see e.g. ABN AMRO Bank, N.V. v. MBIA Inc. , 17 N.Y.3d 208, 226, 928 N.Y.S.2d 647, 952 N.E.2d 463 [2011] ; Schwartz v. Public Adm'r of County of Bronx , 24 N.Y.2d 65, 69–70, 298 N.Y.S.2d 955, 246 N.E.2d 725 [1969] ). As with claim preclusion, we have similarly cautioned against the mechanical application of issue preclusion (see e.g. Jeffreys v. Griffin , 1 N.Y.3d 34, 41, 769 N.Y.S.2d 184, 801 N.E.2d 404 [2003] ). Considering the facts of each case, a court must examine " ‘the realities of litigation,’ such as recognition that if the first proceeding involved trivial stakes, it may not have been litigated vigorously" ( Staatsburg Water Co. v. Staatsburg Fire Dist. , 72 N.Y.2d 147, 153, 531 N.Y.S.2d 876, 527 N.E.2d 754 [1988], quoting Gilberg v. Barbieri , 53 N.Y.2d 285, 292, 441 N.Y.S.2d 49, 423 N.E.2d 807 [1981] ). We have explained that "the fundamental inquiry is whether relitigation should be permitted in a particular case in light of what are often competing policy considerations, including fairness to the parties, conservation of the resources of the court and the litigants, and the societal interests in consistent and accurate results" ( id. at 153, 531 N.Y.S.2d 876, 527 N.E.2d 754 ; accord Buechel v. Bain , 97 N.Y.2d 295, 304, 740 N.Y.S.2d 252, 766 N.E.2d 914 [2001], cert denied sub nom Bain v. Buechel , 535 U.S. 1096, 122 S.Ct. 2293, 152 L.Ed.2d 1051 [2002] ).

With these well-established principles in mind, our analysis of N.Y. City Civ Ct Act § 1808 begins with the statutory language itself because "[i]t is fundamental that a court, in interpreting a statute, should attempt to effectuate the intent of the [l]egislature, and where the statutory language is clear and unambiguous, the court should construe it so as to give effect to the plain meaning of the words used" ( Patrolmen's Benevolent Assn. of City of N.Y. v. City of New York , 41 N.Y.2d 205, 208, 391 N.Y.S.2d 544, 359 N.E.2d 1338 [1976] [internal citations omitted]; see Majewski v. Broadalbin–Perth Cent. School Dist. , 91 N.Y.2d 577, 583, 673 N.Y.S.2d 966, 696 N.E.2d 978 [1998] ). The...