Vantage Enterprises, Inc. v. Caldwell

• Decision Date: 04 August 1976
• Docket Number: No. 40519,40519
• Parties: VANTAGE ENTERPRISES, INC., Appellant, v. Stanley CALDWELL, Appellee.
• Court: Nebraska Supreme Court

Page 678

244 N.W.2d 678

196 Neb. 671

VANTAGE ENTERPRISES, INC., Appellant, v. Stanley CALDWELL, Appellee.

No. 40519.

Supreme Court of Nebraska.

Aug. 4, 1976.

Syllabus by the Court

1. For the doctrine of res judicata to be applicable, the former suit must be based on the same cause of action as the latter.

2. For purposes of application of res judicata, a petition in quantum meruit is a restatement of the same cause of action as that in a petition on express contract, where both petitions are based on the same services; and as such, an earlier judgment in a case on express contract acts as a bar to a later action in quantum meruit.

3. Any right, fact, or matter in issue, and directly adjudicated upon, or necessarily involved in, the determination of an action before a competent court in which a judgment or decree is rendered upon the merits is conclusively settled by the judgment therein and cannot again be litigated between the parties and privies whether the claim or demand, purpose, or subject-matter of the two suits is the same or not.

4. The rule of res judicata is grounded, first, on a public policy and the necessity to terminate litigation, and, second on the belief that a person should not be vexed more than once for the same cause.

Gordon C. Gobel, Fremont, for appellant.

Thomas B. Thomsen, Sidner, Svoboda, Schilke, Wiseman & Thomsen, Fremont, for appellee.

Heard before WHITE, C.J., SPENCER, BOSLAUGH, McCOWN, NEWTON, CLINTON, and BRODKEY, JJ.

BRODKEY, Justice.

This case involves two separate consecutive lawsuits brought by the plaintiff, Vantage Enterprises, Inc., against the defendant, Stanley Caldwell, with whom Vantage had a written contract to construct a house. In its first action, Doc. 65, No. 22202, Vantage sued upon the express written contract, and sought to recover payments allegedly due under the contract. In his answer and cross-petition, Caldwell alleged that Vantage had substantially breached the contract, and was not entitled to payment under the contract. He also cross-petitioned for damages allegedly caused by Vantage's breach of contract. The case was submitted to the jury under the court's instructions to find for Vantage if it found from a preponderance of the evidence that Vantage had substantially performed the contract. The jury returned a verdict for the defendant, Caldwell, but awarded him no damages on his cross-petition. Vantage did not appeal from the judgment.

Shortly thereafter, Vantage filed its second action, Doc. 66, No. 22516, to recover damages from Caldwell based upon the theory of quantum meruit. In his answer and cross-petition in the second action, defendant again alleged as a defense the lack of substantial performance by the plaintiff, and also specifically pleaded the defense of res judicata based upon the entry of the final judgment in the first action. In his cross-petition, Caldwell again claimed damages against the plaintiff as a result of the breach of the contract by the plaintiff. Defendant thereafter filed a motion for summary judgment; and after a hearing on October 28, 1975, the court sustained defendant's motion for summary judgment and dismissed plaintiff's petition and defendant's cross-petition. The record clearly establishes that the parties, the subject matter, and the materials and services involved in the two cases were the same. In answer to interrogatories served upon it prior to the hearing on the motion for a summary judgment, Vantage conceded that both cases would be proved by substantially the same evidence, but contended that the second suit was on the theory of quantum meruit, and not on the theory of express contract. Plaintiff's motion for a new trial was overruled, and Vantage then perfected its appeal to this court. We affirm.

At the outset, we point out that although Vantage conceded that the evidence in the second action based upon the theory of quantum meruit would be substantially the same as that introduced in the jury trial of the first action, we are not informed of what that evidence was. In the hearing on defendant's motion for summary judgment, counsel for defendant, Caldwell, requested the court to take judicial notice of the evidence and testimony in the first trial, and the court stated it would do so. However the record in the case now on appeal to this court does not reflect the evidence given at the former trial, and we must draw our conclusions as to the nature of such evidence by the pleadings in the former case, the court's instructions, and the general verdict returned by the jury. The identity of the parties in the two actions and the existence of the written contract for the construction of the house is admitted; and it is clear from the court's instructions to the jury that the issues tried related principally to the question of whether the plaintiff substantially performed its contract, and also as to the amount of damages sustained by the respective parties. The rule is well-established that the verdict of a jury finding generally in favor of a party to the suit is equivalent to a finding in favor of such party upon all the issues and evidence submitted to them. Dore v. Omaha & C.B. St. Ry. Co., 97 Neb. 250, 149 N.W. 792 (1914); Rosenfield v. Bee Publishing Co., 55 Neb. 388, 75 N.W. 845 (1898); Slater v. Skirving, 51 Neb. 108, 70 N.W. 493 (1897).

The issue for decision in this appeal is whether the verdict and judgment in the first case, based on express contract which resulted in a verdict in favor of the defendant, is res judicata and a bar to plaintiff's subsequent action on the theory of quantum meruit based upon the same facts and evidence.

It is clear that plaintiff was in possession of all the relevant and material facts before the trial in its first action. Under Nebraska law, it could have, and we believe should have, joined its two theories of recovery in its original petition. Section 25--701, R.R.S.1943, specifically provides: 'The plaintiff may unite several causes of action in the same petition, whether they be such as have heretofore been denominated legal or equitable, or both, when they are included in any of the following classes: (1) The same transaction or transactions connected with the same subject of action; (2) contracts, express or implied; * * *.' This court has consistently held that an action on quantum meruit may be joined in a petition with an action on an express contract, and a judgment based on either will satisfy the liability as to both claims where they have their origin in the same transaction. Rodgers v. Jorgensen, 159 Neb. 485, 67 N.W.2d 770 (1954); Umberger v. Sankey, 154 Neb. 881, 50 N.W.2d 346 (1951); Stout v. Omaha, L. & B. Ry. Co., 97 Neb. 816, 151 N.W. 295 (1915). Vantage did not do so. Although its original petition filed in the first action may possibly be interpreted as being based upon the theory of quantum meruit, it chose to file an amended petition in the first action clearly based upon the theory of a breach of an express contract. We think it is clear that plaintiff was aware of both theories of recovery when it filed its original petition.

The doctrine of res judicata operates on the principle that a final judgment on the merits by a court of competent jurisdiction is conclusive upon the parties in any later litigation involving the same cause of action. This court has stated the doctrine as follows: "'Any right, fact, or matter in issue, and directly adjudicated upon, or necessarily involved in, the determination of an action before a competent court in which a judgment or decree is rendered upon the merits is conclusively settled by the judgment therein and cannot again be litigated between the parties and privies whether the claim or demand, purpose, or subject-matter of the two suits is the same or not."' Wischmann v. Raikes, 168 Neb. 728, 97 N.W.2d 551 (1959). See, also, Hickman v. Southwest Dairy Suppliers, Inc., 194 Neb. 17, 230 N.W.2d 99 (1975); Knapp v. City of Omaha, 175 Neb. 576, 122 N.W.2d 513 (1963). We have stated that the rule of res judicata is grounded, first, on a public policy and the necessity to terminate litigation, and, second, on the belief that a person should not be vexed more than once for the same cause. American Province Real Estate Corp. v. Metropolitan Utilities Dist., 178 Neb. 348, 133 N.W.2d 466 (1965); Norlanco, Inc. v. County of Madison, 186 Neb. 100, 181 N.W.2d 119 (1970).

While we have frequently held that an action on an express contract may be joined with an action for quantum meruit where the facts arise out of the same transaction, we do not appear to have previously ruled whether they are the same cause of action, or separate causes of action, at least so far as the application of the doctrine of res judicata is concerned. We have held that to constitute res judicata the former suit must be founded on the same cause of action as the latter. Neslund v. Kinnan, 129 Neb. 339, 261 N.W. 832 (1935). The term 'cause of action' is not easily defined, and the authorities have laid down no thoroughly satisfactory and all-embracing definition. It may mean one thing for one purpose and something different for another, depending, for example, on the questions whether a pleading is good upon demurrer, whether an amendment of a pleading is permissible, and whether the principle of res judicata applies. 1 Am.Jur.2d, Actions, § 1, p. 540. See, also, definition 'cause of action' in Black's Law Dictionary (4th Ed.). For examples of definitions in Nebraska cases, see, City of Alliance v. Cover-Jones Motor Co., 154 Neb. 900, 50 N.W.2d 349 (1951); Asher v. Coca Cola Bottling Co., 172 Neb. 855, 112 N.W.2d 252 (1961); Kohler v. Ford Motor Co., 187 Neb. 428, 191 N.W.2d 601 (1971); Muenchau v. Swarts, 170 Neb. 209, 102 N.W.2d 129 (1960). This court, however, has stated the general test to determine identity of causes of action is whether the same evidence will sustain both the present and the former action,...