Can the doctrine of res judicata bar an owner’s claim against the general contractor after the owner also sued and obtained a satisfied judgment against the subcontractor when there are identical, overlapping damages pursued in separate lawsuits.  A recent case says, not really.

In Pickell v. Lennar Homes, LLC, 48 Fla.L.Weekly D2037a (Fla. 6th DCA 2023), a homeowner sued a homebuilder and the homebuilder’s mechanical subcontractor in separate lawsuits.  The claims and damages asserted in the separate lawsuits were substantially identical. The homeowner obtained a judgment against the mechanical subcontractor which was satisfied (i.e., paid).  The homebuilder tried to use this as a get-out-jail-free card and claimed the homeowner was barred from suing it under the doctrine of res judicata based on overlapping claims and damages.

To successfully assert a defense of res judicata, a party must prove four “identities”: “(1) identity of the thing sued for; (2) identity of the cause of action; (3) identity of persons and parties to the action; and (4) identity of the quality of the persons for or against whom the claim is made.” Pickell, supra (citation omitted).

The issue in this case was the third identity – the identity of the parties which applies to the “same parties or their privies.” Pickell, supra (citation omitted).

Here, though, the mechanical subcontractor was NOT the privy of the homebuilder.  First, the homebuilder’s interest in the separate lawsuit was not bound by the final judgment of the mechanical subcontractor. This could occur if the homebuilder had indemnification responsibilities to the mechanical subcontractor. However, that was not the case.  While the mechanical subcontractor owed the homebuilder an indemnification obligation, that indemnification was not reciprocal meaning the homebuilder did not owe the indemnification obligation to the mechanical subcontractor.  (“But the obligation of indemnification must run from the party asserting the res judicata defense to the party who was sued in the separate action.  Here, the indemnification responsibility does not run from [the home builder] to the [mechanical contractor]; rather, the subcontract requires [the mechanical subcontractor] to indemnify the homebuilder.”)

Now, you may sit back and say this seems unfair if the claims and damages are substantially identical because it allows the homeowner to double dip in damages. However, it does not. It may be inefficient in that it would have made more sense for the lawsuits to be in the same lawsuit versus separate lawsuits. I would agree with this. But there is no double dipping because “satisfaction of ‘overlapping items of compensation’ in different judgments is a ‘post-judgment collections issue.’” Pickell, supra, at n.1.  In other words, “any recovery from [the mechanical subcontractor] would be set-off post-judgment from a potential future judgment against [the homebuilder].” Id

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

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