Michigan Court of Appeals; Docket # 337125; Unpublished
Judges Borrello, Kelly, and Boonstra per Curiam.
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Not applicable
TOPICAL INDEXING:
Collateral Estoppel and Res Judicata
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals upheld the lower court’s grant of summary disposition for Defendant State Farm regarding the application of res judicata to Plaintiff Shawne Henry’s (“Henry”) claim. The Court of Appeals upheld the lower court because Henry’s first action, which she tried to reinstate had in fact been dismissed with prejudice in September 2013.
In March of 2012, Henry was involved in a motor vehicle accident while driving her employer’s vehicle. Henry had no-fault insurance from State Farm and her employer had a no-fault policy with Sparta Insurance Company (“Sparta”). In June 2012, Henry filed suit against State Farm to obtain no-fault benefits. According to Henry, State Farm represented to her that the driver of the other vehicle had insurance and based on those representations she agreed to dismiss State Farm from the lawsuit. On September 7, 2012 Henry brought a second action against State Farm seeking no-fault benefits. On September 10, 2012 the trial court ordered State Farm to be dismissed from the first (June) action with prejudice. On November 8, 2012, the trial court dismissed State Farm from the second action without prejudice. On June 24, 2013, Henry filed a third action against State Farm. State Farm then moved for summary disposition based on res judicata. The trial court dismissed the 2013 claim with prejudice based on res judicata.
Henry then filed a motion to reinstate her first (June) 2012 lawsuit based on mutual mistake of fact. However, a motion to set aside the 2013 case was filed (not the June 2012 case) on April 10, 2015. The trial court set aside the dismissal of the 2013 case and reinstated the case. The parties then stipulated to dismiss the 2013 case without prejudice. Two days later Henry brought a fourth action against State Farm for uninsured and underinsured benefits. State Farm again moved to dismiss based on res judicata, and the trial court heard oral arguments. At oral arguments Henry’s lawyer asserted that the first (June) 2012 case had been reinstated based on mutual mistake. The trial court denied State Farm’s res judicata motion because it believed it had already set aside the first (June) dismissal 2012 order.
Later, State Farm motioned for summary disposition based upon improper procedures being followed by Henry. Alternatively, State Farm argued that Henry was barred by the doctrine of latches. The trial court granted State Farm’s motion for summary disposition. Henry appealed and State Farm cross-appealed arguing that Henry’s claim should be barred by res judicata.
The Court explained that res judicata should be applied to Henry and bar her action. The Court cited to Adair v State, 470 Mich 105, 121 (2004), which stated that res judicata applies to a second action when “(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.” The Court then noted that res judicata does not apply if the facts change or new facts develop. First, the Court explained that the first (June) 2012 action was dismissed on September 10, 2012 with prejudice. Citing to Limbaugh v. Oakland Co. Bd. of Co. Rd. Comm’s, 226 Mich App 389 (1998), the Court explained that a voluntary dismissal with prejudice acts as an adjudication on the merits for purposes of res judicata. Further, a voluntary dismissal with prejudice acts as an adjudication on the merits for both actual claims and potential claims that could have been raised, but where not raised. Henry’s lawyer presented no evidence that the trial court had not reinstated the (June) 2012 dismissal. The Court then decided that the actions were between the same parties and the matter in the 2015 case could have been resolved in the first (June) 2012 action. Thus, the Court found that res judicata applied and Henry was barred from bringing forward her 2015 action.
“Relevant to this appeal, the first lawsuit was brought in June 2012, and State Farm was dismissed with prejudice on September 10, 2012. . . .“[A] voluntary dismissal with prejudice acts as an adjudication on the merits for res judicata purposes.” Limbaugh v Oakland Co Bd of Co Rd Comm’s, 226 Mich App 389; 573 NW2d 336 (1998). Further, because “Michigan cases have construed res judicata as applying both to claims actually raised in the prior action and to ‘every claim arising out of the same transaction which the parties, exercising reasonable diligence, could have raised but did not,” “a voluntary dismissal with prejudice acts as res judicata with respect to all claims that could have been raised in the first action.” Id. at 396. . . . Therefore, on this record, the September 10, 2012 order was a judgment on the merits, between the same parties, involving the same transaction that is involved in the 2015 lawsuit.”
The Court then stated that even if the trial court had reinstated the (June) 2012 case, the lower court’s decision to do so would have been an abuse of discretion. Citing MCR 2.612 the Court explained that a motion to reinstate must be brought in a reasonable amount of time, which is one year when based upon a mutual mistake. Here, Henry did not file to reinstate until February 2014, and did not provide any reason why the reinstatement motion was filed untimely. Thus, the Court concluded that the lower court would have abused its discretion by reinstating the first (June) 2012 case after one year without just cause.
“Here, although Henry offers no explanation for why her motion to reinstate was untimely, the trial court made comments when addressing this issue in 2015 suggesting that the case may have simply fallen through the cracks because Henry’s lawyer was part of a “volume” law firm. A case “falling through the cracks” because the lawyer prosecuting it is busy with other cases is not a sufficient reason to grant an untimely motion to set aside a court order. Accordingly, even if we were to reach this issue, we would conclude that the trial court abused its discretion by reinstating the lawsuit.”
Thus, the Court found for State Farm and barred Henry’s claim based on res judicata.
