Hatch v. Trail King Industries, Inc.

United States Court of Appeals
For the First Circuit
No. 12-1473
DEAN F. HATCH; MARY L. HATCH,
Plaintiffs, Appellants,
v.
TRAIL KING INDUSTRIES, INC.,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Richard Stearns, U.S. District Judge]
Before
Lynch, Chief Judge,
Boudin and Lipez, Circuit Judges.
J. Michael Conley, with whom Kenney & Conley, P.C. was on
brief, for appellants.
Myles W. McDonough, with whom Christopher M. Reilly and Sloane
and Walsh, LLP were on brief, for appellee.
November 2, 2012
LYNCH, Chief Judge. This case involves the doctrine of
claim preclusion.
Dean Hatch was severely injured in a workplace accident
and sued Trail King, the custom manufacturer of the trailer
involved in the accident, in October 2007. The sad details of the
accident and resulting injuries are set forth in our opinion in
Hatch v. Trail King Industries, Inc., 656 F.3d 59 (1st Cir. 2011).
There, we affirmed a jury's finding, in September of
2010, that defendant had not been negligent nor in breach of any
warranty, against claims of instructional error and error in the
ruling on a motion in limine. Id. at 60-61. On January 19, 2010,
in the trial court in that diversity case, plaintiffs had belatedly
attempted to amend their complaint to add another claim, one under
Mass. Gen. Laws c.93A for unfair and deceptive trade practices.
The trial judge denied the motion, finding the effort to amend
untimely. The plaintiffs did not appeal this denial in their
earlier appeal.
This case, which started in 2010 and was stayed during
the 2007 suit, concerns whether the plaintiffs may now maintain an
independent suit for the c.93A claims against Trail King. The
district court thought not, for two reasons: (1) this case
constituted impermissible claim-splitting; and (2) "having heard
the evidence in the jury trial, [it] s[aw] no basis on which it
could reach a different result," because "the issues tried to the
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jury . . . are identical to any meriting 93A consideration." The
trial court dismissed those claims with prejudice.
On appeal, plaintiffs argue broadly that Mass. Gen. Laws
c.93A, § 9(8) provides an exception to the normal rules of res
judicata, a question the state's highest court has not directly
addressed. But context is everything, and on the facts of this
case, we think that both the federal courts and the state courts
would agree that the plaintiffs may not now bring this c.93A claim
because of the failure to appeal from the denial of the motion to
amend. That resolution satisfies any concerns under Erie Railroad
Co. v. Tompkins, 304 U.S. 64 (1938), and avoids extensive
discussion of the effects of the Supreme Court's opinion in Semtek
International Inc. v. Lockheed Martin Corp., 531 U.S. 497 (2001).
I.
The procedural history is important, so it is set forth
in some detail. In October 2007, plaintiffs filed a complaint
against Trail King asserting negligence, breach of warranty, and
loss of consortium (the "2007 action"). On February 21, 2008, the
parties submitted a joint statement to the district court setting
a joint discovery plan and motion schedule, which in relevant part
set a deadline of May 15, 2009 for amending or supplementing the
pleadings. The district court accepted that proposed date as the
deadline for filing amendments. Plaintiffs never requested an
extension of the deadline to amend the pleadings and the court
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never altered it, although the trial court granted a number of
extensions for the completion of discovery.
On January 15, 2010, Trail King moved for summary
judgment. Four days later, on January 19, 2010, more than eight
months after the deadline for amending the pleadings, and more than
four months after the deadline for completion of fact discovery,
plaintiffs moved the court for leave to file a second amended
complaint, asserting claims under Mass. Gen. Laws c.93A, § 2.
Specifically, plaintiffs sought to add c.93A unfair and
deceptive act or practice claims for Trail King's alleged breach of
warranty as well as for certain post-delivery conduct.1 Defendant
opposed the motion for leave to amend, arguing that the amendment
was futile because it failed to state a claim upon which relief
could be granted.
The district court, on March 2, 2010, denied plaintiffs'
motion for leave to amend, stating that "under the discovery
schedule amendments to the pleadings were due in May of 2009."
1
As to the post-delivery conduct, plaintiffs made four
allegations: (1) that defendant made no effort to recall or modify
the trailers despite notice that the trailers were unreasonably
hazardous to load or unload; (2) that defendant discouraged the
utilization of safety chains on existing trailers; (3) that
defendant failed to act upon a request by Advanced Drainage
Systems, Inc. ("ADS"), Hatch's employer, to determine if there were
any safety measures that could be taken to prevent the gates from
falling on drivers; and (4) that when ADS hired a new fleet
manager, Trail King did not advise him of past incidents of falling
gates or of his predecessor's request for an engineering
evaluation.
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Plaintiffs sought reconsideration, representing that
"[t]he anticipated amendment would simply be to add a claim
pursuant to M.G.L. c.93A mirroring the existing warranty claims."
In their supporting memorandum of law, plaintiffs represented that
"because the 93A claim will essentially rise or fall with
Plaintiffs' claim for breach of warranty, the presence of the
additional claim will not impact in any way the parties' pending
motions for summary judgment." Finally, in their renewed motion
for reconsideration, plaintiffs wrote that "the inclusion of a
theory pursuant to Chapter 93A will not change the trial or the
evidence in any material respect." The court denied both the
motion for reconsideration and the renewed motion for
reconsideration.
After being denied, plaintiffs filed a new action in
Massachusetts Superior Court on June 14, 2010. This complaint
asserted the exact same grounds for c.93A relief that had been set
forth in the proposed second amended complaint in the 2007 action:
that as a matter of law, Trail King's breach of warranty
constituted an unfair and deceptive act or practice, and that the
four post-sale actions or inactions by defendant did too.
Defendants removed the case to federal court on diversity
grounds on July 12, 2010. Trail King moved to dismiss the suit and
for a stay in the alternative. The case was then transferred from
Springfield to Boston and was assigned to the same judge who was
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presiding over the 2007 action and who had denied the proposed
second amended complaint as untimely. The district court then
stayed the c.93A action, on August 5, 2010, and reserved ruling on
defendant's motion to dismiss. In opposing defendant's motion to
dismiss, plaintiffs expressly stated that they did not oppose the
granting of a stay.
The 2007 action proceeded to a six-day jury trial.2 The
jury returned a verdict in favor of defendant, rejecting both the
negligence and breach of warranty claims, and the court entered
judgment for the defendant on September 14, 2010.
Plaintiffs appealed the adverse verdict to this court.
Plaintiffs challenged certain jury instructions and a ruling on a
motion in limine, but not the trial court's denial of their motion
for leave to amend, and we affirmed on August 29, 2011. Hatch, 656
F.3d at 59-61.
As to the action filed in 2010, on March 1, 2012,
plaintiffs moved to transfer the stayed c.93A action to the
2
At trial, plaintiffs put on testimony related to the four
acts or omissions that they assert are post-sale conduct
constituting unfair or deceptive acts. They produced testimony as
to the failure to retrofit the trailers, Trail King's alleged
discouragement of ADS from retrofitting its trailers, the adequacy
of Trail King's response to ADS's request for an engineering
solution to the falling gates, and Trail King's alleged lack of
communication to ADS's new fleet manager about the safety history
of the gates. Moreover, at oral argument in this appeal,
plaintiffs' counsel represented to this court that the evidence
presented in the jury trial was essentially the same evidence that
would be presented in the c.93A action.
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Springfield Division. The Boston district court denied the motion;
it also reinstated Trail King's motion to dismiss. On April 11,
2012, the district court dismissed the case with prejudice, ruling
that:
The court agrees with defendant Trail King
that by filing a second and separate Chapter
93A case in Superior Court, plaintiffs have
engaged in impermissible claim-splitting.
Further, although the court recognizes that a
judge may reach a different result on a 93A
claim than the jurys [sic] verdict on non-93A
claims, here the issues tried to the jury and
reached in favor of the defendant (and
affirmed by the First Circuit) are identical
to any meriting 93A consideration. The court,
having heard the evidence in the jury trial,
see [sic] no basis on which it could reach a
different result. The case is dismissed with
prejudice and the clerk will close the case.
This timely appeal followed.
II.
Plaintiffs present this case as being about whether a
separate c.93A action may be maintained after judgment had entered
on the earlier action on non-c.93A claims arising out of the same
transaction or occurrence. They argue that the preclusive effect
of the decision in the 2007 action is to be determined by
Massachusetts res judicata rules pursuant to the Supreme Court's
decision in Semtek, 531 U.S. 497. From that premise, they base
their argument on Mass. Gen. Laws c.93A, § 9(8), which provides
that:
Except as provided in section ten, recovering
or failing to recover an award of damages or
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other relief in any administrative or judicial
proceeding, except proceedings authorized by
this section, by any person entitled to bring
an action under this section, shall not
constitute a bar to, or limitation upon relief
authorized by this section.
They argue this means that claims brought under § 9 are excluded
from the traditional rules of preclusion. The Massachusetts
Supreme Judicial Court ("SJC") has not provided an interpretation
of this statutory provision. See Anderson v. Phoenix Inv. Counsel
of Bos., Inc., 440 N.E.2d 1164, 1167 (Mass. 1982) (stating that the
SJC need not determine the modifying effect, if any, that the
provision has on claim preclusion or issue preclusion).3
Plaintiffs do concede that c.93A, § 9(8) was passed as part of an
effort to supersede the ruling in Gordon v. Hardware Mutual
Casualty Co., 281 N.E.2d 573 (Mass. 1972), which required the
exhaustion of administrative remedies as a condition of a § 9
claim, id. at 577; see Keen v. W. New Eng. Coll., 499 N.E.2d 310,
311 (Mass. App. Ct. 1986), but they argue § 9(8) has a broader
effect.
The question before us is not whether a separate c.93A
claim that has never been raised in a motion to amend in an earlier
action can be maintained in a later separate action. Rather, the
core question before us is whether plaintiffs may bring a second
3
One commentary states that the express language of the
statutory provision seems to permit a split court action, but that
it likely will be found not to abrogate the doctrines of claim
preclusion or issue preclusion. See 52 Mass. Prac. § 7.10.
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action asserting c.93A claims when they earlier sought leave to
amend their complaint to add the c.93A claims, the proposed
amendment was denied as untimely, the underlying case proceeded to
a decision on the merits, the denial of leave to amend was not
appealed, and judgment was entered. We hold that under these facts
the doctrine of claim preclusion applies. That conclusion is
unaltered by the language of c.93A, § 9(8).
A. Standard of Review and Choice of Law
The parties dispute the standard of review that applies.
Plaintiffs argue that we should review the district court's
dismissal de novo. See Andrew Robinson Int'l, Inc. v. Hartford
Fire Ins. Co., 547 F.3d 48, 51 (1st Cir. 2008) (applying de novo
review to a Rule 12(b)(6) dismissal on the ground that the suit was
foreclosed by principles of res judicata). Defendant urges us to
review the dismissal under an abuse of discretion standard, arguing
that such a standard would have applied had plaintiffs appealed the
denial of their motion for leave to amend, Interstate Litho Corp.
v. Brown, 255 F.3d 19, 25 (1st Cir. 2001), and pointing us to the
standard applied in the Tenth Circuit when a district court
dismissed on claim-splitting grounds. See Katz v. Gerardi, 655
F.3d 1212, 1217 (10th Cir. 2011). In our view, the first issue of
whether claim preclusion is available at all in this context
presents an issue of law subject to de novo review. The district
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court's decision to dismiss was within its authority and was
reasonable.
We apply "the law that would be applied by state courts
in the State in which the federal diversity court sits," except
that "in situations in which the state law is incompatible with
federal interests," federal law applies. Semtek, 531 U.S. at 508-
09. The Supreme Court has imposed this rule because "any other
rule would produce the sort of 'forum-shopping . . . and . . .
inequitable administration of the laws' that Erie seeks to avoid."
Id. (alterations in original) (quoting Hanna v. Plumer, 380 U.S.
460, 468 (1965)). We agree with a number of circuit courts who
have read Semtek as applying in successive diversity actions, as is
the case here.4
4
See, e.g., Duane Reade, Inc. v. St. Paul Fire & Marine Ins.
Co., 600 F.3d 190, 195 (2d Cir. 2010) (applying New York law to
govern the effect of a prior diversity judgment in a current
diversity action); Taco Bell Corp. v. TBWA Chait/Day Inc., 552 F.3d
1137, 1144 (9th Cir. 2009) (applying Michigan law in successive
diversity action); Prusky v. ReliaStar Life Ins. Co., 532 F.3d 252,
265 (3d Cir. 2008) (following a prior diversity action, "[t]here is
no dispute that Pennsylvania preclusion law governs in this
diversity action"); Allan Block Corp. v. Cnty. Materials Corp., 512
F.3d 912, 915 (7th Cir. 2008) (stating that in a successive
diversity action the question of whether res judicata precluded the
second action should be governed by state law); Weinberger v.
Tucker, 510 F.3d 486, 491 (4th Cir. 2007) (holding that Virginia
law controlled the preclusive effects of the first diversity
action); Follette v. Wal-Mart Stores, Inc., 41 F.3d 1234, 1237 (8th
Cir. 1994) (stating in a pre-Semtek case that the preclusive effect
of a prior diversity action must be measured in the present
diversity action by state law). However, some circuits apply
federal res judicata principles in successive diversity actions.
See, e.g., Rabo Agrifinance, Inc. v. Terra XXI, Ltd., 583 F.3d 348,
353 (5th Cir. 2009); Rawe v. Liberty Mut. Fire Ins. Co., 462 F.3d
-10-
There is no need to address whether Massachusetts law is
incompatible with federal interests under Semtek because under
either federal or Massachusetts law, the outcome is the same. This
case does not present the sort of problems that Erie, 304 U.S. 64,
sought to avoid.
Defendant relies heavily on a pre-Semtek decision,
Anderson v. Phoenix Investment Counsel of Boston, Inc., 440 N.E.2d
1164 (Mass. 1982), to argue that Massachusetts would apply federal,
not state, claim preclusion law. There, the SJC stated that
"[w]hen a State court is faced with the issue of determining the
preclusive effect of a Federal court's judgment, it is the Federal
law of res judicata which must be examined." Id. at 1167. The SJC
has applied that rule to federal diversity actions. See Whitehall
Co. v. Barletta, 536 N.E.2d 333, 336 (Mass. 1989) (applying the
Anderson rule to an apparent diversity action). However, the SJC
has not clarified the rule in light of Semtek, and it is unclear
that such a rule survives the Semtek decision. We do not need to
resolve this question either.
B. Applying Federal Law, the c.93A Claim is Claim Precluded
If federal law were to apply, plaintiffs lose. Under the
federal law of claim preclusion, "a final judgment on the merits of
521, 528 (6th Cir. 2006). Our pre-Semtek cases applied federal law
to decide the preclusive effect of a prior diversity action. See
Johnson v. SCA Disposal Servs. of New Eng., Inc., 931 F.2d 970, 974
(1st Cir. 1991).
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an action precludes the parties or their privies from relitigating
claims that were raised or could have been raised in that action."
Apparel Art Int'l, Inc. v. Amertex Enters. Ltd., 48 F.3d 576, 583
(1st Cir. 1995). Claim preclusion "relieve[s] parties of the cost
and vexation of multiple lawsuits, conserve[s] judicial resources,
and . . . encourage[s] reliance on adjudication." Breneman v. U.S.
ex rel. FAA, 381 F.3d 33, 38 (1st Cir. 2004) (alterations in
original) (quoting Allen v. McCurry, 449 U.S. 90, 94 (1980))
(internal quotation marks omitted). As the Restatement (Second) of
Judgments § 19 comment a (1982), says, "[t]he rule that a
defendant's judgment acts as a bar to a second action on the same
claim is based largely on the ground that fairness to the
defendant, and sound judicial administration, require that at some
point litigation over the particular controversy come to an end."
The three elements of claim preclusion are: "(1) a final
judgment on the merits in an earlier proceeding, (2) sufficient
identicality between the causes of action asserted in the earlier
and later suits, and (3) sufficient identicality between the
parties in the two actions." Breneman, 381 F.3d at 38 (quoting In
re Colonial Mortg. Bankers Corp., 324 F.3d 12, 16 (1st Cir. 2003))
(internal quotation marks omitted).
It is axiomatic that "claim preclusion doctrine requires
[a party] to live with [its strategic] choices." Airframe Sys.,
Inc. v. Raytheon Co., 601 F.3d 9, 11 (1st Cir. 2010). Those
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strategic choices include whether to attempt to amend a complaint
and whether to appeal a denial of such an attempt. When a party
chooses to move for leave to amend its complaint and then not to
appeal denial of that motion, the party "is not entitled to a
second opportunity [in a later action] to litigate [the] claim"
that the party sought to add. Id. at 16. Instead, the party's
"recourse [is] to appeal, not to start a new action." Id.; Johnson
v. SCA Disposal Servs. of New Eng., Inc., 931 F.2d 970, 976 (1st
Cir. 1991) ("It is widely accepted that appeal is the plaintiff's
only recourse" where a motion to amend is denied as untimely).
This is a well-accepted principle. As described by
commentators,
It appears well-settled . . . that claim
preclusion bars a second action on the part
excluded from the first action. This result
is sound. The abstract theory that amendment
should be freely allowed is widely honored in
practice. There is likely to be good reason
when the court that has control of the first
action concludes that a party should not be
allowed to advance matters so closely related
to the action as to be part of a single claim.
Unless the court can be persuaded to direct
that denial of leave to amend is without
prejudice to advancing the new matter in a
separate action, preclusion should apply. Any
error should be corrected by appeal in the
first proceeding.
18 Wright & Miller, Federal Practice and Procedure § 4412
(footnotes omitted).
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A number of our sister circuits have so held. "It is
well settled that denial of leave to amend constitutes res judicata
on the merits of the claims which were the subject of the proposed
amended pleading." King v. Hoover Group, Inc., 958 F.2d 219, 222-
23 (8th Cir. 1992) (citing Carter v. Money Tree Co., 532 F.2d 113,
115 (8th Cir. 1976)).5
Plaintiffs made a strategic decision to try to add the
c.93A claims more than eight months after the deadline for amending
the pleadings had passed, and four months after discovery had
closed, without notice to defendant during discovery that it faced
a c.93A claim. They also made a strategic choice not to appeal the
district court's denial of their motion for leave to amend, even
though they could have. Under federal law, they must live with
those choices, absent some strong countervailing interest, which is
not present here. We discuss below why we think c.93A, § 9(8)
would not provide an exception.
5
See also Prof'l Mgmt. Assocs., Inc. v. KPMG LLP, 345 F.3d
1030, 1032 (8th Cir. 2003) (per curiam) (stating that res judicata
applies, "even when denial of leave to amend is based on reasons
other than the merits, such as timeliness"); EFCO Corp. v. U.W.
Marx, Inc., 124 F.3d 394, 399-400 (2d Cir. 1997) ("Where a
plaintiff's motion to amend its complaint in the first action is
denied, and plaintiff fails to appeal the denial, res judicata
applies to the claims sought to be added in the proposed amended
complaint."); Qualicare-Walsh, Inc. v. Ward, 947 F.2d 823, 826 (6th
Cir. 1991) (where judge denied request to amend complaint and
plaintiffs chose not to appeal, the judge's determination became a
final judgment and the doctrine of res judicata applied).
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C. Because of the Failure to Appeal the Denial of the Motion
to Amend, the c.93A Claim Is Subject to Claim Preclusion
Under Massachusetts Law
As noted, there is no relevant SJC precedent on the
meaning of c.93A, § 9(8). The SJC also has not directly answered
whether, generally, the failure to appeal the denial of leave to
amend, where the denial is on the grounds of untimeliness, and the
underlying case proceeds to a final judgment, subjects the claims
in the proposed amendment to later claim preclusion. See Shahidi
v. Michael, No. 1624, 2005 WL 3294663, at *2 & n.5 (Mass. App. Div.
Nov. 22, 2005) (finding preclusion). Where, as here, that court
has not spoken directly to an issue, "the federal court must make
an informed prophecy as to the state court's likely stance."
Andrew Robinson Int'l, 547 F.3d at 51. In completing that inquiry,
we look to analogous state court decisions, persuasive opinions
from courts of other jurisdictions,6 learned treatises, and any
6
Courts applying other states' laws have held that denial of
leave to amend constitutes a final judgment on the merits,
subjecting those claims to claim preclusion. See, e.g., Gonsalves
v. Bingel, 5 A.3d 768, 783 (Md. Ct. Spec. App. 2010) ("We agree
with the position of the authorities . . . that a plaintiff who is
denied leave to amend his or her complaint to add additional claims
. . . is nonetheless barred from raising those claims in a second
suit based on the same transaction or series of transactions as the
first."); Kaye v. S & S Tree Horticulture Specialists, Inc., No.
A08-1027, 2009 WL 1311808, at *3 (Minn. Ct. App. May 12, 2009)
(stating that the denial of a motion to amend is given res judicata
effect "even when denial of leave is based on procedural reasons
other than the merits of the case"); Bush v. Dictaphone Corp., No.
98AP-585, 1999 WL 178370, at *5 (Ohio Ct. App. Mar. 30, 1999) (per
curiam) (stating that "decisions on motions to amend typically are
res judicata to further action on the claims sought to be included
in the amended pleading," and that "[a] plaintiff will be bound by
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relevant policy rationales. Id.; Blinzler v. Marriott Int'l, Inc.,
81 F.3d 1148, 1151 (1st Cir. 1996).
Massachusetts law recognizes claim preclusion, which
"makes a valid final judgment conclusive on the parties . . . and
prevents relitigation of all matters that were or could have been
adjudicated in the action." Andrew Robinson Int'l, 547 F.3d at 52(alteration in original) (quoting Kobrin v. Bd. of Registration in
Med., 832 N.E.2d 628, 634 (Mass. 2005)) (internal quotations marks
omitted). Its operation requires the same three elements as
federal law. See Kobrin, 832 N.E.2d at 634 (listing the factors).
We have little doubt that the SJC would adopt the
conventional rule that normally a failure to appeal from a denial
of a motion to add a claim precludes the later assertion of such a
claim in a new action. There are many reasons: Massachusetts law
follows the Restatement and this is the Restatement result; the
application of basic state preclusion principles reaches the
result; and, significantly, an older Massachusetts SJC precedent
virtually compels the conclusion.
"Massachusetts courts apply res judicata in a thoroughly
conventional way," Andrew Robinson Int'l, 547 F.3d at 54, and they
that preclusive effect unless the denial is reversed on appeal");
see also Dall v. Goulet, 871 F. Supp. 518, 521 (D. Me. 1994)
(federal court holding that under state law, "[t]he Superior
Court's refusal to grant leave to amend has a preclusive effect on
Plaintiff's attempt to raise the identical claims in subsequent
litigation").
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follow the Restatement. See, e.g., Bevilacqua v. Rodriguez, 955
N.E.2d 884, 898 (Mass. 2011) (citing to section 11 of the
Restatement (Second) of Judgments); Dep't of Revenue v. Jarvenpaa,
534 N.E.2d 286, 289 (Mass. 1989) (looking to section 20); Osserman
v. Jacobs, 339 N.E.2d 193, 196 (Mass. 1975) (looking to the current
section 19).
According to the Restatement, "[i]ncreasingly . . . by
statute, rule, or court decision, judgments not passing directly on
the substance of the claim have come to operate as a bar," because
"fairness to the defendant, and sound judicial administration,
require that at some point litigation over the particular
controversy come to an end." Restatement (Second) of Judgments
§ 19 cmt. a. Claims can be precluded where a plaintiff was not
permitted to prove the claims during the first action because "they
were not alleged in the complaint and an application to amend the
complaint came too late." Id. § 25 cmt. b. That is the case here.
Under Massachusetts law, the denial of the motion to
amend is a final judgment. The parties were fully heard; the
district court provided a reasoned opinion, stating that it denied
leave to amend on the ground of untimeliness; and the decision was
appealable because the case proceeded to a judgment on the merits,
and it was in fact appealed. See Tausevich v. Bd. of Appeals of
Stoughton, 521 N.E.2d 385, 387 (Mass. 1988). Also, there was a
dismissal on the merits. Cf. Mass. R. Civ. P. 41(b)(3) (stating
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that, except for circumstances that do not exist here "a dismissal
under this subdivision (b) and any dismissal not provided for in
this rule, other than a dismissal for lack of jurisdiction, for
improper venue, or for failure to join a party under Rule 19 . . .
operates as an adjudication upon the merits").
Significantly, older SJC precedent virtually compels our
conclusion. In the context of demurrers, the SJC has held that the
pleading dismissed as defective bars a second action for the same
cause of action where "the plaintiff had been granted leave to
amend his earlier declaration and had neglected or refused to do
so." Osserman, 339 N.E.2d at 195 (Kaplan, J.) (quoting Hacker v.
Beck, 91 N.E.2d 832, 834 (Mass. 1950)) (internal quotation mark
omitted).
In Osserman, Justice Kaplan explained that where
plaintiffs have been given fair and ample opportunity to assert
their rights, they are not "allowed to spurn the opportunity,
suffer judgment, and, without testing the judgment by appeal, start
another action on the same cause." Id. Earlier cases were cited
to this effect. See Elfman v. Glaser, 47 N.E.2d 925, 928 (Mass.
1943) ("The doctrine of res judicata, therefore, applies
where . . . the plaintiff has had ample opportunity to state his
cause of action completely and correctly so as to have the issues
tried but has refused to embrace that opportunity."); Whitney v.
Whitney, 13 N.E.2d 401, 403 (Mass. 1938) (same). The SJC predicted
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that such reasoning "may gain added strength" under the modern
rules of procedure, "which allow such extensive freedom of
amendment that there is less reason than in earlier days for
recourse to successive actions on the same claim."7 Osserman, 339
N.E.2d at 196. The same logic applies here, where plaintiffs were
given ample opportunity to amend their complaint8 but failed to
timely do so and did not appeal the denial.9
This leaves the question of whether the SJC, in light of
the language of c.93A, § 9(8), would nonetheless deviate from
normal claim preclusion rules when there is a failure to appeal
from a denial of a motion to amend and the subject matter of that
7
We have applied similar logic to explain why the denial of
attempts to amend complaints to add additional claims should be
given preclusive effect. See Johnson, 931 F.2d at 976 & n.19
(explaining that appeal is the only recourse when a motion to amend
is denied because "the unchallenged circumstances of a likely
ruling of res judicata would have been a powerful factor in favor
of reversal in view of F.R.Civ.P. Rule 15, which mandates that
'leave [to amend] shall be freely given when justice so requires.'"
(alteration in original) (quoting Fed. R. Civ. P. 15)).
8
Plaintiffs allege that the c.93A claims could not have been
included in the original action or added before expiration of the
time set for amendments. However, plaintiffs had access to the
information pertaining to the "post-sale conduct" months in advance
of the deadline to amend. Trail King served interrogatory answers
on plaintiffs on December 3, 2008, five months before the deadline
to amend, which addressed post-sale conduct.
9
The only Massachusetts lower court opinion we have found
agrees with our conclusion. See Shahidi v. Michael, No. 1624, 2005
WL 3294663, at *2 (Mass. App. Div. Nov. 22, 2005) (stating that
failure to appeal the denial of a motion to amend "was fatal"
because "the denial of a motion to amend to add a claim in the
first action must be challenged directly by way of appeal").
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motion is a c.93A claim. We think that is not likely. Normally,
the subject matter of a motion to amend is not relevant to the
reasons for application of res judicata. See, e.g., Prof'l Mgmt.
Assocs., Inc. v. KPMG LLC, 345 F.3d 1030, 1032 (8th Cir. 2003) (per
curiam) (not looking to subject matter of proposed amendment in
analysis).
We recognize that there may be statutory exceptions to
the normal rules of claim preclusion. Restatement (Second) of
Judgments §§ 20, 26 (1982).10 But, in our view, under the plain
language of c.93A, § 9(8), the provision does not apply here. The
"bar to" relief was not the outcome as to an award of damages in
the 2007 action. See Mass. Gen. Laws ch. 93A, § 9(8) (stating that
"recovering or failing to recover an award of damages," except in
proceedings authorized by the section, "shall not constitute a bar
to" relief). Rather, the bar to relief comes from the attempt to
amend to add a claim, regardless of the nature of the claim, and
the failure to have appealed the denial of leave to amend. That
10
Section 20(1)(c) of the Restatement states that "(1) A
personal judgment for the defendant, although valid and final, does
not bar another action by the plaintiff on the same claim: . . .
(c) When by statute or rule of court the judgment does not operate
as a bar to another action on the same claim, or does not so
operate unless the court specifies, and no such specification is
made." Restatement (Second) of Judgments § 20(1)(c). Section
26(1)(d) states that the general rule against claim-splitting does
not apply when "[t]he judgment in the first action was plainly
inconsistent with the fair and equitable implementation of a
statutory or constitutional scheme, or it is the sense of the
scheme that the plaintiff should be permitted to split his claim."
Id. § 26(1)(d).
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section of c.93A does not purport to address rules of courts or of
civil procedure about amendment of complaints. There is no clear
statement from the legislature of an intent to abrogate the common
law rule in these circumstances.
There is no support for plaintiffs' argument that this
case is like Department of Revenue v. Jarvenpaa, 534 N.E.2d 286,
and that some public policy exists to override the application of
traditional claim preclusion. There, the SJC held that an action
by a minor child under Mass. Gen. Laws c.209C for child support was
not barred by an earlier action brought by the Commonwealth, in
which a jury found the defendant not guilty on paternity charges,
but that the Department of Revenue was barred. Id. at 289-91. The
court held that the legislature had intended in Mass. Gen. Laws
c.209C, § 22(d), to permit the child to readjudicate the issue of
paternity, and this was consonant with the general rule that the
minor child was not in privity with the state. Id. at 289-90. The
court found no issue was raised of "legislative intrusion into
judicial prerogatives." Id. at 291. By contrast, there is no
question of privity here because the plaintiffs are the same in
both actions. Plaintiffs' position would not be consonant with
traditional norms as to claim-splitting. Further, their position
would raise questions of intrusion into judicial prerogatives,
which the SJC explicitly noted in Jarvenpaa were both relevant and
not present in that case. Id. There was no error of law.
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Nor was there any unfairness here. The plaintiffs
themselves represented to the trial court that the c.93A claims
would essentially depend on the outcome of the warranty and
negligence claims. In fact, the plaintiffs told the court that the
proposed amendment "would simply be to add a claim pursuant to
M.G.L. c.93A mirroring the existing warranty claims" (emphasis
added), that "the 93A claim will essentially rise or fall with
Plaintiffs' claim for breach of warranty" (emphasis added), and
that "the inclusion of a theory pursuant to Chapter 93A will not
change the trial or the evidence in any material respect" (emphasis
added).
D. Rejection of Plaintiffs' Argument that Trail King Acquiesced
or Is Estopped
Plaintiffs make a final argument that Trail King
acquiesced to the separate 2010 action through its efforts to keep
the c.93A claims out of the 2007 action and that Trail King should
be estopped from asserting a defense based on preclusion.
The argument is without merit and has been rejected in
our cases. We have affirmed a dismissal on grounds of res judicata
where a defendant had first opposed consolidation of two cases.
Diversified Foods, Inc. v. First Nat'l Bank of Bos., 985 F.2d 27,
31 (1st Cir. 1993) ("[W]hen a plaintiff has chosen to bring two
lawsuits in the same time frame relating to the same operative
facts, it is hard to see why the defendant should not be able to
resist consolidation on proper grounds, such as undue delay."); see
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also Smith v. Smith, No. 111386, 2011 WL 7090711, at *6 (Mass.
Super. Ct. Nov. 15, 2011) (rejecting, as without merit, an argument
that a court expressed an intent to allow separate actions when it
denied a motion to amend). So too here.
Likewise, any estoppel argument asserted against Trail
King fails. Trail King's positions were not inconsistent, the
district court was not misled, and Trail King did not seek an
unfair advantage. See New Hampshire v. Maine, 532 U.S. 742, 750-51
(2001); see also Otis v. Arbella Mut. Ins. Co., 824 N.E.2d 23, 29
(Mass. 2005).
III.
We stress that our decision does not address the question
of whether the language of c.93A, § 9(8) would have permitted the
filing of a new c.93A action following entry of judgment in the
2007 case if plaintiffs had not sought leave to amend.
Nor do we address the district court's second ground --
that based on the evidence it heard at trial, which plaintiffs
identified as going as well to the c.93A claims, it would have
denied the c.93A claims in any event.
Affirmed.
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