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Children’s Claim, Derived from Parent’s Claim in Previous Lawsuit, Is Barred By Res Judicata

Cochran, et al. v. Griffith Energy Services, Inc., et al.
Civil Case No.: 87 (Court of Appeals of Maryland, May 1, 2012)
by Colleen K. O’Brien, Associate
Semmes, Bowen & Semmes (www.semmes.com)

Here, the Court of Appeals of Maryland applied the doctrine of res judicata to decide whether a pair of adult children (“Petitioners”) were allowed to proceed with a lawsuit against an energy company and its attorneys. The suit was based on the energy company spilling heating oil in the basement of the home of Petitioner’s parents in 2002. Petitioner’s parents had previously sued the company and prevailed in suit involving negligence and breach of contract. Although the children, who were in college at the time of the spill, were not parties to that suit, one of the children testified at trial, and the other child was deposed. During the course of the first litigation, the parents also claimed fraud by the Defendant and its attorneys, but that count was dismissed. Apparently not satisfied with the verdict obtained by their parents, in May 2009, the children sued Griffith Energy Services, Inc. (“Griffith”) and their attorneys (“Respondents”) for fraud and negligent supervision. The trial court granted the Respondents’ Motion to Dismiss, ruling that the claim was barred by res judicata, and the Court of Special Appeals affirmed.

Res judicata has three (3) elements: 1) the parties in the present litigation are the same or in privity with the parties to the earlier litigation; 2) the claim presented in the current action is identical to that determined or that which could have been raised and determined in the prior litigation; and 3) there was a final judgment on the merits in the prior litigation. Petitioners conceded that the second and third elements applied, but disputed whether the first element—privity—was met.

The Court of Appeals cited to numerous cases which supported the fact that a nonparty to a lawsuit, under similar circumstances, could be bound to the results of that lawsuit under res judicata. The rationale is that where a person has full knowledge of pending litigation, but makes no effort to intervene, and permits a conclusion of the litigation without objection, that person is concluded by the proceedings as if he were named on the record. In holding that the children were in privity with their parents, the parties in the first suit, the Court was persuaded by the family relationship, the fact that both cases involved the same residence, and the fact that the same attorney represented the children and the parents in both lawsuits. In addition, the children’s claims were based on alleged misrepresentations and fraud by the Respondents to the parents, not based on any independent fraudulent statements made to the children themselves. This made the children’s claims “inextricably intertwined” with their parent’s claims in the first lawsuit. The Court rejected the argument by the children that privity was destroyed because the parents did not seek damages on their behalf during the first lawsuit. In the context of the case here, the Court held that the fact that damages were not sought on behalf of the children was not a bar to res judicata applying. This is because the children had a direct interest in the first suit and their interests were adequately protected in the first suit. Therefore, the Court of Appeals held that the children were in privity with the parents and that the Court of Special Appeals did not err in holding that their claim was barred by res judicata.