Oral Decision, Not Reduced to Writing, Does Not Get Res Judicata Effect (last case)

Res Judicata
Collateral Estoppel
Law of the Case

Specialized Indus. Servs. Corp. v Carter, 2009 NY Slip Op 09018 (App. Div., 2nd, 2009)

In the underlying action, judgment was entered against the plaintiff upon its default in answering or appearing. The plaintiff obtained an order vacating the default judgment, which was ultimately reversed by this Court (see Dave Sandel, Inc. v Specialized Indus. Servs. Corp., 35 AD3d 790). Generally, a party who has lost a case as a result of alleged fraud or false testimony cannot collaterally attack the judgment in a separate action for damages against the party who adduced the false evidence, and the plaintiff's remedy lies exclusively in moving to vacate the default judgment (see North Shore Envtl. Solutions, Inc. v Glass, 17 AD3d 427; Retina Assoc. of Long Is. v Rosberger, 299 AD2d 533; New York City Tr. Auth. v Morris J. Eisen, P.C., 276 AD2d 78, 87; Yalkowsky v Century Apts. Assoc., 215 AD2d 214, 215). Under an exception to that rule, a separate lawsuit may be brought where the [*2]alleged perjury or fraud in the underlying action was "merely a means to the accomplishment of a larger fraudulent scheme" (Newin Corp. v Hartford Acc. & Indem. Co., 37 NY2d 211, 217) which was "greater in scope than the issues determined in the prior proceeding" (Retina Assoc. of Long Is. v Rosberger, 299 AD2d at 533 [internal quotation marks omitted]). The plaintiff here, in its amended verified complaint and supplemental affidavits, has sufficiently alleged a larger fraudulent scheme to fit within the exception to the rule against collateral attack (see New York City Tr. Auth. v Morris J. Eisen, P.C., 276 AD2d at 80, 87-88; cf. North Shore Envtl. Solutions, Inc. v Glass, 17 AD3d at 428).

Contrary to the defendant's contention, the first cause of action in the amended verified complaint is not barred by the doctrine of res judicata since the Judiciary Law cause of action did not arise out of the factual transaction which was the subject matter of that action (see Matter of Hodes v Axelrod, 70 NY2d 364, 372; Mahler v Campagna, 60 AD3d at 1011; Lazides v P & G Enters., 58 AD3d 607, 609; Triboro Fastener & Chem. Prods. Corp. v Lee, 236 AD2d 603, 603-604). Nor is the first cause of action precluded by principles of collateral estoppel in that the claim was not litigated in the underlying action and much of the evidence upon which the plaintiff relies was discovered subsequent to entry of the default judgment in the underlying action (see Kaufman v Eli Lilly & Co., 65 NY2d 449, 456-457; Izko Sportswear Co., Inc. v Flaum, 25 AD3d at 537; Chambers v City of New York, 309 AD2d 81, 85).

Man Choi Chiu v Chiu, 2009 NY Slip Op 08792, (App. Div., 2nd, 2009)

On a prior appeal in this action, this Court affirmed, inter alia, the Supreme Court's determination to award an attorney's fee to the plaintiffs (see Man Choi Chiu v Chiu, 38 AD3d 619). Thus, the doctrine of the law of the case (see People v Evans, 94 NY2d 499, 502) precludes consideration of whether the plaintiffs were properly awarded an attorney's fee (see Matter of Pantelidis v New York City Bd. of Stds. & Appeals, 43 AD3d 314, affd 10 NY3d 846; Toyos v City of New York, 54 AD3d 628; Combier v Anderson, 34 AD3d 333).

As a general rule, we do not consider any issue raised on a subsequent appeal that was raised, or could have been raised, in an earlier appeal that was dismissed for lack of prosecution, although we have the inherent jurisdiction to do so (see Rubeo v National Grange Mut. Ins. Co., 93 NY2d 750; Bray v Cox, 38 NY2d 350). Here, the defendants appealed from an order of the Supreme Court dated September 7, 2007, which, inter alia, denied their motion to cancel the hearing on the issue of the amount of attorney's fees to be awarded. That appeal was dismissed by decision and order on motion of this Court dated June 18, 2008, for failure to prosecute. We decline to exercise our discretion to determine the merits of that appeal on the instant appeal from the judgment, as amended (see Bray v Cox, 38 NY2d [*2]350; Blue Chip Mtge. Corp. v Strumpf, 50 AD3d 936, 937).

Jespersen v Li Sheng Liang, 2009 NY Slip Op 09000 (App. Div., 2nd, 2009)

As a general rule, a dismissal "with prejudice" signifies that the court intended dismiss the action "on the merits" (Yonkers Contr. v Port Auth. Trans Hudson Corp., 93 NY2d 375, 380). However, an oral decision which has never been reduced to a written order or judgment is not entitled to res judicata effect and thus is ineffective as a bar to subsequent proceedings (see Towne v Asadourian, 277 AD2d 800; Begelman v Begelman, 170 AD2d 562; see also 73 NY Jur 2d, Judgments §§ 354, 436, 437). Moreover, it is clear from the hearing transcript, as well as from the order appealed from, that the Supreme Court did not intend its dismissal of the first action to be on the merits. In addition, while a "duplicate" action is subject to dismissal pursuant to CPLR 3211(a)(4), there was no procedural bar to the plaintiff commencing the second action before the first action had been dismissed.

The bold is mine.