Kennedy v. Jones
44 F.R.D. 52, 1968 U.S. Dist. LEXIS 12631, 12 Fed. R. Serv. 2d 107 (1968)
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Rule of Law:
Under Federal Rule of Civil Procedure 13(a), a party is barred by res judicata from bringing a subsequent action on a claim that was a compulsory counterclaim in a prior, fully litigated case, even if their insurance-appointed counsel failed to advise them of the requirement to file the counterclaim.
Facts:
- On September 10, 1965, a vehicle accident occurred involving a tractor-trailer operated by Jessie Lee Kennedy and a vehicle occupied by Mildred Eva Jones.
- Mildred Eva Jones died as a result of the accident.
- Jessie Lee Kennedy sustained personal injuries in the same accident.
- At the time of the accident, Kennedy was operating the tractor-trailer, owned by Murray Manufacturing Corporation, within the scope of his employment.
Procedural Posture:
- Leonard E. Jones, Administrator of the Estate of Mildred Eva Jones, filed a lawsuit (Civil Action No. 4623) against Jessie Lee Kennedy and his employer in federal district court.
- The liability insurance carrier for Kennedy's employer retained a law firm to defend both Kennedy and the company.
- The retained law firm filed a joint answer on behalf of the defendants but did not file a counterclaim for Kennedy's personal injuries.
- The law firm never advised Kennedy of his right or obligation to file a counterclaim, or that failure to do so would bar a future claim.
- The case was tried to a jury, which returned a verdict in favor of Kennedy.
- After the final judgment, Kennedy filed a new lawsuit (Civil Action No. 5394) against the Jones Estate to recover for his own injuries from the same accident.
- The Jones Estate, as defendant in the new action, filed a motion for summary judgment, arguing Kennedy's claim was barred by Rule 13(a).
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Issue:
Does a party's failure to file a compulsory counterclaim in a prior, fully litigated action bar a subsequent independent action on that claim, even when the party's insurance-appointed counsel never advised him of the need to file the counterclaim?
Opinions:
Majority - Hoffman, C.J.
Yes. The failure to plead a compulsory counterclaim under Rule 13(a) in a prior action that has been fully litigated to a final judgment bars a subsequent action on that claim. The court reasoned that Rule 13(a)'s use of the word 'shall' makes it mandatory. The rule is predicated on the theory of res judicata, meaning that once a party has had an opportunity to litigate a cause of action, they are barred from reasserting it. Kennedy had this opportunity in the first lawsuit, which proceeded to a final verdict. The court distinguished this case from those settled without the defendant's knowledge, stating that to create an exception for a party who was not advised of the rule by their insurance-appointed counsel would 'engraft numerous exceptions' to the rule and undermine its purpose of finality and judicial economy. The failure to file constitutes a waiver, and the party is precluded by res judicata from suing upon the claim again.
Analysis:
This decision reinforces the strict and mandatory nature of the compulsory counterclaim rule under FRCP 13(a). It establishes that the consequence of failing to plead—the barring of a subsequent claim—is not excused by an attorney's failure to inform their client of the rule, particularly when the client is represented by insurance counsel. The ruling places a heavy burden on defendants and their counsel to identify and plead all claims arising from the same transaction or occurrence, emphasizing finality and judicial economy over potential inequities arising from lawyer-client communication breakdowns. This strengthens the res judicata effect of judgments and discourages piecemeal litigation.
