Regions Bank v. Prager
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The Supreme Court reversed the decision of the court of appeals affirming the trial court's judgment dismissing Plaintiff's second lawsuit, holding that the doctrine of res judicata did not bar the lawsuit.
Plaintiff originally filed suit against Defendant in the Circuit Court for Shelby County, but, unbeknownst to the parties, the trial court sua sponte dismissed the lawsuit for failure to prosecute. Ten months later, Plaintiff learned of the dismissal and filed a motion to set aside the dismissal. The trial court denied the motion but entered an order stating that the dismissal did not bar Plaintiff from refiling its lawsuit. When Plaintiff subsequently refiled its lawsuit, the trial court granted Defendant's motion to dismiss based on the doctrine of res judicata. The court of appeals affirmed. The Supreme Court reversed the decision of the court of appeals and vacated the judgment of the trial court, holding that the involuntary dismissal of the first suit for failure to prosecute did not operate as an adjudication on the merits, and therefore, the present lawsuit was not barred by the doctrine of res judicata.
Court Description:
Authoring Judge: Chief Justice Jeffrey S. Bivins
Trial Court Judge: Judge James F. Russell
The issue in this appeal is whether the Plaintiff’s lawsuit is barred by the doctrine of res judicata. The Plaintiff originally filed suit against the Defendant in the Circuit Court for Shelby County in May 2014. Unbeknownst to the parties, the trial court sua sponte dismissed the lawsuit for failure to prosecute. Upon learning of the dismissal over ten months later, the Plaintiff moved to set aside the dismissal. The trial court denied the Plaintiff’s request to set aside the dismissal but, articulating an erroneous reading of Rule 41.02(3) of the Tennessee Rules of Civil Procedure, entered an order that stated the dismissal did not bar the Plaintiff from refiling its lawsuit. When the Plaintiff refiled its lawsuit in August 2017, the Defendant filed a motion to dismiss based on the doctrine of res judicata. Despite language to the contrary in its prior order, the trial court granted the Defendant’s motion, holding that the dismissal of the original lawsuit operated as an adjudication on the merits. A divided panel of the Court of Appeals affirmed the trial court’s dismissal of the second lawsuit. We conclude that the doctrine of res judicata does not bar the Plaintiff’s lawsuit. Accordingly, we reverse the decision of the Court of Appeals, vacate the trial court’s judgment, and reinstate the Plaintiff’s lawsuit.
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