The Bose Appellate Blog

The Indiana Court of Appeals has recently clarified the analysis used in the third factor of res judicata, namely whether a matter was or could have been determined in a prior action.  In Hilliard v. Jacobs, one business partner (Hilliard) sued the other (Jacobs) in 2003 to force the transfer or termination of two life insurance policies that Jacobs held on Hilliard’s life.  Hilliard was initially successful in the trial court but then died of natural causes during the pendency of Jacobs’ interlocutory appeal.  Jacobs prevailed on appeal, obtained summary judgment in his favor on remand, and successfully defended the trial court’s order after Hilliard’s widow appealed.  Jacobs was declared to be the rightful owner and beneficiary of the policies and, as such, entitled to collect the proceeds.

In 2008, Hilliard’s widow filed a second action in another trial court, this time alleging multiple new claims with the same fundamental objective: forcing Jacobs to return the proceeds so that he would not realize a profit from the policies.  Jacobs prevailed on summary judgment under the doctrine of res judicata, arguing that the summary judgment order was issued by a competent court on the merits and between the same parties.  Furthermore, as Hilliard’s widow freely admitted, all of the claims and supporting evidence were available to Hilliard back in 2003, but he chose not to assert them in the first action for strategic reasons.

On appeal, Hilliard’s widow argued that the claims in the second action could not have been adjudicated in the first action because the relevant evidence supporting the new claims was not before the court in the first action.  This is an invocation of Indiana’s identical evidence test, or “whether identical evidence will support the issues involved in both actions.”  MicroVote General Corp. v. Ind. Election Comm’n., 924 N.E.2d 184, 192 (Ind. Ct. App. 2010).    The Court of Appeals acknowledged the test but declined Hilliard’s invitation to take such a literal interpretation.  In so doing, the Court referenced a 1990 Seventh Circuit case that commented: “understood literally, that approach would confine a plea of res judicata to cases in which the claim in plaintiff’s second suit was identical to the claim in his first, and would invite piecemeal litigation with a vengeance.”  Atkins v. Hancock County Sheriff’s Merit Board, 910 F.2d 403, 405 (7^th Cir. 1990).  Indeed, this dispute has spawned five published appellate opinions since 2004.  The Court instead chose to apply a “practical interpretation of the identical evidence test” and noted that while individual pieces of evidence may differ between actions, the same general evidence would (or could) have been used to adjudicate all of the Hilliards’ claims.  Perhaps the Hilliards’ biggest mistake was to consciously withhold claims and evidence that existed back in 2003.  As it now stands, “A party cannot fail to introduce evidence in the first case and then later claim that the excluded evidence is necessary for the second case, barring res judicata under the identical evidence rule.”  Such a tactic would “completely eviscerate the doctrine of res judicata.”

In the end, Indiana practitioners are best served by asserting all available claims and evidence at the onset of litigation (or as they arise) rather than withholding the same for potential use at a later date.  It appears that intentionally withheld claims and evidence will no longer pass the identical evidence test in Indiana.