Doctrines of Res Judicata and Collateral Estoppel Precluded Plaintiffs’ Action—Doctrines Clearly Described

The Second Department determined plaintiffs’ breach of contract action was precluded by the doctrines of res judicata and collateral estoppel because all the relevant issues had been raised and determined in defendant’s successful mortgage foreclosure actions. The Second Department offered the following clear descriptions of the res judicata and collateral estoppel doctrines:

The doctrine of res judicata provides that “once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy” … . The doctrine of res judicata bars a party from relitigating any claim which could have been or should have been litigated in a prior proceeding … . Therefore, under res judicata, or claim preclusion, a valid final judgment will bar future actions between the same parties involving the same cause of action … .

The claims asserted by the plaintiffs in this case concern the parties’ rights and obligations under the mortgage agreements between the plaintiffs and the defendant. As such, those claims needed to be—and, in fact, were—raised by the plaintiffs in defending against the foreclosure action, and thus the plaintiffs are barred from relitigating those claims in this action … . * * *

Collateral estoppel, or issue preclusion, precludes a party from relitigating in a subsequent proceeding or action an issue that was raised in a prior action or proceeding and decided against that party or those in privity … . For the bar to apply, the issue must have been material to the first action and “essential to the decision rendered therein,” and it must be the point that is to be determined in the second action, such that “a different judgment in the second would destroy or impair rights or interests established by the first” … . In addition, the party against whom preclusion is sought must have had a “full and fair opportunity to contest the matter in the prior action” … .

In this case, the claims sought to be relitigated are identical to those that were decided against the plaintiffs in the foreclosure action. These claims were material to the action and were essential to the decision rendered. Moreover, the plaintiffs had a full and fair opportunity to contest the prior determination … . SSJ Dev. of Sheepshead Bay I, LLC v Amalgamated Bank, 2015 NY Slip Op 03824, 2nd Dept 5-6-15