Certainly, the outcome no one who’s been harmed by a breached agreement wants to contemplate is taking your breach of contract case to a judgment on the merits… and losing. However, with the help of a skilled South Florida commercial litigation attorney, your situation, even after a loss on the merits, may still be far from hopeless. Generally, the rules of the law say that there are many things you cannot re-litigate, but the law doesn’t block a subsequent case against the same opponent based on a different breach. The key is to develop the necessary facts to demonstrate that the breach you alleged the second time is distinct from the one that formed the basis of your first case.
An Orlando-area dispute is a good example. Upon learning that a local laundromat was for sale, a potential buyer contacted the seller’s broker about a possible deal. During meetings, the seller represented that “the washers and dryers in the laundromat were fully operational and would remain so for years to come; that the business was debt free and netted a healthy monthly profit; [and] that the laundromat had several large commercial accounts, which would remain with the business after the sale.”
After the sale, the buyer allegedly discovered that the assurances made by the broker and the seller were full of misrepresentations and deceptions. Additionally, the sellers knew the representations were untrue, according to the complaint.
The buyer sued and the seller sought to dismiss, arguing that the claim had been litigated two years earlier, and had ended with the court entering an order of dismissal with prejudice.
What collateral estoppel and res judicata mean and what they do
The trial judge agreed with the seller, determining that the legal doctrines of “collateral estoppel” and “res judicata” applied to the dispute and required dismissal of the buyer’s entire case. (Collateral estoppel is a legal concept that says that a party is not entitled to re-litigate the same issue multiple times if there has been a valid judgment in the earlier litigation. Res judicata says that, one you’ve litigated to a judgment on the merits, you cannot re-litigate that cause of action against that same defendant again.)
Pursuing a second case is possible if you have proof of a separate breach
One of the most instructive pieces of the appeals court’s opinion in this laundromat case is the discussion of just how far collateral estoppel and res judicata do (and don’t) go in wiping out subsequent lawsuits involving the same parties. Collateral estoppel does bar an entity from suing the same opponent multiple times for the same breach of contract, but it does not prohibit the same plaintiff from suing the same defendant multiple times for same cause of action (breach of contract,) if the subsequent lawsuit describes a different breach. While the same parties would bear the same burdens of proof of claims or defenses, the cases would be distinct because the facts would be different. When that happens, the plaintiff can potentially proceed with its subsequent case.
So, what should you make of all this? Know that, if you’ve been harmed by a contract breach, there may often be more avenues for success than you might have thought… even if you’ve already litigated once and failed. To be sure you’re giving yourself the best chance of success, arm yourself with a skillful and knowledgeable legal advocate. Call upon the experienced South Florida commercial litigation attorneys at Stok Kon + Braverman. Our team has many years of effectively representing businesses and businesspeople, and is ready to get to work for you.
Contact us online or by calling (954) 237-1777 to schedule your consultation.