Smith v. Russell, 45 N.Y.2d 18 (1978)

A dismissal based on the statute of limitations operates as a decision on the merits for res judicata purposes, barring a subsequent action on the same claim.

Summary

Plaintiff sued defendant for damages related to a collapsed swimming pool, alleging negligence and breach of contract in the first suit. The action was dismissed as time-barred under the statute of limitations. Plaintiff then commenced a second action alleging strict products liability and breach of warranty based on substantially the same facts. The court held that the dismissal of the first action on statute of limitations grounds acted as a judgment on the merits, precluding the second action under the doctrine of res judicata. Furthermore, the plaintiff, having raised the issue of strict liability in the first action, was estopped from relitigating it in the second.

Facts

Plaintiff purchased a swimming pool from defendant in October 1969, which was installed later that month. The pool collapsed around March 15, 1973. Plaintiff initiated an action on January 7, 1974, alleging negligence and reliance on the defendant’s expertise in swimming pool construction. The bill of particulars alleged the use of inferior materials and insufficient patented braces by the defendant.

Procedural History

In the first action, the defendant moved for summary judgment, arguing the statute of limitations had expired. The plaintiff argued strict liability and tort. The Special Term granted the defendant’s motion, dismissing the case based on the statute of limitations. The plaintiff did not appeal. Plaintiff then commenced a second action. The defendant moved for summary judgment based on res judicata and statute of limitations. The second Special Term granted the defendant’s motion, dismissing the complaint.

Issue(s)

Whether the dismissal of the first action based on the statute of limitations constitutes a decision on the merits, thereby precluding a subsequent action on the same claim under the doctrine of res judicata.

Holding

Yes, because a judicial decision based on the statute of limitations is considered a decision on the merits, preventing the plaintiff from bringing another action to enforce the same claim.

Court’s Reasoning

The court reasoned that when a plaintiff brings an action and is barred by the statute of limitations, the judicial decision is considered to be on the merits. The court cited the Restatement of Judgments, § 49, Comment a, which states this principle directly. Because the first case was dismissed as time-barred, the plaintiff was precluded from bringing a second action based on the same underlying claim. The court further noted that the plaintiff had raised the issue of strict products liability in the first action regarding the statute of limitations issue and was therefore estopped from relitigating it in the second action. The proper course of action for the plaintiff was to appeal the initial determination rather than filing a second lawsuit. As the court stated, “Plaintiffs remedy was an appeal from that determination rather than a second action setting forth the same cause of action as that claimed to have been asserted when the controversy was reviewed initially.”