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Amec Civil LLC v. Mitsubishi International Corp.

December 28, 2007; as amended January 9, 2008

AMEC CIVIL LLC, APPELLANT,
v.
MITSUBISHI INTERNATIONAL CORPORATION., APPELLEE.



Appeal from the Superior Court of the District of Columbia (CAB-4162-06) (Hon. Russell F. Canan, Trial Judge).

The opinion of the court was delivered by: Farrell, Associate Judge

Argued December 4, 2007

Before FARRELL, KRAMER, and FISHER, Associate Judges.

The issue before us, governed by Virginia law, is whether res judicata barred appellant's action for attorney's fees filed in the Superior Court of the District of Columbia after appellant had withdrawn the claim from underlying breach-of-contract litigation in Virginia, without obtaining either agreement by appellee or authorization by the court to defer the claim to later proceedings. We hold, with the trial judge, that appellant was precluded in these circumstances from pursuing its claim for attorney's fees in a separate action.

I.

AMEC Civil LLC (hereafter AMEC) sued Mitsubishi International Corp. (MIC) in Virginia state court alleging breach of contract after MIC failed to supply steel for highway bridges under the parties' contract related to a construction project in Virginia. The jury returned a verdict for AMEC and awarded damages for breach, an award MIC paid without taking an appeal.

The parties' contract also contained an indemnification provision, which provided in relevant part:

Without limitation of any other right or remedy available to Purchaser hereunder or at law, Seller shall protect, defend, indemnify and hold Purchaser and Owner harmless from and against any and all claims, losses, damages, liabilities, fines, penalties, costs and expenses (including attorneys' fees) directly or indirectly arising out of (i) Seller's refusal or failure to perform or observe any of Seller's agreements, undertakings, warranties or obligations referred to hereunder, including, without limitation, the delivery, furnishing or utilization in the Project of any non-conforming materials and/or labor . . . . This indemnity shall not apply to the extent that the matter is caused by the negligent act or omission of any or all of the persons or entities indemnified hereunder.

Accordingly, in AMEC's suit for breach of contract, the complaint had included a request for attorney's fees as part of its ad damnum clause.*fn1 During trial, however, AMEC withdrew the claim for attorney's fees after a brief colloquy on the subject, and the jury heard no evidence about fees and was not instructed on the issue.

Instead, after receiving judgment on the breach of contract claim, AMEC brought suit in the Superior Court of the District of Columbia seeking to enforce the attorney's fee provision. MIC moved for summary judgment, arguing that AMEC was splitting its claims in a manner that Virginia law prohibits, and that its failure to pursue the claim for legal fees to judgment in the Virginia suit barred recovery under principles of res judicata. After a hearing, the trial judge agreed, stating that AMEC had "had a full opportunity to submit any evidence they wanted [on the fee issue] at trial and could have pursued its claim to verdict."

This appeal by AMEC followed. We review both the grant of summary judgment and the trial court's application of res judicata principles de novo. See Carrollsburg v. Anderson, 791 A.2d 54, 58 (D.C. 2002); Osei-Kuffnor v. Argana, 618 A.2d 712, 713 (D.C. 1993). The parties are in accord that, by operation of the contract, Virginia law governs the substantive issues presented.

II.

Virginia law requires a litigant raising the defense of res judicata to establish four elements: (i) "identity of the remedies sought"; (ii) "identity of the cause of action"; (iii) "identity of the parties"; and (iv) "identity of the quality of the persons for or against whom the claim is made." Davis v. Marshall Homes, Inc., 576 S.E.2d 504, 506 (Va. 2003). Res judicata bars the assertion in a subsequent proceeding not only of all claims actually brought in an earlier proceeding, but of claims constituting the same cause of action that could have been brought in the earlier proceeding. See Lofton Ridge, LLC v. Norfolk Southern Railway Co., 601 S.E.2d 648, 650 (Va. 2004) ("When the second suit is between the same parties as the first, and on the same cause of action, the judgment in the former is conclusive of the latter, not only as to every question which was decided, but also as to every other matter which the parties might have litigated and had determined . . . .").

In dispute here is primarily the question of whether AMEC's claim for attorney's fees is part of "the same cause of action" as its underlying claims for breach of contract. In our view, Virginia law beginning with Sands v. Roller, 86 S.E. 857 (Va. 1915), provides a clear answer. Sands, like this case, involved successive actions for breach of agreement (there failure to make payments due on promissory notes) and for related legal fees and expenses. As the Virginia Supreme Court described the sequence: "The present controversy arises from a suit brought . . . after the judgment was rendered [for the plaintiff on the contract], and since it was satisfied, to recover the fees and expenses ...


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