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Apodaca v. AAA Gas Co.3/11/2003
use our modern procedural system permits considerable freedom to amend, " he law of res judicata now reflects the expectation that parties who are given the capacity to present their `entire controversies' shall in fact do so." Restatement § 24 cmt. a.
However, we have also held that res judicata applies not only where a claim was actually litigated in the first action but also where it could have been litigated. Bank of Santa Fe v. Marcy Plaza Assocs., 2002-NMCA-014, 14, 131 N.M. 537, 40 P.3d 442; see Wolford, 1999-NMCA-024, 17-18; Anaya, 1996-NMCA-092, 7-9; Ford, 119 N.M. at 414, 891 P.2d at 555. When a plaintiff fails to take advantage of this opportunity in a timely fashion, however, the claim is forever barred. See Moffat, 2002-NMCA-067, 26; See Restatement (Second) of Judgments § 26 cmt. b (1982). The proper recourse for a plaintiff is to appeal the denial, Three Rivers Land Co., 98 N.M. at 696, 652 P.2d at 246; Restatement § 26 cmt. b, and/or request the court to expressly reserve the plaintiff's right to maintain a second action.
In this case the trial court denied Plaintiffs' amendment because it came too late, and we found no abuse of discretion in the trial court's ruling. Plaintiffs now attempt to avoid the trial court's ruling, which we found proper, by asking this Court to find error in the dismissal of the second complaint because they did not have a full and fair opportunity to litigate the claims in the first action. In essence, Plaintiffs argue they should be allowed to split their claims because the trial court forced that decision on them by denying the amendment. We disagree. The only applicable exception we find to the rule precluding claim splitting is where the court expressly reserves a plaintiff's right to maintain a second action. Restatement § 26(1)(b). We have previously held that "the trial court's refusal to grant leave to amend the complaint is not a reservation by the court." Three Rivers Land Co., 98 N.M. at 696, 652 P.2d at 246 (internal quotation marks omitted). While we have found no New Mexico precedent on point, several federal jurisdictions have held that the " enial of leave to amend does not negate an otherwise valid defense of res judicata, particularly when that denial is premised upon the party's own dilatory conduct." U.S. Truck Co. v. Nat'l Am. Ins. Co., 186 F. Supp. 2d 1184, 1190 (W.D. Okla. 2002); accord King v. Hoover Group, Inc., 958 F.2d 219, 222-23 (8th Cir. 1992); Johnson v. SCA Disposal Servs., Inc., 931 F.2d 970, 975 (1st Cir. 1991); Petromanagement Corp. v. Acme-Thomas Joint Venture, 835 F.2d 1329, 1334 (10th Cir. 1988); Interstate Pipe Maint., Inc. v. FMC Corp., 775 F.2d 1495, 1497-98 (11th Cir. 1985) (per curiam); Nilsen v. City of Moss Point, Miss., 701 F.2d 556, 563 (5th Cir 1983); Poe v. John Deere Co., 695 F.2d 1103, 1107 (8th Cir. 1982). Federal and New Mexico law rely on the Restatement for guidance in this matter, see Ford, 119 N.M. at 413, 891 P.2d at 553, and we agree with those federal courts. Plaintiffs availed themselves of the opportunity to litigate their claims too late in the first action. The denial of leave to amend does not negate an otherwise valid defense of res judicata.
Plaintiffs invoke a plea for fairness and ask us to make an exception to preclusion principles because of the inflexible approach of the trial court in refusing to allow the amendment. However, mere assertion of error does not compel an exception to the rule precluding claim splitting. See Restatement (Second) of Judgments § 28 cmt. j (1982). There must be clear and convincing need of an extraordinary and compelling reason to overcome policies favoring preclusion of a second action. Id. § 28(5) & cmt. g. Such instances a
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