Robert Larochelle v. Dover Mortgage Co. d/b/a David A. Bordetsky

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2014-0447, Robert Larochelle v. Dover
Mortgage Co. d/b/a David A. Bordetsky, the court on April 6,
2015, issued the following order:

Having considered the brief, the memorandum of law, and the record
submitted on appeal, we conclude that oral argument is unnecessary in this
case. See Sup. Ct. R. 18(1). We affirm.

The defendant, Dover Mortgage Co. d/b/a David A. Bordetsky, appeals an
order of the Circuit Court (Ashley, J.) in favor of the plaintiff, Robert Larochelle,
on his small claim for the principal amount under a promissory note. The
defendant contends that the trial court erred by failing to find that the plaintiff’s
claim for the principal was barred by the doctrine of res judicata because the
plaintiff could have sued for the principal in a prior small claim action for interest
on the same note.

The applicability of res judicata presents a question of law that we review
de novo. In the Matter of Hampers & Hampers, 166 N.H. 422, 429 (2014). The
essence of the doctrine of res judicata is that a final judgment by a court of
competent jurisdiction is conclusive upon the parties in subsequent litigation
involving the same cause of action, even though the plaintiff is prepared in the
second action to present evidence or grounds or theories of the case not
presented in the first action. Id. A cause of action is the underlying right that is
preserved by bringing a suit or action. Hansa Consult of N. Am. v. Hansaconsult
Ingenieurgesellschaft, 163 N.H. 46, 50 (2011). A cause of action does not include
claims for which the factual basis did not exist at the time of the first action.
West Gate Village Assoc. v. Dubois, 145 N.H. 293, 297 (2000).

In this case, we conclude that the plaintiff’s claims for interest due on the
note from the defendant do not constitute the same cause of action as his claim
for the principal due under the note. The note provides that “[u]pon default . . .,
at the option of the holder, the entire principal amount outstanding and accrued
interest under this note shall at once become due and payable without further
notice or demand to” the defendant. (Emphasis added.) The trial court found,
and the defendant does not contest, that the plaintiff “has successfully obtained
a judgment against the defendant in connection with the interest payments that
were not timely paid” but “has not received the principal of the amount owed.”
The defendant does not cite, nor are we aware of, any authority that, under a
note giving the holder the option of demanding the principal upon default, a
claim for interest is the same cause of action as a claim for principal. Cf. Hansa
Consult, 163 N.H. at 50 (holding action to enforce terms of settlement not same
cause of action as one involving statutory and common law claims); LeTarte v.
West Side Dev. Group, 151 N.H. 291, 294 (2004) (holding, under anticipatory
breach doctrine, failure of obligor under installment contract to make several
payments provides obligee with option to treat non-payment as total breach and
maintain action for all damages under contract); Morgenroth & Assoc’s v. State,
126 N.H. 266, 270 (1985) (holding action to enforce contract not same cause of
action as one involving statutory right to indemnification).

The defendant argues that “as the relief requested in this case was
available at the time [the plaintiff] filed his previous cases, res judicata precludes
the current action.” However, as the trial court correctly stated, a plaintiff is not
compelled to “choose to pursue civil action to collect a principal balance rather
than ongoing interest payments, when he is owed both amounts.” The defendant
argues that the plaintiff “shows no signs of ceasing his propensity to file
piecemeal lawsuits.” However, as the trial court correctly stated, “[w]hile
repeated claims for the interest payments may be inconvenient to the defendant,
he could certainly avoid such legal action if he paid the monies he promised to
pay.”

We conclude that the underlying right in the actions for interest payments
is distinct from the right to bring an action for the principal. Res judicata is
therefore inapplicable as between the two actions. See Morgenroth, 126 N.H. at
270.

Affirmed.

Dalianis, C.J., and Hicks, Conboy, Lynn, and Bassett, JJ., concurred.

Eileen Fox,
Clerk

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