On October 8, 2025, the Second Department issued a decision in Babad v. Oratz, 2025 NY Slip Op. 05490, holding that collateral estoppel does not bar a claim based on facts discovered after judgment in the earlier case, explaining:
Pursuant to CPLR 3211(a)(5), a party may move to dismiss a [complaint] based on the doctrine of res judicata or collateral estoppel. Under the doctrine of res judicata, a disposition on the merits bars litigation between the same parties or those in privity with them of a cause of action arising out of the same transaction or series of transactions as a cause of action that either was raised or could have been raised in the prior proceeding. The doctrine of collateral estoppel precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same. The party seeking the benefit of collateral estoppel bears the burden of proving that the identical issue was necessarily decided in the prior action and is decisive of the present action, and the party against whom preclusion is sought bears the burden of demonstrating the absence of a full and fair opportunity to contest the prior determination.
Here, contrary to the determinations of the Supreme Court, the issues raised in the instant action were not decided and could not have been raised in a prior action to which the plaintiff was a party. Accepting the facts as alleged in the complaint as true, the evidence on which the plaintiff relies was discovered subsequent to entry of a judgment in the prior action. Accordingly, neither res judicata nor collateral estoppel bars the plaintiff from litigating the instant action against the defendants.
(Internal quotations and citations omitted).