On October 27, 2021, the Second Department issued a decision in Jacobson Dev. Group, LLC v. Grossman, 2021 NY Slip Op. 05851, holding that res judicata applies to claims that could have been brought in a prior action but were not, explaining:
Under res judicata, or claim preclusion, a valid final judgment bars future actions between the same parties on the same cause of action. One linchpin of res judicata is an identity of parties actually litigating successive actions against each other: the doctrine applies only when a claim between the parties has been previously brought to a final conclusion. The doctrine of res judicata operates to preclude the reconsideration of claims actually litigated and resolved in a prior proceeding, as well as claims for different relief against the same party which arise out of the same factual grouping or transaction, and which should have or could have been resolved in the prior proceeding. A pragmatic test has been applied to make this determination—analyzing whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties expectations or business understanding or usage.
Here, the tortious interference with contract and tortious interference with business relations causes of action insofar as asserted against JAZ in this action could have been raised in the prior action, which arose out of the same transaction or series of transactions as those presented in this action. Although the complaint in the prior action alleged breach of the mortgage and the complaint in this action alleged breach of the joint venture agreement, the complaint in the prior action alleged that Yews executed the mortgage in connection with the joint venture agreement, and the joint venture agreement described the terms of the $350,000 loan that was the subject of the prior action. Indeed, the complaint in this action alleged many breaches of the joint venture agreement that overlapped with allegations in the complaint in the prior action. Although Jacobson averred in his affidavit submitted in opposition to the appellants’ motion that the joint venture agreement was not breached until Yews conveyed the premises to JAZ in December 2017, which was after the prior action was commenced, the mere fact that it is possible to characterize each of the alleged acts as an independent breach does not diminish the essential interconnection of these ongoing acts or the expectation that they would be tried as a single unit. Further, the plaintiff learned that Yews had conveyed the premises to JAZ, at the latest, in March 2018 when JAZ intervened as a defendant in the prior action, and the plaintiff could have sought to amend the complaint in the prior action to add causes of action against JAZ alleging tortious interference with contract and tortious interference with business relations. However, the plaintiff did not.
Accordingly, the Supreme Court should have granted that branch of the appellants’ motion which was to dismiss the complaint insofar as asserted against JAZ with prejudice pursuant to CPLR 3211(a)(5) on the ground of res judicata.
(Internal quotations and citations omitted).