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Georgia Supreme Court Clarifies Effect of Two Dismissal Rule – Health Law and Regulation Update Blog Post by Eric Frisch

Health Law and Regulation Update Blog Post by Eric Frisch.

The Georgia Supreme Court has held that the “two dismissal” rule of O.C.G.A. §9-11-41(a)(3) does not bar a second or third action brought against new parties and remanded the case for further proceedings. In this case, plaintiffs filed a wrongful death suit against a physician, several nurses, and several corporate entities arising out of the death of their newborn son. The case was transferred from Fulton County to Chatham County. Within a few months, plaintiffs sued a hospital entity that employed the nurses and the doctor’s practice group employer in two new lawsuits in Fulton County. Neither defendant was sued in the original lawsuit, but the claims were similar but with different relief.

Later, the Chatham County court entered an order permitting an amended complaint to add both new defendants to the original lawsuit, now in Chatham County in April. In early May, plaintiffs dismissed both Fulton County lawsuits. In October, the two new defendants moved to dismiss the claims against them in Chatham County invoking the “two dismissal rule” and arguing that the claims against them in Chatham County were barred by res judicata. After some other procedural machinations, the Chatham County court dismissed the two defendants and the Court of Appeals affirmed.

In reversing, the Court analyzed the history and jurisprudence of the two-dismissal rule. Under O.C.G.A. §9-11-41(a)(3), the filing of a second notice of dismissal of an action operates as an adjudication on the merits of that action. “The plain text of the statute provides that the two-dismissal rule applies to actions, not claims,” the Court wrote. The Court further explained that “an action” is the “judicial means of enforcing a right.”

Next, Section 9-11-41(a)(3) refers to the second dismissal operating as an adjudication on the merits, but the text of the statute does not expressly provide that the dismissal is conclusive as to a third action or that it has the effect of res judicata. Accordingly, Section 9-11-41(a)(3) is not a true defense, res judicata is the defense and the trial court must analyze whether there is truly res judicata. For there to be res judicata, there must be three things: (1) identity of the cause of action, (2) identity of the parties or their privies, and (3) previous adjudication on the merits. If the only thing that is pled is the application of 9-11-41(a)(3)’s two-dismissal rule, then only one factor – adjudication on the merits – has been established. The invoking defendant must also prove the other two factors before there is res judicata.

In this case, the Court held that the Court of Appeals erred by holding that the action against the two new defendants were barred because the original lawsuit sought recovery on the same claims that were dismissed twice. The Court held that the Court of Appeals erred in holding that so long as the second voluntarily dismissed action and the later action shared the same claims, the two-dismissal rule had res judicata effect. The Court reversed and instructed the Court of Appeals to vacate part of its opinion and remand to the trial court for further proceedings into whether there was res judicata.

Take-home: the bottom-line is that the trial court needed to analyze whether the two new defendants were “parties or privies” to the original lawsuit as part of its res judicata analysis and that did not happen. The legal error was in focusing on the wrongful death claims being the same and drawing the conclusion that the actions were barred because the claims were the same. This case is a good reminder of the difference between an action and claims and between res judicata and other preclusion theories.

The case is Joyner v. Leaphart, ___ S.E.2d ___, 2022 WL 2230629 (Ga.Sup.Ct. June 22, 2022).