In Garrett v Washington, No. 323705, the Court of Appeals begrudgingly held that res judicata does not apply to a claim for uninsured motorist benefits that was not asserted with a previous claim for personal protection insurance (“PIP”) benefits. The Court noted that it was bound to reach this holding based on its previous decision in Adam v Bell, ___ Mich App ___; ___ NW2d ___ (2015); however, the Court voiced its disagreement with this decision and declared a conflict with Adam under MCR 7.215(J)(2).
In January 2013, Gary Garrett was involved in an automobile accident with Darita Washington. At the time of the accident, Garrett had a no-fault insurance policy with State Farm. In June 2013, Garrett filed a complaint against State Farm that sought PIP benefits (the “original action”). The original action proceeded to case evaluation and was ultimately settled by mutual acceptance of the case evaluation award. The trial court subsequently dismissed the original action at a settlement conference. On the same day, Garrett filed a negligence claim against Washington and a breach of contract claim for uninsured motorist benefits against State Farm. State Farm filed an answer, asserting res judicata as an affirmative defense. The trial court determined that Garrett’s claim for against State Farm was barred by the doctrine of res judicata and voluntarily dismissed the claim against Washington without prejudice.
On the basis of the Court’s previous decision in Adam, the Court of Appeals reversed the trial court’s decision on the issue of res judicata. In Adam, the Court held that applying res judicata to require mandatory joinder of a potential uninsured motorist claim with a PIP claim would be inconsistent with the statutory treatment of these divergent no-fault claims. Thus, the Court of Appeals concluded that it was bound to reverse the trial court’s decision based on the holding in Adam. However, the Court also noted that it disagreed with the holding in Adam and would decline to reverse if Adam were not binding precedent.
In addition, the Court held that the issue was not moot simply because Garrett voluntarily dismissed his claim against Washington because the dismissal was without prejudice, thereby allowing Garrett to reassert his claim in the future. Finally, the Court held that, on the basis of the holding in Adam, Garrett’s claim was not barred by the compulsory joinder rule in MCR 2.203(A).
