## Facts

- James Jarosz and three partners planned to acquire a business (Union Products) through newly formed corporations, with each partner holding a 25% ownership interest after the acquisition.
- Jarosz retained attorney Stephen L. Palmer and Palmer’s firm to assist with the acquisition and financing.
- After the acquisition, Jarosz’s partners terminated him as an employee and officer.
- Jarosz sued the partners and the corporation for wrongful termination and breach of fiduciary duty (the Union Products action), and Palmer represented the partners and the corporation in that litigation.
- In the Union Products action, Jarosz moved to disqualify Palmer, asserting Palmer had previously represented Jarosz individually in the acquisition and therefore had a conflict; the motion judge denied disqualification, finding no attorney-client relationship with Jarosz for that purpose.
- Jarosz then filed a separate action against Palmer alleging breach of contract, breach of fiduciary duty, legal malpractice, and a statutory unfair-practices claim, based on alleged mishandling of Jarosz’s legal affairs in forming the acquisition entities.

## Issues

1. Whether a court deciding a Rule 12(c) motion for judgment on the pleadings may take judicial notice of records and rulings from a related civil action.
2. Whether denial of a motion to disqualify counsel in a prior action collaterally estops the moving party from litigating, in a later malpractice action, the existence of an attorney-client relationship.
3. Whether the disqualification ruling was (a) essential to the merits of the prior action and (b) sufficiently final to support issue preclusion, including where the prior action later ended by stipulation.

## Decision

- The Supreme Judicial Court reversed the dismissal of Jarosz’s malpractice action and remanded for further proceedings.
- The court held that the motion judge in the malpractice action properly took judicial notice of materials from the related Union Products action when deciding the Rule 12(c) motion.
- The court held that collateral estoppel did not bar Jarosz from litigating whether Palmer had represented him individually.
- Although the attorney-client issue had been briefed and decided after a nonevidentiary hearing (satisfying “actually litigated”), the disqualification ruling was not essential to the merits of the Union Products action.
- The disqualification ruling also lacked the requisite finality for issue preclusion because it was not subject to appellate review, and a later stipulation of dismissal could not retroactively supply finality.

## Legal Principles

- A judge may take judicial notice of records in another civil action when deciding a motion for judgment on the pleadings.
- Collateral estoppel requires that the issue was actually litigated, determined by a final judgment, and that the determination was essential to the prior judgment on the merits.
- An issue may be “actually litigated” without an evidentiary hearing or trial if the parties had a fair opportunity to present their positions and the court decided the issue.
- A determination made in resolving an interlocutory procedural motion, when not essential to the substantive merits of the underlying claims, does not support issue preclusion in later litigation.
- A ruling not subject to appellate review may lack sufficient finality to be given preclusive effect; termination of the earlier case by stipulation does not convert a nonappealable interlocutory ruling into a final judgment for preclusion purposes.

## Conclusion

The court permitted Jarosz’s malpractice claims to proceed, holding that a prior, nonappealable denial of a disqualification motion—though actually litigated—was neither essential to the merits of the earlier action nor sufficiently final to collaterally estop litigation of the attorney-client relationship in a later malpractice suit.


Jarosz v. Palmer, 436 Mass. 526 (2002)