## Facts

- Powder Basin Psychiatric Associates, Inc. employed Dr. George J. Ullrich and later terminated his employment.
- After the termination, Powder Basin filed an Idaho state-court action against Ullrich seeking return of office furniture it alleged Ullrich wrongfully took or retained.
- In that first action, Powder Basin also asserted that Ullrich had wrongfully taken money belonging to the practice, but Powder Basin did not amend its complaint to add a separate claim for the money and did not plead a request for an accounting.
- The parties settled the furniture dispute in the first action, and the court dismissed the case with prejudice.
- After the dismissal with prejudice, Powder Basin filed a second Idaho state-court action against Ullrich seeking recovery of the money it claimed he had taken.
- In the second action, Ullrich moved for summary judgment, arguing Powder Basin’s money claim was barred by res judicata (claim preclusion) based on the dismissal with prejudice of the first action.
- Ullrich also asserted a counterclaim in the second action alleging unjust enrichment.
- The trial court granted summary judgment for Ullrich and dismissed Powder Basin’s money claim as precluded; the trial court later dismissed Ullrich’s counterclaim with prejudice.
- Powder Basin appealed, arguing (among other things) that it sought an expedited resolution of the first case, that the furniture and money disputes arose from different transactional facts, and that applying preclusion would be unfair given Ullrich’s counterclaim.

## Issues

1. Whether claim preclusion barred Powder Basin’s second action for money where the first action between the same parties was dismissed with prejudice after settlement and the money dispute could have been pleaded in the first case.
2. Whether the money claim and the furniture claim arose from the same transaction or series of connected transactions for purposes of Idaho’s transactional approach to claim preclusion.
3. Whether a plaintiff’s desire to resolve the first case quickly, or asserted unfairness tied to a defendant’s unjust-enrichment counterclaim, prevents application of claim preclusion.

## Decision

- The Idaho Court of Appeals affirmed the summary judgment for Ullrich.
- The court treated the prior dismissal with prejudice as a final judgment on the merits for purposes of res judicata.
- The court held Powder Basin’s money claim was part of the same transaction (or series of connected transactions) as the earlier furniture dispute and therefore could have been litigated in the first action.
- The court rejected Powder Basin’s argument that its wish for an expedited first case justified bringing a second, related lawsuit later.
- The court rejected Powder Basin’s fairness argument tied to Ullrich’s counterclaim, noting the counterclaim had ultimately been dismissed with prejudice.

## Legal Principles

- Claim preclusion applies when (1) the parties are the same (or in privity), (2) the earlier action ended in a final judgment on the merits, and (3) the later claim was or could have been litigated in the earlier action.
- Idaho applies a transactional test: claims are the same for res judicata purposes when they arise out of the same transaction or series of connected transactions and would normally be tried together as a convenient unit.
- A settlement followed by a dismissal with prejudice is treated as a final judgment on the merits for claim-preclusion purposes.
- A party may not split a single transaction into separate suits by litigating one part first (e.g., furniture) and reserving another part (e.g., money) for later, where the later claim could have been pleaded in the first action.
- A litigant’s preference for speed or simplified litigation in the first case does not create an exception to claim preclusion.
- General fairness objections do not defeat claim preclusion where the elements are met, particularly when the opposing party’s related counterclaim has also been dismissed with prejudice.

## Conclusion

Because Powder Basin’s second lawsuit sought recovery of money tied to the same post-termination dispute addressed in the first suit, and because the first suit was settled and dismissed with prejudice, the Idaho Court of Appeals held the money claim could and should have been brought in the first action and was therefore barred by claim preclusion, so summary judgment for Ullrich was affirmed.


Powder Basin Psychiatric Associates, Inc. v. Ullrich, 129 Idaho 658 (1996)