## Facts

- In a marital dissolution, Katherine Rucker and her husband Robert Rucker agreed to use an independent appraiser to value Robert’s 50% interest in The Tile Shop.
- Based on information provided by Robert and company personnel, the appraiser valued Robert’s interest at about $7.125 million.
- Robert’s attorney, Steven B. Schmidt of Rider Bennett, LLP, drafted the marriage termination agreement; Katherine received a $2.4 million property settlement, and Robert represented he had fully disclosed his business interests.
- After the dissolution judgment (entered Oct. 1, 2001), Katherine sued Robert for fraud on the court based on alleged intentional misrepresentations and nondisclosure that undervalued the business and produced an unfair settlement.
- The trial court in that action found Robert engaged in material misrepresentation and nondisclosure leading to a grossly unfair settlement; the matter later settled on appeal.
- Katherine then sued Schmidt and Rider Bennett for fraud, fraud on the court, and aiding and abetting fraud based on their alleged involvement in the nondisclosure and concealment.
- The district court granted summary judgment to Schmidt and Rider Bennett, holding the claims were barred by res judicata because the attorneys were in privity with Robert due to the attorney-client relationship.
- The court of appeals reversed, concluding the attorney-client relationship alone did not establish privity; the Minnesota Supreme Court granted review.

## Issues

1. Whether res judicata barred Katherine Rucker’s tort claims against her ex-husband’s attorney and law firm on the theory that an attorney and client are in privity solely because of the attorney-client relationship.

## Decision

- The Minnesota Supreme Court affirmed the court of appeals and reversed summary judgment for Schmidt and Rider Bennett.
- The court held that an attorney-client relationship, by itself, does not establish privity for res judicata purposes.
- Because Schmidt and Rider Bennett were not in privity with Robert, Katherine’s prior litigation against Robert did not preclude her separate claims against the attorneys.
- The case was remanded for further proceedings on the merits.

## Legal Principles

- Res judicata applies when: (1) the earlier claim involved the same parties or their privies, (2) there was a final judgment on the merits, (3) the later claim involves the same cause of action, and (4) the parties had a full and fair opportunity to litigate.
- Privity for claim preclusion requires a mutuality of legal interest; a shared objective in litigation is insufficient.
- An attorney’s representation of a client does not, without more, merge the attorney’s legal identity with the client’s for claim-preclusion purposes.
- Privity may exist where a nonparty controlled the prior litigation, succeeded to the same legal right, or was virtually represented; absent those conditions, privity is not established.
- Alleged joint tortfeasors may be sued separately; a judgment against one does not bar claims against another absent privity or another preclusion basis.

## Conclusion

The court permitted Katherine Rucker’s claims against her ex-husband’s attorney and law firm to proceed, ruling that claim preclusion could not be based solely on the attorney-client relationship because it does not, by itself, create privity.


Rucker v. Schmidt, 794 N.W.2d 114 (Minn. 2011)