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Kyne v. Karas

A-4791-02T2 (N.J. Super. App. Div. 2004) (Unpublished)

SETTLEMENTS—Where, at the time of settlement of a suit, a party is not aware of a particular, distinctly different, claim it might have had against another settling party, it will not be barred from bringing that claim later.

A patient refused to pay his dentist for work that the patient believed had been improperly performed. The dentist sued, and the patient responded with a counterclaim for professional malpractice. The parties reached a settlement prior to the trial, but the patient refused to pay the settled amount and then brought his own action alleging breach of contract. Specifically, the patient claimed that the original dental services agreement had required a bridge and crown to be fabricated of gold and porcelain, but that they had actually been fabricated from an inferior composition alloy and that brought about a poor result. The dentist moved for summary judgment asserting res judicata based on the earlier settlement.

The entire controversy doctrine requires all parties to join all claims arising from the same transaction and does not permit a party to reserve any component claim for litigation another day. However, the doctrine does not apply to claims unknown at the time of the original action. Thus, the critical issue in this case was whether the patient knew or should have known at the time of the original action that he had gotten an inferior alloy instead of the gold and porcelain he was promised.

The Appellate Division held that the breach of contract claim was not necessarily subsumed by the malpractice claim because the difference between gold and porcelain and inferior composite is not readily discernible. Here, the patient alleged that he didn’t know of the problem until he went to another dentist. This question was never addressed by the lower court. Therefore, the Appellate Division was forced to remand the case for an answer, telling the lower court that if it found that the patient did not know about the contract breach at the time of the original settlement, he could bring the later action.

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