Negligence Action Improperly Dismissed on Res Judicata Grounds Because District Court Cannot Take Judicial Notice of Prior Litigation without Agreement of Parties

The doctrine of res judicata prevents parties from re-litigating issues and claims that a court has already decided.  In addition, the evidentiary doctrine of judicial notice allows judges to accept as true certain facts without the need for the parties to present evidence supporting those facts. The Iowa Court of Appeals recently applied these doctrines to allow a negligence action involving neighboring landowners to survive a motion to dismiss.

The plaintiffs and the defendants were neighboring landowners involved in a boundary dispute. They settled the boundary dispute litigation by agreement. Before the district court approved the settlement, however, the plaintiffs filed another action against the defendants, alleging that the defendants were negligent in constructing a nearby subdivision. The plaintiffs contended in the second action that the defendants’ negligence in installing and maintaining drainage protection damaged the plaintiffs’ property and diminished its value.

Two years after the plaintiffs filed the negligence action, the district court granted the defendants’ newly-filed motion to dismiss on the basis of res judicata. Pursuant to the doctrine of judicial notice, the district court reviewed the file in the parties’ previous boundary dispute litigation and found that the prior litigation had resolved all of the current claims between the parties. The district court thus held that res judicata barred the second action and dismissed the case.

On appeal, the Iowa Court of Appeals reversed.  The court found that res judicata, which includes both claim preclusion and issue preclusion, could only be raised in a motion to dismiss if the nature of the prior adjudication met one of two requirements (unless the parties mutually agree).  Res judicata, the court noted, could only be raised when it either appeared on the face of the petition or  arose from matters of which a court could take judicial notice. Because the plaintiffs’ petition did not reference the boundary dispute litigation, the court analyzed whether the district court properly took judicial notice of the boundary dispute case file. The court set forth the general rule that “it is improper for the court to consider or take judicial notice of the records of the same court in a different proceeding without an agreement of the parties.” Because there was no agreement of the parties, the court held that it was improper for the district court to consider facts outside of the pleadings in granting the motion to dismiss. The case was returned to the district court for further proceedings. Consequently, dismissal of the negligence case—which the district court has already decided is barred by the prior action—will have to wait until summary judgment.