The Consequences of a Dismissal with Prejudice

By March 21, 2016 October 25th, 2018 Construction Litigation Blog, Iman Reza

A few years ago, our client was sued for allegedly supplying defective materials to a project. After some litigation, our client was dismissed, “with prejudice”— that means a dismissal of the lawsuit based on merits of the case.

A new suit was recently filed against our client with regard to the same project by same party that previously sued. The complainant alleges that the new lawsuit regards materials different than those at issue in the first suit.

We quickly filed a demurrer — a challenge to the new complaint based on the theory of res judicata. In other words, the matter has already been determined by a court because a “with prejudice” dismissal bars any future action on the same subject matter by the same parties.

Res judicata is very powerful. It bars not only the reopening of the original dispute, but also subsequent litigation of all issues which were or could have been raised in the original suit. So our position is that even if this new lawsuit involves different materials, the claims are still barred because they could have been brought in the prior lawsuit.

The moral of the story is to deliberate, very carefully, about the ramifications of a dismissal. If the goal is to never litigate anything related to the dispute again, then a dismissal, “with prejudice” is the recommend approach.