It is, ORDERED that this motion by defendant for an Order pursuant to CPLR 3211(a)(5) dismissing plaintiffs' complaint on the grounds that said action may not be maintained because of the doctrine of res judicata, is granted on the merits; and it is further

ORDERED that movant is directed to serve a copy of this Order with Notice of Entry upon plaintiffs' counsel within thirty (30) days of the date herein pursuant to CPLR 2103(b)(1),(2) and (3) and thereafter file the affidavit of service with the Clerk of the Court. [*2]

The present action before the Court and the subject of defendant's motion is a post judgment action under Article 52 of the CPLR, which seeks to hold the defendant, Gordon Kessler, personally liable by piercing the corporate veil. Defendant moves to dismiss the complaint pursuant to CPLR 3211(a)(5) based upon the doctrine of res judicata.

Plaintiffs, Leslie B. Rosen and Lauren Rosen, also brought a prior action under Suffolk County Index Number 15212/2002 against defendant and Watermill Development Corp. (hereinafter "Watermill") asserting various causes of action based upon the breach of a residential real estate contract. In response to the complaint, defendant and Watermill brought a motion pursuant to CPLR 3211(a)(1) and CPLR 3211(a)(7) to dismiss the complaint based upon documentary evidence and failure to state a cause of action. By Order (Doyle, J.), dated October 24, 2002, the motion by defendant and Watermill was granted to the extent that plaintiffs' seventh cause of action sounding in negligence was dismissed. In his decision Justice Doyle denied that part of defendant's application to dismiss the causes of action asserted against him in his individual capacity. Defendant and Watermill appealed the decision of Justice Doyle.

The Appellate Division Second Department, modified the lower court's order by dismissing the ninth and tenth causes of action as against the corporate and individual defendants and also dismissed the eighth cause of action as against the individual defendant Kessler (see Rosen v Watermill Dev. Corp., 1 AD3d 424, 768 NYS2d 474 [2d Dept 2003]). Subsequent to the matter being remanded, by Order (Underwood, J) dated June 7, 2004, the caption was modified to reflect that only the corporation remained as a defendant in the action and that all claims as against the individual defendant Kessler were dismissed by the recent decision of the Appellate Division. In the Order, Justice Underwood stated that both counsel appeared before him for a certification conference on the remaining claims on May 17, 2004. Pursuant to a motion brought by plaintiff against Watermill, on January 11, 2005 this Court granted plaintiffs' unopposed application to strike the corporate defendant's answer pursuant to CPLR 3126 and for a judgment as against Watermill.

The party seeking to invoke the doctrine of res judicata must demonstrate that the critical issue in the instant action was decided by a court of competent jurisdiction. The Court has read and reviewed the appellate briefs submitted by the parties in the prior action. Both the plaintiff and the defendant in their appellate briefs set forth arguments for and against piercing the corporate veil (compare Young v Tseng, 23 AD3d 552, 804 NYS2d 259 [2d Dept 2005]).

Defendant's application herein is opposed by plaintiffs. In opposing the application, counsel for plaintiffs states that defendant's purported defense is based on an erroneous Westlaw editor's Headnote in the decision by the Appellate Department and that defendant disingenuously attempts to exploit the Westlaw editor's obvious error in referring to the issue of veil piercing, as there is no dispute that plaintiffs did not assert a veil piercing a claim in the prior action and the Court did not address or decide that issue in Rosen v Watermill Dev. Corp., 1 AD3d 424, supra . Although plaintiffs blame Westlaw for a legal faux pas, other commentators in treaties have cited to the decision for the very same principle of law plaintiffs find to be an inexcusable mistake in the Westlaw summary report (see NYPRAC-Cont § 3:8. Alter Ego Theory, citing to Rosen v Watermill Dev. Corp., 1 AD3d 424, 768 NYS2d 474 [2d Dept 2003]). Plaintiffs' counsel also states that [*3]defendant's motion should be denied since controlling legal authority shows that veil piercing claims are generally not subject to preclusion doctrines.

The doctrine, or principle, of res judicata is that "once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different relief" (Yonkers Contr. Co. v Port Auth. Trans-Hudson Corp., 93 NY2d 375, 380, 690 NYS2d 512 [1990] citation omitted; see also Luscher ex rel. Luscher v Arruz, 21 AD3d 1005, 801 NYS2d 379 [2d Dept 2005]; Santiago v New York Bd. of Health, 8 AD3d 179, 779 NYS2d 863 [1st Dept 2004]; Sound Distrib. Corp. v Ponce Acquisition Corp., 179 AD2d 469, 577 NYS2d 863 [1st Dept 1992]). "The party seeking to invoke the doctrine of res judicata must demonstrate that the critical issue in the instant action was decided in the prior action and that the party against whom estoppel is sought was afforded a full and fair opportunity to contest such issue" (Luscher ex rel. Luscher v Arruz, 21 AD3d 1005, at 1007, supra ). Res judicata is an affirmative defense with the following three elements "(1) the previous action involved an adjudication on the merits; (2) the previous action involved the plaintiffs or those in privy with them [and]; (3) the claims asserted in the subsequent action were, or could have been, raised in the prior action." (Monahan v City of New York Dept. of Corr., 214 F3d 275, 285 [2d Cir. 2000] citations omitted, cert den 531 US 1035, 121 S.Ct. 623, 148 L. Ed 2d 533 [2000]). "The second lawsuit must, however, also involve the same " claim-or nucleus of operative fact'-as the first suit." (Fulani v MacKay, Slip Copy, 2007 WL 959308 [SDNY 2007] citation omitted). A claim is identical if it involves the same primary right (see City of Martinez v Texaco Trading & Transp., Inc., 353 F3d 758 [9th Cir 2003]; cf Glatt v Town of Williamstown, 11 AD3d 1017, 783 NYS2d 172 [4th Dept 2004]).

A slip opinion by the New York State Law Reporting Bureau is published without head notes and commentary within days of the decision by the respective Appellate Division. In the instant matter, Rosen v Watermill under 2003 NY Slip Op 18219, the Appellate Division modified the order of the lower court by reversing the lower court's denial of defendant Kessler's motion to dismiss the eighth cause of action alleging a breach of contract as against him. In the decision dismissing the cause of action, the Appellate Division specifically stated that the evidence established that Kessler entered into the contract of sale and the related contracts in his corporate capacity as president of the defendant, Watermill Development Corp., citing specifically to the following cases Madesen Home Equities, Inc. v Echeverria, 266 AD2d 435, 698 NYS2d 703 (2d Dept 1999); Gotteher v Viet-Hoa Co., 170 AD2d 648, 567 NYS2d 71 (2d Dept 1991); Gold v Royal Cigar Co., 105 AD2d 831, 482 NYS2d 32 (2d Dept 1984), wherein the Appellate Division found that there was no basis upon which to pierce the corporate veil (cf. Cleland v Fort Ticonderga Assoc., Inc., 71 AD2d 740, 419 NYS2d 261 [3d Dept 1979]) and hold defendant Kessler personally liable. Additionally, in the decision, the Appellate Division did not preserve plaintiffs' right to maintain a second action as against defendant Kessler (see New York v Caristo Constr. Corp., 62 NY2d 819, 477 NYS2d 603 [1984]) nor did the Appellate Division indicate that the decision was not made on the merits (see Asgahar v Tringali, 18 AD3d 408, 795 NYS2d 68 [2d Dept 2005] where the complaint was dismissed with leave to replead and thus, was plainly not on the merits; see also Mudry v Giannattasio, 8 AD3d 455, 779 NYS2d 111 [2d Dept 2004; Feigen v Advance Capital Mgt. Corp., 146 AD2d 556, 536 NYS2d 786 [1st Dept 1989]). [*4]

The word "merits" as a legal term is regarded as referring to the "strict legal rights of the parties" (Mink v Keim, 266 AD184, 186, 41 NYS2d 769 [1st Dept 1943]). As defined in Black's Law Dictionary, West Publishing, Eighth Edition, 2004, the word "merits" relates to the substantive considerations to be taken into account in deciding a case as opposed to the extraneous or technical points, especially of procedure. A brief on the merits, necessarily includes arguments as to errors of the trial court, otherwise it would require an appeals court to make a decision on less than all of the facts and issues relating to the substantive rights of the parties.

Under New York's transactional analysis approach to res judicata, "once a claim is brought to a final conclusion, all other claims . . . are barred, even if based upon different theories or if seeking a different remedy" (83-17 Broadway Corp. v Debcon Fin. Servs. Inc., ____ AD3d ____, ____ NYS2d ____ [2d Dept 2007], citations omitted; see also Young v Tseng, 23 AD3d 377, 805 NYS2d 556 [2d Det 2005]; Barieri v Bridge Funding, 5 AD3d 414, 772 NYS2d 610 [2d Dept 2004]; Brooklyn Welding Corp. v City of New York , 198 AD2d 189, 604 NYS2d 87 [1st Dept 1993], app dism 83 NY2d 795, 611 NYS2d 128 [1994]; Silverman v Leucadia, 156 AD2d 442, 548 NYS2d 720 [2d Dept 1989]; see e.g. Rizzo v Ippolito, 137 AD2d 511, 524 NYS2d 255 [2d Dept 1988]). "Res Judicata is designed to provide finality in the resolution of disputes," recognizing that [c]onsiderations of judicial economy as well as fairness to the parties mandate, at some point, an end to litigation" (Matter of Hunter, 4 NY3d 260, 269-270, 794 NYS2d 286 [2005], citation omitted). "The doctrine of res judicata is designed to put an end to a matter once decided. It forbids relitigation of the matter as an unjustifiable duplication, an unwarranted burden on the courts as well as on the opposing parties. Its main predicate is that the party against whom it is being invoked has already had a day in court, and, if it was not satisfactory, the proper course was to appeal the unsatisfactory result rather than ignore it and attempt its relitigation in a separate action" (Siegal, NY Prac., § 442 at 474 [4th Ed]; see also 73A NY Jur2d Judgments § 331, generally; judgments as precluding relitigation of same claim or cause of action [2007]; see also Gramatan Home Inv. Corp. v Lopez, 46 NY2d 481, 414 NYS2d 308 [1979]).

Indeed, res judicata bars not only those claims which were raised herein but those which could have been raised in the prior action (see Fogel v Oelmann, 7 AD3d 485, 776 NYS2d 76 [2d Dept 2004]; Waylonis v Baum, 281 AD2d 636, 723 NYS2d 55 [2d Dept 2001]; MacGregor-Phillips v MacGregor, 273 AD2d 206, 709 NYS2d 446 [2d Dept 2000]; Marinelli Assocs. v Helmsley-Noyes., Inc., 265 AD2d 1, 705 NYS2d 571 [1st Dept 2000]; Gramercy Holding Corp. v Cohen, 260 AD2d 542, 686 NYS2d 739 [2d Dept 1999]; Evergreen Bank, N.A. v Danshnaw, 246 AD2d 814, 668 NYS2d 256 [3d Dept 1998]). Thus, the doctrine of res judicata as public policy, prevents courts from wasting limited resources with continued relitigation of previously adjudicated claims and it "would be meaningless if a party could split its cause of action merely to ensure that each alternative theory received individualized attention" (Schwartzreich v E.P.C. Carting Co., Inc., 246 AD2d 439, 441, 668 NYS2d 370 [1st Dept 1998])

Plaintiffs do not contest nor deny that the claims asserted in the instant action are identical or arise out of the same underlying transaction which was decided by the Appellate Division nor that the issue of piercing the corporate veil was addressed or determined by the Appellate Court (compare Rebh v Rotterdam Ventures, Inc. d/b/a Galesi Group, 252 AD2d 609, 675 NYS2d 234 [3d Dept 1998]). Plaintiffs only claim that this action is not barred as against defendant in his [*5]individual capacity because the Appellate Division merely concluded that he was not personally liable. However, courts have consistently held that where general factual allegations are asserted as against an entity and those who act on its behalf, although they are sufficient to state a claim against the entity, they are insufficient to state a claim against those who act on behalf of the entity (see Gotteher v Viet-Hoa Co., 170 AD2d 648, supra ; Gold v Royal Cigar Co., 105 AD2d 831, supra ). The Appellate Division found no evidence that defendant Kessler was, in any way, acting outside the scope of his corporate responsibility in dealing with plaintiffs. It is well established in New York that a corporation exists as a separate legal entity, independent of its owner and therefore, defendant Kessler, as the owner, is consequently not responsible for the debts of the corporation (see Damianos Realty Group, LLC v Fracchia, 35 AD3d 274, 825 NYS2d 344 [2d Dept 2006]; Retopolis, Inc. v 14th St. Dev. LLC., 17 AD3d 209, 797 NYS2d 1 [1st Dept 2005]; Island Seafood Co. v Golub Corp., 303 AD2d 892, 759 NYS2d 768 [3d Dept 2003]; First Capital Asset Mgt. v N.A. Partners, L.P., 300 AD2d 112, 755 NYS2d 63 [1st Dept 2002]; Seuter v Liebermann, 229 AD2d 386, 664 NYS2d 566 [2d Dept 1996]; Morris v New York State Dept. of Taxation and Fin., 82 NY2d 135, 603 NYS2d 807 [1993]).

It is the burden of the party against whom res judicata is asserted to demonstrate the lack of a fair opportunity to litigate the allegedly precluded issues (see Vogel v Board of Ed. for the Dunkirk City School Dist., 259 AD2d 831, 686 NYS2d 205 [ 3rd Dept 1999]). Rosen had a full and fair opportunity to litigate the issue of piercing the corporate veil in the previous action under Suffolk County index number ( id ) see also Marinelli Assoc. v Helmsley-Noyes Co., Inc. 265 AD2d 1, supra ; D'Arata v New York Cent. Mut. Fire Ins. Co., 76 NY2d 659, 536 NYS2d 24 [1990]) and does not deny this singular fact and thus the relitigation of this issue is barred herein ( see Ventura v M.A.F. Estates, Inc., 247 AD2d 378, 668 NYS2d 645 [ 2d Dept 1998]).

Plaintiffs failed to move in the Appellate Division to reargue the decision. They also failed to appeal the decision of the Appellate Court in the Court of Appeals. Consequently, they may not now relitigate that issue in this action before a court of subordinate jurisdiction (see Feigen v Advance Capital Mgt. Corp., 146 AD2d 556, supra ). Plaintiffs' attempt to assert the identical claims on the same theory and the same facts in order to recover on said theory is impermissible as this substantive issue of law was decided by the Appellate Division, Second Department in Rosen v Watermill Dev. Corp, 1 AD3d 424 , supra ).

It is undisputed that the claim as against defendant in the present action arose out of the same transaction as the prior action. Therefore, the claim is barred (see CPLR 3211[a][5]; Corto v Lefrak, 203 AD2d 94, 610 NYS2d 214 [1st Dept 1994]; lv app den 86 NY2d 774, 610 NYS2d 214 [1995]; reargument den 86 NY2d 839, 634 NYS2d 447 [1995], lv app den 82 NY2d 658, 604 NYS2d 557 [1993]; Beck v Eastern Mut. Ins. Co., 295 AD2d 740, 744 NYS2d 57 [3d Dept 2002]; Matter of the State of New York v Town of Hardenburgh, 273 AD2d 769, 710 NYS2d 435 [3d Dept 2000]; Hypertonics, Inc. v Digital Equip. Corp., 195 AD2d 541, 601 NYS2d 834 [2d Dept 1993]; Ryan v NY Tel. Co., 62 NY2d 494, 478 NYS2d 823 [1989]; O'Brien v City of Syracuse, 54 NY2d 353, 455 NY2d 687 [1981]).

"Justice requires that every cause be once fairly and impartially tried; but the public [*6]tranquillity demands that, having been once so tried, all litigation of that question, and between those parties, should be closed forever." (Fish v Vanderlip, 218 NY 29, 37 [ 1916]). The Court of Appeals has long since replaced the "consequential test" articulated in Schuylkill Fuel Corn. v Nieberg Realty Corp., 250 NY 304 (1929) with the "transactional test," and the analysis by the Schuylkill Court states:

A judgment in one action is conclusive in a later one not only as to matters actually litigated therein, but also as to any that might have been so litigated, when the two causes of action have such a measure of identity that a different judgement in the second would destroy or impair right or interests established by the first" (id at 306-307, citation omitted).

Therefore, whatever test one considers, the public policy considerations have not changed and based upon the application of the above noted principals of law, the Court finds that the action by plaintiffs is barred by res judicata. "It is undeniably a settled principle that a party seeking to enforce a claim, legal or equitable, must present to the court, either by pleadings or proofs, or both, all of the grounds upon which he expects a judgment in his favor. He is not at liberty to split up his demand and prosecute it by piecemeal, or present only a portion of the grounds upon which special relief is sought, and leave the rest to be presented in a second suit, if the first fails. There would be no end to litigation if such a practice were permissible" (see Stark v Starr, 94 US 477, 485, 4 Otto 477, 24 L. Ed. 276[1876 ]). The court will not permit plaintiffs to circumvent the ruling by the Appellate Division by commencing another action.

Accordingly, the motion to dismiss the complaint pursuant to CPLR 3211(a)(5) is granted on the merits. This constitutes the Order and decision of the Court.

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Thomas F. Whelan, J.S.C.