In this action for, inter alia, loss of personal property, the Court sua sponte dismisses it pursuant to CPLR § 3211(a)(5) on grounds that both the claim alleged in the complaint and the one asserted by defendant in her counterclaim are barred by the doctrine of res judicata.

The instant action is for, inter alia, loss of personal property. Within his endorsed complaint, pro se plaintiff alleges that he is owed $15,000 for monies due and loss of personal property. Within her answer, pro se defendant interposes a counterclaim seeking $3,098.17 and also asserting monies due and loss of personal property.

On January 8, 2019, the parties appeared before this Court for a bench trial. During a pretrial conference, the Court sought more specificity regarding the claims alleged and learned the following: Plaintiff alleges that some time ago, defendant agreed to purchase a vehicle for plaintiff's use. It was agreed that although the vehicle would be in defendant's name, plaintiff would use the same and pay the resulting note on the vehicle and maintain insurance on the same. Plaintiff contends that at some point, after plaintiff had made substantial payments for the vehicle, defendant denied him access to the same. Thus, plaintiff sues to recover sums paid toward the use of the vehicle. Defendant alleges that she did, in fact, agree to purchase a vehicle for plaintiff's use and for which plaintiff would pay the note. However, defendant contends that at some point plaintiff was involved in an accident substantially damaging the vehicle. Plaintiff failed to repair the vehicle, ceased making payments on its note and placed the vehicle in a parking lot. Defendant ultimately recovered the vehicle, paid sums due to the parking lot and repaired the same.

The parties further agree that in 2018, defendant initiated an action in Small Claims Court where she sought to recover all sums expended by her in repairing the instant vehicle. The foregoing action was tried and after defendant—then the plaintiff—presented evidence of sums allegedly owed to her, the court, found in defendant's favor, awarding her $5,725.21. Plaintiff—then the defendant—never interposed any counterclaims in the small claims action and has never taken any action to vacate the judgment, which is dated May 24, 2018. Plaintiff indicated that in defense of the Small Claims action, he presented evidence that he was owed money by defendant for the use of the vehicle and that he had initiated this action to recover the same.

Based on the foregoing, the Court finds that the instant action is barred by the doctrine of [*2]res judicata ^[FN1] . Specifically, the claims before the Small Claims Court were identical to those alleged in this action, the parties in both actions are the same, fully participated in the trial of the prior action, and the judgment rendered in defendant's favor in that action resolved the issues asserted in this action on the merits.

The doctrine of res judicata precludes a party or his privies from re-litigating issues of fact and law decided in a prior proceeding. The doctrine holds that

as to the parties in a litigation and those in privity with them, a judgment on the merits by a court of competent jurisdiction is conclusive of the issues of fact and questions of law necessarily decided therein in any subsequent action

(Gramatan Home Investors Corp. v Lopez, 46 NY2d 481, 485 [1979]). Thus, res judicata precludes renewal of issues actually litigated and resolved in a prior proceeding (id. at 485; Luscher v Arrua, 21 AD3d 1005, 1006-1007 [2d Dept 2005]; Koether v Generalow, 213 AD2d 379, 380 [2d Dept 1995]; New York Site Development Corporation v New York State Department of Environmental Conservation, 217 AD2d 699, 700 [2d Dept 1995]). It also precludes litigation of claims for different relief which arise from the same facts or transaction, which should or could have been resolved in the prior proceeding even if they weren't (Luscher at 1006-1007; Koether at 380). The party seeking to avail himself of the doctrine must demonstrate that the issue sought to be litigated was critical and decided in a prior action and that the party against whom the doctrine is being asserted had a full and fair opportunity to contest the issue (Luscher at 1007; New York Site Development Corporation at 700). As Justice Cardozo aptly noted

[a] judgment in one action is conclusive in a later one not only as to any 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 judgment in the second would destroy or impair rights or interests established by the first. It is not conclusive, however, to the same extent when the two causes of action are different, not in form only, but in the rights and interests affected. The estoppel is limited in such circumstances to the point actually determined (internal citations omitted)

Schuylkill Fuel Corporation v B. & C. Nieberg Realty Corporation, Inc., 250 NY 304, 306-307 [1929]).

It is well settled that res judicata operates to bar an action and, thus, is only applicable when the prior action were resolved on the merits and that "[w]here a dismissal does not involve a determination on the merits, the doctrine of res judicata does not apply (Djoganopoulos v Polkes, 67 AD3d 726, 727 [2d Dept 2009]; Maitland v Trojan Elec. & Mach. Co., 65 NY2d 614, 615 [1985]). For purposes of res judicata, a dismissal of an action because it was untimely commenced and, thus, barred by the applicable statute of limitations is considered a dismissal on the merits (Smith v Russell Sage Coll., 54 NY2d 185, 194 [1981]; Hendrickson v Philbor Motors, Inc., 102 AD3d 251, 260 [2d Dept 2012] ["We caution that some CPLR 3211 dismissals are considered to be on the merits, such as dismissals under subdivision (a)(5) for actions commenced beyond the applicable statute of limitations and actions barred by the statute of frauds."]; Cold Spring Harbor Area Civic Ass'n, Inc. v Board of Zoning Appeals of Town of Huntington, 305 AD2d 444, 445 [2d Dept 2003] ["A dismissal on statute of limitations grounds is considered a dismissal on the merits for claim preclusion purposes and bars a second action."]). A dismissal of an action on grounds that the complaint fails to state a cause of action is not, for res judicata purposes, one on the merits (Maitland v Trojan Elec. & Mach. Co., 65 [*3]NY2d 614, 615 [1985]; Linton v Perry Knitting Co., 295 NY 14, 17 [1945]; Hodge v Hotel Empls. & Rest. Empls. Union Local 100 of AFL-CIO, 269 AD2d 330, 330-331 [1st Dept 2000]; Amsterdam Sav. Bank v Marine Midland Bank, 140 AD2d 781, 782 [3d Dept 1988]; Furia v Furia, 116 AD2d 694, 695 [2d Dept 1986]). However, because "[w]hen a complaint is dismissed for legal insufficiency or other defect in the pleading[s], it does not act as a bar to the commencement of a new action for the same relief unless the dismissal was expressly made on the merits or the new complaint fails to correct the defects or omissions fatal to the prior one" (Furia at 695; Amsterdam Sav. Bank at 782), res judicata will bar any subsequent action if it fails to correct the pleading deficiencies precipitating the prior dismissal and seeks to add new causes of action not asserted previously (Beninati v Nicotra, 239 AD2d 242, 242 [1st Dept 1997] ["The complaint was properly dismissed on the ground that, styled as one for abuse of process, it adds nothing new of substance to plaintiff's previous complaint that, styled as one for malicious prosecution, was dismissed for failure to state a cause of action."]; Schneider v David, 197 AD2d 363, 363 [1st Dept 1993]).

Res judicata can be raised by the court sua sponte (Tromba v E. Fed. Sav. Bank, FSB, 148 AD3d 753, 753 [2d Dept 2017] [Court's own motion to dismiss plaintiff's complaint as barred by res judicata affirmed on appeal.]; Modica v Zergebel, 160 AD2d 689, 690 [2d Dept 1990]), and where appropriate, the court can dismiss an action pursuant thereto (Tromba at 753; Modica at 690).

Here, based on the assertions of the parties during the Court's conference, it is clear that the issues before the Small Claims Court were identical to those in this action. To be sure, defendant therein sought to recover for damage caused by plaintiff to her vehicle and the defendant therein defended the claims therein by asserting and providing evidence that he was owed money by the plaintiff therein because he paid the note on said vehicle. As noted above, the doctrine of res judicata precludes a party or his privies from re-litigating issues of fact and law decided in a prior proceeding because "a judgment on the merits by a court of competent jurisdiction is conclusive of the issues of fact and questions of law necessarily decided therein in any subsequent action" (Gramatan Home Investors Corp. at 485). Accordingly, res judicata not only precludes renewal of issues actually litigated and resolved in a prior proceeding (id. at 485; Luscher at 1006-1007; Koether at 380; New York Site Development Corporation at 700), but it also precludes litigation of claims for different relief which arise from the same facts or transaction, which should or could have been resolved in the prior proceeding even if they weren't (Luscher at 1006-1007; Koether at 380). The preclusive effects of the doctrine apply if the issue sought to be litigated in the present action was critical and decided in a prior action and the party against whom the doctrine is being asserted had a full and fair opportunity to contest the issue (Luscher at 1007; New York Site Development Corporation at 700).

It is well settled that despite its language, which would seem to limit the applicability of res judicata to the amount of a a judgment obtained in Small Claims Court, City Civ. Ct. Act § 1808, which states that

[a] judgment obtained under this article shall not be deemed an adjudication of any fact at issue or found therein in any other action or court; except that a subsequent judgment obtained in another action or court involving the same facts, issues and parties shall be reduced by the amount of a judgment awarded under this article[,] does not the limit the preclusive effects of res judicata. Stated differently, "New York City Civil Court Act § 1808 does not divest the small claims judgment of its res judicata, or claim preclusion, effect" (Chapman v Faustin, 150 AD3d 647 [1st Dept 2017]; Merrimack Mut. Fire Ins. Co. v Alan Feldman Plumbing & Heating Corp., 102 AD3d 754 [2d Dept 2013]; Matter of Carp (Van Tassel), 234 AD2d 715, 717 [3d Dept 1996]; Chin v Interboro Petroleum Transporter, Inc., 28 Misc 3d 78, 80 [App Term 2010]; Omara v Polise, 163 Misc 2d 989, 990 [App Term 1995]). Thus, a judgment obtained in Small Claims Court, on the merits and against the same party, precludes a subsequent action against the same party based upon the same harm and arising out of the same or related claims (Chapman at 220 ["That plaintiffs now seek [*4]different damages than sought in the small claims action does not alter this conclusion, as plaintiffs could have pursued all relief in a single action in the Supreme Court, but opted instead to pursue the claim in the Small Claims Part of the Civil Court, where any recovery would be capped at $5,000, 'exclusive of interest and costs,' does not divest the small claims judgment of its res judicata, or claim preclusion, effect (internal citations omitted)]; Merrimack Mut. Fire Ins. Co. at 755 ["Here, the plaintiff insurance company's claim to recover for property damage to the Karsons' home allegedly caused by the defendant's negligence is the same as the claim brought by its subrogee David Karson in the District Court, which was dismissed after trial. Since the Karsons would be barred by the doctrine of res judicata from asserting the claim, the claim of the plaintiff, as subrogee of the Karsons, is similarly barred."]; Matter of Carp (Van Tassel) at 717; Chin at 80; Omara at 990).

Accordingly and unquestionably, defendant's counterclaim is barred because while what she seeks therein is a deficiency judgment - the difference between the damages sustained and those awarded as limited by the Small Claims Court's monetary jurisdiction, her decision to bring the action in Small Claims Court, where it was resolved on the merits as opposed to this Court where she could have been awarded all sums alleged, does not obviate the preclusive effects of res judicata (Chapman at 220).

Plaintiff's complaint and the claims therein must also be dismissed because it is clear that in awarding judgment in defendant's favor, and in the face of plaintiff's claims that he was owed substantial sums by defendant, the Small Claims Court clearly decided the issues in this case against plaintiff. Indeed, had this not been the case, the court would have awarded defendant no damages at all because logically, defendant's damages in the Small Claims action would have been offset by any sums that plaintiff established were due to him from defendant in the Small Claims Action.

This Court is not, of course, concluding that plaintiff in this action should have brought the instant claim as a counterclaim in the Small Claims Court action and that the failure to do so is what triggers the preclusive effects of res judicata. Pursuant to CPLR § 3011, New York does not have a compulsory counterclaim rule (Henry Modell and Co., Inc. v Minister, Elders and Deacons of Refm. Prot. Dutch Church of City of New York, 68 NY2d 456, 461 [1986]), and generally a party can reserve its right to assert claims in a separate action (Rosenberg v Slotchin, 181 AD 137, 139 [3d Dept 1917]). Thus, the failure to assert a counterclaim will not trigger preclusion of the issue which could have been raised therein unless the second action seeks "relief inconsistent with the judgment in the first action by asserting what is simply a new legal theory" (Henry Modell and Co., Inc. at 461; 67-25 Dartmouth St. Corp. v Syllman, 29 AD3d 888, 890 [2d Dept 2006]). In other words, if the claim asserted in a subsequent action could have been raised in the prior action and would, if resolved in the subsequent action impair the rights of the prevailing party in the prior action, then res judicata bars the claim. To be sure, in Henry Modell and Co., Inc., the court held that res judicata barred plaintiff's action when the theory asserted therein could have been raised, and in fact was partially raised in a prior summary proceeding, and because if plaintiff prevailed in the subsequent action it would have impaired defendant's "rights established by the first action" (id. at 461). In 67-25 Dartmouth St. Corp., the court came to a similar conclusion when it dismissed plaintiff's action for legal fees on grounds of res judicata (id. at 889). Specifically, the court held that plaintiff's claims for legal fees incurred in defending defendant's prior action could have been asserted as a counterclaim and

consideration of the cooperative's claim for attorneys' fees would require the reconsideration of the issues raised in the prior action to determine, inter alia, whether the shareholder was in default, impairing the rights or interests of the shareholder as well as constituting a waste of judicial resources

(id. at 890).

Here, although plaintiff's current claim, if decided, could divest defendant of her judgment in the Small Claims action, such claim could not have been brought as a counterclaim in Small Claims Court because City Civ. Ct. Act § 1805(c), precluded the instant claim from [*5]being asserted as a counterclaim. Specifically, City Civ. Ct. Act § 1805(c) states that

[n]o counterclaim shall be permitted in a small claims action, unless the court would have had monetary jurisdiction over the counterclaim if it had been filed as a small claim. Any other claim sought to be maintained against the claimant may be filed in any court of competent jurisdiction.

Thus, because the Small Claims Court's monetary jurisdiction is $5,000 (City Civ. Ct. Act § 1801), the instant action, which seeks $15,000 in damages could not have been brought as a counterclaim in the Small Claims action.

However, as noted above res judicata bars plaintiff's claim because the claims asserted were necessarily decided against him in the preceding Small Claims action where he participated and interposed the sums sough herein as a defense to defendant's preceding action. It is hereby

ORDERED that plaintiff's complaint and defendant's counterclaim be dismissed, with prejudice. It is further

ORDERED that this Court's judgments, entered on September 18, 2018, be vacated. It is further

ORDERED that the defendant serve a copy of this Decision and Order with Notice of Entry upon plaintiff within thirty (30) days hereof.

This constitutes this Court's decision and Order.