Locked out: the hidden threat of claim preclusion for tenants in summary process.

• Author: Smith, Rosemary
• Position: Massachusetts

1. Introduction II. Background Legal Principles: Claim Preclusion and Summary Process Counterclaims A. Basic Preclusion Principles B. Uniform Summary Process Rule 5 1. Status of Summary Process Counterclaims Prior to Adoption of Summary Process Rule 5 2. Adoption of Summary Process Rule 5 C. Reconciling Preclusion Principles with Summary Process Rule 5 III. The Claim Preclusive Effect of Summary Process Proceedings in Recent Case Law A. Trial Court Dismissals Based on Preclusive Effect of Summary Process Proceedings B. The Doyle Decision and Its Implications C. Out-of-State comparisons D. Conclusions from the Case Law IV. Misguided Reliance on Rule 5 in the Legal Community A. Legal Service Providers B. Judges in Summary Process Cases 1. Motions to Amend Answers 2. Motions to Dismiss or Sever Counterclaims V. Practical Recommendations for Tenant Attorneys A. Best Practices in Summary Process 1. Protecting Clients from the Effects of Claim Preclusion 2. Using the Precedent to a Tenant's Advantage B. Policy Arguments Against Enforcement of Claim Preclusion in Subsequent Actions VI. Conclusion I. INTRODUCTION

   Throughout its history, Massachusetts has struggled to develop a satisfactory legal mechanism to remove a tenant from possession. (1) Summary process, the contemporary eviction procedure, continues to reflect the difficulty of reconciling the significant, competing interests at stake in housing cases. For the landlord, "real estate constitutes unique property and ... time lost in regaining it from a party in illegal possession can represent an irreplaceable loss...." (2) At the same time, a tenant has a "unique and fundamental need ... for dwellings that are habitable and secure." (3) The summary process statute, supplemented by legal precedent and court procedural rules, attempts to strike a balance between these important interests in the eviction process.

   In a sense, counterclaims are a classic example of how statute, precedent, and procedural rules work together to regulate summary process proceedings. Tenant counterclaims took on significance through a combination of statutory and decisional law, and have since been formalized in court procedural rules. Counterclaims are also an example, however, of how these diverse strains of legal influence can lead to a procedural regime that is at times arbitrary and even perverse. When the relevant legal standards are unclear or conflicting, courts are forced to fabricate procedural rules on an ad hoc basis, without the time or resources to fully assess the policy implications of their decisions. The result is a procedure that is at best unpredictable and at worst in conflict with the important interests that summary process is meant to protect.

   This article brings attention to the problematic treatment of counterclaims in summary process law. It focuses on whether tenant counterclaims are compulsory--that is, whether they are barred by claim preclusion if not raised in summary process. A survey of relevant legal sources indicates that the answer is far from clear. Despite a broadly held assumption that tenant counterclaims are permissive, some courts have taken the position that they are compulsory and therefore subject to claim preclusion. This confusion in the summary process law is likely to have a significant prejudicial effect on tenants, who cannot easily assess or protect against the threat they face from claim preclusion. Therefore, this paper recommends that tenant attorneys take two forms of remedial action. First, attorneys should adjust their practices in summary process cases to reflect the cautious assumption that tenant counterclaims are compulsory. Second, attorneys should develop and articulate the argument that treating tenant counterclaims as compulsory is inconsistent with the policy interests underlying summary process proceedings.

   Part Two of this article reviews the ambiguous statutory language and procedural rules that have given rise to confusion concerning the proper treatment of tenant counterclaims. Parts Three and Four contrast recent Massachusetts court decisions, holding that tenant counterclaims are compulsory, with the broadly held assumption of summary process judges and lawyers that such counterclaims are permissive. Finally, Part Five identifies proper remedial procedures for tenant representatives to adopt. Although a comprehensive solution to this problematic area of law may need to come from the Massachusetts Legislature or Supreme Judicial Court, this article seeks to offer short term strategies for reducing the claim preclusion threat faced by tenants in summary process proceedings.

2. BACKGROUND LEGAL PRINCIPLES: CLAIM PRECLUSION AND SUMMARY PROCESS COUNTERCLAIMS

   The legal issues at stake in this debate do not lend themselves to simple or categorical description. Both the common law doctrine of claim preclusion and the Massachusetts statutory summary process procedure have evolved over centuries, almost entirely independently of each other. (4) They reflect attitudes toward civil litigation that cannot always be fully reconciled. (5) This section will not attempt to present a definitive summary of the law, nor indeed is such a project feasible in light of the key questions that courts have yet to answer. Rather, it highlights an important legal conflict and introduces a framework for thinking about how this conflict might be resolved.

   1. Basic Preclusion Principles

      The concept that a final judgment may have a preclusive effect on later actions, commonly referred to as res judicata, can be divided into two distinct doctrines: claim preclusion and issue preclusion. (6) Claim preclusion prevents a party from bringing related claims in multiple lawsuits by providing that a "valid, final judgment" is "conclusive on the parties ... and bars further litigation of all matters that were or should have been adjudicated in the action." (7) Issue preclusion prevents a party from litigating the same issue in multiple lawsuits. (8) By foreclosing duplicative litigation of claims and issues, these two doctrines jointly "relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication." (9) Claim and issue preclusion are "based on the idea that the party to be precluded has had the incentive and opportunity to litigate the matter fully in the first lawsuit." (10)

      In general, issue preclusion applies with full force to summary process proceedings. Thus, for example, in Possehl v. Ossino, (11) issue preclusion applied to bar a tenant from bringing a negligence claim against his landlord. (12) The tenant had raised the identical claim in an earlier summary process proceeding, which had ended in an agreement for judgment in favor of the landlord. (13) The court affirmed dismissal of the tenant's suit, noting that "parties may not relitigate a claim which has been submitted to the court for decision and which has become the subject of a final and unappealed judgment in that forum." (14) Similarly, issue preclusion has also applied to bar a landlord from reasserting allegations actually litigated in a prior summary process proceeding. (15)

      The applicability of claim preclusion to summary process proceedings is a more difficult question. The Massachusetts statute governing summary process does not directly address the applicability of claim preclusion in most circumstances. (16) In Bui v. Ma, (17) however, the court squarely applied claim preclusion to the claims of a landlord in summary process. (18) Bui involved a second summary process action brought against the same tenant by a successor landlord. (19) Applying basic claim preclusion principles, the court concluded that the successor landlord was barred from raising certain claims to possession that could have been raised by her predecessor in interest in the first summary process action. (20) As the court explained: "[T]he guiding principle is that [the current landlord] is precluded from litigating not only those claims that were actually decided in the [prior summary process action] but also those that could have been brought in that action." (21)

      Thus, the outstanding question, explored throughout this article, is whether claim preclusion applies to the counterclaims of a tenant in summary process. In general, claim preclusion principles do not apply to defendants' counterclaims unless a statute or rule of court makes those counterclaims "compulsory." (22) The Massachusetts procedural rules contain two relevant provisions: one from the rules broadly governing civil actions and one from the rules more narrowly governing summary process proceedings. (23) Massachusetts Rule of Civil Procedure 13 ("Rule 13"), with certain exceptions not relevant to our analysis, makes counterclaims compulsory if they "arise[] out of the transaction or occurrence that is the subject matter of the opposing party's claim." (24) By contrast, Uniform Summary Process Rule 5 ("Rule 5") specifically provides that summary process counterclaims "shall not be considered compulsory." (25) The proper reconciliation of these two provisions cannot be determined in an informational vacuum. Rather, one must first look to the history and context of Rule 5 in order to understand its intended scope and the manner in which courts will likely interpret it.

   2. Uniform Summary Process Rule 5

      1. Status of Summary Process Counterclaims Prior to Adoption of Summary Process Rule 5

         As reviewed in the previous section, claim preclusion only applies to counterclaims that are treated as compulsory under the applicable procedural rules. (26) Unfortunately, Massachusetts policymakers have historically given little official attention to the proper treatment of summary process counterclaims. No statute addresses this issue. (27) Furthermore, prior to 1980, there were no uniform court procedural rules governing summary process...