Regions Bank v. Nathan I. Prager

The issue in this appeal is whether the Plaintiff’s lawsuit is barred by the doctrine of res judicata.  The Plaintiff originally filed suit against the Defendant in the Circuit Court for Shelby County in May 2014.  Unbeknownst to the parties, the trial court sua sponte dismissed the lawsuit for failure to prosecute.  Upon learning of the dismissal over ten months later, the Plaintiff moved to set aside the dismissal.  The trial court denied the Plaintiff’s request to set aside the dismissal but, articulating an erroneous reading of Rule 41.02(3) of the Tennessee Rules of Civil Procedure, entered an order that stated the dismissal did not bar the Plaintiff from refiling its lawsuit.  When the Plaintiff refiled its lawsuit in August 2017, the Defendant filed a motion to dismiss based on the doctrine of res judicata.  Despite language to the contrary in its prior order, the trial court granted the Defendant’s motion, holding that the dismissal of the original lawsuit operated as an adjudication on the merits.  A divided panel of the Court of Appeals affirmed the trial court’s dismissal of the second lawsuit.  We conclude that the doctrine of res judicata does not bar the Plaintiff’s lawsuit.  Accordingly, we reverse the decision of the Court of Appeals, vacate the trial court’s judgment, and reinstate the Plaintiff’s lawsuit.