This is the second decision of the Supreme Court in this dispute. In Kalil v. Dummer, 155 N.H. 307 (2007), the plaintiffs appealed from zoning board of adjustment (ZBA) decisions upholding denial of building permits and denial of a variance to build in a conservation overlay district. The Court remanded because of an “underdeveloped” ZBA record. (See “Court Update,” New Hampshire Town and City, June 2007, p30.) On remand, after further proceedings, the trial court upheld both ZBA decisions. The plaintiffs elected not to appeal the decision of the superior court, but instead commenced a new lawsuit seeking damages for inverse condemnation arising from the ZBA’s denial of the variance. The trial court granted the Town’s motion to dismiss on the grounds of “res judicata.”
On appeal the Supreme Court restated the elements of the doctrine of res judicata:
Res judicata precludes the litigation in a later case of matters actually decided, and matters that could have been litigated, in an earlier action between the same parties for the same cause of action. The doctrine applies when three elements are met: (1) the parties must be the same or in privity with one another; (2) the same cause of action must be before the court in both instances; and (3) a final judgment on the merits must have been rendered in the first action. [citations omitted]
The Court cited as controlling precedent the case of Shepherd v. Westmoreland, 130 N.H. 542 (1988), in which the Court had applied the res judicata criteria to dismiss an inverse condemnation claim filed after the superior court had upheld denial of a variance. The plaintiffs argued that the Court should “revisit” the ruling in Shepherd as unfair, because it requires the combination of an administrative appeal and a Constitutional claim requiring original findings of fact. The Court rejected the argument, pointing out that the trial court can “bifurcate” such a case, deciding the administrative appeal first and, if necessary, the inverse condemnation claim separately.