Fagnan v. Great Central Insurance Co.
United States Court of Appeals for the Seventh Circuit
577 F.2d 418 (1978)
Duane Fagnan (plaintiff) and passenger David Harness were hurt in a car accident with Robert Thompson, who died in the crash. In an earlier lawsuit, Harness sued Thompson's estate, and the estate's administrator filed a third-party claim against Fagnan; Fagnan cross-claimed against the administrator for contribution, but that whole action settled and was dismissed, which counted as a judgment on the merits. Fagnan then filed this new lawsuit directly against Thompson's insurer, Great Central Insurance Co. (defendant), under Wisconsin's direct-action statute, and won at the district court. Great Central appealed, arguing Fagnan's claim against the estate had already been resolved (and barred) by the earlier settlement.
Whether a compulsory counterclaim that is not asserted in an earlier action is barred from being raised in subsequent litigation by the judgment in that earlier action.