Res judicata. Ordinarily, the court issuing a judgment should not address its preclusive effect on future litigation.

Alden and Alden v. Alden, Alden, Dee and Alden (2009-017) (22-Jan-2010) 2010 VT 3 (mem.)
Julia Dee and Todd Alden appeal the Superior Court’s denial of a Rule 59(e) motion to amend the court’s order terminating the 1973 William C. Alden Trust. Appellants contend that the court’s refusal to expressly limit the preclusive effect of the order was an abuse of discretion. We affirm.

With respect to the Termination Action, each of the beneficiaries consented to termination of the Trust. However, they disagreed over how to distribute the Trust assets. The court issued its final order distributing the Trust. Meanwhile, appellants filed a series of motions all requesting that the court clarify that they would not be precluded from litigating their fiduciary breach claims in the Fiduciary Breach Action and that they would not be precluded from each seeking one-fifth of the amount, if any, that decedent’s second wife is found to have misappropriated, as damages in the Fiduciary Breach Action. The superior court denied the various motions and objections and declined to address the preclusive effect of its orders on the Fiduciary Breach Action.

The general rule is that a court should not dictate preclusion consequences at the time of deciding a first action. Rather, the court in the subsequent action is entitled to make its own determination as to the preclusive effect of the earlier judgment. “It is the duty of the second trial court—which knows both what the earlier finding was and how it relates to a later case—to independently determine what preclusive effect a prior judgment may be given.” Any exception to this rule is entirely prudential and not compelled by law. In the instant case, the superior court had no obligation to address the res judicata effect of its judgment. Therefore, we conclude that the superior court did not abuse its discretion in refusing to amend its order.


However we are compelled to address the preclusive effect of the judgment here. Because appellants sought, but were not permitted, to raise their fiduciary breach claims in the Termination Action, res judicata principles would not preclude them from pursuing the fiduciary breach claims in the Fiduciary Breach Action. Further, should decedent’s second wife be found liable in the Fiduciary Breach Action, appellants remain free to argue that they should each receive one-fifth of the value of the Trust assets that decedent’s second wife is proven to have misappropriated.