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    "judges": [
      "Judges McGEE and TYSON concur."
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    "parties": [
      "GERARDO MURILLO and MATHILDA MURILLO v. JON M. DALY, SR. and BONNIE T. DALY"
    ],
    "opinions": [
      {
        "text": "WYNN, Judge.\nIn North Carolina, to establish when an action will be treated as a compulsory counterclaim, the similarity in the nature of the action and the remedy sought has been characterized as more important than a basis in a common factual transaction. Twin City Apartments, Inc. v. Landrum, 45 N.C. App. 490, 493, 263 S.E.2d 323, 325 (1980). In this case, Defendants argue that the trial court correctly treated Plaintiffs\u2019 claims for breach of contract and negligence as compulsory counterclaims to a summary ejectment action. Because we hold that the nature of the actions asserted and remedies sought in the claims for breach of contract and negligence are different from the summary ejectment claim, we reverse the trial court\u2019s order and remand for trial.\nGerardo and Mathilda Murillo entered into a residential lease agreement with Jon and Bonnie Daly in 1996 for the rental of a house located at 388 Riverbend Drive, Advance, North Carolina. The Murillos agreed to pay $2,200.00 per month and took possession of the property around 10 September 1996.\nThroughout 2001 and 2002, the septic tank system at the rental property began to deteriorate. During this time, bathtub and toilets would backup, causing sewage to overflow into the house.\nIn October 2002, the Murillos stopped paying rent and demanded that the Dalys fix the septic tank system. The Murillos continued to occupy the residence for five months without paying rent.\nMr. Daly filed a Complaint in small claims court on 4 March 2003 in Davie County, North Carolina seeking to eject the Murillos from the property and to recover unpaid rent from the Murillos\u2019 breach of the lease agreement. In their counterclaim, the Murillos sought dismissal of the Complaint and \u201csuch other and further relief as the Court deems just and proper.\u201d The Murillos asserted that the septic tank had been non-functioning for three years, allowing sewage and excrement to overflow in the bathrooms and cover the backyard. They further contended that Daly\u2019s claim was retaliatory.\nAfter hearing evidence from both parties, the Magistrate ruled against the Murillos on their counterclaim, ordered the Murillos to vacate the premises, and awarded Mr. Daly $4000.00 in unpaid rent plus the costs of the proceeding. The Murillos did not perfect their appeal to the District Court in Davie County.\nThereafter, the Murillos filed a new action in Superior Court, Davie County. The Murillos alleged essentially the same facts in their Complaint as they did in their Answer and Counterclaim in the previous action in small claims court. In this new suit, they alleged breach of contract, negligence, and unfair and deceptive trade practices. The Dalys moved for summary judgment as to all claims. On 4 January 2004, the trial court granted the motion for summary judgment on the ground that the claims were barred in their entirety by the doctrine of res judicata. The Murillos appealed.\nOn appeal, the Murillos argue that the trial court erred in granting the Dalys\u2019 Motion for Summary Judgment for their breach of contract, negligence, and unfair and deceptive trade practice claims. We agree.\nSummary judgment shall be rendered if \u201cthere is no genuine issue as to any material fact and . . . any party is entitled to a judgment as a matter of law.\u201d N.C. Gen. Stat. \u00a7 1A-1, Rule 56(c) (2004). On appeal, an order allowing summary judgment is reviewed de novo. Summey v. Barker, 357 N.C. 492, 496, 586 S.E.2d 247, 249 (2003).\nUnder the doctrine of res judicata:\nWhere a second action or proceeding is between the same parties as the first action or proceeding, the judgment in the former action or proceeding is conclusive in the latter not only as to all matters actually litigated and determined, but also as to all matters which could properly have been litigated and determined in the former action or proceeding.\nFickley v. Greystone Enters., Inc., 140 N.C. App. 258, 260, 536 S.E.2d 331, 333 (2000) (citation omitted).\nA counterclaim is compulsory \u201cif it arises out of the transaction or occurrence that is the subject matter of the opposing party\u2019s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.\u201d N.C. Gen. Stat. \u00a7 1A-1, Rule 13(a) (2004). To determine whether a claim arises out of the same transaction or occurrence as a prior claim, the court must consider: \u201c(1) whether the issues of fact and law are largely the same; (2) whether substantially the same evidence is involved in each action; and (3) whether there is a logical relationship between the two actions.\u201d Brooks v. Rogers, 82 N.C. App. 502, 507-8, 346 S.E.2d 677, 681 (1986).\nIn this case, Mr. Daly\u2019s action for ejectment and recovery of unpaid rent was based on the assertion that the Murillos breached the lease agreement by failing to pay rent, and the Murillos\u2019 counterclaim alleged that the summary ejectment was filed in retaliation. The Murillos\u2019 current claims are for breach of contract, negligence, unfair and deceptive trade practices arising from a broken septic tank system.\nIn Twin City Apartments, Inc., 45 N.C. App. 490, 263 S.E.2d 323, this Court found a similar claim was not compulsory. The tenant filed a complaint against'the landlord in Hertford County alleging: (1) the landlord breached the lease agreement for personal reasons; (2) breach of rental contract; (3) breach of covenants of the leasehold; (4) breach of covenants of fitness and habitability; (5) duty to repair; and (6) civil rights violations. Id. at 492, 263 S.E.2d at 324. The landlord then filed a summary ejectment complaint against the tenant in Forsyth County. Id. The tenant answered and argued that the landlord\u2019s claim should have been raised as a compulsory counterclaim in the Hertford County case. Id. This Court determined that \u201c[t]he nature of the actions and the remedies sought are too divergent[,]\u201d to require the landlord\u2019s summary ejectment action be designated a compulsory counterclaim. Id. at 493, 263 S.E.2d at 326.\nHere, the Murillos\u2019 claims are based on the Dalys\u2019 failure to adequately maintain the septic tank system on the property; they do not attack the summary ejectment proceeding. Both the summary ejectment proceeding and current claims arise from the landlord-tenant relationship of the parties. However, a \u201ccommon origin\u201d alone is insufficient to characterize the Murillos\u2019 claims as compulsory counterclaims. Twin City Apartments, Inc., 45 N.C. App. at 493, 263 S.E.2d at 325. Also, the remedies sought by the Murillos and Dalys in the two actions are different. The Dalys sought possession of the property and unpaid rent, whereas the Murillos seek monetary damages for breach of contract, tort claims, as well as a claim of unfair and deceptive trade practices. The nature of the remedies are too divergent to classify the Murillos\u2019 claims as compulsory counterclaims. Id.\nAs the Murillos\u2019 claims were not compulsory counterclaims in the previous action, they are not now barred by the doctrine of res judicata. Fickley, 140 N.C. App. at 260, 536 S.E.2d at 333. Therefore, the trial court\u2019s order granting the Dalys\u2019 Motion for Summary Judgment must be reversed and the case remanded for trial on the merits.\nReversed and remanded.\nJudges McGEE and TYSON concur.\n. While the Murillos asserted counterclaims before the Magistrate against the summary ejectment action under G.S. 42-26(1), this Court recognized in Twin City Apartments, Inc., 45 N.C. App. at 494, 263 S.E.2d at 325-26, that:\n\u201cG.S. 42-26(1) provides no defense because none exists. Once the estate of the lessee expires, the lessor, by virtue of his superior title, may resume possession by following proper procedures. Defendant\u2019s right to possession is protected by virtue of G.S. 42-35 and G.S. 42-36, which provide a remedy to the tenant if he is evicted, but later restored to possession.\u201d\n. For the purposes of res judicata parties include all persons in privity with a party. Hales v. N.C. Ins. Guaranty Ass\u2019n, 337 N.C. 329, 333, 445 S.E.2d 590, 594 (1994). \u201cPrivity\u201d for purposes of res judicata \u201cdenotes a mutual or successive relationship to the same rights of property.\u201d Id. at 334, 445 S.E.2d at 594 (citations omitted). As Ms. Daly had a mutual relationship with regard to the rental property at issue she was in privity with Mr. Daly for the purposes of res judicata.",
        "type": "majority",
        "author": "WYNN, Judge."
      }
    ],
    "attorneys": [
      "David B. Hough for plaintiff s-appellants.",
      "Orbock, Bowden, Ruark & Dillard, PC, by Edwin W. Boden and Allman, Spry, Leggett & Crumpler, P.A., by W. Rickert Hinnant and Roger E. Cole for defendants-appellees."
    ],
    "corrections": "",
    "head_matter": "GERARDO MURILLO and MATHILDA MURILLO v. JON M. DALY, SR. and BONNIE T. DALY\nNo. COA04-533\n(Filed 15 March 2005)\nJudgments; Pleadings\u2014 compulsory counterclaims \u2014 summary ejectment \u2014 breach of contract \u2014 negligence\u2014res judicata\nPlaintiff tenants\u2019 claims against defendant landlords for breach of contract, negligence and unfair and deceptive trade practices were not compulsory counterclaims in defendants\u2019 prior summary ejectment action and were thus not barred by the doctrine of res judicata, because: (1) the claims for breach of contract and negligence were different from the summary ejectment claim when plaintiffs\u2019 claims are based on defendants\u2019 failure to adequately maintain the septic tank system on the property and plaintiffs do not attack the summary ejectment proceeding; (2) although both the summary ejectment proceeding and current claims arise from the landlord-tenant relationship of the parties, a common origin alone is insufficient to characterize plaintiffs\u2019 claims as compulsory counterclaims; and (3) the remedies sought by the two parties in the two actions are different when defendants sought possession of the property and unpaid rent whereas plaintiffs sought monetary damages for breach of contract, tort claims, and for unfair and deceptive trade practices.\nAppeal by Plaintiffs from judgment entered 4 January 2004 by Judge Mark E: Klass in Superior Court, Davie County. Heard in the Court of Appeals 11 January 2005.\nDavid B. Hough for plaintiff s-appellants.\nOrbock, Bowden, Ruark & Dillard, PC, by Edwin W. Boden and Allman, Spry, Leggett & Crumpler, P.A., by W. Rickert Hinnant and Roger E. Cole for defendants-appellees."
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