Court Of Appeals Clarifies Privity And Res Judicata In Personal Injury Case
Opinion Published: November 10, 2025 (Garrett, P.J. and Patel and Yates, JJ.)
COA Docket No. 368756
Wayne County Circuit Court
Holding: Defendants who have different potential liabilities lack the “substantial identity of interests” as required for a finding of privity in an analysis of whether res judicata applies to a subsequent claim.
Facts: Johnny McPherson was injured in December 2018 when a railing gave way as he walked up the stairs of a house he rented. He initially sued Alvin Sallen (the sole shareholder of Alten Homes, Inc, the property owner) in 2021, but that case was dismissed in June 2022 because Sallen had no individual liability. In March 2022, while the first case was still pending, McPherson filed a second lawsuit against the actual property owner (Alten Homes, Inc.) and contractors (James White and James White Enterprises, LLC) who had performed maintenance work.
The trial court initially denied Alten Homes's motion for summary disposition, finding no privity between Sallen and the corporation. However, on reconsideration, the court reversed itself based on Wildfong v Fireman's Fund Ins Co, 181 Mich App 110 (1989), ruling that res judicata barred the claims because Sallen and Alten Homes were in privity as shareholder and closely-held corporation. The court then dismissed the contractors' claims on similar grounds.
Key Appellate Holdings:
The court held that Sallen and Alten Homes were not in privity for res judicata purposes. The critical distinction was that they were defendants with different potential liabilities—Sallen had no individual liability while Alten Homes, as the landlord, did. Defendants who do not share the same potential liability lack the "substantial identity of interests" required for privity. Further, the Court of Appeals held that the contractors were also not in privity with Sallen. The contractors and Sallen had no common potential liability, and merely being sued in the same case is insufficient to establish privity.
As to the appropriate standard of review, the Court of Appeals clarified that de novo review applied to the summary disposition ruling, rejecting the argument that an abuse of discretion standard applied simply because the dismissal occurred after a reconsideration motion.
