![]() ![]() The fact that Colonial Penn had no cause of action against Hallmark for the $1.5 million until it paid on the guaranty makes it obvious that Colonial Penn's claim against Hallmark did not-for the purposes of Rule 13(a)-arise out of the same "transaction" as Hallmark's claim against Colonial Penn. That issue bears no logical relationship with the claim here, which can be seen either as an action to assert the bank's rights to which Colonial Penn had been subrogated, or alternatively as a claim for reimbursement. The nub of Hallmark's suit against Colonial Penn was Colonial Penn's agreement to issue and underwrite the policy, embodied in the Administration Agreement. The same is true here, except in this case, unlike in Valencia, the two claims do not even emerge from the same document. ![]() Because this claim is not "based on the same, or nearly the same, factual allegations" as the previous litigation, it is not barred by res judicata. In the present litigation, Colonial Penn alleges that Hallmark defaulted on the bank loan, and that it was forced to make good on the guaranty. In sum, none of the facts alleged would give rise to an action by Colonial Penn against Hallmark for the amount of the loan. There was no allegation that Hallmark defaulted on the loan or that Colonial Penn paid on the guaranty. Colonial Penn, in its counterclaim (which-on this point-sought only an accounting), alleged that Hallmark breached the Guaranty Agreement by withdrawing the last $500,000 from the bank loan fund after learning that Colonial Penn would no longer offer the insurance policy. In the first litigation, Hallmark alleged that Colonial breached the Administrator Agreement, under which Colonial promised to issue and underwrite, and Hallmark promised to administer, the new policy. The two claims before us do not arise out of the same factual allegations. 2d 254 (1987), we have recently, attempting to draw a brighter line, suggested that "two claims are one for the purposes of res judicata if they are based on the same, or nearly the same, factual allegations." Herrmann, 999 F.2d at 226. ![]() While the traditional formulation is that a claim is barred by res judicata if it emerges from the same "core of operative facts" as a previously litigated matter, see generally, In the Matter of Energy Cooperative Inc., 814 F.2d 1226, 1230-31 (7th Cir.), cert. We have previously observed that the law of res judicata is "not as clear as it might be," and lamented that in this important area of law it is most unsatisfying to rely-as the cases and commentators tell us to-on "pragmatism" and fuzzy lines such as whether the parties would have expected the cases to have been tried as a unit. Hallmark argues that Colonial Penn's suit on the guaranty arises out of the same transaction as Hallmark's breach of contract action, and is therefore res judicata. ![]()
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