Legal Definitions - circuity of action

Circuity of action refers to a legal situation where multiple, separate lawsuits are filed to resolve issues that could have, and ideally should have, been addressed and settled within a single, more direct legal proceeding. It describes an inefficient and roundabout way of litigating, often leading to wasted time, money, and judicial resources for all parties involved.

Modern rules of civil procedure are largely designed to prevent circuity of action by encouraging or requiring parties to resolve all related claims and disputes in one comprehensive lawsuit, rather than pursuing them through a series of sequential or duplicative actions.

Here are some examples to illustrate this concept:

• Example 1: Contractual Indemnification Chain

  • Imagine Company A sues Company B for breach of contract because Company B failed to deliver a specialized component on time.
  • Company B, in turn, had ordered that component from Company C, and their agreement states that Company C must indemnify (cover the losses of) Company B if its failure to deliver causes a breach with Company B's clients.
  • Instead of bringing Company C into the initial lawsuit (for example, by filing a "third-party complaint" against Company C), Company B defends itself against Company A alone.
  • If Company A wins its lawsuit against Company B, Company B then has to pay damages.
  • Afterward, Company B files a completely new and separate lawsuit against Company C to recover the money it just paid to Company A.

  This is a classic example of circuity of action because the question of Company C's ultimate responsibility, which directly impacts Company B's liability, could have been addressed and resolved in the first lawsuit. This would have saved time and resources for all three companies and the court system by determining all related liabilities in one proceeding.

• Example 2: Construction Defect Liability

  • Consider a situation where a Homeowner sues a General Contractor because the foundation of their newly built house has significant structural defects.
  • The General Contractor had hired a specific Subcontractor to pour the foundation, and their agreement specifies that the Subcontractor is responsible for any defects in their work.
  • Instead of involving the Subcontractor in the Homeowner's lawsuit (e.g., by notifying them to defend or by filing a claim against them within the same case), the General Contractor defends the lawsuit alone.
  • If the Homeowner wins and the General Contractor is ordered to pay for the extensive foundation repairs.
  • Then, the General Contractor initiates a brand new lawsuit against the Subcontractor to recover the costs of the repairs and the judgment paid to the Homeowner.

  This illustrates circuity of action because the ultimate party responsible for the faulty foundation (the Subcontractor) could have been brought into the original lawsuit. This would have allowed the court to determine all liabilities in one comprehensive proceeding, rather than requiring two separate, sequential legal battles over essentially the same underlying issue.