VEGETILA v. CHAGANTI (2026)

Introduction

Swapna and Srinivas Chaganti appeal the circuit court's entry of summary judgment in Padma Vegetila's favor based on its finding that the Chagantis’ claims are precluded by prior litigation. Because the circuit court erred in applying claim preclusion,¹ Vegetila was not entitled to judgment as a matter of law. The judgment is reversed and remanded.

Background

In 2021, the Chagantis loaned Harish Sunkara money. According to the Chagantis, Sunkara and Vegetila, who were married at the time, executed two deeds of trust against their home to secure the debt—one for $650,000 and one for $300,000. The Chagantis recorded the $650,000 deed of trust in July 2021. After Sunkara and Vegetila failed to make payments on the debt, the Chagantis instigated foreclosure proceedings in January 2022 on the $650,000 deed of trust.

The First Case: Validity of the $650,000 deed of trust

In February 2022, Sunkara sued the Chagantis, one of their companies, Vegetila, and the trustee of the deeds. Sunkara sought a declaration that the $650,000 deed of trust was forged, damages for wrongful foreclosure on the $650,000 deed, and damages for slander of title stemming from recording the $650,000 deed. Sunkara's verified petition did not challenge the validity of the $300,000 deed and, in fact, admitted the $300,000 deed of trust was valid. The Chagantis counterclaimed seeking to recover the debt secured by the $650,000 deed of trust but not seeking foreclosure on the deed. Vegetila replied to the counterclaim by asserting the $650,000 deed of trust was forged. The first lawsuit only challenged the validity of the $650,000 deed of trust.

Following mediation, the parties executed a settlement agreement. In accordance with the agreement, the circuit court entered a consent judgment in November 2022, against Sunkara for $545,000 with interest and included a payment plan for Sunkara. The judgment dismissed Vegetila with prejudice “pursuant to the [s]ettlement [a]greement.” Neither the terms of the settlement agreement nor the agreement itself were ever entered into the court record in the first case.

Sunkara and Vegetila then divorced. Sunkara transferred his interest in the marital property to Vegetila by a quitclaim deed. He then failed to pay any amount owed under the consent judgment.

The Second Case: The $300,000 deed of trust

On March 6, 2024, the Chagantis recorded the $300,000 deed of trust. On October 1, 2024, the Chagantis sent a notice of default and intent to foreclose on the $300,000 deed of trust.

In January 2025, Vegetila filed a petition for judicial review pursuant to section 570.095, RSMo Supp. 2018, or in the alternative, for declaratory judgment. Vegetila claimed that someone forged her signature on the $300,000 deed of trust. Vegetila's petition also claimed that the consent judgment in the first suit barred enforcement of the $300,000 deed of trust.

Vegetila subsequently moved for summary judgment. Vegetila claimed that she was entitled to judgment as a matter of law because the Chagantis should have raised claims regarding the $300,000 deed of trust in the first case, and the failure to do so precluded them from raising their claims in this case. Based on the consent judgment, Vegetila argued there was no valid obligation underlying either of the deeds of trust.

The Chagantis responded and raised additional disputed material facts. The Chagantis argued they only issued the foreclosure notice on the $300,000 deed of trust because the terms of the first case's judgment have not been fulfilled. The circuit court issued summary judgment in Vegetila's favor, finding the Chagantis’ claims should have been raised in the first case. The Chagantis appeal.

Standard of Review

This Court reviews the circuit court's grant of summary judgment de novo. Green v. Fotoohighiam, 606 S.W.3d 113, 115 (Mo. banc 2020). Summary judgment is appropriate when the record demonstrates there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Id.; Rule 74.04(c)(6). The summary judgment record is viewed “in the light most favorable to the party against whom summary judgment was entered, and that party is entitled to the benefit of all reasonable inferences from the record.” Glendale Shooting Club, Inc. v. Landolt, 661 S.W.3d 778, 783 (Mo. banc 2023) (quoting Brockington v. New Horizons Enters., LLC, 654 S.W.3d 876, 880 (Mo. banc 2022)). “In reviewing the decision to grant summary judgment, this Court applies the same criteria as the [circuit] court in determining whether summary judgment was proper.” Weeks v. St. Louis Cnty., 696 S.W.3d 333, 338 (Mo. banc 2024) (quoting Sachtleben v. Alliant Nat'l Title Ins. Co., 687 S.W.3d 624, 629 (Mo. banc 2024)).

Analysis

The Chagantis claim the circuit court erred by granting summary judgment in Vegetila's favor because claim preclusion does not thwart their right to foreclose on the $300,000 deed of trust. The Chagantis argue that claim preclusion cannot apply because there was no final judgment in the first case. They also argue there was no dispute regarding the validity of foreclosure on the $300,000 deed of trust in the first case.

Claim preclusion “prohibits ‘splitting’ a claim or cause of action.” Chesterfield Vill., Inc. v. City of Chesterfield, 64 S.W.3d 315, 318 (Mo. banc 2002). Claim preclusion “bars relitigation of a claim adjudicated and ‘every point properly belonging to the subject matter of litigation and which the parties, exercising reasonable diligence, might have brought forward at the time.’ ” LaBlance v. Dir. of Revenue, 658 S.W.3d 505, 508-09 (Mo. banc 2022) (quoting King Gen. Contractors, Inc. v. Reorganized Church of Jesus Christ of Latter Day Saints, 821 S.W.2d 495, 501 (Mo. banc 1991)). Claim preclusion “only applies after a final judgment has been rendered.” Golden Valley Disposal, LLC v. Jenkins Diesel Power, Inc., 183 S.W.3d 635, 640 (Mo. App. 2006) (quoting Spino v. Bhakta, 174 S.W.3d 702, 707 (Mo. App. 2005)). Accordingly, if a party's current claim arises from the same “act, contract, or transaction” from a final judgment in the prior litigation, the claim “is barred by the original judgment under the doctrine of claim preclusion.” Kesterson v. State Farm Fire & Cas. Co., 242 S.W.3d 712, 716 (Mo. banc 2008).

The circuit court's judgment in this case found the same parties were involved in the first case and the facts stemmed from the same transaction. The circuit court then found that the Chagantis’ notice of default and intent to file judicial foreclosure should have been raised in the first case. The circuit court reasoned that because their claims on the $300,000 deed of trust could have been brought in the first case, the Chagantis were precluded from bringing them in this case. The circuit court's logic is incorrect.

First, it is unclear whether the “consent judgment” in the first case was a final judgment. “A judgment entered by consent of the parties cannot be appealed, for it is not a judicial determination of rights, but a recital of an agreement.” Delphi Mgmt. Sols., Inc. v. Bearden, 717 S.W.3d 315, 321 (Mo. App. 2025). While the “consent judgment” in the first case referenced a settlement agreement between the parties, that agreement was not incorporated by reference, attached, or otherwise entered into the record. If a document does not appear in the court file, it cannot be part of the judgment regardless of whether the parties intended to incorporate the document by reference to it. Further, the “consent judgment” did not dispose of all parties in the case for it to form a final judgment. Spicer v. Donald N. Spicer Revocable Living Trust, 336 S.W.3d 466, 469 (Mo. banc 2011).

But even if the judgment from the first case were final, the $300,000 deed of trust was not at issue in the first lawsuit. The only issue presented in the first case was the validity of the $650,000 deed of trust. Sunkara's petition admitted the validity of the $300,000 deed of trust; a fact no party disputed. Neither Sunkara nor Vegetila filed a claim seeking to invalidate the $300,000 deed of trust or the promissory note that it secured.

Based on the summary judgment record, the Chagantis’ foreclosure on the $300,000 deed of trust is not an attempt to relitigate any claim from that first case. The two deeds of trust and promissory notes evidence two separate obligations for money lent on separate occasions. This case involves the first instance of any party attempting to invalidate or enforce the $300,000 deed of trust. Claim preclusion only precludes claims that arise from the same “act, contract, or transaction.” Kesterson, 242 S.W.3d at 716. It was, therefore, unnecessary for the Chagantis to raise a claim about the $300,000 deed of trust's validity or enforcement when that issue was not disputed.²

The summary judgment record shows two distinct loans evidenced by two distinct promissory notes and deeds of trust. It is conceivable that many of the same defenses may be applicable to enforcement of the $300,000 deed of trust or that the $650,000 note and deed were intended to supplant the $300,000 deed, but the record before this Court demonstrates disputed issues of material fact impacting these arguments. One such dispute centers on the authenticity of Vegetila's signature on the $300,000 deed of trust. This issue was not litigated in the first suit, was not raised as a claim by Vegetila or the Chagantis therein, and—because it arose out of a separate contract—does not appear to have been a compulsory counterclaim under Rule 55.32(a). “If the compulsory counterclaim rule does not apply, neither does claim preclusion (res judicata).” Hemme, 183 S.W.3d at 599.

Accordingly, the circuit court erred as a matter of law in determining claim preclusion prohibited the Chagantis’ foreclosure action on the $300,000 deed of trust.

Conclusion

The circuit court's judgment is reversed and remanded.

FOOTNOTES

1.   Claim preclusion is also referred to as res judicata. The term res judicata can be imprecise because it has two possible meanings. Res judicata can at times refer generally to all forms of prior adjudication. In this broad sense it encompasses both the doctrines of claim preclusion, which is at issue in this case, and issue preclusion (also known as collateral estoppel), which is not. The term claim preclusion is more precise because it refers exclusively to the latter.

2.   “The definition of a compulsory counterclaim—a claim that ‘arises out of the transaction or occurrence that is the subject matter of the opposing party's claim’—mirrors the condition that triggers a defense of claim preclusion (res judicata) if a claim was left out of a prior suit.” Joel Bianco Kawasaki Plus v. Meramec Valley Bank, 81 S.W.3d 528, 533 (Mo. banc 2002) (quoting Publicis Commc'ns v. True North Commc'ns Inc., 132 F.3d 363, 365-66 (7th Cir. 1997)); see also Rule 55.32(a). Failure to bring a compulsory counterclaim results in it being barred in a future action. Hemme v. Bharti, 183 S.W.3d 593, 596 (Mo. banc 2006).

John P. Torbitzky, Judge

Michael E. Gardner, Presiding Judge, and James M. Dowd, Judge, concur.