Adler v. D&H INDUSTRIES, INC.

¶ 1. This case is about Wisconsin's exception to the permissive counterclaim rule known as the "common-law compulsory counterclaim rule." When a subsequent action would serve to nullify the initial judgment or would impair the rights established in the initial action, then we will bar the subsequent action and rule that it should have been raised as a counterclaim in the first action. Here, however, the original action is still pending. Therefore, use of the common-law compulsory counterclaim rule by the circuit court to dismiss the second suit was error. We also hold that the alternative…