Hart v. Yamaha-Parts Distributors, Inc.

• Decision Date: 28 April 1986
• Docket Number: YAMAHA-PARTS,No. 84-7801,84-7801
• Citation: 787 F.2d 1468
• Parties: 1 UCC Rep.Serv.2d 82 Ronald Basil HART, Jr., Plaintiff-Appellant, v.DISTRIBUTORS, INC., Yamaha International Corporation, Yamaha Motor Corporation, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1468

787 F.2d 1468

1 UCC Rep.Serv.2d 82

Ronald Basil HART, Jr., Plaintiff-Appellant, v. YAMAHA-PARTS DISTRIBUTORS, INC., Yamaha International

Corporation, Yamaha Motor Corporation, et al.,

Defendants-Appellees.

No. 84-7801.

United States Court of Appeals, Eleventh Circuit.

April 28, 1986.

Mickey L. Johnson and Richard W. Bell, Bell & Johnson, Pelham, Ala., for plaintiff-appellant.

Thomas R. Elliott, Jr., London, Yancey, Clark & Allen, Birmingham, Ala., for defendants-appellants.

Appeal from the United States District Court for the Northern District of Alabama.

Before HILL and CLARK, Circuit Judges, and MOYE ^*, Chief District Judge.

HILL, Circuit Judge:

FACTS

Appellant sued defendant Yamaha Motor Corporation, U.S.A. ("YMC/USA") and various fictitious defendants in Alabama state court for injuries he sustained as a result of a motorcycle accident. He rested his claim upon the Alabama Extended Manufacturers Liability Doctrine, negligence and willful misconduct in the defective design and manufacture of the motorcycle.

Alabama permits fictitious party pleading. Ala.R.Civ.P. 9(h). The "plaintiff must be ignorant of the identity of the fictitious party when he files the original complaint and he must state a cause of action against the fictitious party in the body of the original complaint." Kinard v. C.A. Kelly and Co., 468 So.2d 133, 135 (Ala.1985).

[T]hereafter, when he ascertains the true identity of the defendant, he may amend his pleadings and substitute the party's true name for the fictitious one. An amendment pursuant to Rule 9(h) substituting the defendant's true name for a fictitious one is not an amendment changing the party against whom a claim is asserted. The substitution of a named defendant for a fictitious one relates back to the date of the original pleading.

Id. (citations omitted).

In response, YMC/USA identified several of the fictitious defendants described in the complaint, including appellees Yamaha International Corporation ("Yamaha International") and Yamaha Parts Distributors, Inc. ("Yamaha Parts"), removed the action to federal district court and filed a motion to dismiss. The inclusion of fictitious defendants prevents immediate removal on the basis of diversity jurisdiction, but a named defendant may seek removal "by showing that any fictitious defendants are The principal basis of YMC/USA's motion to dismiss was that YMC/USA was not in existence when the motorcycle was distributed. After conferring with both parties, the district court dismissed the action with prejudice. For presumably tactical reasons, appellant did not contest this dismissal. Because the action was removed to federal court, apparently appellant feared he had lost the benefit of the Alabama fictitious party pleading rule. The statute of limitations applicable to the original action had expired and appellant's counsel was apparently concerned that he would be unable to bring in the newly discovered defendants under Fed.R.Civ.P. 15(c).

merely nominal parties, fraudulently joined to defeat federal jurisdiction, non-existent, or persons whose citizenship would not prevent removal...." Hamby v. Zayre Corp., 544 F.Supp. 176, 178-79 (N.D.Ala.1982). It was therefore necessary for YMC/USA to specifically identify the fictitious defendants or otherwise show their diversity of citizenship before removing this action to federal court. In addition to Yamaha International and Yamaha Parts, YMC/USA also identified Yamaha Motor Company, Ltd., a Japanese corporation which does no business in the United States, and asserted that the remaining unidentified fictitious defendants were also Japanese citizens. Yamaha Motor Company, Ltd. represented several categories of fictitious defendants, including that of YMC/USA's parent company.

Appellant subsequently filed the present breach of warranty action, also in Alabama state court, against YMC/USA, Yamaha Parts, Yamaha International and various fictitious defendants. The defendants again identified and described the fictitious defendants and removed the case to federal district court where they filed a motion for summary judgment based on res judicata, collateral estoppel and failure to give timely notice of breach of warranty. The district court took judicial notice of all pleadings and orders in the earlier action and granted summary judgment, holding defendants were entitled to summary judgment on all three grounds. Appellant appeals from this judgment.

DISCUSSION

I. RES JUDICATA

Res judicata is a doctrine of claim preclusion; it refers to "the preclusive effect of a judgment in foreclosing relitigation of matters that should have been raised in an earlier suit." Migra v. Warren City School District Board of Education, 465 U.S. 75, 77 n. 1, 104 S.Ct. 892, 894 n. 1, 79 L.Ed.2d 56 (1984). Although both actions were based on state law and originally brought in state court, we apply federal common law because we are determining the preclusive effect of a federal judgment. See, e.g., Precision Air Parts, Inc. v. Avco Corp., 736 F.2d 1499, 1503 (11th Cir.1984), cert. denied, --- U.S. ----, 105 S.Ct. 966, 83 L.Ed.2d 970 (1985). For res judicata to bar appellant's second action, four elements must be present: (1) a final judgment on the merits, (2) rendered by a court of competent jurisdiction, (3) the parties, or those in privity with them, must be identical in both suits, and (4) the same cause of action must be involved in both cases. Ray v. Tennessee Valley Authority, 677 F.2d 818, 821 (11th Cir.1982), cert. denied, 459 U.S. 1147, 103 S.Ct. 788, 74 L.Ed.2d 994 (1983) (quoting Stevenson v. International Paper Co., 516 F.2d 103, 108 (5th Cir.1975).

A. Claim Against YMC/USA

Res judicata clearly bars the present action against YMC/USA. Appellant concedes YMC/USA was a party in both cases and that judgment was rendered by a court of competent jurisdiction. A dismissal with prejudice operates as a judgment on the merits unless the court specifies otherwise. Fed.R.Civ.P. 41(b). See, e.g., Weissinger v. United States, 423 F.2d 795, 798 (5th Cir.1970). Appellant cannot avoid preclusion by grounding his second action on a different theory of liability. Claim preclusion "extends not only to the precise legal theory presented in the previous litigation, but to all legal theories and claims arising out of the same 'operative nucleus of fact.' " Olmstead v. Amoco Oil Co., 725 F.2d 627, 632 (11th Cir.1984). Both actions arise from the same motorcycle accident and are merely different theories of liability for alleged defects in the motorcycle's design and/or manufacture. We therefore affirm the district court's judgment in favor of YMC/USA.

B. Claims against Yamaha Parts Distributors, Inc. and Yamaha International Corporation

The first, second and fourth elements of res judicata are also satisfied with respect to Yamaha Parts and Yamaha International for the reasons stated above. The only element at issue is whether these entities were either parties to the original action or in privity with a party.

1. Parties.

Neither Yamaha Parts nor Yamaha International was expressly named as a defendant in the original action. Nonetheless, this factor is not determinative; the issue is complicated by the Alabama fictitious party pleading rule. Defendants argue Yamaha Parts and Yamaha International became parties to the original action before removal by virtue of identification by YMC/USA. The district court found that Yamaha Parts and Yamaha International were parties to the prior action because they "fully intended to expose themselves to a consideration of the merits of plaintiff's claim against them ... by allowing [YMC/USA] to substitute them for two of the fictitious defendants as described." (R1-11-40). Under the Alabama fictitious party rule, however, substitution occurs when a plaintiff who has designated defendants by fictitious names amends the complaint to substitute the defendant's true name for the fictitious one. See e.g., Kinard v. C.A. Kelly and Co., 468 So.2d 133, 134-35 (Ala.1985). Appellant never amended his pleadings to substitute Yamaha Parts or Yamaha International; it was defendant YMC/USA who identified these entities in connection with its removal petition. This identification was sufficient under Hamby v. Zayre Corp., 544 F.Supp. at 178-79, to show that the fictitious parties were entities whose citizenship would not prevent removal, but Hamby does not hold that persons so identified automatically become parties to the action. YMC/USA does not cite any authority, nor can we find any, to support its contention that a defendant's uncontradicted identification of fictitious parties brings the named persons in as parties without substitution under Ala.R.Civ.P. 9(h).

Even if we accept YMC/USA's argument that the affidavit identifying Yamaha Parts and Yamaha International brought them in as named but unserved defendants, they would not be "parties" for res judicata purposes. A party is one who is both named as a party to the action and subjected to the court's jurisdiction. Restatement (Second) of Judgments Sec. 34 (1980). Persons become subject to a court's jurisdiction in one of several ways. One may voluntarily subject oneself to the court's jurisdiction "by making an appearance or participating in the action in a manner that has the effect of an appearance. In the absence of such a submission to the jurisdiction of the court, to become a party a person must be served with process or its equivalent...." Id. comment a. "As to defendants, the fundamental requirements are designation as a party, compliance with valid procedures designed to give notice of the action, and a basis of jurisdiction. Most statements of this principle are negative: a person is not bound absent compliance with these requirements." 18 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure Sec. 4449 at 411-12 (1981). E.g., E.B. Elliott Adv. Co. v. Metropolitan Dade County, 425 F.2d...