Equity Resources Management, Inc. v. Vinson

• Court: Alabama Supreme Court
• Writing for the Court: HOUSTON, Justice.
• Citation: 723 So.2d 634
• Parties: EQUITY RESOURCES MANAGEMENT, INC., et al. v. Linda VINSON.
• Decision Date: 13 November 1998

723 So.2d 634

EQUITY RESOURCES MANAGEMENT, INC., et al.
v.
Linda VINSON

1970217.

Supreme Court of Alabama.

November 13, 1998.

723 So.2d 635

Susan S. Wagner, Frank S. James III, and Wesley C. Redmond of Berkowitz, Lefkovits, Isom & Kushner, P.C., Birmingham, for appellants

Jimmy Jacobs, Montgomery, for appellee.

HOUSTON, Justice.

Pursuant to Rule 5, A.R.App.P., this Court granted permission to Equity Resources Management, Inc. ("Equity Resources"), Paul Spina, Jack Fiorella, and Carol Bohn,¹ to appeal the trial court's denial of their motion for a summary judgment in this action filed against them by Linda L. Vinson. The summary judgment motion was based on the defense of res judicata, the elements of which were stated in that motion as "(1) a prior judgment on the merits, (2) rendered by a court of competent jurisdiction, (3) with substantial identity of the parties, and (4) with the same cause of action presented in both suits."²

Before she filed this action in August 1996, Vinson had filed an action against these same defendants in the United States District Court for the Middle District of Alabama, Northern Division (Vinson v. Equity Resources Management, Inc., et al., CA-95-T-1649-N, "the federal action"), seeking damages for, among other things, age discrimination, under the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq. In the federal action, she had sought damages for:

"(1) [T]he loss of income and benefits from the date of her termination to the present;

723 So.2d 636

(2) the loss of future income and benefits; (3) damage to her ability to secure employment of comparable pay, responsibilities, and advancement opportunities; (4) loss of her home with concomitant loss of the value of her investment therein, and the loss of future appreciation thereto; (4[sic]) medical expenses; (5) interest expenses incurred due to loans necessitated by the loss of her source of income; and (6) damage to her reputation for creditworthiness and present and future ability to obtain credit."

In connection with three of her claims now before this Court (those claims alleging fraud, breach of contract, and negligence or wantonness in the hiring, training, supervision, and retention of her immediate supervisor, Bohn), Vinson seeks damages for:

"(a) [T]he loss of income and benefits from the date of her termination to the present; (b) the loss of future income and benefits; (c) damage to her ability to secure employment of comparable pay, responsibilities, and advancement opportunities; (d) loss of her home with concomitant loss of the value of her investment therein, and the loss of future appreciation thereto; (e) mental and emotional distress; (f) medical expenses; (g) interest expenses incurred due to loans necessitated by the loss of her source of income; and, (h) damage to her reputation for creditworthiness and present and future ability to obtain credit."

Vinson also seeks punitive damages in connection with her claims alleging fraud and wanton hiring, as well as in connection with her claim alleging a "violation of [her] rights to equal protection and due process of law under Article One §§ 6 and 13 of the Constitution of Alabama of 1901."

The federal district court dismissed Fiorella, Spina, and Bohn as defendants on the ground that as to them Vinson had failed to state a claim upon which relief could be granted. The federal claim against Equity Resources was then tried to a jury, which awarded Vinson $86,000.³ The district court entered a judgment on the jury's verdict, and, after this permissive appeal was filed, that judgment was affirmed by an unpublished opinion. Vinson v. Equity Resources, 141 F.3d 1190 (11th Cir.1998) (table).

The essential elements of res judicata are (1) a prior judgment on the merits, (2) rendered by a court of competent jurisdiction, (3) with substantial identity of the parties, and (4) with the same cause of action presented in both actions. If those four elements are present, then any claim that was, or that could have been, adjudicated in the prior action is barred from further litigation. Dairyland Ins. Co. v. Jackson, 566 So.2d 723, 725-26 (Ala.1990).

The federal district court entered a judgment in favor of Vinson and against Equity Resources on the merits of Vinson's federal statutory age-discrimination claim. That court also entered a judgment on the merits in favor of the individual defendants Spina, Fiorella, and Bohn. See Higgins v. Henderson, 551 So.2d 1050, 1053 (Ala.1989) ("In a federal court, dismissal for failure to state a claim on which relief may be granted is an adjudication on the merits of the case."). Subject matter jurisdiction over federal age-discrimination claims is expressly conferred on federal district courts. See 29 U.S.C. § 626(c)(1). The dispositive issue on this appeal is, therefore, whether the fourth element of res judicata—that each action was based on the same cause of action—is present.

This Court, in Whisman v. Alabama Power Co., 512 So.2d 78, 81 (Ala.1987), restated the elements of res judicata:

"[R]es judicata ... involves prior litigation between a plaintiff and a defendant, which is decided on the merits by a court of competent jurisdiction, and then a subsequent attempt by the prior plaintiff to relitigate the same cause of action against the same defendant, or perhaps to relitigate a different claim not previously litigated but which arises out of the same evidence. Alabama law is well settled that this will not be allowed. A valid, final judgment on the merits of the claim extinguishes the claim. If the plaintiff won, the claim is merged into the judgment; if the

723 So.2d 637

defendant won, the plaintiff is barred from relitigating any matter which could have been litigated in the prior action."

(Citations omitted. Emphasis in original.) This statement from Whisman is consistent with a long line of cases holding that whether the second action presents the same cause of action depends on whether the issues in the two actions are the same and on whether substantially the same evidence would support a recovery in both actions. See, e.g., Sessions v. Jack Cole Co., 276 Ala. 10, 158 So.2d 652 (1963); Gulf American Fire & Casualty Co. v. Johnson, 282 Ala. 73, 209 So.2d 212 (1968); Geer Brothers, Inc. v. Crump, 349 So.2d 577 (Ala.1977); Dominex, Inc. v. Key, 456 So.2d 1047 (Ala.1984); Sullivan v. Walther Builders, Inc., 495 So.2d 655 (Ala.1986); Pierce v. Rummell, 535 So.2d 594 (Ala.1988); Garris v. South Alabama Production Credit Ass'n, 537 So.2d 911 (Ala. 1989); Dairyland Ins. Co. v. Jackson, supra; Croft v. Pate, 585 So.2d 799 (Ala.1991); Selma Foundry & Supply Co. v. Peoples Bank & Trust Co., 598 So.2d 844 (Ala.1992); Vaughan v. Barr, 600 So.2d 994 (Ala.1992); Reed v. Brookwood Medical Center, 641 So.2d 1245 (Ala.1994); Benetton S.p.A. v. Benedot, Inc., 642 So.2d 394 (Ala.1994); see also other cases collected at 34 Ala. Digest 2d Judgment Key No. 585(2) (1994).

Even though some of our cases have recognized that the plaintiff's presentation of alternative legal theories in a second action can be a factor to be considered in determining whether the two causes of action are the same, see, e.g., Benetton S.p.A. v. Benedot, Inc., supra; Vaughan v. Barr, supra; and Dairyland Ins. Co. v. Jackson, supra, this Court has made it very clear that the determinative inquiry is whether the claims in both actions arise out of, and are subject to proof by, the same evidence. See Gulf American Fire & Casualty Co. v. Johnson, supra, 282 Ala. at 78, 209 So.2d at 216, quoting Cannon v. Brame, 45 Ala. 262, 263 (1871):

"`In civil cases the judgment of a court of concurrent jurisdiction, directly upon the point, is as a plea, a bar, and as evidence, conclusive, between the same parties upon the same matter directly in question in another court. A verdict for the same cause of action, between the same parties, is absolutely conclusive. And the cause of action is the same when the same evidence will support both actions, although the actions may happen to be founded on different writs. Thus a judgment in trespass will be a bar to an action of trover for the same taking. And a verdict in trover will be a bar to an action for money had and received for the sale of the same goods.'"

(Citation omitted.) See also Geer Brothers, Inc. v. Crump, supra, 349 So.2d at 580 ("Even though the forms of the action, past and present, are different, if substantially the same evidence supports their issues, the judgment in the former action is a bar to the latter."); Benetton S.p.A. v. Benedot, Inc., supra, 642 So.2d at 399 ("In Selma Foundry, this Court made it clear that the `same evidence' test applies in determining whether the same cause of action is presented in consecutive actions with regard to the fourth element of res judicata."); Garris v. South Alabama Production Credit Ass'n, supra, 537 So.2d at 914 ("Regardless of the form of the action, the issue is the same when it is supported in both actions by substantially the same evidence."); and Reed v. Brookwood Medical Center, supra, 641 So.2d at 1247 ("For purposes of determining whether the doctrine of res judicata applies to a claim, the manner in which the claim is labeled in the complaint does not necessarily determine the nature of the claim.").

Difference in the proof of damages is not a ground for distinguishing the issues in each case. Sessions v. Jack Cole Co., supra; Geer Brothers,...