Ex parte Hillard

• Decision Date: 03 September 2021
• Docket Number: 1200452
• Parties: Ex parte Deborah Hillard and Holland Hillard Warr v. Rik Tozzi In re: Deborah Hillard
• Court: Alabama Supreme Court

Ex parte Deborah Hillard and Holland Hillard Warr

In re: Deborah Hillard v. Rik Tozzi

No. 1200452

Supreme Court of Alabama

September 3, 2021

Jefferson Circuit Court, CV-16-312

PETITION FOR WRIT OF MANDAMUS

SELLERS, JUSTICE.

Deborah Hillard and Holland Hillard Warr jointly petitioned this Court for a writ of mandamus, raising numerous issues. We ordered answers and briefs on one issue raised by Warr whether the Jefferson Circuit Court erred in denying her summary-judgment motion on the counterclaim brought against her by her former husband, Rik Tozzi, which Warr asserts is barred by principles of res judicata. Warr specifically requests that we issue the writ of mandamus directing the circuit court to grant her summary-judgment motion. We deny the petition as to that issue. Moreover, because, in our order of April 28, 2021, we ordered answers and briefs as to only that one issue, we implicitly denied the petition as to the other issues raised by Hillard and Warr. See Ex parte Carson, 945 So.2d 448, 449 (Ala. 2006).

Warr and Tozzi married in July 2011. Shortly before their marriage, Warr's house was destroyed by a tornado. Warr used insurance proceeds from the loss to purchase and begin remodeling a house in which she and Tozzi planned to live. It appears that title to the new house was vested solely in Warr's name.

Apparently the insurance proceeds were insufficient to promptly complete the remodeling, and, in September 2012, Warr's mother Deborah Hillard, sent Tozzi an email indicating that Hillard was going to provide $140, 000 to "tide [Warr] over." Attached to the email was a draft promissory note providing that the funds were to be repaid to Hillard within 90 days. Although the original draft of the promissory note identified both Warr and Tozzi as borrowers, Tozzi removed Warr's name and accompanying signature line and signed his name to the promissory note as the sole borrower. According to Tozzi, Hillard represented to him when she sent the draft promissory note that she needed the promissory note executed immediately for tax purposes, that she had been unable to locate Warr to obtain her signature, that Tozzi would not personally have to repay the loan, and that the loaned funds would be repaid to Hillard from the proceeds from the eventual sale of the house.

Thereafter, Hillard arranged for $140, 000 to be transferred from a trust, of which Hillard was a beneficiary, to a bank account held jointly by Hillard and Warr. The money was then transferred to a different bank account also held jointly by Hillard and Warr, which the parties have referred to as the "house account." Funds in the house account were used to pay for the remodeling of Warr's new house. Tozzi had no ownership interest in either of the referenced bank accounts or the house.

In February 2014, Tozzi initiated divorce proceedings in the Tuscaloosa Circuit Court. During those proceedings, Tozzi asserted that he should not be required to repay the money allegedly due Hillard pursuant to the promissory note because the funds had been used solely to improve Warr's house and because he had contributed his own funds toward those improvements. He asked the domestic-relations court to treat the funds allegedly due under the promissory note as a joint marital debt and to order them to be repaid from the proceeds from the sale of Warr's house. The domestic-relations court, however, declined Tozzi's request and, in April 2019, entered a divorce judgment declaring in part that "each party shall be liable for any debts in his or her own name." It appears that that portion of the divorce judgment was based on a prenuptial agreement entered into by Tozzi and Warr, which made each party responsible for his or her personal debts.

During the pendency of the divorce proceedings, Hillard initiated a collections action against Tozzi in the Tuscaloosa Circuit Court. She stated causes of action alleging breach of the promissory note and money had and received. At some point, Hillard's action was transferred to the Jefferson Circuit Court where, in December 2016, Tozzi filed a counterclaim against Hillard. He also added Warr as an additional counterclaim defendant at that time.

Pursuant to his counterclaim, Tozzi alleged that Hillard had fraudulently induced Tozzi to execute the promissory note by misrepresenting that he would not have to repay the money loaned, by misrepresenting that Hillard needed a promissory note only for tax purposes, and by misrepresenting that Hillard had been unable to locate Warr to obtain her signature on the promissory note. Tozzi also asserted that Hillard had fraudulently suppressed the fact that the money would be deposited into a bank account held jointly by Hillard and Warr. Additionally, Tozzi alleged that Warr had conspired with Hillard to fraudulently induce Tozzi to sign the promissory note as the sole borrower and had fraudulently suppressed the fact that the money was deposited into a bank account held by Warr and Hillard.^[1]

Warr moved for a summary judgment on Tozzi's counterclaim, arguing in part that it is barred by principles of res judicata based on the earlier divorce proceedings. The trial court denied Warr's motion, and she timely filed the instant petition for a writ of mandamus.

"A petition for a writ of mandamus is an appropriate method by which to seek this Court's review of the denial of a motion to dismiss or for a summary judgment predicated on the doctrine of res judicata. Ex parte LCS Inc., 12 So.3d 55, 56 (Ala. 2008) (citing Ex parte Sears, Roebuck & Co., 895 So.2d 265 (Ala. 2004)). See also Ex parte Jefferson Cnty., 656 So.2d 382 (Ala. 1995).

" 'The standard governing our review of an issue presented in a petition for the writ of mandamus is well established:

"' "[M]andamus is a drastic and extraordinary writ to be issued only where there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court." '

"Ex parte Cupps, 782 So.2d 772, 774-75 (Ala. 2000) (quoting Ex parte Edgar, 543 So.2d 682, 684 (Ala. 1989))."

Ex parte Webber, 157 So.3d 887, 891 (Ala. 2014).

"Res judicata and collateral estoppel are two closely related, judicially created doctrines that preclude the relitigation of matters that have been previously adjudicated or, in the case of res judicata, that could have been adjudicated in a prior action.

" 'The doctrine of res judicata, while actually embodying two basic concepts, usually refers to what commentators label "claim preclusion," while collateral estoppel ... refers to "issue preclusion," which is a subset of the broader res judicata doctrine.'

"Little v. Pizza Wagon, Inc., 432 So.2d 1269, 1272 (Ala. 1983) (Jones, J., concurring specially). See also McNeely v. Spry Funeral Home of Athens, Inc., 724 So.2d 534, 537 n.l (Ala. Civ. App. 1998). In Hughes v. Martin, 533 So.2d 188 (Ala. 1988), this Court explained the rationale behind the doctrine of res judicata:

" 'Res judicata is a broad, judicially developed doctrine, which rests upon the ground that public policy, and the interest of the litigants alike, mandate that there be an end to litigation; that those who have contested an issue shall be bound by the ruling of the court; and that issues once tried shall be considered forever settled between those same parties and their privies.'

"533 So.2d at 190. The 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.'

"Equity Res. Mgmt., Inc. v. Vinson, 723 So.2d 634, 636 (Ala. 1998). '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.' 723 So.2d at 636. Res judicata, therefore, bars a party from asserting in a subsequent action a claim that it has already had an opportunity to litigate in a previous action."

Lee L. Saad Constr. Co. v. DPF Architects, P.C., 851 So.2d 507, 516-17 (Ala. 2002).

Warr has not shown that, in the divorce action, Tozzi asserted or fully litigated the allegedly fraudulent acts and omissions surrounding the advent of the promissory note. It does not appear that Tozzi's tort-based assertions in the present case, namely, that Warr suppressed material information and participated in a conspiracy to fraudulently induce him to sign the promissory note as the sole borrower, were made in the divorce action or addressed in the divorce judgment, which made no specific mention of the promissory note. Even so, Warr asserts that the doctrine of res judicata precludes a party from litigating not only matters that have been previously adjudicated, but also matters that could have been adjudicated in a prior action. This Court does not doubt that the domestic-relations court could have taken into account Tozzi's fraud and conspiracy allegations, had he made them, in exercising its discretion in dividing the parties' marital property and debt. See Coleman v. Coleman, 566 So.2d 482, 485 (Ala. 1990) (indicating that, in a divorce action, the trial court "can consider the conduct of the parties during the marriage when awarding alimony and dividing the marital property"). According to Warr, because Tozzi could have made his fraud and conspiracy allegations in the divorce action, he is barred from raising them as tort claims in the present case.

Warr bears the burden in seeking a writ of mandamus. Ex parte Glover, 801 So.2d 1, 6 (Ala. 2001) ("The petitioner bears the burden of proving each of [the] elements [establishing...