Phillips v. Montoya

• Decision Date: 27 October 2017
• Docket Number: 2160600
• Citation: 253 So.3d 438
• Parties: Ivan PHILLIPS v. Nick MONTOYA
• Court: Alabama Court of Civil Appeals

253 So.3d 438

Ivan PHILLIPS

v.Nick MONTOYA

2160600

Court of Civil Appeals of Alabama.

October 27, 2017

Edward A. Merrell and James Illston of Merrell Law Firm, LLC, Hoover, for appellant.

Candice J. Shockley, Pelham, for appellee.

MOORE, Judge.

Ivan Phillips appeals from a summary judgment entered by the Shelby Circuit Court ("the circuit court"), concluding that his claims against Nick Montoya were barred by the doctrine of res judicata. We affirm the circuit court's judgment.

Facts and Procedural History

On September 29, 2016, Phillips filed in the circuit court a complaint against Montoya, alleging claims of negligence, wantonness, breach of contract, misrepresentation, breach of express warranty, breach of implied warranty, and slander of title ("the circuit-court action"). Phillips attached several exhibits to his complaint. On September 30, 2016, Phillips filed an amended complaint alleging those same claims against Montoya. On October 31, 2016, Montoya answered the amended complaint.

On November 21, 2016, Montoya filed a motion to dismiss or, in the alternative, for a summary judgment; Montoya argued that Phillips's claims were barred by the doctrine of res judicata because, he said, those claims had been adjudicated in a previous judgment entered by the Shelby District Court ("the district court") in case no. DV–2015–900469 ("the district-court action"). Montoya attached evidentiary materials in support of his motion, which indicate that, in the district-court action, Montoya filed a complaint on or about June 23, 2015, against Phillips and his wife, April Phillips; that the Phillipses asserted counterclaims against Montoya based on negligence, wantonness, breach of contract, misrepresentation, breach of express warranty, breach of implied warranty, and slander of title; that the Phillipses failed to appear for the trial in the district-court action; and that, on November 19, 2015, the district court entered a default judgment against the Phillipses and awarded Montoya damages in the amount of $9,502.50, plus court costs.

On January 17, 2017, Phillips responded to Montoya's motion to dismiss or, in the alternative, for a summary judgment in the circuit-court action. On January 19, 2017, Montoya filed a reply to Phillips's response. On January 24, 2017, Phillips filed a supplemental response to Montoya's motion. Thereafter, on February 7, 2017, the circuit court entered a judgment dismissing Phillips's case.

Because Montoya's motion to dismiss or, in the alternative, for a summary judgment was based entirely on the defense of res judicata and depended on the submission of the filings from the district-court action, we conclude that the circuit court must have relied on those materials in deciding to dismiss the case. Furthermore, those materials were not attached to Phillips's complaint. Therefore, Montoya's motion should have been treated as a summary-judgment motion, and we will review the circuit court's judgment using the corresponding standard of review applicable to a summary judgment. See, e.g., Ex parte Price, 244 So.3d 949 (Ala. 2017) ; and Lloyd Noland Found., Inc. v. HealthSouth Corp., 979 So.2d 784, 792–93 (Ala. 2007).

On March 2, 2017, Phillips filed a postjudgment motion; that motion was denied on April 11, 2017. On April 28, 2017, Phillips filed his notice of appeal to this court.¹

Standard of Review

" ‘We review this case de novo, applying the oft-stated principles governing appellate review of a trial court's grant or denial of a summary judgment motion:

" ‘ "We apply the same standard of review the trial court used in determining whether the evidence presented to the trial court created a genuine issue of material fact. Once a party moving for a summary judgment establishes that no genuine issue of material fact exists, the burden shifts to the nonmovant to present substantial evidence creating a genuine issue of material fact. ‘Substantial evidence’ is ‘evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.’ In reviewing a summary judgment, we view the evidence in the light most favorable to the nonmovant and entertain such reasonable inferences as the jury would have been free to draw." ’

" American Liberty Ins. Co. v. AmSouth Bank, 825 So.2d 786, 790 (Ala. 2002) (quoting Nationwide Prop. & Cas. Ins. Co. v. DPF Architects, P.C., 792 So.2d 369, 372 (Ala. 2000) (citations omitted))."

General Motors Corp. v. Kilgore, 853 So.2d 171, 173 (Ala. 2002).

Discussion

On appeal, Phillips argues that the circuit court erred in entering a summary judgment in favor of Montoya on the basis of the doctrine of res judicata.

"Res judicata is a judicially created doctrine that precludes the relitigation of matters that have been adjudicated or that could have been adjudicated in the prior action. Lee L. Saad Constr. Co. v. DPF Architects, P.C., 851 So.2d 507 (Ala. 2002). 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." ’ Chapman Nursing Home, Inc. v. McDonald, 985 So.2d 914, 919 (Ala. 2007) (quoting Equity Res. Mgmt., Inc. v. Vinson, 723 So.2d 634, 636 (Ala. 1998) )."

Ex parte Chesnut, 208 So.3d 624, 635 (Ala. 2016).

Phillips specifically argues that the first element of the doctrine of res judicata was not met because, he says, a default judgment is not a judgment on the merits. We note, however, that our supreme court has held that a default judgment constitutes a "prior judgment on the merits" for purposes of res judicata. See McDonald v. U.S. Die Casting & Dev. Co., 628 So.2d 433, 433–34 (Ala. 1993). Therefore, we find no error on this point.

Phillips also argues that the first element of the doctrine of res judicata was not met because, he says, the Phillipses' counterclaims in the district-court action were not specifically adjudicated by the district court in the default judgment. When the holdings in a judgment entered by a trial court indicate that the court implicitly denied a counterclaim, that judgment will be deemed final. Jones v. DeRamus, 199 So.3d 74, 75 (Ala. Civ. App. 2015) ; and Horton v. Perkins, 17 So.3d 235, 237 n.2 (Ala. Civ. App. 2009). For example, although a counterclaim is not expressly denied, it will be deemed implicitly denied when a judgment in full is entered for the plaintiff. Roberts v. Security Trust & Sav. Bank of Brilliant, 470 So.2d 674, 675 (Ala. 1985). Furthermore, our supreme court has held that claims seeking money damages for trespass asserted by both a plaintiff and a defendant were implicitly denied when the judgment entered established a boundary line but did not award any money damages. Hingle v. Gann, 368 So.2d 22, 23–24 (Ala. 1979). Additionally, this court has held that when a trial court awards no damages on a claim, that claim is implicitly denied. Ervin v. Stackhouse, 64 So.3d 666, 672 (Ala. Civ. App. 2010).

Based on the foregoing, we conclude that a default judgment entered against a defendant based on his or her nonappearance at trial, such as the November 19, 2015, default judgment entered against the Phillipses in the district-court action, sufficiently indicates the implicit denial of any pending counterclaim. Therefore, we deem the November 19, 2015, default judgment in the district-court action to be a final judgment on the merits as to all the claims asserted in that action. See Jones v. DeRamus, 199 So.3d at 75. See also, e.g., Connecticut Nat'l Bank v. Oxenhandler, 30 Conn. App. 541, 545–46, 621 A.2d 300, 302 (1993) ("The judgment rendered for failure to appear for trial implicitly included a judgment for the plaintiffs on the defendants' counterclaim. By their failure to appear for trial, the defendants forfeited their rights to defend against the plaintiffs' complaint and to prosecute any cause of action they may have had arising from their counterclaim."). Because the Phillipses' counterclaims in the district-court action were implicitly denied, the first element of the doctrine of res judicata was met.

Phillips also argues that the second element of the doctrine of res judicata was not met because, he says, the district court lacked subject-matter jurisdiction over the district-court action because, he asserts, the Phillipses' counterclaims involved damages in excess of the district court's jurisdictional limits. We note, however, that the Phillipses' counterclaims in the district-court action requested unspecified damages. If the Phillipses intended to claim damages in excess of the jurisdictional limits of the district court, they were not required to bring their claims in the district-court action; instead, they could have asserted their claims in a separate action in the circuit court. See, e.g., Ex parte Moody, 620 So.2d 28, 30 (Ala. Civ. App. 1993) ("[A]lthough [a] counterclaim might otherwise be compulsory, [a defendant is] not required to assert his counterclaim in [a district court] action ... if he intend[s] to request damages ‘beyond the jurisdiction of the district courts.’ " (quoting Rule 13(dc), Ala. R. Civ. P., which, at the time, modified Rule 13(a)(4), Ala. R. Civ. P. There no longer is a Rule 13(a)(4) )). Because the Phillipses did not request damages outside the jurisdictional limits of the district court, we cannot conclude that the district court lacked jurisdiction over their counterclaims.

Phillips also argues that the district court erred in not setting aside the default judgment after weighing the factors set forth in Kirtland v. Fort Morgan Authority Sewer Services, Inc., 524 So.2d 600, 604 (Ala. 1988). However, the summary judgment entered in the circuit-court action is the judgment under review in this appeal; the propriety of the default judgment in the district-court action is not properly before us. Therefore, we will not...