Pierce v. Rummell
| Decision Date | 21 October 1988 |
| Citation | 535 So.2d 594 |
| Parties | Beth Ann PIERCE v. Shirley L. RUMMELL f/k/a Shirley L. Pierce. Charles E. PIERCE v. Shirley L. RUMMELL f/k/a Shirley L. Pierce. 86-1377, 86-1378, 86-1527 and 86-1528. |
| Court | Alabama Supreme Court |
W.A. Kimbrough, Jr., and Braxton Counts III of Turner, Onderdonk & Kimbrough, Mobile, for appellant Beth Ann Pierce.
Johnny M. Lane, Saraland, for appellant Charles E. Pierce.
W. Lloyd Copeland of Clark, Deen & Copeland, Mobile, for appellee.
This is an appeal from a judgment for Shirley Pierce against Charles ("Charlie") and Beth Pierce for conspiring to defraud Shirley. The jury returned a $60,000 verdict for Shirley, and the trial court entered judgment on the verdict. Charlie and Beth raise issues regarding denial of their motions for a mistrial, directed verdict, judgment notwithstanding the verdict, and new trial; those motions raised, among other issues, res judicata, collateral estoppel, and the statute of limitations. Beth also appeals from the denial of her motion for new trial on her claim against Shirley on a promissory note and mortgage.
On April 27, 1982, the Mobile Circuit Court entered a judgment of divorce in favor of Shirley Pierce against Charlie Pierce. That judgment ordered Charlie to pay the remaining $10,000 mortgage balance on Charlie and Shirley's house in Saraland to Alabama Federal Savings & Loan Association ("Alabama Federal"). The judgment further ordered Charlie to sell the house and divide the proceeds equally with Shirley. After the divorce, Shirley moved to Gulf Shores, Alabama. Charlie married Beth, who is one of the defendants in this action.
At the end of August 1982, Charlie told Shirley he intended to borrow $50,000 from his parents to pay debts of the marriage, personal loans, and taxes that had led to liens on the house. Shirley and Charlie signed a promissory note for $50,000 payable to Charlie's parents, W.T. and Pearl Pierce. (W.T. Pierce died before the trial.) The note was secured by a $50,000 second mortgage on Charlie and Shirley's house.
Charlie stopped making the mortgage payments to Alabama Federal. On April 13, 1983, Alabama Federal foreclosed the mortgage and recorded the foreclosure deed in the Probate Court of Mobile County. Prior to the foreclosure, notices were published in the Mobile Press Register from March 16, 1983, through mid-April 1983. Pearl purchased the house for $10,000 at the foreclosure sale. Shirley allegedly did not know that the mortgage on the house had been foreclosed until Charlie informed her on May 17, 1984, a month after her right to redeem the property had expired.
On July 23, 1984, Shirley filed a motion for rule nisi against Charlie, seeking to have him found in contempt of court for his failure to comply with the divorce judgment. The motion requested the court to order Charlie to pay Shirley $75,000, the claimed value of Shirley's half interest in the house. The court at first ordered a commissioner to sell the house, but later entered an order denying Shirley's motion to have the house sold.
On May 3, 1985, Shirley filed a complaint against Charlie and his mother Pearl. The final amended complaint added claims against Beth. Shirley alleged that Charlie had defrauded her by not paying the mortgage debt; by allowing Pearl to purchase the house at the foreclosure sale; and by thus defeating Shirley's rights to the proceeds from the sale of the house. Shirley further alleged that Beth, Pearl, and Charlie conspired to defraud her. Charlie and Beth answered individually and asserted defenses of res judicata, collateral estoppel, and the statute of limitations.
In late March 1986, Pearl conveyed the house to Beth and assigned the $50,000 promissory note and mortgage to Beth. On July 15, 1986, Beth sued Shirley for defaulting on the mortgage and promissory note. This claim was consolidated with Shirley's claims for trial.
During the trial, Charlie and one of Shirley's lawyers had a physical fight in front of the jury. Beth and Charlie both moved for a mistrial. The trial court denied the motions.
At the conclusion of the plaintiff's evidence and again at the conclusion of all the evidence, Beth moved for a directed verdict. The trial court denied the motions. The trial court also refused to give Beth's requested jury charges concerning res judicata, collateral estoppel, constructive notice, and the statute of limitations.
As to Shirley's claims, the jury returned a verdict against Beth and Charlie but not against Pearl. The jury, through special interrogatories, found Beth and Charlie liable for conspiring to defraud Shirley and found Charlie liable for legal fraud, and it awarded Shirley $30,000 in compensatory damages and $30,000 in punitive damages. The jury also returned a verdict for Shirley on Beth's suit on the note and mortgage. The trial court entered judgment on the verdicts. Beth and Charlie filed separate motions for judgment notwithstanding the verdict or, in the alternative, a new trial. The trial court denied both motions.
The first issue presented by Charlie and Beth is whether the trial court erred by denying their motions and by refusing Beth's charges to the jury based on res judicata and collateral estoppel. The res judicata defense requires these four elements: (1) a prior judgment by a court of competent jurisdiction; (2) that the prior judgment was rendered on the merits; (3) that the parties to both suits are substantially identical; (4) that the same cause of action is present in both suits. Tatum v. Kelley, 481 So.2d 1132, 1135 (Ala.1985). Charlie and Beth contend that the court's ruling on Shirley's motion for rule nisi should have res judicata and collateral estoppel effects on Shirley's fraud claims in this lawsuit. Although Shirley pleaded in her motion all the facts that serve as the basis for her fraud claims, the court hearing the motion was addressing Charlie's compliance with the divorce judgment, not fraud, conspiracy to defraud, or fraudulent conveyances.
Furthermore, because Charlie no longer owned the house, the court hearing the motion would not have ordered that the house be sold; any relief that Shirley would have been granted would have been a property division related to the divorce. See Thomas v. Thomas, 406 So.2d 939 (Ala.Civ.App.1981), and Timmons v. Central Bank of the South, 528 So.2d 845 (Ala.1988). The relief would not have included setting aside the allegedly fraudulent conveyance from Pearl to Beth, nor would the relief have included compensatory and punitive damages for fraud and conspiracy to defraud. Shirley's motion for rule nisi and her action based on fraud are not the same causes of action; accordingly Charlie and Beth's res judicata defense fails.
The defense of collateral estoppel requires four elements: (1) an issue identical to the one litigated in the prior suit; (2) that the issue was actually litigated in the prior suit; (3) that resolution of the issue was necessary to the prior judgment; and (4) identical parties. Lott v. Toomey, 477 So.2d 316, 319 (Ala.1985). The motion for rule nisi raised issues concerning Charlie's compliance with the divorce judgment, specifically, the requirement that he pay Shirley half of the house's value at the time of the divorce.
Shirley's claims of fraud and conspiracy raise issues concerning Charlie's conduct that led to Alabama Federal's foreclosing the mortgage and to the subsequent events that may have defeated Shirley's interest in the house. The issues raised by Shirley's present claims are not identical to the ones in the prior lawsuit, nor was their resolution necessary to the order on the rule nisi motion. Thus, collateral estoppel does not bar litigation of any issue raised by Shirley's present claims.
The second issue presented by Charlie and Beth is whether Shirley had...
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