Smith v. Malouf

• Decision Date: 29 April 1992
• Docket Number: No. 90-CA-0681,90-CA-0681
• Citation: 597 So.2d 1299
• Parties: Robert L. SMITH, Executor of the Estate of Henderson Smith, Deceased v. Robert A. MALOUF, Michael J. Malouf, Michael B. Flanagin, Philip Simon, Jr., John T. Crouch, Janet Jones Crouch and Johnny Rees.
• Court: Mississippi Supreme Court

Page 1299

597 So.2d 1299

Robert L. SMITH, Executor of the Estate of Henderson Smith, Deceased v. Robert A. MALOUF, Michael J. Malouf, Michael B. Flanagin Philip Simon, Jr., John T. Crouch, Janet Jones Crouch and Johnny Rees.

No. 90-CA-0681.

Supreme Court of Mississippi.

April 29, 1992.

Fred T. Rucker, Scales & Scales, Jackson, for appellant.

Robert A. Malouf, Malouf & Malouf, Jackson, for appellees.

Before ROY NOBLE LEE, C.J., and BANKS and McRAE, JJ.

McRAE, Justice, for the Court:

This is the case of the plaintiff who wouldn't take "no" for an answer. The primary question is whether a plaintiff may pursue an action for trespass to real property while appealing a final decree in a separate action wherein Chancery Court of Madison County declared the plaintiff to have no legally cognizable interest in the subject property. The Court must also decide whether such persistence runs afoul of the Litigation Accountability Act of 1988. Appealing from summary judgment in favor of the defendants and the imposition of sanctions for filing a frivolous action, Appellant Smith assigns the following as error:

I. THE TRIAL COURT ERRED IN RULING THAT A JUDGMENT PENDING APPEAL IS "FINAL" AND CONTROLLING AS TO ALL COLLATERAL ISSUES PRESENTED BY COMPANION CASES.

II. THE TRIAL COURT ERRED IN UPHOLDING THE DEFENDANT'S MOTION FOR SUMMARY JUDGMENT.

III. THE TRIAL COURT ERRED IN ASSESSING SANCTIONS AGAINST THE PLAINTIFF AND HIS ATTORNEY FOR FILING THE INSTANT CASE.

Finding that all three assignments have merit, we reverse and remand for trial.

FACTS

The course of events leading up to the case sub judice began on or about May 29, 1987 when Henderson Smith, now deceased, quitclaimed a portion of his real property to one Lorene Smith. Following the death of Henderson Smith, appellant Robert L. Smith ("Robert Smith") was appointed executor of the estate. In December, 1987 he brought an action (Cause No. 28,735) seeking to set aside the conveyance from Henderson Smith to Lorene Smith on grounds that the deed had been procured through undue influence and that Henderson Smith had lacked capacity to convey property. The case came on for trial on February 15, 1989 in the Chancery Court of Madison County, Mississippi. After the plaintiff rested, the defendant moved to dismiss. Finding that the plaintiff had not made a prima facie showing of undue influence or lack of capacity, the chancellor granted the motion to dismiss and entered a judgment to that effect on February 24, 1989 ("the February judgment"). Robert Smith subsequently appealed the dismissal to this Court.

On January 10, 1989, a little over a month before the dismissal of Cause No. 28,735, Robert Smith filed his complaint in the instant case. As in Cause No. 28,735, the case sub judice involves the tract of land allegedly conveyed from Henderson Smith to Lorene Smith. In his complaint, Robert Smith alleges that defendants Robert A. Malouf, et al. ("Malouf") trespassed upon the property by cutting several trees and commencing construction of a gravel road. The complaint seeks damages and an injunction barring further road construction.

According to Malouf, the defendants did not learn about the February judgment until November of 1989. On November 9, 1989, Malouf wrote a letter to Robert Smith's attorney, Clarence Scales. In his letter, Malouf asserted that Robert Smith had no standing to maintain his trespass action since, according to the February judgment, he had no legally cognizable interest in the subject property. Malouf demanded that Robert Smith withdraw his claim or face a motion for summary judgment and a demand for attorney's fees pursuant to the Litigation Accountability Act of 1988.

Robert Smith did not withdraw his claim. True to his word, Malouf filed a motion for summary judgment and sanctions on December 21, 1989. Malouf attached to his motion, inter alia, copies of the complaint and judgment from Cause No. 28,735 along with a sworn affidavit itemizing defendants' attorney's fees. On May 29, 1990, the Chancery Court of Madison County granted Malouf's motion for summary judgment and awarded attorney's fees jointly and severally against Robert Smith and his attorney in the amount of $2,480.00. In his Conclusions of Law, the chancellor stated that the February judgment deprived Robert Smith of standing in the instant case and that Smith and his attorney knew or should have known that further pursuit of the matter would be meritless.

Subsequent to the perfection of Smith's appeal in the instant case, this Court reversed the February judgment. See Smith v. Smith, 574 So.2d 644 (Miss.1990). The Court remanded for further consideration, holding that Robert Smith had established a prima facie case for lack of capacity in his attack on the conveyance from Henderson Smith to Lorene Smith. Smith, 574 So.2d at 654.

LAW

I. WHETHER THE TRIAL COURT ERRED IN RULING THAT A JUDGMENT PENDING APPEAL IS "FINAL" AND CONTROLLING AS TO ALL COLLATERAL ISSUES PRESENTED BY COMPANION CASES?

We have never before addressed the question of whether the pendency of an appeal alters the collateral estoppel or res judicata effect of an otherwise final judgment. However, in Mississippi Power & Light Co. v. Town of Coldwater, 168 F.Supp. 463 (N.D.Miss.1958), the United States District Court found on the basis of Mississippi law that "the appeal to the Supreme Court of Mississippi does not prevent [the judgment in a former suit] from being res judicata." Id. at 476. The court stated the following:

The question next to arise is whether or not the appeal to the Supreme Court which is still pending prevents the judgment of the trial court from being res adjudicata. This question has been answered by the Supreme Court of Mississippi. In the case of Early v. Board of Supervisors, 182 Miss. 636, 181 So. 132, the Court says an appeal with supersedeas does not vacate the judgment appealed from; it merely suspends the enforcement of the judgment pending the determination of the appeal. If on that determination the judgment is affirmed, the effect thereof is to establish or confirm the validity of the judgment from and as the date of its rendition in the court of original jurisdiction. See also Klaas v. Continental Southern Lines, 225 Miss. 94, 82 So.2d 705, 708. The Court said: "Clearly the judgments of the trial court were the effective adjudications of plaintiffs' rights. Their effect was suspended during appeal with supersedeas to the Supreme Court, but our judgment simply affirmed the validity of the judgments of the circuit court" See also Stone v. McKay Plumbing Co., 200 Miss. 792, 26 So.2d 349, 30 So.2d 91; Lyle Cashion Co. v. McKendrick, 227 Miss. 894, 87 So.2d 289.

The effect of these decisions is that the judgment in the former suit is res adjudicata of everything complained of in the present lawsuit or is pending before the Supreme Court and that the appeal to the Supreme Court of Mississippi does not prevent it from being res adjudicata. The appeal simply supersedes the enforcement of the judgment.

Mississippi Power, 168 F.Supp. at 475-76.

The federal court's characterization of Mississippi law is reasonable and echoes the holdings of other jurisdictions. The various states have ruled with virtual unanimity that a judgment is "final" for res judicata and collateral estoppel purposes even though pending on appeal. See, e.g., Holmberg v. State, 796 P.2d 823, 824 (Alaska 1990); Westman v. Dessellier, 459 N.W.2d 545, 547 (N.D.1990); Jordan v. Washington Metropolitan Area Transit Authority, 548 A.2d 792, 795 (D.C.Ct.App.1988); Bunnett v. Smallwood, 768 P.2d 736, 740 (Colo.Ct.App.1988); Capalbo v. Planning and Zoning Board of Appeals, 208 Conn. 480, 547 A.2d 528, 532 (1988); Rathe v. Adirondack Concepts, Inc., 131 A.D.2d 81, 520 N.Y.S.2d 82, 85 (N.Y.Supr.Ct.1987); Cully v. Lutheran Medical Center, 37 Ohio App.3d 64, 523 N.E.2d 531, 532 (Ohio Ct.App.1987); Consumers Oil Co. v. Spiking, 717 S.W.2d 245, 251 (Mo.Ct.App.1986); Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1, 6 (Tex.1986); Bassett v. Civil Serv. Comm'n, 100 Pa.Cmwlth. 356, 514 A.2d 984, 986 (1986); Gregory Marketing Corp. v. Wakefern Food Corp., 207 N.J.Super. 607, 504 A.2d 828, 837 (1985). But see McBurney v. Aldrich, 816 S.W.2d 30, 34 (Tenn.App.1991); People ex rel. Gow v. Mitchell Bros.' Santa Anna Theater, 101 Cal.App.3d 296, 161 Cal.Rptr. 562 (1980). According to Restatement (Second) of Judgments, sec. 13 cmt. f (1982): "[The better view is that a judgment otherwise final remains so despite the taking of an appeal unless what is called an appeal actually consists of a trial de novo."

Rule 60(b) of the Mississippi Rules of Civil Procedure suggests that the majority rule would apply under Mississippi law. Rule 60(b) provides: "On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment ... for the following reasons: ... (5) ... a prior judgment upon which it is based has been reversed." A court could hardly base its judgment upon a prior judgment which is later reversed unless (1) the prior judgment is appealed and (2) the prior judgment is given collateral effect. Rule 60(b) thus seems to espouse the proposition that a judgment from which an appeal is taken can still have collateral estoppel or res judicata effect.

Even in jurisdictions which follow the majority rule, however, a judgment from which an appeal has been taken loses its collateral estoppel or res judicata effect upon being reversed by the appellate court. See Rapoport v. Tesoro Alaska Petroleum Co., 794 P.2d 949, 952 (Alaska 1990); Jordan, 548 A.2d at 794; Rathe, 520 N.Y.S.2d at 84; Bassett, 514 A.2d at 986. In the instant case, Malouf relied on the conclusive effect of the February judgment, a judgment this Court reversed in Smith. Having lost its collateral estoppel effect, the February judgment is no longer sufficient to undergird Malouf's motion for summary judgment.

II. WHETHER THE...