Smith v. Scott Paper Co.

• Decision Date: 05 February 1993
• Citation: 620 So.2d 976
• Parties: Robert L. SMITH v. SCOTT PAPER COMPANY. 1911108.
• Court: Alabama Supreme Court

Page 976

620 So.2d 976

Robert L. SMITH v. SCOTT PAPER COMPANY.

1911108.

Supreme Court of Alabama.

Feb. 5, 1993.

Order Overruling Application for

Rehearing April 30, 1993.

Andrew T. Citrin, Robert T. Cunningham, Jr. and David G. Wirtes, Jr. of Cunningham, Bounds, Yance, Crowder and Brown, Mobile, for appellant.

Broox G. Holmes, Robert J. Mullican and Clifford C. Brady of Armbrecht, Jackson, DeMouy, Crowe, Holmes & Reeves, Mobile, for appellee.

STEAGALL, Justice.

The plaintiff, Robert L. Smith, appeals from a summary judgment entered in favor of the defendant, Scott Paper Company, in an action alleging fraud and the tort of outrage.

Scott Paper had denied Smith's claim for worker's compensation benefits and, in a previous lawsuit by Smith against Scott Paper, the trial court had entered a judgment awarding Smith the benefits. Smith then filed this action; the trial court entered a summary judgment in favor of Scott Paper, holding that Smith's claims arose out of the same nucleus of operative facts as his earlier worker's compensation claim and that, by not bringing these claims in the first action, Smith was barred by the doctrine of res judicata from bringing the claims in this case.

Smith appeals, arguing that the worker's compensation action was not based upon the same cause of action as this tort action and that the doctrine of res judicata therefore does not bar the claims in this case. Smith argues that his worker's compensation case did not encompass all of the issues raised in this case and that the evidence and the burden of proof in a worker's compensation case do not support a recovery on the claims in this case.

The elements of res judicata are (1) a final judgment on the merits (2) rendered by a court of competent jurisdiction (3) with substantially the same parties and (4) with the same cause of action presented in both cases. Crutcher v. Wynn, 591 So.2d 453 (Ala.1991). Smith concedes that the first three elements of res judicata are present in this case; therefore, the question before this Court is whether the same cause of action is presented in this case as was presented in the worker's compensation case.

In Patrick v. Femco Southeast, Inc., 590 So.2d 259 (Ala.1991), this Court stated that the issues of fact and law in a worker's compensation case are entirely different from those in a fraud action and that the trier of fact in a fraud action and that in a worker's compensation action, and the evidence to support or refute a fraud claim and that necessary to support or refute a worker's compensation claim are different. In the instant case, the issues of law and fact regarding the fraud and outrage claims are different from those presented in the worker's compensation case and, as in Patrick, the trier of fact in this case is different from that in the worker's compensation case, and the evidence necessary to support or refute the fraud and outrage claims is different from the evidence necessary to support or refute the worker's compensation claims.

Initially we hold, therefore, that Smith's present claims are not barred by the doctrine of res judicata. A correct judgment, however, will not be reversed even if the trial court has based it on the wrong reasons. Boykin v. Magnolia Bay, Inc., 570 So.2d 639 (Ala.1990).

In order to enter a summary judgment, the trial court must determine that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law. Rule 56, A.R.Civ.P. This case was filed after June 11, 1987; accordingly, the "substantial evidence rule" applies to the ruling on the motion for summary judgment. Ala.Code 1975, § 12-21-12. In order to defeat a properly supported motion for summary judgment, the nonmovant must present substantial evidence creating a genuine issue of material fact. Betts v. McDonald's Corp., 567 So.2d 1252 (Ala.1990). "[S]ubstantial 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." West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989).

In order to sustain his fraud claim based on misrepresentation, Smith must present substantial evidence (1) that Scott Paper had a duty to speak the truth, (2) that it falsely represented to him a material existing fact, whether intentionally, recklessly, or innocently, (3) that he relied upon the false representation, and (4) that he suffered loss or damage proximately resulting from the false representation. Smith v. MBL Life Assur. Corp., 589 So.2d 691 (Ala.1991).

In order to sustain his claim of outrage, Smith must present substantial evidence that Scott Paper, "by extreme and outrageous conduct intentionally or recklessly" caused him to suffer "severe emotional distress." American Road Service Co. v. Inmon, 394 So.2d 361, 365 (Ala.1980); see, also, Gray v. Liberty National Life Ins. Co., [Ms. 1911246, July 30, 1993], (Ala.1993), and Bailey v. Avera, 560 So.2d 1038 (Ala.1990).

" 'Extreme conduct' is defined as conduct so outrageous in character and so extreme in degree as to go beyond all possible bounds of decency and to be regarded as atrocious and utterly intolerable in a civilized society. The extreme conduct must result in emotional distress so severe that no reasonable person could be expected to endure it."

Gray v. Liberty National Life Ins. Co., 3; see American Road Service Co. v. Inmon, at 365.

The record shows that Smith failed to present substantial evidence in support of his fraud and outrage claims and thus did not refute Scott Paper's prima facie showing that there was no genuine issue of material fact and that it was entitled to a judgment as a matter of law on these claims. See Rule 56. The trial court's judgment is affirmed.

AFFIRMED.

MADDOX, ALMON and ADAMS, JJ., concur.

INGRAM, J., concurs in the result.

ON APPLICATION FOR REHEARING

STEAGALL, Justice.

APPLICATION OVERRULED.

ADAMS, HOUSTON and INGRAM, JJ., concur.

ALMON, J., concurs specially on denial of application for rehearing.

MADDOX, J., dissents.

ALMON, Justice (concurring specially on denial of application for rehearing).

On application for rehearing, I have reconsidered the issues presented on original submission, and I would now vote to affirm the summary judgment on the ground of res judicata. The "same cause of action" element for res judicata does not require the same theory of relief to have been presented in the prior action, but only that both actions grow out of "the same nucleus of operative fact." Crutcher v. Wynn, 591 So.2d 453, 454 (Ala.1991), quoting NAACP v. Hunt, 891 F.2d 1555, 1561 (11th Cir.1990). If the test for res judicata is met, "any claim that was or could have been adjudicated in the prior action is barred from further litigation." Dairyland Ins. Co. v. Jackson, 566 So.2d 723, 725 (Ala.1990) (emphasis added); Chandler v. Commercial Union Ins. Co., 467 So.2d 244 (Ala.1985).

In his workers' compensation action, Smith argued that he should receive the additional 10% payment for failure to pay a workers' compensation claim without good cause. Ala.Code 1975, § 25-5-59 (a 1992 amendment raised the additional payment to 15%). In attempting to show that Scott Paper had failed to pay without good cause, Smith introduced evidence that Scott Paper had tried to coerce him into claiming benefits under its accident and sickness ("A & S") insurance, which covered non-work-related injuries, rather than claiming benefits under the workers' compensation law. The court in the workers' compensation action denied the additional 10% payment. The fraud and outrage claims in this case are based on the same alleged attempt to coerce Smith into filing under the A & S coverage. In entering the summary judgment in this case, the court noted the above-stated facts and also noted:

"In the trial of the first lawsuit, Plaintiff even called a co-employee, Leonard Allen, as a witness to show that Scott had attempted to coerce some employees into accepting A & S benefits rather than workman's compensation benefits. This is the same witness named by Plaintiff in his deposition as being a witness to Plaintiff's claim of a 'pattern or practice' by Scott as to A & S claims to support Plaintiff's claim of fraud and outrage in this second lawsuit."

The court here also noted, regarding the proceedings in the former action: "By letter dated December 4, 1989, the then attorney for Plaintiff even offered to settle the fraud and outrage claims which Plaintiff claimed arose out of Scott's February 1989 denial of benefits." See Judge McRae's well-reasoned order, attached as Appendix A to this opinion, for a full statement of the evidence and the court's reasons for granting the motion.

In Patrick v. Femco Southeast, Inc., 590 So.2d 259 (Ala.1991), Patrick was fired after he claimed workers' compensation benefits. He filed an action alleging wrongful termination, and Femco counterclaimed, alleging fraud. Patrick argued that the counterclaim should have been filed in his workers' compensation action and thus was barred by res judicata. The Court disagreed:

"Femco's claim alleging fraud, misrepresentation, and suppression of a material fact did not arise out of the same operative facts as Patrick's workman's compensation case; the issues of fact and law in a workman's compensation case are entirely different from those in a fraud action; the trier of fact in these two claims is not the same; and the evidence to support or refute Patrick's claim and the evidence to support or refute Femco's counterclaim are also different."

590 So.2d at 261 (emphasis added). The basis of Femco's fraud claim does not appear in the opinion; it does not appear to have been related to Patrick's claim for workers' compensation benefits. In any event, Femco made a showing that it did not discover the fraud until long after the workers' compensation claim had been...