Whisman v. Alabama Power Co.

• Decision Date: 17 July 1987
• Citation: 512 So.2d 78
• Parties: Arnold WHISMAN v. ALABAMA POWER COMPANY. HARTFORD FIRE INSURANCE COMPANY and Vanguard Industrial Corporation. v. ALABAMA POWER COMPANY. Allan DENSON and Hartford Fire Insurance Company v. ALABAMA POWER COMPANY. 85-1067, 85-1068 and 85-1085.
• Court: Alabama Supreme Court

Page 78

512 So.2d 78

Arnold WHISMAN v. ALABAMA POWER COMPANY.

HARTFORD FIRE INSURANCE COMPANY and Vanguard Industrial Corporation. v. ALABAMA POWER COMPANY.

Allan DENSON and Hartford Fire Insurance Company v. ALABAMA POWER COMPANY.

85-1067, 85-1068 and 85-1085.

Supreme Court of Alabama.

July 17, 1987.

Clarence F. Rhea of Rhea, Boyd & Rhea, Gadsden, for appellant.

Roger C. Suttle of Inzer, Suttle, Swann & Stivender, Gadsden, and James H. Miller III and Martha F. Petrey, of Balch & Bingham, Birmingham, for appellee.

HOUSTON, Justice.

Vanguard Industrial Corporation ("Vanguard"), Hartford Fire Insurance Company ("Hartford"), Allan Denson ("Denson"), and Arnold Whisman ("Whisman"), in three consolidated cases, appeal from orders granting summary judgment in favor of Alabama Power Company ("APCo") by the Etowah County Circuit Court on the basis of res judicata, collateral estoppel, and the failure of the appellants to assert compulsory counterclaims under Rule 13, Ala.R.Civ.P.

In June 1980, a fire in Attalla, Alabama, destroyed a warehouse in which property of Vanguard, Denson, and Whisman was stored. Hartford was the fire insurance carrier for Vanguard and Denson; Hartford paid Vanguard and Denson in accordance with the insuring agreement and took a subrogation assignment. Eight suits were filed claiming, inter alia, that APCo negligently caused the fire.

One of these suits, Culp Iron & Metal, Inc. v. Alabama Power Co., CV 80-1771-S, was tried in 1983 (hereinafter Culp v. APCo). Before the trial of Culp v. APCo and with leave of court, APCo had joined Vanguard, Hartford, Denson, and Whisman as third-party defendants and claimed that their negligence caused the fire and resulting property damage to APCo's substation. This joinder was discussed by the court and all parties and the joinder was allowed without objection. Neither Vanguard, Hartford, Denson, or Whisman filed a counterclaim against APCo or moved to consolidate any of the other pending suits. Each of them did assert the affirmative defense of the contributory negligence of APCo, and the trial court charged the jury on their contributory negligence defense.

In Culp v. APCo, the trial court propounded certain special interrogatories to the jury. The first one was: "Do you find that Alabama Power Company was negligent in supplying electricity to Vanguard Industrial Corporation so as to proximately cause all the damages to Culp Iron and Metal?" The jury answered this question "No" and returned a verdict in APCo's favor on the claims of Culp, who was the owner of the warehouse.

The second question was: "Do you find that Alabama Power Company was negligent in supplying electricity to Vanguard and that Alabama Power Company's negligence combined or concurred with one or more of the third-party defendants or others to proximately cause the damages to Culp Iron and Metal?" The jury answered this question "No."

The fourth special interrogatory was: "Do you find the issues in favor of Alabama Power Company on its third-party complaint against either Vanguard or Hartford or both?" The jury answered this affirmatively, finding that Vanguard and Hartford negligently caused the fire. A verdict for $35,000 was returned in favor of APCo.

The trial court entered a judgment for APCo against Culp and for APCo against Vanguard and Hartford. Vanguard and Hartford then appealed to this Court. See, Vanguard Industrial Corp. v. Alabama Power Co., 455 So.2d 837 (Ala.1984), in which this Court held that because the jury wrongfully apportioned damages, APCo had to nol-pros its judgment against Vanguard or Hartford. On remand, APCo nol-prossed the judgment against Hartford and proceeded to collect and satisfy the judgment against Vanguard.

There then remained in the Circuit Court of Etowah County seven other lawsuits pending against APCo, including the three which are consolidated in this appeal, which arose out of the same operative facts as those in Culp v. APCo. APCo amended its answer in these lawsuits to raise the affirmative defenses of res judicata, collateral estoppel, and failure to assert a compulsory counterclaim. It then filed motions for summary judgment, which were granted.

With respect to the three suits consolidated here for appeal, APCo argued that because the plaintiffs were parties in Culp v. APCo, their claims were barred.

Case No. 85-1068 (Vanguard and Hartford) and Case No. 85-1085 (as to Hartford):

A valid, final judgment on the merits of an issue extinguishes that issue and operates as an absolute bar in a subsequent suit between the same parties on any issue which was or could have been litigated. Lesley v. City of Montgomery, 485 So.2d 1088 (Ala.1986); Educators' Investment Corp. of Alabama, Inc. v. Autrey, 383 So.2d 536 (Ala.1980): Ozley v. Guthrie, 372 So.2d 860 (Ala.1979); Wheeler v. First Alabama Bank of Birmingham, 364 So.2d 1190 (Ala.1978); McGruder v. B & L Construction, Inc., 331 So.2d 257 (Ala.1976); A.B.C. Truck Lines, Inc. v. Kenemer, 247 Ala. 543, 25 So.2d 511 (1946).

The interest of society demands that there be an end to litigation, that multiple litigation be discouraged, not encouraged, and that the judicial system be used economically by promoting a comprehensive approach to the first case tried. See, Commentary, Issue Preclusion in Alabama, 32 Ala.L.Rev. 500 (1981).

In the 1983 trial (Culp v. APCo ), APCo, as a third-party plaintiff, prevailed in the suit against it brought by Culp and prevailed on its claim against Vanguard and Hartford as third-party defendants. The issues presented were the cause of the fire at Vanguard's plant, the alleged negligence of APCo and of Vanguard and Hartford, and the alleged contributory negligence of APCo. In two cases now on appeal, No. 85-1068 and, as to Hartford, No. 85-1085, the identical issues are presented. The third-party action presented issues in mirror image.

The traditional res judicata case (frequently referred to as a claim preclusion) involves prior litigation between a plaintiff and a defendant, which is decided on the merits by a court of competent jurisdiction, and then a subsequent attempt by the prior plaintiff to relitigate the same cause of action against the same defendant, or perhaps to relitigate a different claim not previously litigated but which arises out of the same evidence. Alabama law is well settled that this will not be allowed. A valid, final judgment on the merits of the claim extinguishes the claim. If the plaintiff won, the claim is merged into the judgment; if the defendant won, the plaintiff is barred from relitigating any matter which could have been litigated in the prior action. Lesley v. City of Montgomery, supra; Ozley v. Guthrie, supra; Wheeler v. First Alabama Bank of Birmingham, supra; McGruder v. B & L Construction, Inc., supra. Likewise, under res judicata we have consistently rejected an attempt by a former defendant to relitigate issues that were, or could have been, raised in prior litigation that ended in a valid adjudication by a court of competent jurisdiction. Educators' Investment Corp. of Alabama, Inc. v. Autrey, supra; A.B.C. Truck Lines, Inc. v. Kenemer, supra.

In A.B.C. Truck Lines, two lawsuits arose out of a two-truck collision. The first lawsuit was filed in Georgia by Kenemer against A.B.C. Truck Lines. The issue concerned the negligent operation of an A.B.C. Truck Lines truck, and judgment was rendered in favor of Kenemer. Thereafter, A.B.C. Truck Lines filed suit against Kenemer in Alabama for damage to A.B.C. Truck Lines' truck in the collision. The trial court dismissed the action; we affirmed. Discussing the doctrine of res judicata, we wrote:

"There is a good exposition of the doctrine in 2nd Black on Judgments, where it is first noted that 'it is a general rule that a valid judgment for the plaintiff definitely and finally negatives every defense that might and should have been raised against the action.... "A party cannot relitigate matters which he might have interposed, but failed to do, in a prior action between the same parties or their privies in reference to the same subject-matter...." ' "

247 Ala. at 547, 25 So.2d at 514.

We further held that if a judgment goes against the defendant, and he afterwards sues the plaintiff on a claim "which he might have presented in the first suit but did not, if the facts which he must establish to authorize his recovery are inconsistent with the facts on which the plaintiff recovered in the first action, the former judgment is a bar." Res judicata may be pleaded as a bar, not only as to matters actually presented to sustain or defeat the right asserted in the earlier proceeding, but also as to any other available matter that might have been presented to that end. A.B.C. Truck Lines v. Kenemer, 247 Ala. at 548, 25 So.2d at 515. APCo elected to recover the judgment in full from Vanguard and nol-prossed the judgment against Hartford.

The fact that the judgment against Hartford was nol-prossed by APCo in accordance with our opinion in Vanguard Industrial Corp. v. Alabama Power Co., supra, has no effect on the defense of res judicata. The issue has been litigated and, if the defense is asserted, the prior litigation will preclude this issue from being relitigated. A nolle prosequi is a formal entry upon the record by the plaintiff in a civil suit by which he declares that he "will no further prosecute" the case either as to some of the defendants or altogether. Black's Law Dictionary (5th ed. p. 945). If a judgment is nol-prossed, then the plaintiff is stating that he will not prosecute it further, but it remains a bar to any future action. For purposes of res judicata, the nol-prossed judgment remains a prior judgment on the merits even though the plaintiff has entered on the court record a declaration that he will not pursue its execution. ¹

We affirm APCo's summary judgment in Case No. 1068 (Vanguard and Hartford) and as to Hartford in Case No. 85-1085. The...