Title: Calhoun v. Greening

State: alaska

Issuer: Alaska Supreme Court

Document:

Calhoun v. Greening  636 P.2d 69 (1981) Dale CALHOUN, Appellant, v. John A. GREENING, Airport Automotive Storage, Inc., a/k/a Aksala, Inc., Mick Manns, Cecilia Manns, Frank Stowman, Robert Feistner, and Bonnie Feistner, Appellees. File No. 5097. Supreme Court of Alaska. November 13, 1981. *70 James A. Parrish, Fairbanks, for appellant. Charles D. Silvey, Merdes, Schaible, Staley & DeLisio, Inc., Fairbanks, for appellees. Before RABINOWITZ, C.J., and CONNOR, BURKE and MATTHEWS, JJ. OPINION RABINOWITZ, Chief Justice. Dale Calhoun appeals from the superior court's refusal to vacate a judgment against him pursuant to Alaska Civil Rule 60(b).[1]*71 We hold that Calhoun's motion to vacate is barred by the doctrine of res judicata, and hence affirm the superior court's judgment denying the Civil Rule 60(b) motion. It is not necessary for us to set out all the details of this procedurally convoluted case, so we will only state the points relevant to our decision. In July 1976, John Greening filed a complaint against a corporation and seven individuals, including Calhoun. The complaint alleged that the individuals had mismanaged the corporation and had not properly compensated Greening for his $5,000 contribution to the corporation. Calhoun and most of the other defendants answered, with no cross-claims asserted at that time. In June 1978, a pretrial order was entered, setting the pretrial conference for Friday, September 22, and trial for the following week. On September 1, the superior court calendaring department notified counsel, including Calhoun's counsel Mike Stepovich, that the pretrial conference had been changed to Monday, September 25. In late September the posture of the case changed drastically. On the 21st attorney Charles Silvey, representing three defendants, filed a pretrial memorandum indicating that all the non-defaulting defendants[2] except Calhoun had tentatively reached an agreement with Greening and would join Greening in pursuing claims against Calhoun. A copy of this memorandum was mailed to Stepovich on September 20. A formal stipulation incorporating the agreement was filed in court on September 25; the record does not indicate that Stepovich was served with this document. On September 25, the scheduled date for the pretrial conference, Judge Van Hoomissen was snowbound in Galena, and the parties were informed of this fact by posted notice. Neither Calhoun nor Stepovich was present at court on that date. The calendar clerk then set the pretrial conference, with trial to follow, for September 27.[3] On that date again neither Calhoun nor Stepovich was present. Judge Van Hoomissen heard testimony concerning the case, and on October 25 signed findings of fact and conclusions of law prepared by Silvey as well as a judgment against Calhoun in favor of Greening and four of the defendants. Irwin Ravin replaced Stepovich as Calhoun's counsel, and on November 22, 1978, Ravin moved, pursuant to Civil Rule 60(b), to set aside the judgment as obtained in violation of Calhoun's due process rights. He did not accompany his motion with any memorandum in support, but relied only on two brief and conclusory affidavits by Calhoun and Stepovich, in which they denied receiving notice of the hearing at which judgment was entered and claimed that the judgment was unfair. This motion was opposed, and was denied by Judge Van Hoomissen on December 13, 1978. The denial of the motion was not appealed. In August 1979, Silvey, representing all the prevailing parties, moved to set aside as fraudulent a property conveyance made by Calhoun. According to Silvey, Calhoun had sold his successful sole proprietorship construction business for ten dollars to an unincorporated association owned by his father and his wife. Calhoun, now represented by his present counsel, responded with an opposition to Silvey's motion, and "in the alternative a motion for relief from judgment." Judge Van Hoomissen denied the motion for relief from judgment on November 27, 1979, and this appeal followed. We have previously discussed the doctrine of res judicata, and have stated: Res judicata is a doctrine judicial in origin which has as its primary objective claim preclusion or judicial finality. The term is used to denote two things in respect to the effect of a valid, final judgment:*72 (1) that such a judgment, when rendered on the merits, is an absolute bar to a subsequent action, between the same parties or those in privity with them, upon the same claim or demand; and, (2) that such a judgment constitutes an estoppel, between the same parties or those in privity with them, as to matters that were necessarily litigated and determined although the claim or demand in the subsequent action is different. Drickersen v. Drickersen, 546 P.2d 162 , 169 (Alaska 1976), quoting 1B J. Moore, Moore's Federal Practice ¶ 0.405, at 621 (2d ed. 1980) (footnote omitted). Calhoun's instant motion is his second attempt to have the judgment against him set aside. We believe that this motion constitutes a "subsequent action ... upon the same claim or demand" within the meaning of Drickersen.[4] Calhoun advances three arguments against application of res judicata here. He first contends that the instant motion is his first attack on the amended judgment, signed by Judge Van Hoomissen on February 15, 1979. That amended judgment, however, merely corrected an arithmetical error in the original judgment; it cannot be regarded as a new judgment as far as Calhoun's motion is concerned. Calhoun's second contention is that his second motion raises issues not addressed by his first. Ravin's motion simply asserted denial of due process, while this motion claims a violation of Civil Rule 55(c).[5] However, a fundamental tenet of the res judicata doctrine is that it precludes relitigation between the same parties not only of claims that were raised in the initial proceeding, but also of those relevant claims that could have been raised then. Calhoun had a full opportunity to present his Rule 55(c) argument as part of his initial motion; his failure to raise it then precludes him from raising it now. See Engebreth v. Moore, 567 P.2d 305 (Alaska 1977).[6] Calhoun's final contention is that we should not as a policy matter accord res judicata effect to the denial of a motion to set aside judgment. His position is that: [A] party subject to a questionable judgment should not be required, at his peril, to raise all issues affecting the validity of the judgment in one motion. Rather, in light of the burden a judgment imposes upon him, he should be allowed to take immediate action on the grounds which he readily perceives. In light of the substantial authority to the contrary,[7] we find this argument *73 unpersuasive. Moran v. Poland, 494 P.2d 814 (Alaska 1972), involved a situation that was very similar to the case at bar. After judgment was entered against him in federal district court, Moran retained new counsel and moved in federal court to have the judgment set aside pursuant to Fed.R. Civ.P. 60(b). Id. at 815. This motion was apparently not diligently pursued and was ultimately denied. Id. In response to the appeal of the superior court's denial of a subsequent motion to set aside the judgment in a state court proceeding, we held: Res judicata prevents the relitigation in a second suit for relief from judgment of matters which were adjudged or could fairly have been adjudged in a prior proceeding between the same parties raising the same claim for relief. Id. (footnote omitted). The section in Moore to which that statement is cited is clear: "[A] judgment rendered in a 60(b) proceeding is res judicata as to matter that was adjudged or was fairly open for adjudgment." 7 J. Moore, Moore's Federal Practice ¶ 60.28[3], at 413 (2d ed. 1979) (footnote omitted). Moran is dispositive of this appeal. Since appellant's Rule 55(c) claim "could fairly have been adjudged" in the prior Civil Rule 60(b) proceeding, it is now barred.[8] COMPTON, J., not participating. *74 MATTHEWS, Justice, dissenting. I In my view the judgment on the cross claims of Calhoun's co-defendants, Mick and Cecilia Manns (the Manns) and Robert and Bernice Feistner (the Feistners), is void. No order allowing the Feistners to file cross claims was ever entered. They lodged an order to that effect, but the order was expressly not used. As to the Manns, their motion to file a cross claim was served by mail on Calhoun's attorney on September 25, just two days before the trial. The Manns' motion was granted on September 29, 1978, two days after Calhoun had been found liable to the Feistners and the Manns in what passed for a trial in this case. Calhoun had no duty to answer the cross claims which the Feistners and the Manns *75 attempted to set out in their amended answers until leave of court for such amendments was granted. Civil Rule 15(a). Once leave of court was granted, as it was with respect to the Manns on September 29, and never was with respect to the Feistners, Calhoun would ordinarily have twenty days within which to answer. Civil Rule 12(a). This period could be shortened by order of the court. Civil Rule 15(a). However, such an order would have to be served on Calhoun and Calhoun would have to be given some period within which to answer and prepare his defenses. A judgment is void if reasonable notice that it may be entered is not given or if a reasonable opportunity to be heard is not provided. Section 6 of the Restatement of Judgments (1942) states: A judgment is void unless a reasonable method of notification is employed and a reasonable opportunity to be heard afforded to persons affected. Further, a judgment is void if it is based on amended pleadings where the defendant has not been given an opportunity to defend against the new matter. Comment c to § 8 of the Restatement of Judgments states in relevant part: c. Requirement that judgment be within the issues. Even though the State has jurisdiction over the parties and even though the court is one with competency to render the judgment, a judgment by default is void if it was outside the cause of action stated in the complaint and if the defendant was not given a fair opportunity to defend against the claim on which the judgment was based. Such a judgment is subject to collateral attack. (See Illustration 1.) This does not mean, however, that the court may not permit an amendment of the pleadings so as to raise issues not raised by the original pleadings, provided that the parties have an opportunity to be heard on the issues raised by the amended pleadings. The court may under modern practice permit amendments of the pleadings at the trial, in order that they may conform to the evidence, provided that the parties are given an opportunity to be heard on the new issues presented. Illustration 1 to this comment states: 1. A brings an action in State X against B, a corporation of State X, seeking an injunction against future trespasses on A's land, without alleging past trespasses. Service of the summons is made upon an officer of B. B defaults and a decree is entered enjoining future trespasses by B and for the recovery of $10,000 damages for past trespasses. The decree, in so far as it awards damages, is void. A further illustration is given in comment b to § 117 of the Restatement: Thus where a person and his car are injured in a collision but in the action which he brings his complaint is limited to a claim for harm to the car, a judgment which includes damages for harm to the person is invalid if no notice of the additional claim is given to the defendant and the defendant does not appear at the trial. In this case the judgment is void because it goes outside the cause of action stated in the complaint and the defendant was not given a fair opportunity to defend against the claim upon which the judgment was based. It is clear that the above principles apply to the judgment on the cross claims. As of the time of trial, September 27, the Feistners, the Manns and Calhoun were all defendants to the complaint of plaintiff, John Greening. No cross claims had been filed. Calhoun was entitled not to appear at the trial, knowing that the worst that might happen would be that a judgment on Greening's complaint would be entered against him, as it was, in the sum of $1,081.25. Since the cross claims had not been filed, Calhoun neither had notice of their filing nor a fair opportunity to defend against them.[1] Permitting an amendment *76 of the Feistners' and the Manns' answers at the time of trial to state cross claims against Calhoun, assuming even that had happened, would still have left Calhoun without a fair opportunity to defend. The judgment on the cross claims is therefore void. A void judgment is a legal nullity; it establishes no binding legal obligations; it may be vacated by the court which rendered it at any time or by any other court in which its validity is appropriately called in question; it has no res judicata effect and cannot be bootstrapped into validity by laches. 7 Moore's Federal Practice ¶¶ 60.25[2] at 300-01, 60.25[3] at 314, 60.25[4] at 314-15, 60.41[1] at 802, 60.41[2] at 803-05; Wright & Miller, Federal Practice & Procedure: Civil § 2862; see Aguchak v. Montgomery Ward Co., Inc., 520 P.2d 1352 , 1354 (Alaska 1974) ("a void judgment is entitled to no respect whatever.") In my view these rules are dispositive of this case. We should remand to the superior court with directions to set aside the judgment on the cross claims and to conduct such further proceedings as may be appropriate. II I also note that this is a case in which the court and counsel for the appellees failed to follow the rule of common courtesy expressed by this court in Hill v. Vetter, 525 P.2d 529 , 530 n. 4 (Alaska 1974) and Cook v. Aurora Motors, Inc., 503 P.2d 1046 , 1049 n. 6 (Alaska 1972), that a trial in the absence of one's opponent or the opponent's attorney should not take place until an attempt is made to alert the opponent's attorney of the proceedings. Such a practice "is a highly desired courtesy to the opposing side, which can help avoid unnecessary, time consuming motions before the court," Id. at 1049 n. 6, and it is a practice which this court should continue to urge on the bar and the trial bench. III Moreover, I believe that the majority has erred in basing today's opinion on the doctrine of res judicata. The doctrine of res judicata relates to the effects of a judgment in a subsequent separate lawsuit. Note, Developments in the Law Res Judicata, 65 Harv.L.Rev. 818, 820 (1951-52). This is the sense in which we have always referred to res judicata. Engebreth v. Moore, 567 P.2d 305 , 307 (Alaska 1977); Drickerson v. Drickerson, 546 P.2d 162 , 169 (Alaska 1976); Moran v. Poland, 494 P.2d 814 , 815 (Alaska 1972); Palfy v. First National Bank of Valdez, 471 P.2d 379 , 383 (Alaska 1970); Pennington v. Snow, 471 P.2d 370 , 377 (Alaska 1970); State v. Baker, 393 P.2d 893 , 898 (Alaska 1964). This is the sense in which res judicata is generally understood.[2] Res judicata has no application to a direct, as opposed to collateral, attack on a judgment. Caldwell v. Taylor, 218 Cal. 471, 23 P.2d 758, 760 (1933); In Re Hess Estate, 379 P.2d 851 , 855 (Okl. 1962); Scott v. Dilks, 47 Cal. 2d 207, 117 P.2d 700, 702 (Dist.Ct.App. 1941); Livengood v. Munns, 27 N.E.2d 92, 96 (Ind. App. 1940); Haudenschilt *77 v. Haudenschilt, 39 S.E.2d 328, 339 (W. Va. App. 1946). Motions under Rule 60(b) are direct, not collateral attacks. 7 Moore's Federal Practice ¶ 60.41[1] at 801 (2d ed. 1979). Apart from the question of labels, it is true that successive or renewed motions for relief from a judgment should only be granted under compelling circumstances in order to prevent injustice.[3] Cases in which relief, either partial or complete, has been granted on a renewed motion to vacate a judgment include: Collex, Inc. v. Walsh, 74 F.R.D. 443 (E.D.Pa. 1977); Dellwo v. Petersen, 34 Idaho 697, 203 P. 472 (1921); Rambush v. Rambush, 267 Cal. App. 2d 734 , 73 Cal. Rptr. 268 (1968); Lynch v. Betts, 198 Cal. App. 2d 755 , 18 Cal. Rptr. 345 (1962). For the reasons expressed in part I of this dissent, it is clear to me that compelling circumstances requiring relief exist here.