REL: 06/27/2014

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SUPREME COURT OF ALABAMA

OCTOBER TERM, 2013-2014

____________________

1121443

____________________

Ex parte Larry Webber

PETITION FOR WRIT OF MANDAMUS

(In re: Donald Sherrod et al.

v.

Larry Webber)

(Pickens Circuit Court, CV-13-900026)

MURDOCK, Justice.

Larry Webber petitions this Court for a writ of mandamus

directing the Pickens Circuit Court to vacate its August 19,

2013, order denying Webber's motion to dismiss an action filed
1121443

2

against him by Donald Sherrod, Helen Sherrod, and State Farm

Fire and Casualty Company ("State Farm"). We grant the

petition.

I. Facts and Procedural History

In June 2011, the Sherrods hired Webber to paint the

interior of their house. The Sherrods and State Farm allege

that Webber and his employees did not cover objects in the

house before painting and that overspraying damaged the walls,

floors, countertops, fixtures, appliances, and a number of

items of personal property in the house. 

On July 12, 2011, Donald Sherrod sued Webber in the

small-claims court in Pickens County ("the small-claims-court

action"). It is undisputed that Sherrod's wife Helen was not

a party to the small-claims-court action. The complaint

alleged that Webber owed Sherrod $3,000 because the

"[p]ainting on the inside of my home was not completed [and

the] overspray paint all over the inside of the house" had

caused damage.

Following a bench trial, the district court -- the

small-claims court -- entered an order on November 8, 2011,

which recounted that the complaint alleged that "the painting
1121443

The Sherrods and State Farm note in their brief that 1

copies of the complaint in the small-claims-court action, the

notation that Webber paid the judgment, and the order

acknowledging satisfaction of the judgment that are attached

to Webber's mandamus petition were not attached to Webber's

motion to dismiss the underlying action. Thus, those items

were not before the circuit court. "On mandamus review, this

Court has consistently stated that we will not consider

materials that have not been before the trial court."

Ex parte East Alabama Med. Ctr., 109 So. 3d 1114, 1118 n.1

(Ala. 2012). Webber did attach to his motion to dismiss a

copy of the district court's order entering a judgment in

favor of Donald Sherrod for $3,136.09. That order

substantially set out the allegations in the complaint in the

small-claims-court action. Moreover, in his motion to

dismiss, Webber stated that he had paid the judgment rendered

in the small-claims-court action. In their brief to this

Court, the Sherrods and State Farm admit that "[t]he small

claims judgment was satisfied, but Webber presented nothing to

3

on the inside of [the Sherrods'] home was not completed, and

that [Webber] oversprayed paint such that the inside of the

house and other items were damaged and had to be cleaned."

The district court concluded that Donald Sherrod "is entitled

to recover from [Webber] for the damage caused to his home due

to overspraying of paint in the amount of $3,000, plus cost in

the amount of $136.09."

Webber paid the judgment amount of $3,136.09 on

November 21, 2011, and the district court entered an order

acknowledging satisfaction of the judgment on November 28,

2011.1
1121443

the trial court to indicate when or how it was satisfied."

Sherrods and State Farm's brief, p. 2. The Sherrods and State

Farm do not dispute the authenticity or veracity of the

documents submitted to this Court, nor do they contend that

the exclusion of those documents from our consideration would

affect our disposition of this petition. They merely object

that three of those documents were not submitted to the

circuit court in the present action. They are correct, but

the supplemental documents only confirm information that was

provided to the circuit court.

A copy of the insurance contract between the Sherrods and 2

State Farm was not included in the materials submitted for our

review.

4

In an affidavit filed in the present action, Helen

Sherrod stated in part that "[m]y husband sued Larry Webber in

Small Claims Court. I was not a party to this Small Claims

Court case. After my husband sued Mr. Webber, we made a claim

with our homeowner's insurance company, State Farm Fire &

Casualty Company." In their response to Webber's motion to

dismiss this action, the Sherrods and State Farm stated that,

"[i]n December 2011, after investigating the Sherrods' claim,

State Farm paid $41,996.19 to the Sherrods." In her

affidavit, Helen Sherrod stated that State Farm's payment was

"for the damage[] to the flooring, walls and interior of the

home. State Farm did not pay us for the damage[] to any of

the personal property because the damage[] to the personal

property [was] not covered by our policy."2
1121443

5

On March 25, 2013, the Sherrods and State Farm filed an

action in the Pickens Circuit Court against Webber ("the

circuit-court action"). The complaint in the circuit-court

action stated:

"1. Plaintiffs, Helen Sherrod and Donald Sherrod,

hired [Webber] to perform certain painting work on

their residence in Pickensville, Alabama.

"2. On or about June 25, 2011, the residence of

Helen and Donald Sherrod, and their contents and

other personal property located in such residence,

[were] damaged extensively due to paint

overspraying, negligence, and/or poor workmanship

committed by [Webber].

"3. As a proximate consequence of [Webber's] said

conduct, the residence, real property and personal

property of plaintiffs, Helen Sherrod and Donald

Sherrod, [were] rendered damaged and greatly

depreciated in value.

"4. Plaintiff, State Farm Fire and Casualty Company,

is subrogated in part to the rights of Helen Sherrod

and Donald Sherrod against [Webber] on account of

the matters set forth above.

"WHEREFORE, [the Sherrods and State Farm] demand

judgment in their favor and against [Webber] as

follows: in favor of the plaintiffs, Helen Sherrod

and Donald Sherrod, and against [Webber] in the

amount of $35,000.00 plus interest, and in favor of

plaintiff, State [Farm], and against [Webber] in the

amount of $41,996.19, plus interest, plus the costs

accruing in this action."

On May 24, 2013, Webber filed a motion to dismiss the

complaint, asserting that the action was barred by the
1121443

6

doctrine of res judicata and the prohibition against double

recovery. On June 14, 2013, the Sherrods filed a response to

the motion to dismiss in which they argued that Helen Sherrod

owned an undivided one-half interest in the personal property

in the Sherrods' residence, that she was not a party to the

small-claims-court action, and that she did not recover

anything herself in that action. On June 21, 2013, the

Sherrods and State Farm filed a second response to the motion

to dismiss in which they argued that Helen Sherrod and State

Farm were not parties to the small-claims-court action, that

there was not "substantial identity of the parties" between

the two actions, and that the small-claims court was not a

court of competent jurisdiction, for purposes of res judicata.

On June 25, 2013, Webber filed a reply to the the Sherrods and

State Farm's response to his motion to dismiss. In that

reply, Webber noted that, as a subrogee, State Farm "steps

into the shoes of its subrogor and that [a] subrogee only gets

those rights that its subrogor has." On June 27, 2013, the

Sherrods and State Farm filed a "Supplemental Response" to the

motion to dismiss in which they argued that Webber's motion

was procedurally flawed because, they said, he should have
1121443

7

raised the defenses of res judicata and double recovery in a

motion for a summary judgment rather than in a motion to

dismiss. 

On August 19, 2013, the circuit court entered an order

denying the motion to dismiss without explaining its reasons.

This petition followed.

II. Standard of Review

In Lloyd Noland Foundation, Inc. v. HealthSouth Corp.,

979 So. 2d 784, 792 (Ala. 2007), we observed:

"Although HealthSouth's motion addressing its

defenses of res judicata and collateral estoppel was

actually framed as a 'motion to dismiss,' the motion

should have been treated as one seeking a summary

judgment because the face of the complaint did not

reference the prior litigation .... Furthermore, the

trial court clearly considered matters outside the

pleadings in making its determination, thus

converting the Rule 12(b)(6) motion to dismiss into

a Rule 56, Ala. R. Civ. P., summary-judgment

motion."

In this case, the complaint did not acknowledge the

existence and nature of the judgment that resulted from the

small-claims-court action. Instead, Webber submitted a copy

of that judgment with his motion to dismiss. The circuit

court was due to consider that attachment, thus effectively

converting Webber's motion to dismiss to a motion for a
1121443

8

summary judgment. See, e.g., Graveman v. Wind Drift Owners'

Ass'n, Inc., 607 So. 2d 199, 202 (Ala. 1992) (stating that

conversion of a motion to dismiss to a motion for a summary

judgment "is proper where, as here, the parties, in support

of, or in opposition to, the motion, file matters outside the

pleadings and these matters are not excluded by the court").

A petition for a writ of mandamus is an appropriate

method by which to seek this Court's review of the denial of

a motion to dismiss or for a summary judgment predicated on

the doctrine of res judicata. Ex parte LCS Inc., 12 So. 3d

55, 56 (Ala. 2008) (citing Ex parte Sears, Roebuck & Co., 895

So. 2d 265 (Ala. 2004)). See also Ex parte Jefferson Cnty.,

656 So. 2d 382 (Ala. 1995). 

"The standard governing our review of an issue

presented in a petition for the writ of mandamus is

well established:

"'[M]andamus is a drastic and extraordinary

writ to be issued only where there is (1)

a clear legal right in the petitioner to

the order sought; (2) an imperative duty

upon the respondent to perform, accompanied

by a refusal to do so; (3) the lack of

another adequate remedy; and (4) properly

invoked jurisdiction of the court.'"

Ex parte Cupps, 782 So. 2d 772, 774-75 (Ala. 2000) (quoting

Ex parte Edgar, 543 So. 2d 682, 684 (Ala. 1989)).
1121443

9

Our standard of review for a ruling on a motion for a

summary judgment is as follows:

"We review the trial court's grant or denial of

a summary-judgment motion de novo, and we use the

same standard used by the trial court to determine

whether the evidence presented to the trial court

presents a genuine issue of material fact. Bockman

v. WCH, L.L.C., 943 So. 2d 789 (Ala. 2006). Once the

summary-judgment movant shows there is no genuine

issue of material fact, the nonmovant must then

present substantial evidence creating a genuine

issue of material fact. Id. 'We review the evidence

in a light most favorable to the nonmovant.' 943 So.

2d at 795. We review questions of law de novo. Davis

v. Hanson Aggregates Southeast, Inc., 952 So. 2d 330

(Ala. 2006)."

Smith v. State Farm Mut. Auto. Ins. Co., 952 So. 2d 342, 346

(Ala. 2006).

III. Analysis

Webber's primary argument is that the circuit-court

action is barred by the doctrine of res judicata. 

"The elements of res judicata are '"(1) a prior

judgment on the merits, (2) rendered by a court of

competent jurisdiction, (3) with substantial

identity of the parties, and (4) with the same cause

of action presented in both actions."' Chapman

Nursing Home, Inc. v. McDonald, 985 So. 2d 914, 919

(Ala. 2007) (quoting Equity Res. Mgmt., Inc. v.

Vinson, 723 So. 2d 634, 636 (Ala. 1998))."

Greene v. Jefferson Cnty. Comm'n, 13 So. 3d 901, 910 (Ala.

2008) (emphasis added). "'If those four elements are present,
1121443

10

then any claim that was, or that could have been, adjudicated

in the prior action is barred from further litigation.'"

Ex parte LCS Inc., 12 So. 3d at 57-58 (quoting Equity Res.

Mgmt., Inc. v. Vinson, 723 So. 2d 634, 636 (Ala. 1998)). 

"'"Res judicata is a broad,

judicially developed doctrine,

which rests upon the ground that

public policy, and the interest

of the litigants alike, mandate

that there be an end to

litigation; that those who have

contested an issue shall be bound

by the ruling of the court; and

that issues once tried shall be

considered forever settled

between those same parties and

their privies."'"

12 So. 3d at 57 (quoting Lee L. Saad Constr. Co. v. DPF

Architects, P.C., 851 So. 2d 507, 516-17 (Ala. 2002), quoting

in turn Hughes v. Martin, 533 So. 2d 188, 190 (Ala. 1988)

(emphasis added)).

Webber's argument is straightforward. Webber notes that

Donald Sherrod filed the small-claims-court action against him

as a result of damage to property inside the Sherrods' house

allegedly caused by "overspraying" of paint by Webber while he

was painting the interior of the Sherrods' house. Donald

Sherrod won a judgment against Webber in that action, and
1121443

11

Webber paid the judgment. Almost two years later, Donald

Sherrod, his wife Helen, and their homeowners' insurance

company, State Farm, filed the circuit-court action against

Webber, alleging that property inside the Sherrods' house was

damaged as a result of Webber's "overspraying" paint inside

the house. Webber argues that the same cause of action is

presented in both actions, that there was a prior judgment on

the merits by a court of competent jurisdiction, and that the

second action was filed by the same party (Donald Sherrod) and

parties with substantially the same identity (Helen Sherrod

and State Farm). 

The Sherrods and State Farm do not dispute that there was

a prior judgment on the merits and that the two actions

involve the same cause of action. They also make no attempt

to contend that Donald Sherrod is not the same party who

initiated the small-claims-court action. Instead, they raise

two arguments to explain why the doctrine of res judicata

should not apply to the circuit-court action: First, they

contend that the small-claims court was not a court of

competent jurisdiction as to the claims brought in the

circuit-court action; second, they argue that neither Helen
1121443

Section 12-12-31(a), Ala. Code 1975, provides: 3

"The district court shall exercise exclusive

jurisdiction over all civil actions in which the

matter in controversy, exclusive of interest and

costs, does not exceed three thousand dollars

($3,000). These actions shall be placed on a small

claims docket by each district court and shall be

12

Sherrod nor State Farm were in privity with Donald Sherrod and

thus that there is not a substantial identity of parties

between the two actions.

A. Jurisdiction of the Small-Claims Court

Specifically, with regard to their first argument, the

Sherrods and State Farm note that, in order for an action to

be barred by the doctrine of res judicata, "'it must, among

other things, ... involve a question that could have been

litigated in the former cause or proceeding.'" Lee L. Saad

Constr. Co., 851 So. 2d at 517 (quoting Stephenson v. Bird,

168 Ala. 363, 366, 53 So. 92, 93 (1910)). The Sherrods and

State Farm argue that their claims in the circuit-court action

could not have been brought in the small-claims court because

the damages claimed by the Sherrods and by State Farm in the

circuit-court action exceed the $3,000 jurisdictional limit

for the small-claims court. See § 12-12-31(a), Ala. Code

1975.3
1121443

processed according to uniform rules of simplified

civil procedure as may be promulgated by the Supreme

Court."

13

The Sherrods and State Farm's argument is misguided. A

jurisdictional limitation on damages does not affect the res

judicata effect of a judgment. "A court of competent

jurisdiction is a court with jurisdiction over the subject

matter. If a court lacks jurisdiction over a claim, then that

claim would not qualify as one that 'might have been tried' by

that court." Lloyd Noland Found., Inc., 979 So. 2d at 795

(emphasis added). "'A difference in the element of damages is

not grounds for distinguishing two causes of action for res

judicata purposes.'" Chiepalich v. Coale, 36 So. 3d 1, 4

(Ala. 2009) (quoting Robinson v. Holley, 549 So. 2d 1, 2 (Ala.

1989)). 

It is undisputed that the district court had jurisdiction

over Donald Sherrod's claim based on property damage caused by

overspraying of paint. The Sherrods presumably knew the

approximate amount of damage Webber had caused soon after

Webber completed the job, yet Donald Sherrod elected to file

his claim in the small-claims court, a court with limited

jurisdiction as to damages. The fact that almost two years
1121443

Restatement (Second) of Judgments § 24 (1982) provides:

4

"(1) When a valid and final judgment rendered in an

action extinguishes the plaintiff's claim pursuant

to the rules of merger or bar (see §§ 18, 19), the

claim extinguished includes all rights of the

plaintiff to remedies against the defendant with

respect to all or any part of the transaction, or

series of connected transactions, out of which the

action arose.

"(2) What factual grouping constitutes a

'transaction', and what groupings constitute a

'series', are to be determined pragmatically, giving

weight to such considerations as whether the facts

are related in time, space, origin, or motivation,

whether they form a convenient trial unit, and

whether their treatment as a unit conforms to the

parties' expectations or business understanding or

14

after filing that action the Sherrods decided to seek a

damages amount that exceeds the jurisdictional amount of

small-claims court for the same act does not remove the

preclusive effect of the previous judgment. 

The argument posited by the Sherrods and State Farm would

have us approve of a form of "claim-splitting" between

different forums. Donald Sherrod sought and received the

maximum amount available in the small-claims court. Now the

Sherrods and State Farm seek further damages on the same

claim. A comment to § 24 of Restatement (Second) of

Judgments well explains why this is not permissible: 4
1121443

usage."

This Court has stated that Alabama follows "a test that

in certain respects is similar to, but which is not the same

as, the 'same transaction' test, which is found in Restatement

(Second) of Judgments and which is applied in the federal

courts." Equity Res. Mgmt., Inc., 723 So. 2d at 638. Because

the Sherrods and State Farm concede that the two actions

involve the same cause of action, the difference between the

two tests is irrelevant to the observation made above.

15

"The rule stated in this Section as to splitting a

claim is applicable although the first action is

brought in a court which has no jurisdiction to give

a judgment for more than a designated amount. When

the plaintiff brings an action in such a court and

recovers judgment for the maximum amount which the

court can award, he is precluded from thereafter

maintaining an action for the balance of his claim.

... It is assumed here that a court was available to

the plaintiff in the same system of courts -- say a

court of general jurisdiction in the same state --

where he could have sued for the entire amount. ...

The plaintiff, having voluntarily brought his action

in a court which can grant him only limited relief,

cannot insist upon maintaining another action on the

claim."

Restatement (Second) of Judgments § 24 cmt. g (1982). In

short, the jurisdictional limitation of the small-claims court

as to damages did not affect that court's "competent

jurisdiction" over the claim for res judicata purposes.

B. Virtual Representation of Helen Sherrod by Donald Sherrod

in the Small-Claims-Court Action

A question remains as to whether the small-claims-court

action and the circuit-court action share a "substantial
1121443

16

identity of parties." As mentioned above, there is no dispute

in this regard with respect to Donald Sherrod; consequently,

res judicata bars his participation in the circuit-court

action. The Sherrods and State Farm maintain, however, that

neither Helen Sherrod nor State Farm can be closely identified

with Donald Sherrod for res judicata purposes. 

Webber argues that Helen Sherrod shares an identity of

interest in the subject matter of the litigation with Donald

Sherrod because she is his wife, because she is a joint owner

of the property that allegedly was damaged, and because she

and her husband jointly hired Webber to perform the services

that damaged their jointly owned property. (We further note

that there is no dispute that Helen was aware of Donald's

previous action against Webber.) Under these circumstances,

there is sufficient identity of interest in the subject matter

of the litigation that Helen is bound by the results of her

husband's previous litigation. 

The Sherrods and State Farm argue that as a co-owner of

the property, Helen Sherrod is entitled to a one-half share of

the damages awarded. Because she was not a party to the

small-claims-court action, the Sherrods and State Farm contend
1121443

17

that Helen Sherrod can maintain a separate action to recover

the damages she incurred individually as a result of Webber's

actions. For support, the Sherrods and State Farm cite

McClurkin v. Ziebach & Webb Timber Co., 666 So. 2d 520, 522

(Ala. Civ. App. 1995), in which the Court of Civil Appeals

observed that, "[i]n the case of Abbot v. Braswell, 289 Ala.

90, 265 So. 2d 871 (1972), the Supreme Court held that where

property is owned by joint tenants, one of them alone can

maintain an action for damage[] to the property suffered

individually by that tenant."

McClurkin merely stands for the proposition that one of

two joint tenants may bring an action based on damage to

jointly owned real property suffered by that tenant without,

in all cases, having to join the other tenant as a

coplaintiff. There was no issue in McClurkin as to whether a

judgment in such an action would serve as a res judicata bar

to some future action by the prevailing party or someone with

whom the prevailing party shared a substantial identity of

interest. 

This Court has explained:

"Our caselaw requires that 'there is a

substantial identity of parties in the two actions.'
1121443

18

Ex parte Ford Motor Credit Co., 772 So. 2d 437, 440

(Ala. 2000). Substantial identity requires that the

'"parties be identical, sometimes referred to as the

mutuality of estoppel requirement."' Stewart v.

Brinley, 902 So. 2d 1, 10 (Ala. 2004) (quoting

McMillian v. Johnson, 878 F. Supp. 1473, 1520 (M.D.

Ala. 1995)). '"An exception is made to this

requirement for parties in privity with a party to

the prior action."' Stewart, 902 So. 2d at 10

(quoting McMillian, 878 F. Supp. at 1520) (emphasis

omitted). A party is deemed to be in privity with a

party to a prior action when there is '"'an identity

of interest in the subject matter of litigation.'"'

Stewart, 902 So. 2d at 11 (quoting Hughes v. Martin,

533 So. 2d 188, 191 (Ala. 1988), quoting in turn

Issue Preclusion in Alabama, 32 Ala. L. Rev. 500,

521 (1981)).

"....

"This Court has stated: '"'"A person may be

bound by a judgment even though not a party to a

suit if one of the parties to the suit is so closely

aligned with his interests as to be his virtual

representative."'"' Gonzalez, LLC v. DiVincenti, 844

So. 2d 1196, 1203 (Ala. 2002) (quoting Green v.

Wedowee Hosp., 584 So. 2d 1309, 1315 ([Ala.] 1991),

quoting other cases)."

Greene, 13 So. 3d at 912 (emphasis added).

In Owen v. Miller, 414 So. 2d 889 (Ala. 1981), this Court

stated:

"A non-party who has an interest sufficiently close

to the matter litigated and who had an adequate

opportunity to litigate the issue in the prior

proceeding, may be bound by the earlier judgment.

Hudson v. Wright, 164 Ala. 298, 51 So. 389 (1909);

Moody v. Moody, 339 So. 2d 1030 (Ala. Civ. App.),

cert. denied, 339 So. 2d 1035 (Ala. 1976). See
1121443

19

Parklane Hosiery Co. v. Shore, 439 U.S. 322, 99

S.Ct. 645, 58 L.Ed.2d 552 (1978); Blonder-Tongue

Laboratories, Inc. v. University of Illinois

Foundation, 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d

788 (1971). This Court held in Mitchell v. Austin,

266 Ala. 128, 94 So. 2d 391 (1957), that persons

with mutual or successive interests in the same

property may be bound by the results of a prior

adjudication."

414 So. 2d at 891 (emphasis added). 

Similarly, in Mosley v. Builders South, Inc., 41 So. 3d

806 (Ala. Civ. App. 2010), the Court of Civil Appeals held

that a corporation that had been solely owned by a divorcing

wife and husband at the time of their divorce was bound by the

divorce judgment, despite the fact that the corporation had

not been made a party to the divorce action, because the

corporation was "a nonparty who had an interest sufficiently

close to the matter litigated and who had an adequate

opportunity to litigate the issue in the [divorce action]."

41 So. 3d at 812. See also Simmons v. Simmons, 99 So. 3d 316,

321 (Ala. Civ. App. 2011) (concluding that, even if a

daughter, an alleged joint owner of a house with her mother,

had not been joined as a party to an action between her mother

and the mother's husband concerning ownership of the house,

the daughter would have been bound by the judgment in the
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20

action "[b]ecause [the daughter] had actual notice of [the

husband and wife's] action and an adequate opportunity to

litigate the validity of her claim to own the house jointly

with [her mother] as a joint tenant with right of

survivorship"). We also note that federal courts have held

that "[a]lthough a familial relationship need not, in and of

itself, confer privity status, it does constitute an important

factor when assessing the preclusive effects of a prior

adjudication." Jaffree v. Wallace, 837 F.2d 1461, 1467 (11th

Cir. 1988). See also Mesa Petroleum Co. v. Coniglio, 787 F.2d

1484, 1489–90 (11th Cir. 1986) (plaintiff-wife was precluded

from litigating claims her husband previously had litigated);

Cotton v. Federal Land Bank of Columbia, 676 F.2d 1368,

1369–71 (11th Cir. 1982) (plaintiff-husband was precluded from

litigating claims his wife previously had litigated); Seamon

v. Bell Tel. Co. of Pa., 576 F. Supp. 1458, 1460–61 (W.D. Pa.

1983) (plaintiff-husband was precluded from litigating claims

his wife previously had litigated), aff'd, 740 F.2d 958 (3d

Cir. 1984).

In sum, as to Helen Sherrod, all the elements of res

judicata, including the necessary substantial identity of
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21

parties, are present in this case. Accordingly, Helen Sherrod

is barred from filing the circuit-court action.

C. State Farm's Status

Having concluded that both Donald and Helen Sherrod are

barred by the doctrine of res judicata from filing the

circuit-court action, we are left with the question whether

State Farm also is barred by the doctrine of res judicata. 

As Webber correctly observes, "[u]nder the equitable

doctrine of subrogation, 'a subrogee steps into the shoes of

its subrogor and that subrogee only gets those rights that its

subrogor has. The subrogee can have no greater rights.'"

Trott v. Brinks, Inc., 972 So. 2d 81, 87 (Ala. 2007) (quoting

Star Freight, Inc. v. Sheffield, 587 So. 2d 946, 958 n.5 (Ala.

1991)). Because State Farm's rights as a subrogee extend only

as far as the rights of the Sherrods, State Farm also must be

barred from filing the circuit-court action. 

"'[O]ur courts have adopted the rule that

an insurance company's right to subrogation

is lost as against a wrongdoer who, without

notice of the insurer's rights, settled

with and was released from liability by the

insured. A statement found at 46 C.J.S.

Insurance § 1209 at 155 (1946) expresses

both that rule and the natural converse

thereof.
1121443

The Sherrods and State Farm asserted in their 5

supplemental response to the motion to dismiss that Webber

should be estopped from raising the defense of res judicata

because, "[a]t the time [the small-claims-court] case was

tried, [Webber] and [his] attorney knew that the Sherrods'

total damages greatly exceeded the court's jurisdictional

limits. The proper procedure would have been to request that

the case be transferred to circuit court for final

disposition." The Sherrods and State Farm failed to offer any

evidence as to Webber's knowledge, and they failed to offer

any authority indicating why it would have been Webber's

responsibility to insist that the claim against him was too

small. We find this argument to be without merit.

22

"'"When a wrongdoer chargeable

with notice of insurer's rights

as subrogee of the insured makes

a settlement with insured to

which insurer is not a party, the

settlement will be regarded as

having been made subject to the

rights of the insurer, and

without destruction thereof; but

a general release by insured to a

third person without notice or

knowledge of the insurance

company's rights is a bar to the

c o m p a n y ' s c l aim to

subrogation."'"

Commercial Union Ins. Co. v. Blue Cross & Blue Shield of

Alabama, 540 So. 2d 1368, 1370 (Ala. 1989) (quoting Miller v.

Auto–Owners Ins. Co., 392 So. 2d 1201, 1203 (Ala. Civ. App.

1981)).

5

One legal treatise succinctly summarized the principle at

issue this way:
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"Under equitable subrogation principles, a

subrogee has no greater rights than the subrogor;

thus, the subrogee is entitled to only those

remedies to which the subrogor is entitled, and no

greater remedies. No new cause of action is created,

because the claim of the subrogee is derivative of

the claim of the subrogor, and only changes the

ownership of the claim. Thus, if a subrogor is

barred by res judicata from maintaining claims or

lacks standing, the subrogee is equally barred."

83 C.J.S. Subrogation § 88 (2010) (footnotes omitted). See

also 73 Am. Jur. 2d Subrogation § 71 (2012). 

Unfortunately for State Farm, it simply cannot avoid the

fact that, because its claim is based solely on its rights as

a subrogee, it "'steps into the shoes of [the Sherrods] and

[State Farm] only gets those rights that [the Sherrods]

ha[ve].'" Trott, 972 So. 2d at 87 (quoting Star Freight,

Inc., 587 So. 2d at 958 n.5). As we explained in Part III.B

of this opinion, the Sherrods are precluded by the doctrine of

res judicata from bringing the circuit-court action against

Webber. Therefore, State Farm is likewise barred from

participation in the circuit-court action.

IV. Conclusion

We conclude based on the foregoing that the doctrine of

res judicata bars the Sherrods and State Farm from bringing

the circuit-court action. Accordingly, the circuit court
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should have granted Webber's motion for a summary judgment on

all the claims against him. Because of our disposition of

this case on the ground of res judicata, we need not address

Webber's double-recovery argument. We grant the petition for

a writ of mandamus and direct the Pickens Circuit Court to

vacate its August 19, 2013, order and to enter a summary

judgment in favor of Webber as to all claims. 

PETITION GRANTED; WRIT ISSUED.

Stuart, Bolin, Parker, Shaw, Main, Wise, and Bryan, JJ.,

concur. 

Moore, C.J., dissents.