Opinion ID: 2787907
Heading Depth: 2
Heading Rank: 2

Heading: Alabama Litigation

Text: Canal claims the Alabama court’s judgment precludes the Missouri federal district court from considering this case under the doctrines of res judicata (claim preclusion) and collateral estoppel (issue preclusion), which bar a rehearing of the issue here. -6- “‘The law of the forum that rendered the first judgment controls the res judicata analysis.’” C.H. Robinson Worldwide, Inc. v. Lobrano, 695 F.3d 758, 764 (8th Cir. 2012) (quoting Laase v. Cnty. of Isanti, 638 F.3d 853, 856 (8th Cir. 2011)). Because the first judgment here was by the United States District Court for the Middle District of Alabama, sitting in diversity, “we must give that federal diversity judgment the same claim-preclusive effect that [Alabama] state courts would give to a state court judgment.” Id. (citing Semtek Int’l., Inc. v. Lockheed Martin Corp., 531 U.S. 497, 508 (2001)). In Alabama, in order for either res judicata or collateral estoppel to bar a second claim, a final judgment on the merits of the prior claim is required. See, e.g., Equity Res. Mgmt., Inc. v. Vinson, 723 So. 2d 634, 636 (Ala. 1998) (res judicata); Shelby Cnty. Planning Comm’n v. Seale, 564 So. 2d 900, 901-02 (Ala. 1990) (collateral estoppel). The Alabama court here entered two judgments. In the first, it granted a default judgment in favor of Canal as to the Yelder defendants only, stating Canal had no duty to defend or indemnify the Yelder defendants under the Canal policy and making no determination on the merits as to Canal’s obligations under the MCS-90 endorsement to Tri-National (who was not a party to the suit) or even to Harco (who was a party). In the second judgment, the Alabama court dismissed Harco without prejudice “[b]y agreement of the parties,” with the expressed understanding that “TriNational is not a party so they can still sue [Canal].” We conclude the Alabama court did not render a prior final judgment on the merits as to Tri-National’s present claim on the MCS-90 endorsement issue and therefore Tri-National’s claim is not barred.3 See Ex parte Sealy, LLC, 904 So. 2d 1230, 1236 (Ala. 2004) (“‘The effect of a voluntary dismissal without prejudice is to render the proceedings a nullity and leave 3 Canal also asserts Tri-National is judicially estopped from bringing this claim because Harco stated in the Alabama litigation that it did “not [intend] to ever make a claim against [Canal].” Like the district court, we find no inconsistency and note Harco stated “[it] would be Tri-National who would go after Canal, not Harco,” which is exactly what has happened here. -7- the parties as if the action had never been brought.’” (quoting In re Piper Aircraft Distrib. Sys. Antitrust Litig., 551 F.2d 213, 219 (8th Cir. 1977))).