Opinion ID: 1715028
Heading Depth: 2
Heading Rank: 1

Heading: Res Judicata Argument

Text: Res judicata and collateral estoppel are two closely related, judicially created doctrines that preclude the relitigation of matters that have been previously adjudicated or, in the case of res judicata, that could have been adjudicated in a prior action. The doctrine of res judicata, while actually embodying two basic concepts, usually refers to what commentators label `claim preclusion,' while collateral estoppel... refers to `issue preclusion,' which is a subset of the broader res judicata doctrine. Little v. Pizza Wagon, Inc., 432 So.2d 1269, 1272 (Ala.1983) (Jones, J., concurring specially). See also McNeely v. Spry Funeral Home of Athens, Inc., 724 So.2d 534, 537 n. 1 (Ala.Civ.App.1998). In Hughes v. Martin, 533 So.2d 188 (Ala.1988), this Court explained the rationale behind the doctrine of res judicata: 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. 533 So.2d at 190. 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. Equity Res. Mgmt., Inc. v. Vinson, 723 So.2d 634, 636 (Ala.1998). If those four elements are present, then any claim that was, or that could have been, adjudicated in the prior action is barred from further litigation. 723 So.2d at 636. Res judicata, therefore, bars a party from asserting in a subsequent action a claim that it has already had an opportunity to litigate in a previous action. The corollary to the above-stated rationale is that the doctrine of res judicata will not be applied to bar a claim that could not have been brought in a prior action. Old Republic, supra, 790 So.2d at 928. See also United States v. Maxwell, 189 F.Supp.2d 395, 406 (E.D.Va.2002); Restatement (Second) of Judgments, § 26(1)(c) (1982), [4] Restatement (Second) of Judgments, § 51(1)(a). [5] In order for a judgment between the same parties to be res judicata, it must, among other things,... involve a question that could have been litigated in the former cause or proceeding. Stephenson v. Bird, 168 Ala. 363, 366, 53 So. 92, 93 (1910). See also Dekle v. Vann, 284 Ala. 142, 223 So.2d 30 (1969), in which this Court held that a prior judgment in equity ordering the defendants to open a wall adjacent to the plaintiff's land was not res judicata in a subsequent action seeking damages for trespass, because the equity court lacked jurisdiction to award punitive damages. When deciding whether an arbitrator's award is res judicata as to a subsequent claim, we must also consider whether the claim was within the scope of the submission to the arbitrator. Old Republic, 790 So.2d at 929; Restatement (Second) of Judgments, § 26(1)(c); Restatement (Second) of Judgments, § 84, comment d. (A preliminary question in giving res judicata effect to an arbitration award is whether the claim or issue was within the scope of the reference to arbitration.). Because an arbitrator's jurisdiction is limited to the scope of the submission, claims not within the scope of the submission are not barred by the doctrine of res judicata in a subsequent action. Old Republic, 790 So.2d at 929-30; Restatement (Second) of Judgments, § 26(1)(c). In Old Republic, we held that a prior arbitration award on claims alleging fraud and breach of contract was res judicata as to two claims against the same defendant for tortious interference with a subagency contract. We held that the plaintiff's tortious-interference claims, albeit labeled differently in the subsequent civil action, arose from the same nucleus of operative facts as did the fraud and breach-of-contract claims. 790 So.2d at 933. However, we also held that the tortious-interference claims were `within the scope of the submission' to arbitration. 790 So.2d at 929 (quoting Fink v. Golenbock, 238 Conn. 183, 196, 680 A.2d 1243, 1252 (1996)). This holding was critical to the result in Old Republic, because had those claims not been within the scope of the submission, the arbitrator would have lacked subject-matter jurisdiction over those claims and the arbitrator's decision, therefore, would not have been res judicata as to those claims. ([T]he issue in this case is ... whether the claims Lanier litigated `were within the scope of the submission' to arbitration.) 790 So.2d at 929. See also Restatement (Second) of Judgments, § 26(1)(c); Restatement (Second) of Judgments, § 84, comment d. Saad Construction's tort claims were not within the scope of the submission to arbitration. The trial court ordered arbitration to the extent set out in [paragraph 44 of the Board/Saad Construction] contract. The arbitration clause provided for arbitration of any dispute, claim or question concerning the meaning of contract documents, or concerning a breach of the contract. The director explained that in the arbitration proceeding he would determine whether work directed by an owner or design professional is for the account of the contractor or the owner. It is also instructive that the Board, the other party to the contract containing the arbitration provision at issue, objected to Saad Construction's motion to compel arbitration, arguing that Saad Construction's tort claims are beyond the scope of the provisions of paragraph 44 and any `arbitration' of this matter pursuant to paragraph 44 will still require the Court to resolve the tort issues between the parties. (Emphasis in Board's objection.) A party to a contract can be forced to arbitrate only those issues he or she specifically agrees to submit to arbitration. Ryan Warranty Servs., Inc. v. Welch, 694 So.2d 1271, 1273 (Ala.1997). Whether the parties agreed to submit certain claims to arbitration requires a determination of the intent of the parties. Id. General rules of contract interpretation require that the intent of the parties be derived from the words of the contract, unless an ambiguity exists. 694 So.2d at 1273. The arbitration clause in Saad Construction's contract with the Board was unambiguously limited to matters concerning interpretation of the contract or a breach of the contract. The limiting language of the arbitration clause did not encompass Saad Construction's tort claims against the appellees; thus, those claims were not within the scope of submission to arbitration. Additionally, the appellees presented no evidence indicating that the director possessed the authority to award Saad Construction all the damages it now seeks. Res judicata will not apply to bar a subsequent action for a remedy that was not available in a prior action. Dekle, supra, 284 Ala. at 144, 223 So.2d at 31; Restatement (Second) of Judgments, § 26(1)(c). Because the director lacked subject-matter jurisdiction over Saad Construction's tort claims and could not award punitive damages, res judicata does not bar Saad Construction from asserting those claims in a subsequent action. Old Republic, 790 So.2d at 929-30; Restatement (Second) of Judgments, § 26. Moreover, the appellees offered no evidence indicating that Saad Construction could have asserted in the arbitration the claims it now asserts against them. The Board and Saad Construction were the only signatories to the contract containing the arbitration provision, and the Board and Saad Construction were the only parties that actually participated in the arbitration. The arbitration provision explicitly stated that the director's decision shall be final, binding and conclusive on the parties to the contract. (Emphasis added.) [T]he doctrine of estoppel operates to prevent a signatory to an arbitration agreement from frustrating arbitration of a related claim against a nonsignatory where the nonsignatory seeks arbitration. Ex parte Tony's Towing, Inc., 825 So.2d 96, 98 (Ala.2002). There is no evidence in the record indicating that DPF, Turberville, Mueller, Capes, Capes Engineering, Yonge & Associates, or Kerr sought to join the arbitration or that they were even willing to participate in the arbitration of Saad Construction's claims against them. DPF, Turberville, and Mueller argue that they did not seek to intervene in the arbitration because, they said, Saad Construction had already indicated that it did not intend to arbitrate its claims against them. However, there is no factual basis in the record for the implication by those appellees that, in the absence of Saad Construction's objections, they would have sought to intervene. For all that appears, the Boarda signatory to the arbitration clauseor the arbitrator would have objected to the joinder of any of the appellees in the arbitration. The appellees had the burden of proving that Saad Construction could have arbitrated its tort claims against them. Rule 8(c), Ala. R. Civ. P.; Smitherman, supra, 743 So.2d at 448. Saad Construction could not have done so without the appellees' cooperation. Because the appellees did not satisfy their burden of proving that Saad Construction could have arbitrated its tort claims against them, res judicata does not apply to bar Saad Construction from subsequently asserting its tort claims against the appellees. As this Court has previously recognized: `[T]he relevant federal law requires piecemeal resolution when necessary to give effect to an arbitration agreement. Under the Arbitration Act, an arbitration agreement must be enforced notwithstanding the presence of other persons who are parties to the underlying dispute but not to the arbitration agreement.' Terminix Int'l Co. v. Jackson, 669 So.2d 893, 897 (Ala.1995) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 20, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) (footnote omitted; emphasis in Moses H. Cone )). Because we hold that the appellees have not met their burden of proving that Saad Construction could have brought its tort claims against them in the arbitration, we need not determine whether the other elements necessary for the application of res judicata are present.