Opinion ID: 1139033
Heading Depth: 1
Heading Rank: 1

Heading: The Dismissal of the First Action was on the Merits

Text: The trial judge in Ferguson I, the Honorable Robert E. Lee Key, entered an order restraining Commercial Bank from foreclosing on the mortgages, conditioned upon the Fergusons' posting a surety bond of $250,000. The amount was reduced to $30,000 by stipulation of the parties, but the Fergusons still failed to post this bond. On April 23, 1987, the foreclosure sale took place. [2] That same day, Judge Key dismissed the Fergusons' complaint by entering the following on the case action summary sheet: Petitioner not having filed required bond in any amount, petition is hereby rendered moot and matter dismissed out of Court and costs taxed to the Petitioner. (Emphasis added). The Fergusons contend, and the majority holds, that the first action was based on an application for a temporary restraining order that, by its very terms, did not reach the merits of the case. The Fergusons cite Browning v. Wesco Co., 218 Ala. 544, 119 So. 660 (1929), for the proposition that a temporary injunction is not itself an adjudication on the merits, but rather is used to prevent any change in the status quo until such time as there is an opportunity for an adjudication on the merits. Commercial Bank does not contest the proposition that a hearing on a motion for a temporary restraining order cannot constitute an adjudication, but rather points out that the temporary restraining order was conditionally granted and was subsequently dismissed, and contends that the dismissal was clearly a judgment on the merits by virtue of Rule 41(b). Rule 41(b) provides in part: Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join a party under Rule 19, operates as an adjudication upon the merits. Rule 41(b) has been interpreted to mean that a trial court has the inherent power to dismiss a cause for failure to comply with court rules or orders. See, e.g., Link v. Wabash R.R., 370 U.S. 626, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1962); Ryder Int'l Corp. v. State, 439 So.2d 162 (Ala.Civ.App.1983). For example, in Crutchfield v. Vogel, 233 Ala. 306, 171 So. 889 (1937), the Court held that the dismissal of an action to enjoin a foreclosure on the ground that the petitioner had failed to amend his petition in accordance with the trial court's order allowing 20 days within which to do so was equivalent to a dismissal on the merits and barred relitigation of the issues raised. See also Miller v. Local Mortgage Co., 459 So.2d 918 (Ala.Civ.App.1984) (dismissal for failure to post bond after initial grant of order restraining foreclosure was adjudication on the merits); Savage v. Savage, 246 Ala. 389, 20 So.2d 784 (1945) (dismissal for failure to amend within the time fixed by the court was an adjudication on the merits); Fife v. Pioneer Lumber Co., 237 Ala. 92, 185 So. 759 (1939) (dismissal for failure to amend within the time fixed by the court was an adjudication on the merits). The United States Supreme Court pointed out the following: All of the dismissals enumerated in Rule 41(b) which operate as adjudications on the meritsfailure of the plaintiff to prosecute, or to comply with the Rules of Civil Procedure, or to comply with an order of the Court, or to present evidence showing a right to the relief on the facts and the lawprimarily involve situations in which the defendant must incur the inconvenience of preparing to meet the merits because there is no initial bar to the court's reaching them. It is therefore logical that a dismissal on one of these grounds should, unless the Court otherwise specifies, bar a subsequent action. In defining the situations where dismissals `not provided for in this rule' also operate as adjudications on the merits, and are not to be deemed jurisdictional, it seems reasonable to confine them to those situations where the policy behind the enumerated grounds is equally applicable. Thus a sua sponte dismissal by the Court for failure of the plaintiff to comply with an order of the Court should be governed by the same policy. Although a sua sponte dismissal is not an enumerated ground, here too the defendant has been put to the trouble of preparing his defense because there was no initial bar to the Court's reaching the merits. Costello v. United States, 365 U.S. 265, 81 S.Ct. 534, 5 L.Ed.2d 551 (1961). The majority states that [a] dismissal based on mootness is not an adjudication on the merits, citing 18 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 4436, at 344 (1981). Section 4436 is entitled Lack or Refusal to Exercise Jurisdiction. Id. at 338. The majority focuses on the word moot in Judge Key's order, without considering why the action became moot, that is, because the [p]etitioner [did not file] required bond in any amount; and the majority's reliance on cases dealing with a lack of jurisdiction or the refusal of a court to exercise jurisdiction are inapposite. Even though the trial judge used the word moot in his order, he specifically stated that he was entering the dismissal because of petitioner's not having filed required bond in any amount. Clearly, the dismissal by the trial judge was because of the Fergusons' failure to post the required bond, and it was the Fergusons' failure to post the bond that permitted the foreclosure to go forward, a foreclosure that the Fergusons now claim was wrongful. It would appear that the dismissal in this case on the ground of mootness was caused by the Fergusons' failure to post the required bond, and that the dismissal here comes within the provisions of Rule 41(b) [f]or failure of the plaintiff to prosecute or to comply with ... any order of court. The majority cites an Alaska Supreme Court case, Ostrow v. Higgins, 722 P.2d 936 (Alaska 1986), which admittedly holds that a dismissal based on the failure of a plaintiff to pursue a request for a preliminary injunction to prevent a foreclosure, which ultimately resulted in a dismissal of the plaintiff's action, was not an adjudication on the merits. Ostrow does not discuss the principle of law that a dismissal for want of prosecution is an adjudication on the merits, and insofar as it holds that an involuntary dismissal of an action because of the failure of a plaintiff to post a required bond should not be given res judicata effect, it should not be followed, because it is contrary to cases from this Court that deal with a plaintiff's failure to prosecute an action and is contrary to a holding in a Second Circuit Court of Appeals case that is based on strikingly similar operative facts. In Browning Debenture Holders' Comm. v. DASA Corp., 605 F.2d 35 (2d Cir.1978), the plaintiffs had originally instituted a suit in federal district court in which they alleged that the bank, by its inaction, had violated its fiduciary obligations under an indenture agreement, as well as under a state statute. The action was originally dismissed in the district court because of the plaintiffs' failure to post a bond, the same reason stated by Judge Key in Ferguson I. The original plaintiffs in Browning subsequently sought to maintain a state claim based on many of the same operative facts that had been present in the first action, another fact that is strikingly similar to the facts here. The original defendants had filed their action in the district court to enjoin further prosecution of the state action on grounds of the preclusive effect of the original judgment. The district court enjoined prosecution of the state action; the Court of Appeals for the Second Circuit affirmed, holding as follows: [I]t is too well established, especially by our recent decisions, to require dilation here, that res judicata is binding upon parties as to issues which might have been raised but were not. [Citing cases.] [Emphasis in original.] Thus, even if the district court had not ruled explicitly on the state law fiduciary claims now sought to be raised in the state courts, litigation of such claims nevertheless would be barred by res judicata. We also reject the contention that the district court's dismissal of the action against the Bank was not `on the merits'. In the action as originally commenced in the district court the claims against the Bank were dismissed for failure to post a bond. Such an involuntary dismissal for failure to comply with a court order constitutes a dismissal on the merits. Fed.R.Civ.P. 41(b).... Appellants nevertheless urge that under Saylor v. Lindsley, 391 F.2d 965 (2d Cir.1968), such a dismissal is not a judgment `on the merits' sufficient to trigger the application of res judicata. We hold that Saylor is wholly inapposite here. In Saylor we acknowledged the general rule that a dismissal under Rule 41(b) was `on the merits' for purposes of res judicata; but on the facts of that case we refused to preclude a new plaintiff [emphasis in original] from bringing a shareholder's derivative action where a prior plaintiff [emphasis in original] had failed to post bond in the early stages of the litigation. In so holding, we emphasized that the dismissal was prior [emphasis in original] to any significant preparations by the defendants for trial. In the instant case the situation is quite different. The Brewer appellants commenced the original action. They failed to post bond. They will not be permitted now to rely upon their own non-compliance with a court order to bootstrap themselves into further harassing of appellees who already have borne a very substantial burden in defending against essentially baseless and frivolous claims. 605 F.2d at 39. (Emphasis added except where indicated.) This case bears a striking resemblance to Browning, and even though the trial judge used the word moot in dismissing Ferguson I, it appears that the order of the trial judge in Ferguson I was obviously more than a dismissal of the application for the temporary restraining order, and was an adjudication on the merits within the meaning of Rule 41(b). [3]