Opinion ID: 1951069
Heading Depth: 2
Heading Rank: 2

Heading: Putative Dismissal of the Claims Against English with Prejudice

Text: We must first decide whether and how the plaintiffs' tort claims against the agent English were effectively dismissed. The only manifestations of dismissal of those claims in the record are the exchange between the trial judge and counsel discussing a dismissal with prejudice at the beginning of the trial, the plaintiffs' oral motion to set aside that dismissal at the close of all the evidence, the recitation of a dismissal without prejudice at the end of the unsigned, uninitialed case action summary entry dated 1/11/2001 (the day after the trial), and the absence of any record of the plaintiffs' prosecuting any claims against English personally after the initial in-court exchange about dismissing those claims with prejudice. In pertinent part, Rule 41(a), Ala. R. Civ. P., provides: (a) Voluntary Dismissal: Effect Thereof. (1) By Plaintiff; By Stipulation.... [A]n action may be dismissed by the plaintiff without order of court ... by filing a stipulation of dismissal signed by all parties who have appeared in the action. Unless otherwise stated in the... stipulation, the dismissal is without prejudice.... (2) By Order of Court. Except as provided in paragraph (1) of this subdivision of this rule, an action shall not be dismissed at the plaintiff's instance save upon order of the court and upon such terms and conditions as the court deems proper.... Unless otherwise specified in the order, a dismissal under this paragraph is without prejudice. Rule 58, Ala. R. Civ. P., provides: (a) Rendition of Judgments and Orders. A judge may render an order or judgment: (1) by notation thereof upon bench notes without any other or further written document or (2) by executing a separate written document, or (3) by including the order or judgment in the opinion or memorandum, or (4) by simply appending to the opinion or memorandum or including therein direction as to the order or judgment sought to be entered. (b) Sufficiency of Judgment, Order, or Minute Entry Thereof. A judgment or order, or the minute entry thereof, need not be phrased in formal language nor bear particular words of adjudication. The judgment or order, or the minute entry thereof, will be sufficient if it is signed or initialed by the judge, or by the clerk in the case of a judgment entered pursuant to Rule 55(b)(1), and indicates an intention to adjudicate, considering the whole record, and if it indicates the substance of the adjudication. (c) Entry of Judgment or Order. Upon rendition of a judgment or order as provided in subdivision (a) of this rule, unless it contains a specific direction otherwise or is subject to the provisions of Rule 54(b), the clerk shall note such judgment or order forthwith in the civil docket if separately maintained. Notation of a judgment or order on separately maintained bench notes or in the civil docket or the filing of a separate judgment or order constitutes the entry of the judgment or order. The entry of the judgment or order shall not be delayed for the taxing of costs. (Emphasis added.) Because the trial judge rendered judgment against Alfa (not English) by executing [(including signing)] a separate written document, Rule 58(a), the first part of the unsigned, uninitialed 1/11/2001 case action summary recitation  the part identifying this particular judgment constitute[d] the entry of the judgment, Rule 58(c) (emphasis added), against Alfa itself. Because the separate written document, Rule 58(a), was signed by the trial judge, it was sufficient as a judgment against Alfa. Rule 58(b). However, because the trial judge did not sign or initial the 1/11/2001 case action summary entry or any discrete document reciting a dismissal without prejudice of the plaintiffs' claims against English, Rule 58 does not accord any legal status whatsoever to the recitation of a dismissal without prejudice of the plaintiffs' claims against English at the end of that case action summary entry. Rather, that particular recitation is a nullity. Hillegass v. State, 795 So.2d 749, 751 (Ala.Civ.App.2001). Therefore, even though Alfa did not, either before the trial court or on original submission to this Court, challenge that part of that case action summary entry, it does not foreclose Alfa from arguing that the plaintiffs' claims against English were dismissed with prejudice. In the absence of a contrary order compliant with Rule 58, several features of this case prompt us to treat the exchange between the trial judge and counsel as an effective dismissal of the plaintiffs' claims against English with prejudice. First, the record is undisputed that the plaintiffs did orally move the trial court for such a dismissal. Second, the trial judge orally impliedly granted the dismissal. Third, all of the parties, including the plaintiffs, treated the exchange between the trial judge and counsel as a dismissal of the claims against English with prejudice. Fourth, if that exchange itself did not effect a dismissal with prejudice, the subsequent proceedings consistent with the exchange achieved the same result. We will explain this fourth feature. The omission of the claims against English from the jury charge was tantamount to a JML for English and against the plaintiffs. Regions Bank v. Plott, 897 So.2d 239, 243-44 (Ala.2004). Such a judgment would have constituted an adjudication on the merits in favor of English and against the plaintiffs, just like a dismissal with prejudice. See Jefferson County v. City of Hueytown, 656 So.2d 382, 385 (Ala.1995). Further, Alfa cites us to the case of Poston v. Gaddis, 372 So.2d 1099, 1101 (Ala.1979): It is thus we conclude that when no evidence is presented concerning a claim, the court's oral charge to the jury makes no mention of such a claim and judgment is rendered on all other issues presented and covered by the oral charge, then the judgment will be considered a final judgment as to all issues. On the other hand, if a claim is to be adjudicated in a separate proceeding, the record must reflect an order of severance or an order for a separate trial entered prior to judgment. In the absence of such an order in this situation, the judgment will be deemed a final judgment on all issues pleaded and any claims which are not specifically disposed of in the judgment will be deemed to have been rejected or denied. (Citations omitted; emphasis added.) Thus, if, in a case of claims to be tried by a jury, like the case now before us, the trial court does not of record formally reserve or sever a claim for separate disposition, the omission of that claim from the judgment actually entered will be deemed a judgment on the merits of that claim adverse to the claimant. Id. Such a judgment pursuant to such a jury trial is distinguishable from a judgment pursuant to a bench trial, which may, under some circumstances, address and adjudicate claims serially without a formal order of severance. See e.g. Posey v. Posey, 614 So.2d 1041, 1042 (Ala.1993), and Malone v. Gainey, 726 So.2d 725, 726 (Ala.Civ.App.1999). Cumulatively, we acknowledge Oswalt v. Scripto, Inc., 616 F.2d 191, 195 (5th Cir.1980): Nor are we deterred from finding a stipulated dismissal by the fact that there is no formal stipulation of dismissal entered in the record by the Oswalts or Scripto. This court approved a district court's finding that an oral dismissal of claims against defendants in the course of a trial was sufficient to constitute a dismissal under Rule 41(a)(1)[, Fed.R.Civ.P.,] even though there was no formal dismissal or stipulation filed with the clerk. Harkless v. Sweeny Independent School District of Sweeny, Texas, 554 F.2d 1353, 1360 (5th Cir.1977), aff'g in part, 388 F.Supp. 738, 749 (S.D.Tex.1975). The Tenth Circuit in Pipeliners Local [Union No. 798, Tulsa, Oklahoma v. Ellerd, 503 F.2d 1193 (10th Cir.1974),] has found that a verbal stipulation of dismissal in open court sufficed for the purpose of Rule 41(a)(1)(ii). Compare, [ Battle v.] Municipal Housing Authority for the City of Yonkers, [53 F.R.D. 423 (S.D.N.Y.1971)]. We rely only tentatively and partially on Oswalt, as we would prefer compliance with Rule 58, for all of the virtues and benefits of following the rules. For the reasons we have explained, we deem the plaintiffs' claims against Alfa agent English  the claims against him for fraud and negligent or wanton failure to procure insurance  to have been dismissed with prejudice by the exchange between the trial judge and counsel at the beginning of the trial. For the effect of this dismissal with prejudice, Alfa cites us to Barlow v. Liberty National Life Insurance Co., 708 So.2d 168 (Ala.Civ.App.1997). In Barlow, the defendant Liberty National asserted in its cross-appeal that the plaintiff's dismissal with prejudice of his claims against the agent of Liberty National entitled Liberty National to a JML on the plaintiffs' respondeat-superior tort claims against Liberty National. The Court of Civil Appeals explained and held: `A dismissal of an action with prejudice constitutes an adjudication on the merits that bars any subsequent litigation.' Calhoun v. Pennsylvania Nat'l Mutual Casualty Ins. Co., 676 So.2d 1332, 1334 (Ala.Civ.App.1996) (citations omitted). Our supreme court has held as follows: `[W]hen [a] principal and his agent are sued in [a] joint action in tort for misfeasance or malfeasance of the servant, and his liability for the conduct of said servant is under the rule of respondeat superior, a verdict in favor of the servant entitles the master to have the verdict against him set aside.'  Larry Terry Contractors, Inc. v. Bogle, 404 So.2d 613, 614 (Ala.1981) (quoting Louisville & N.R. Co. v. Maddox, 236 Ala. 594, 600, 183 So. 849, 853 (1938)). Therefore, we conclude that the trial court erred in not dismissing Barlow's respondeat superior claims against Liberty National for [the agent's] actions. 708 So.2d at 173. Accord Crete Carrier Corp. v. Adair, 792 So.2d 429, 430 (Ala.Civ.App.2000). The same principles apply to the case now before us. The dismissal with prejudice of the claims alleged against English  the torts of fraud and negligent or wanton failure to procure insurance  constituted an adjudication on the merits to the effect that English was not guilty of committing either of those torts. Therefore, Alfa could hardly be guilty of committing those same torts by and through the agency of English and thus could not be vicariously liable for those torts under the doctrine of respondeat superior. Id. The plaintiffs cite Big B, Inc. v. Cottingham, 634 So.2d 999 (Ala.1993), USA Petroleum Corp. v. Hines, 770 So.2d 589 (Ala.1999), Daugherty v. M-Earth of Alabama, Inc., 519 So.2d 467 (Ala.1987), and Salter v. A. Fraser Pattillo, Jr., Inc., 519 So.2d 930 (Ala.1988), for the proposition that the dismissal with prejudice of the tort claims against the agent English did not exonerate the principal Alfa from vicarious liability for those alleged torts. These four precedents, however, are distinguishable from the case now before us. While in each of Cottingham and Hines the trial court, on the plaintiff's motion, dismissed one or more tort claims against the agent and allowed the plaintiff to proceed against the principal, neither case states that the dismissal was with prejudice. For all that appears in either case, the trial court dismissed the tort claim or claims against the agent without prejudice, while in the case now before us the trial court dismissed the tort claims against the agent with prejudice. Although a dismissal without prejudice does not constitute an adjudication on the merits, Smith v. Union Bank & Trust Co., 653 So.2d 933, 935 (Ala.1995), a dismissal with prejudice does, Hammermill Paper Co. v. Day, 336 So.2d 166, 168 (Ala.1976). In Daugherty and Salter the pertinent issue was whether a pro tanto release of an agent from tort claims exonerated the principal from vicarious liability for those alleged torts. Each release expressly reserved the tort claims against the principal. In each case this Court held that it was bound by § 12-21-109, Ala.Code 1975, to honor the express reservation of the tort claims against the principal. Because the plaintiffs in the case now before us did not, in any release governed by § 12-21-109, expressly reserve their tort claims against Alfa, those tort claims are not preserved by the holding of Daugherty and Salter, and likewise those two precedents are not affected by the holding exonerating Alfa from the tort claims in the case now before us. Thus, we conclude that the dismissal with prejudice of the tort claims against the agent English exonerated the principal Alfa from vicarious liability for those alleged torts and entitled Alfa to a JML on the tort claims. Accordingly, the trial court erred in denying the motion by Alfa for a JML in its favor on those two claims  the claims for fraud and negligent or wanton failure to procure insurance alleged against both agent English and Alfa. This conclusion does not impair the right of the plaintiffs to prosecute their remaining claim  their claim against Alfa for breach of its oral contract to issue policies providing for a 15-year pay up. The plaintiffs alleged this claim only against Alfa and not against English. The plaintiffs' motion to dismiss the claims they alleged against English did not include this contract claim, as they alleged it only against Alfa. While, before the trial court, Alfa challenged English's authority to make the oral contract on behalf of Alfa, Alfa neither raises nor briefs this issue on appeal before this Court. Thus, Alfa has abandoned that challenge. Tucker v. Cullman-Jefferson Counties Gas Dist., 864 So.2d 317, 319 (Ala.2003). Similarly, while, before the trial court, Alfa invoked the dismissal with prejudice of the claims against English as a ground for a JML in favor of Alfa on all of the plaintiffs' claims, including their contract claim, Alfa does not, on appeal to this Court, brief that ground for a JML as it would apply to the plaintiffs' contract claim. Alfa makes no argument and cites no authority to us for the proposition that the dismissal with prejudice of the tort claims against English exonerated Alfa from the contract claim. (See Willis v. Parker, 814 So.2d 857, 864 (Ala.2001), and Pate v. T-Square, Inc., 545 So.2d 70, 71 (Ala.Civ.App.1989), for an explanation of the incidence of liability on a principal, its agent, or both on a contract made by the agent for the principal.) Therefore, Alfa has abandoned its contention that the dismissal with prejudice of the tort claims against English entitled Alfa to a JML on the plaintiffs' contract claim against Alfa. Tucker, supra .