Court Opinion

ID: 8598506
Source: CourtListenerOpinion
Date Created: 2022-11-23 17:01:57.423553+00
Date Added: 2024-06-11T16:55:04.375809
License: Public Domain

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               DISTRICT OF COLUMBIA COURT OF APPEALS

                                   No. 20-CV-462

                             MA SHUN BELL, APPELLANT,

                                          V.

                WEINSTOCK, FRIEDMAN & FRIEDMAN, P.A., APPELLEE.

                           Appeal from the Superior Court
                            of the District of Columbia
                                  (CAB-8461-19)

                       (Hon. Yvonne M. Williams, Trial Judge)

(Argued February 16, 2022                             Decided November 23, 2022)

      Radi Dennis for appellant.

      David M. Ross, with whom Kevin P. Farrell was on the brief, for appellee.

      Before MCLEESE and DEAHL, Associate Judges, and MCLEAN, Associate
Judge, Superior Court of the District of Columbia. *

      MCLEAN, Associate Judge: On January 9, 2020, Ms. Bell filed her First

Amended Class and Individual Claims for Damages and Incidental Relief,

individually and on behalf of those similarly situated, against Weinstock, Friedman

      *
          Sitting by designation pursuant to D.C. Code § 11-707(a).
                                         2

& Friedman, P.A. (“appellee”). 1 The complaint alleges violations of the District of

Columbia Automobile Financing and Repossession Act (“AFRA”), violations of the

District of Columbia Consumer Protection Procedures Act (“CPPA”), violations of

the District of Columbia Debt Collection Law (“DCL”), and abuse of process. On

April 6, 2020, the Superior Court granted appellee’s Motion to Dismiss based on res

judicata/claim preclusion. This appeal followed. For the reasons below, we reverse

the Superior Court ruling and remand.

                                 I. Background.

                    A. Superior Court Small Claims Matter

      In 2012, Ms. Bell purchased a vehicle through a Retail Installment Sales

Contract (“RISC”). At some point in 2016, Ms. Bell did not make payments on the

vehicle, and it was repossessed in November or December 2016. On March 29,

2017, First Investors Servicing Corporation (“FISC”), by and through its counsel,

appellee Weinstock, Friedman & Friedman, P.A., filed suit in the Small Claims

Branch of the District of Columbia Superior Court seeking a deficiency amount of

$8,271.40 (Docket No. 2017 SC3 001636). On May 17, 2017, Ms. Bell signed a

      1
       Weinstock, Friedman & Friedman, P.A. is now named Friedman, Framme
& Thrush, P.A.
                                          3

one-page settlement agreement with FISC in which Ms. Bell agreed to pay FISC a

total of $8,271.41 in set monthly installments. The agreement further provided that

FISC would dismiss the matter with prejudice if Ms. Bell timely made all payments.

However, if Ms. Bell defaulted on the agreement, FISC was entitled to apply for

entry of default judgment for the outstanding balance. Ms. Bell eventually defaulted

on the agreement, and, on August 8, 2018, the Superior Court entered a judgment in

favor of FISC for $6,822.97.       After FISC sought enforcement through wage

garnishment, Ms. Bell filed a motion to set aside the judgment on December 26,

2018, and a motion for judicial review on February 28, 2019; the Superior Court

denied the motions by orders dated February 21, 2019, and April 1, 2019,

respectively. On November 7, 2019, FISC filed a Praecipe of Satisfaction that

dismissed the matter with prejudice as “paid and satisfied in full.”

          B. Related Superior Court Civil Action (2019 CA 08266 B)

      Ms. Bell filed a separate lawsuit against FISC on January 9, 2020, individually

and on behalf of those similarly situated, for class and individual claims for

violations of AFRA; class and individual claims for violations of CPPA; an

individual claim for violations of DCL; and an individual claim for abuse of process.

The trial court dismissed Ms. Bell’s claims based on claim preclusion. See March
                                          4

16, 2020, order. Ms. Bell appealed the dismissal. In Bell v. First Investors Servicing

Corp. (“Bell I”), this court affirmed the dismissal of Ms. Bell’s third, fourth, and

fifth claims, reversed the dismissal of her first and second causes of action, and

remanded for further proceedings. Bell I, 256 A.3d 246, 259 (D.C. 2021). This court

found that the first and second causes of action were partially precluded because

success on the claims that rested on allegations that “in essence assert that FISC was

not entitled to collect the deficiency amount reflected in the 2018 judgment, and thus

challenge FISC’s right to the funds the court awarded . . . would nullify the judgment

in favor of FISC.” Id. at 256.

      On November 12, 2021, after FISC filed a motion for judgment on the

pleadings, the trial court dismissed the remainder of Ms. Bell’s claims for failure to

assert a claim upon which relief could be granted. See November 12, 2021, order.

Ms. Bell appealed that order on December 3, 2021. We recently reversed that order

and remanded for further proceedings. Bell v. First Investors Servicing Corp., Mem.

Op. & J. (D.C. Nov. 9, 2022).

         C. Superior Court Civil Action on Appeal (2019 CA 08461 B)

      Ms. Bell filed her complaint in this matter with claims regarding AFRA

violations, CPPA violations, DCL violations, and abuse of process on January 9,
                                          5

2020. Appellee filed a Motion to Dismiss Plaintiff’s Amended Complaint on

January 22, 2020. Ms. Bell filed an Opposition on February 17, 2020, and appellee

filed a Reply in Support on February 27, 2020. On April 6, 2020, the Superior Court

granted appellee’s Motion to Dismiss based on res judicata (claim preclusion)

finding that (1) “the facts alleged in this matter are based on the common nucleus of

facts brought forward in the Small Claims action which was fully adjudicated on the

merits, and that Ms. Bell could have brought these claims in the earlier proceeding,”

and (2) that appellee and FISC are in privity because “[t]he actions she alleges that

[appellee] took relate directly to actions [appellee] did in its role of attorney-agent

to FISC.” April 6, 2020, order at 7-8. The trial court also found that Ms. Bell’s

claims were barred because they could have been brought as permissive

counterclaims in the action against FISC. See id. at 7.

      Ms. Bell filed an Opposed Motion for Reconsideration on May 5, 2020, to

which appellee filed an Opposition on May 18, 2020. On July 2, 2020, the Superior

Court denied Ms. Bell’s motion. See July 2, 2020, order at 3 (“Plaintiff attempts to

relitigate her unsuccessful positions without either demonstrating manifest error or

injustice or presenting new or changed circumstances”).

      Ms. Bell filed this appeal on July 24, 2020.
                                          6

                             D. Arguments on Appeal 2

      In Appellant’s Opening Brief, Ms. Bell argues that the trial court erred in

dismissing her complaint based on res judicata because (1) the trial court failed to

apply the nullification/impairment analysis described in Smith v. Greenway

Apartments, LP, 150 A.3d 1265 (D.C. 2016); (2) Ms. Bell’s success on these claims

would not nullify the small claims judgment; and (3) there is no identity of parties

as appellee was not party to the small claims action nor is appellee in privity with

FISC for the small claims action. In discussing policy considerations, Ms. Bell

further argues that the application of res judicata in these circumstances (1) violates

due process because it deprives her of a full and fair opportunity to pursue her claims

against appellee and (2) weakens state and federal consumer protection and debt

collection laws.

      Appellee argues that the trial court correctly dismissed Ms. Bell’s claims

based on res judicata because (1) her claims are precluded under the

nullification/impairment test since success on the claims would threaten FISC’s

      2
         On August 12, 2021, this court issued its opinion in Bell I. That opinion
moots the parties’ arguments in this matter related to the categorization of small
claims counterclaims as permissive or compulsory and the proper claim preclusion
test for permissive counterclaims. See Bell I, 256 A.3d at 253-56. This opinion
addresses only issues still in controversy.
                                           7

judgment and (2) appellee is in privity with FISC. Appellee further argues that Ms.

Bell’s status as a pro se litigant in the small claims action is not a basis to fail to

apply res judicata.

       The court will analyze these arguments in detail below to the extent they relate

to the trial court’s decision. 3

       3
         Appellee raises two Super. Ct. Civ. R. 12(b)(6) arguments as alternative
bases for upholding the trial court’s dismissal of Ms. Bell’s claims. First, appellee
argues that Ms. Bell’s settlement agreement with FISC bars her current claims.
Second, appellee argues that Ms. Bell failed to state a cognizable claim because
Maryland law, not District law, applies to her claims by virtue of the choice of law
clause in the RISC. We decline to address the merits of these arguments as the trial
court’s opinion did not do so, but we do note that (1) appellee failed to present any
argument or reasoning as to why they may claim the “benefits” of any terms of the
settlement agreement or the RISC given that they are not parties, successors in
interest, or assignees to either and (2) even if appellee was protected by the
settlement agreement, Ms. Bell cannot be deemed to have waived causes of action
through a settlement agreement under AFRA, CPPA, and DCL to the extent that the
causes of action do not nullify the small claims judgment. See Bell I, 256 A.3d at
256 n.12. Each party also argued that the other raised untimely arguments for the
first time on appeal. These arguments are without merit as they are about citations
to law (as opposed to newly introduced arguments).
                                          8

                                    II. Analysis.

                                  A. Res Judicata

      This court “reviews de novo the application of the doctrine of res judicata.”

Calomiris v. Calomiris, 3 A.3d 1186, 1190 (D.C. 2010) (citation omitted). Res

judicata (claim preclusion) dictates that “a final judgment on the merits of a claim

bars relitigation in a subsequent proceeding of the same claim between the same

parties or their privies.” Patton v. Klein, 746 A.2d 866, 869 (D.C. 1999); see also

Carr v. Rose, 701 A.2d 1065, 1070 (D.C. 1997). “A privy is one so identified in

interest with a party to the former litigation that he or she represents precisely the

same legal right in respect to the subject matter of the case.” Patton, 746 A.2d at

870 (citation omitted).

      Appellee contends that they are in privity with FISC because—as attorneys

for FISC—they controlled the small claims action, and the current claims are based

on actions they took as agents of FISC during the small claims action. The trial court

found that appellee was in privity with FISC because attorneys are agents for their

clients, “agents and principals are in privity for res judicata purposes if the prior

action concerned a matter within the agency,” and the actions appellee took were
                                           9

within the scope of their agency. 4 April 6, 2020, order at 8 (internal citations

omitted).

      This court has previously issued opinions that support the position that an

attorney may act as an agent of a client. See, e.g., Bolton v. Crowley, Hoge & Fein,

P.C., 110 A.3d 575, 583-84 (D.C. 2015) (“An agent owes [his] principal a fiduciary

duty and a duty of loyalty, and like other agents, lawyers owe their clients a duty of

loyalty and a duty of care.” (internal quotation marks omitted)). That said, “[a]gents

and principals. . . are not ordinarily in privity with each other.” D.C. Redevelopment

Land Agency v. Dowdey, 618 A.2d 153, 163 (D.C. 1992) (citation omitted). “[A]

decision on the merits in an action against the principal is res judicata in a later

action against the agent only ‘if the prior action concerned a matter within the

agency.’” Major v. Inner City Prop. Mgmt., 653 A.2d 379, 381 (D.C. 1995) (citing

Tamari v. Bache & Co. (Lebanon) S.A.L., 637 F. Supp. 1333, 1341 (N.D. Ill. 1986).

“Where privity exists and the issue to be tried is identical as against both principal

      4
        It is uncontested that there was a final judgment on the merits in, and appellee
was not party to, the small claims action. This court previously determined
counterclaims that “assert that FISC was not entitled to collect the deficiency amount
reflected in the [small claims] judgment, and thus challenge FISC’s right to the funds
the court awarded” are precluded by the nullification/impairment exception. Bell I,
256 A.3d at 256. As such, we do not address these elements of the res judicata
analysis.
                                            10

and agent, the doctrine of res judicata applies to bar subsequent litigation.” Dowdey,

618 A.2d at 164.

       This court has previously found an attorney in privity with a client for

purposes of res judicata where he was a limited partner with the client in the business

at issue in the litigation. See Smith v. Jenkins, 562 A.2d 610, 616 (D.C. 1989). 5 But

this court has not directly addressed in what context an attorney-client relationship

creates privity for purposes of res judicata. 6 Courts in many other jurisdictions have

considered this issue and their decisions generally fall into two categories. First,

courts that have reasoned that to find privity between an attorney and client there

must be a mutuality of legal interests, which does not exist in every attorney-client

relationship. See, e.g., Rucker v. Schmidt, 794 N.W.2d 114, 119 (Minn. 2011)

       5
        Smith also analyzed privity based on a control analysis, 562 A.2d at 616, but
this court will not address that analysis as it was not a basis for the trial court’s
decision.
       6
         Appellee argues that this issue was addressed in Quick v. EDUCAP, Inc.,
318 F. Supp. 3d 121 (D.D.C. 2018). Although the federal district court in that case
applied District law to hold that a suit against attorneys was barred by res judicata,
the court did not analyze privity between the attorneys and client or distinguish
between them in the res judicata analysis, seemingly because no party disputed
privity. See id. at 139 (“When evaluating whether claim preclusion operates to bar
a subsequent lawsuit, courts look to whether the prior litigation ‘(1) involv[ed] the
same claims or cause of action, (2) between the same parties or their privies, and (3)
there has been a final, valid judgment on the merits, (4) by a court of competent
jurisdiction.’. . . The parties here dispute only the first and third elements.”) (citation
omitted).
                                          11

(holding that a “common objective” in obtaining a “favorable outcome” was

insufficient to find privity where no mutuality of legal interest existed); Lane v.

Bayview Loan Servicing, LLC, 831 S.E.2d 709, 714-15 (Va. 2019) (agreeing that “an

attorney does not share the same legal interest as his or her client merely by virtue

of his or her representation of that client” because that representation does not create

“a mutual or successive relationship to the same rights of property”); Branning v.

Morgan Guar. Tr. Co., 739 F. Supp. 1056, 1063-64 (D.S.C. 1990) (upholding

application of res judicata to client, but not as to attorneys because there was no

evidence that they had “any mutual or successive relationship in the same rights of

property with” the client); Cont’l Sav. Ass’n v. Collins, 814 S.W.2d 829, 832 (Tex.

App. 1991) (“It would be a surprise to this court and to the lawyers of the state of

Texas to learn that by virtue of mere representation a lawyer establishes privity with

his client. As pointed out by [appellant], does the appellee, by virtue of his implied

claim of privity, accept responsibility for the money judgment rendered”);

Weinberger v. Tucker, 510 F.3d 486, 492-93 (4th Cir. 2007) (finding an attorney in

privity with client not because of the attorney-client relationship but due to specific

identity of interests); Thrasher Buschmann & Voelkel, P.C. v. Adpoint, Inc., 24

N.E.3d 487, 496-98 (Ind. Ct. App. 2015) (requiring a “careful examination of the

circumstances of each case” and finding that an award of attorney’s fees was
                                          12

insufficient to be the “something more” than an attorney-client relationship

necessary to find privity).

      The second category consists of courts that have found that an attorney-client

relationship created privity with little to no analysis of the mutuality of legal

interests. See, e.g., Jayel Corp. v. Cochran, 234 S.W.3d 278, 284 (Ark. 2006)

(“[T]he attorney-client relationship between the [client] and [lawyer] is sufficient to

satisfy the privity requirement for purposes of res judicata.”); Plotner v. AT&T

Corp., 224 F.3d 1161, 1169 (10th Cir. 2000) (“The law firm defendants appear by

virtue of their activities as representatives of Green and AT&T, also creating

privity.”); Henry v. Farmer City State Bank, 808 F.2d 1228, 1235 n.6 (7th Cir. 1986)

(“Even though the Bank was the only actual party to the state court mortgage

foreclosure proceedings, the other defendants, as directors, officers, employees, and

attorneys of the Bank, are in privity with the Bank for purposes of res judicata.”); In

re El San Juan Hotel Corp., 841 F.2d 6, 10-11 (1st Cir. 1988) (affirming dismissal

of claims against attorney that were previously brought against his client because

they “shared a significant relationship”); Kinsky v. 154 Land Co., LLC, 371 S.W.3d

108, 114-15 (Mo. Ct. App. 2012) (relying on a control analysis to determine that an

attorney was in privity with a client). The underlying factual circumstances in this

second category indicate that the attorney had at least some legal interest in the prior
                                          13

proceeding, which may mean that the lack of analysis of mutual legal interest

inadvertently led to a broader rule. 7

      We find the reasoning in the first category of cases persuasive and in line with

the District’s law on privity. See, e.g., Price v. Indep. Fed. Sav. Bank, 110 A.3d 567,

571 (D.C. 2015) (evaluating whether the parties have “precisely the same legal

right”); Patton, 746 A.2d at 870 (finding application of res judicata inappropriate

where “no identity of parties”). Although attorneys may act as agents of their clients

when they act in their role as counsel, the required mutuality of interests will not

      7
         See, e.g., Jayel Corp., 234 S.W.3d at 282-83 (Attorney Cochran filed suit on
behalf of his clients against Jayel Corporation for nuisance and trespass. Jayel filed
a counterclaim that alleged that the notice of legal action was not justified. The
parties executed a settlement agreement, and the matter was dismissed with
prejudice. The agreement allowed Jayel to proceed against Cochran in her
individual capacity, and Jayel did so. The claims were identical to the counterclaims
in the first action); Plotner, 224 F.3d at 1164, 1166, 1175 (Appellant filed for
bankruptcy and a reorganization plan was approved. Appellant then filed several
subsequent suits alleging fraud and breach of fiduciary duty, which the bankruptcy
court dismissed based on res judicata and the appellate court upheld); Farmer City
State Bank, 808 F.2d at 1235-36 (Bank filed a complaint seeking foreclosure of
Plaintiffs’ mortgages and a judgment was entered against the Plaintiffs. Plaintiffs
challenged the foreclosure and judgment on appeal, and the decision was affirmed.
Plaintiffs subsequently filed a suit alleging RICO claims against twenty-nine
defendants. The court noted that “[t]he [Plaintiffs’] allegations of fraud and forgery,
if substantiated, would have been a complete defense to the foreclosure proceedings.
[citation omitted] Having failed to raise those allegations before the state court,
[Plaintiffs] cannot attack the state court judgments by subsequently filing RICO
claims based on the same facts in federal court.”).
                                           14

exist in every circumstance. It is not sufficient that the actions taken by an attorney

in a prior case were on behalf of a client or within the scope of their agency. Even

in such circumstances, the interests of attorneys may not align with their clients’ and

attorneys do not have full control over litigation such that it may be automatically

assumed that they had fully litigated their interests in an earlier representation of a

client. 8

          For these reasons, we hold that for purposes of res judicata, a decision

regarding whether appellee was in privity with FISC requires analyzing the

mutuality of their legal interests. The trial court did not engage in that analysis.

                             B. Permissive Counterclaims

          Turning to the trial court’s determination that the claims against appellee

could and should have been brought during the small claims action, if the trial court

determines it is necessary to re-evaluate that decision it should do so consistent with

Bell I.

         Attorneys and clients have “the common objective” to obtain a “favorable
          8

outcome . . . [b]ut that level of common interest … is not the kind of estate, blood,
or legal interest that would give rise to privity…” Rucker, 794 N.W.2d at 119.
                                        15

                                 III. Conclusion.

      Based on the foregoing, we reverse the dismissal of Ms. Bell’s claims, and

remand for further proceedings consistent with this opinion and with the benefit of

the ruling in Bell I. As in Bell I, we make no determination regarding whether Ms.

Bell’s claims may be dismissed on alternative grounds.

                                             So ordered.