Opinion
Docket No. 26409.
Filed May 17, 2001.
Appeal from the District Court of the Seventh Judicial District, State of Idaho, Bonneville County. Hon. Richard T. St. Clair, District Judge. Hon. William G. Carlson, Magistrate.
Order of the district court granting summary judgment, reversed and remanded.
McBride Roberts, Idaho Falls, for appellant. Michael R. McBride argued.
Thomsen Stephens, Idaho Falls, for respondent. T. Jason Wood argued.
Connie L. Hindmarsh sued Martin L. Mock for damages resulting from personal injuries she sustained in an automobile collision between Hindmarsh and Mock. Hindmarsh appeals from the district court's order granting summary judgment in favor of Mock based upon the res judicata effect of Hindmarsh's prior small claims judgment against Mock for property damage arising out of the same automobile collision. We reverse.
I. FACTUAL AND PROCEDURAL BACKGROUND
On June 10, 1998, Hindmarsh and Mock were involved in an automobile collision. In November, Hindmarsh sued Mock in the small claims division of the district court. Following a court trial, damages were awarded to Hindmarsh on January 27, 1999, in the amount of $3,000 plus costs, with the magistrate noting, "damage and loss of use exceeds $3,000." Hindmarsh obtained a writ of execution, which was satisfied on March 31, 1999, through garnishment of Mock's wages.
On December 16, 1999, Hindmarsh sued Mock in district court for personal injuries sustained in the automobile collision. Mock filed a motion for summary judgment asserting that he was entitled to judgment as a matter of law based upon the res judicata effect of the small claims action arising out of the same occurrence-the automobile collision of June 10, 1998.
Hindmarsh opposed Mock's motion for summary judgment, arguing that identity of issues is an essential element of res judicata and that the issue in the small claims case was property damage, not personal injuries, and, further, that Hindmarsh's personal injury claim was not "ripe" until after her shoulder surgery on April 2, 1999.
The district court granted summary judgment in favor of Mock, ruling that, although Hindmarsh had not put on evidence of personal injuries in her small claims case, such injuries could have been raised in the prior case, especially in light of the fact that she alleged her injuries were "severe and debilitating." Additionally, the court ruled that giving res judicata effect to a small claims judgment was consistent with public policy. Finally, the court declined to grant Hindmarsh's subsequently filed motion for relief under Idaho Rule of Civil Procedure 60(b), explaining that Hindmarsh failed to file her motion with the small claims division. Thereafter, the district court entered judgment in favor of Mock. Hindmarsh appeals.
II. STANDARD OF REVIEW
In an appeal from an order granting summary judgment, the appellate court's standard of review is the same as that used by the district court in ruling on a motion for summary judgment.
Aberdeen-Springfield Canal Co. v. Peiper, 133 Idaho 82, 86, 982 P.2d 917, 921 (1999); Snyder v. Miniver, 134 Idaho 585, 587, 6 P.3d 835, 837 (Ct.App. 2000). Summary judgment is proper when "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." I.R.C.P. 56(c). When considering a motion for summary judgment, a court "liberally construes the record in a light most favorable to the party opposing the motion and draws all reasonable inferences and conclusions in that party's favor." Brooks v. Logan, 130 Idaho 574, 576, 944 P.2d 709, 711 (1997); Miniver, 134 Idaho at 587, 6 P.3d at 837.
III. APPLICATION OF CLAIM PRECLUSION
On appeal, Hindmarsh argues that her prior small claims judgment for property damage is not a bar to recovery for personal injury damages. She argues that her prior claim for property damage is separate and distinct from her claim for personal injuries, and thus the district court erred in ruling that the small claims judgment barred recovery for further damages.
Res judicata is comprised of two components, claim preclusion, or true res judicata, and issue preclusion, also known as collateral estoppel. Aldape v. Akins, 105 Idaho 254, 668 P.2d 130 (Ct.App. 1983). In Aldape, we addressed the doctrine: "[C]laim preclusion," or true res judicata . . . treats a judgment, once rendered, as the full measure of relief to be accorded between the same parties on the same "claim" or "cause of action.". . . When the plaintiff obtains a judgment in his favor, his claim "merges" in the judgment; he may seek no further relief on that claim in a separate action. Conversely, when a judgment is rendered for a defendant, the plaintiff's claim is extinguished; the judgment then acts as a "bar." . . . Under these rules of claim preclusion, the effect of a judgment extends to the litigation of all issues relevant to the same claim between the same parties, whether or not raised at trial. . . . . [C]ollateral estoppel or "issue preclusion" . . . bars the relitigation of issues actually adjudicated, and essential to the judgment, in a prior litigation between the same parties. . . .
Id. at 256, 668 P.2d at 132.
The present case involves claim preclusion, as Hindmarsh seeks damages not requested or determined in the prior proceeding. Mock's motion for summary judgment was based upon the preclusive effect of the prior small claims judgment: that as a valid and final judgment, it constituted the full measure of relief between the same parties on the cause of action as to every matter offered and received to sustain or defeat the claim and as to every matter which could have been or should have been litigated in the first suit. U.S. Bank Nat. Ass'n v. Kuenzli, 134 Idaho 222, 226, 999 P.2d 877, 881 (2000); Williams v. Christiansen, 109 Idaho 393, 397, 707 P.2d 504, 508 (Ct.App. 1985).
Hindmarsh argues that her small claims judgment is not a bar to recovery of damages for her personal injuries because the issue of such injuries was not raised in the small claims proceeding. In Aldape, we adopted the approach of the RESTATEMENT (SECOND) OF JUDGMENTS § 24 (1982) (herein cited as section 24) recognizing that claim preclusion does not require absolute identity of claims in the two proceedings before judgment in the prior suit precludes the second suit. Rather, § 24 utilizes a same transaction or occurrence approach:
(1) When a valid and final judgment rendered in an action extinguishes the plaintiff's claim pursuant to the rules of merger or bar (see §§ 18, 19), the claim extinguished includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose. (2) What factual grouping constitutes a "transaction," and what groupings constitute a "series," are to be determined pragmatically, giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties' expectations or business understanding or usage.
The instant action, and the small claims case, arose from an automobile collision on June 10, 1998, involving separate vehicles driven by Hindmarsh and Mock. Accordingly, we must conclude that Hindmarsh's claims for property damage and personal injuries arose from the same transaction.
Mock cites Williams, in which this Court affirmed a magistrate's ruling that a default judgment for $1,000 plus costs in a small claims action for the loss of eight of forty-six sheep killed by a neighbor's large dog during the month of June 1980, barred recovery for the remaining June sheep killings. Id. at 395-98, 707 P.2d at 506-09. Applying the rule stated in § 24, the Williams court held that claim splitting is prohibited even though the first action is brought in a court which has no jurisdiction to give a judgment for more than a designated amount, assuming that a court was available to the plaintiff in the same court system where he or she could have sued for the entire amount. Id. at 397, 707 P.2d at 508.
The interests injured in the present case differ from those in Williams, in which the plaintiff failed to bring in a single action a claim for total property losses due to a neighbor's dog attacking his sheep. In circumstances such as the one at bar-an automobile collision giving rise to both property damage and personal injuries-the application of res judicata principles is not so clear cut. There is a split of authority regarding whether a small claims judgment in what would otherwise be a negligence case bars a subsequent claim for personal injuries arising out of the same transaction. See and compare Landry v. Luscher, 976 P.2d 1274 (Wash.App. 1999) (prior small claims judgment awarding the plaintiff husband and wife judgment for damage to their automobile precludes recovery of personal injuries to the wife arising out of the same automobile collision), with Rosse v. DeSoto Cab Co., 40 Cal.Rptr.2d 680 (Cal.App. 1995) (holding that collateral estoppel effect may not be accorded a small claims judgment arising out of an automobile collision), and Isaac v. Truck Serv., Inc., 752 A.2d 509 (Conn. 2000) (the doctrine of collateral estoppel does not apply to a claim for personal injuries arising out of an automobile accident where the parties have previously litigated the issue of property damage arising out of the same accident in small claims court).
The split illustrated above turns on the nature and limits of small claims proceedings. In Sanderson v. Niemann, 110 P.2d 1025 (Cal. 1941), the California Supreme Court explained:
It is apparent that [the small claims] court was established in order to offer a means of obtaining speedy settlement of claims of small amounts. The theory behind its organization is that only by escaping from the complexity and delay of the normal course of litigation could anything be gained in a legal proceeding which may involve a small sum. Consequently, the small claims court functions informally and expeditiously. The chief characteristics of its proceedings are that there are no attorneys, no pleadings and no legal rules of evidence; there are no juries, and no formal findings are made on the issues presented. At the hearings the presentation of evidence may be sharply curtailed, and the proceedings are often terminated in a short space of time. The awards-although made in accordance with substantive law-are often based on the application of common sense; and the spirit of compromise and conciliation attends the proceedings. See, generally, Leuschen v. Small Claims Court, [ 215 P. 391 (Cal. 1923)]; Superior Wheeler Cake Corp. v. Superior Court of County of Los Angeles, 264 P. 488 [(Cal. 1928)].
An examination of the significant portions of the California statute creating a small claims court serves to emphasize its peculiarly informal character. The action is commenced by an affidavit which states a claim for money due from the defendant, with no indication of the nature of the claim [citation omitted]. The claim must be prosecuted and defended by the parties themselves without the aid of attorneys. [citation omitted]. No formal pleading, other than the claim and notice, is necessary, and the hearing and disposition of all such actions is informal, "with the sole object of dispensing speedy justice between the parties." [citation omitted].
Id., at 1030-31, as cited in 40 Cal.Rptr.2d at 682 (emphasis added). The Sanderson court concluded that, while typical inferior courts, such as justice and municipal courts, nevertheless function as courts of law with pleadings, legal rules of evidence, and the right to representation by counsel, small claims court is not such a typical inferior court. Id. Of necessity, the technical aspects of negligence claims and their defenses have not been fully presented or considered prior to the rendering of judgment. Id. We agree. The resolution of cases brought before the small claims department are often based on the application of common sense, a spirit of compromise and conciliation necessitated by such an informal and truncated proceeding, unencumbered by strict rules of pleading, discovery, rules of evidence and attorneys. See Rosse, 40 Cal.Rptr.2d at 682. As a result, a small claims proceeding cannot be said to be determinative of such issues.
Id. See also RESTATEMENT (SECOND) OF JUDGMENTS § 26 cmt. c(1) (1982).
Idaho's small claims system is nearly identical to the system described in Sanderson. At the time of Hindmarsh's case, the jurisdictional limit was $3000 or less. An Idaho small claims action is commenced by filing a "claim" on a form provided by the court stating only the name, address, amount and nature of the plaintiff's claim in very general terms, counterclaims are not permitted, the parties may not be represented by counsel, proceedings are informal-the rules of evidence and procedure do not apply-no record is made of the proceedings, and any appeal is conducted as a trial de novo. I.C. §§ 1-2301-1-2309; I.R.C.P. 1(a), 81(b) and (n); I.R.E. 101(e)(5). The sole object of a small claims proceeding is the "dispensing speedy and quick justice between the litigants." I.C. § 1-2309. In no way is such a speedy and quick dispensing of justice the equivalent of a rigorous determination of the issues raised in the most common negligence action, such as that arising from an automobile collision.
In Perez v. City of San Bruno, 616 P.2d 1287 (Cal. 1980) the California Supreme Court distinguished between an unappealed small claims case from one in which the losing defendant invoked the right to appeal, was provided a trial de novo, and judgment was rendered against the appealing defendant, holding that in the latter case, collateral estoppel would apply.
Subsequently, the California Small Claims Act was amended to provide a trial de novo that is virtually indistinguishable from the small claims proceeding, thus undermining the reasoning of Perez. Rosse, 40 Cal.Rptr.2d at 682-83. Since Idaho provides that any appeal from a small claims judgment entitles the litigants to a trial de novo with the full panoply of procedural rights provided in the courts of general jurisdiction, the reasoning of Perez appears sound.
As aptly stated by the Connecticut Supreme Court in Isaac:
It is indisputable that automobile accidents are one of the most common occurrences in our society in general, and in our state in particular, that result in civil litigation in our courts. It is also indisputable that most of those accidents that ultimately result in litigation involve, at one stage or another, claims for both property damage to the vehicle involved and personal injuries to the people involved. Thus, in focusing on those cases that involve those two types of claims, we focus on one of the paradigmatic examples of civil litigation in the judicial system. We also know that typically the amount of the property damage claim will be ascertained much sooner than the ultimate value, whether by settlement or by litigation, of the personal injury claim. Moreover, we know that, if the claimant has collision insurance, typically she will use that source of funds to repair her car, and leave to her insurer the collection of that expense, including the amount of the deductible, from the alleged tortfeasor; and, if there is no collision
insurance, the claimant typically will be required to repair her car out of her own funds and will want to collect that expense from the alleged tortfeasor as soon as possible. This set of indisputable understandings leads us to conclude that claimants, alleged tortfeasors and the judicial system as a whole will be better served by encouraging the prompt adjudication of contested property damage claims through the small claims process, without the inhibiting opportunity costs [footnote omitted] that the imposition of the claim preclusion doctrine would impose. 752 A.2d at 513-14. In such circumstances, the policies behind res judicata-of ensuring certainty and finality in human affairs by prohibiting a party from relitigating a matter that the party has already had the opportunity to litigate-must give way where their mechanical application would frustrate other social policies of greater importance, such as providing an inexpensive forum for the resolution of property damage claims without compromising the right of the plaintiff to be made whole by permitting recovery for bodily injuries, unencumbering the courts of general jurisdiction of claims suitable for small claims resolution, and encouraging honesty and fairness in insurance matters. We note that neither party appealed the small claims judgment. Accordingly, a trial de novo, with the full panoply of procedural rights, was not afforded either party as provided for in I.R.C.P. 81(o). We reject the mechanical application of res judicata principles as applied in Landry v. Luscher, supra, because such would work a significant injustice and frustrate social policies of greater importance than repose. We conclude that the policies behind small claims proceedings-under which procedural rights provided in the regular trial courts are sacrificed in favor of cheap and speedy resolution-strongly militate in favor of a rule against giving preclusive res judicata effect to an unappealed small claims judgment in this circumstance.
This balancing of competing policies is consistent with the general tenor of RESTATEMENT (SECOND) OF JUDGMENTS § 26 (1982).
Accordingly, we hold that res judicata does not apply and that Hindmarsh may pursue her claim for personal injuries arising out of the same automobile collision.
IV. CONCLUSION
The district court erred in granting Mock's motion for summary judgment after concluding that Hindmarsh's personal injury claim was barred by the prior small claims case for property damage arising out of the same automobile collision. Accordingly, we reverse the district court's order granting Mock's motion for summary judgment and remand for further proceedings.
Judge Pro Tem McDERMOTT CONCURS.
I respectfully dissent. Hindmarsh and Mock were involved in an auto accident on June 10, 1998. Hindmarsh filed an action for damages against Mock on November 25, in the Small Claims Court of the Magistrate Division, in the Seventh Judicial District, Bonneville County, Idaho. Mock answered the small claims complaint asserting that he was not negligent or liable for the cause of the accident. A court trial was conducted. The magistrate found Mock liable and awarded damages to Hindmarsh for the jurisdictional maximum of $3,000, noting that the "damage and loss of use exceeds $3,000." Thereafter Hindmarsh obtained a judgment and a writ of execution. Hindmarsh proceeded to garnish Mock's wages and received full satisfaction for the judgment entered, thus concluding the litigation between the two.
On December 16, 1999, Hindmarsh again filed a lawsuit against Mock based upon the same June 10, 1998, auto accident. This suit was filed in the district court and alleged damages for bodily injury, medical bills, pain and suffering, and lost wages. The district court granted summary judgment in favor of Mock, holding that the res judicata effect of Hindmarsh's prior small claims judgment against Mock for property damages from the same auto accident precluded the second lawsuit. Hindmarsh appealed.
The issue in this case is simple, but potentially far-reaching. Should the courts of this state carve out an exception to the doctrine of res judicata under the facts presented here?
Should parties be allowed to litigate liability for a car accident in one trial before the court and then re-litigate it before a jury two years later? Would this same result be reached had Mock been found not liable or had Hindmarsh failed to prove any damages and not appealed? Is there a potential for inconsistent verdicts or judgments? Should plaintiffs be required to choose their forum and then be bound by it and its procedures-which in this case could have included removal from small claims to the district court pursuant to the rules? Should a defendant such as Mock be assured that, upon having his wages garnished and the judgment satisfied, there is finality afforded to his responsibility for the accident?
The majority opinion has held that, "res judicata does not apply" to a small claims judgment for property damage arising out of an automobile collision involving personal injuries, thus carving out an exception in those limited cases in order for Hindmarsh to pursue her claim.
Having done so, the majority opinion allows for re-litigation of liability, possible inconsistent judgments, multiple forums of repeated litigation and no finality afforded to the parties upon conclusion of the initial lawsuit. I am unpersuaded, based on the split of authority the majority recognizes, that this should now become the law in Idaho. See Williams v. Christiansen,, 109 Idaho 393, 707 P.2d 504 (Ct.App. 1985). Therefore, I respectfully dissent and await further word from our Supreme Court and legislature.