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01/13/95 SAM L. SMITH v. UNION BANK & TRUST COMPANY

January 13, 1995

SAM L. SMITH, AS EXECUTOR OF THE ESTATE OF ELSIE S. LECKIE, DECEASED
v.
UNION BANK & TRUST COMPANY



Appeal from Montgomery Circuit Court. (CV-93-2122). William R. Gordon, Trial Judge.

Released for Publication April 22, 1995.

Ingram, Almon, Shores, Houston, Steagall, and Cook, JJ., concur.

The opinion of the court was delivered by: Ingram

INGRAM, JUSTICE.

In 1976, several persons, including Elsie S. Leckie, executed a promissory note to Union Bank & Trust Company ("Union Bank"), secured by a mortgage in favor of Union Bank on certain real property. In 1993, the note went into default; Union Bank then held a foreclosure sale of the mortgaged property. The sum paid for the property at the sale was less than the amount owed on the promissory note. Union Bank sued to recover the deficiency from Leckie and the other makers of the note.

Leckie, however, died shortly before Union Bank filed the action, and a motion was filed on her behalf to dismiss her from the action. Union Bank then moved to amend the style of its complaint to include "The Estate of Elsie S. Leckie." On July 8, 1993, the trial court granted the motion to dismiss the action against Leckie, individually, and on that same date it denied Union Bank's motion to amend, because, it said, "the estate is not the proper party"; however, in that same order, the trial court stated:

"Within ten (10) days of the date of this order, [Union Bank] is allowed to amend the complaint by adding Sam L. Smith as the Executor of the Estate of Elsie S. Leckie, Deceased, as a Defendant."

Union Bank, although it subsequently obtained a default judgment against two of the makers, did not amend its complaint pursuant to the July 8 order. On September 21, 1993, the trial court ordered a scheduling conference for October 6, 1993. On October 6, 1993, the trial court issued the following order:

"ORDERED, Union Bank & Trust Company having failed to timely comply with the Court's order dated September 21, 1993, the remaining claims are dismissed without prejudice and the file is closed."

Soon thereafter, Union Bank filed a new complaint, styled "Union Bank & Trust Company v. Sam L. Smith, in his capacity as Executor of and for the Estate of Elsie S. Leckie," seeking a judgment for the deficiency. Smith moved to dismiss the action; on March 22, 1994, the trial court denied Smith's motion to dismiss. We have permitted Smith to appeal from that interlocutory order denying a dismissal. See Rule 5(a), Ala.R.App.P.

Smith contends that the trial court's October 6, 1993, dismissal of Union Bank's action prohibits Union Bank from bringing its subsequent action against Smith as the executor of Leckie's estate. Smith relies on the doctrines of res judicata and collateral estoppel.

For the doctrine of res judicata, or claim preclusion, to apply, the following elements are required: (1) a prior judgment on the merits, (2) rendered by a court of competent jurisdiction, (3) with the same parties, and (4) with the same subject matter presented in both actions. Ex parte State ex rel. Harrell, 588 So. 2d 868, 869 (Ala. 1991); see also Dairyland Ins. Co. v. Jackson, 566 So. 2d 723 (Ala. 1990). "Where these elements are present, the former suit bars any later suit on the same cause of action, including issues that were or could have been litigated in the prior case." Lott v. Toomey, 477 So. 2d 316, 319 (Ala. 1985).

By way of showing the slight contrast, we note that our cases applying the doctrine of collateral estoppel, or issue preclusion, have required the following elements: (1) that an issue in a prior action was identical to the issue litigated in the present action; (2) that the issue was actually litigated in the prior action; (3) that resolution of the issue was necessary to the prior judgment; and (4) that the same parties are involved in the two actions. Dairyland Ins. Co., 566 So. 2d at 726; see also Constantine v. United States Fidelity & Guar. Co., 545 So. 2d 750 (Ala. ...


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