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Ring v. Leighton

Supreme Court of Maine

January 22, 2019


          Argued: July 19, 2018

          Zachary J. Smith, Esq. (orally), Lawsmith Legal Services, LLC, Bangor, for appellant Eric Ring

          Thomas G. Mundhenk, Esq. (orally), Mundhenk & Bell, LLC, Portland, for appellee Daniel Leighton


          MEAD, J.

         [¶1] On February 8, 2016, Clinton McGaw, driving a vehicle owned by Eric Ring, was on his way to pick up a customer in furtherance of Ring's business when he was involved in a collision with a vehicle driven by Daniel Leighton. In a small claims matter filed by Leighton against McGaw, the District Court (Lincoln, Stitham, J.) found that McGaw was negligent and awarded Leighton just over $3, 900 in damages and costs. No appeal was filed and the judgment was paid. Ring then filed a complaint in the Superior Court asserting that Leighton was negligent and had caused Ring economic harm. Ring appeals from a summary judgment entered by the Superior Court (Penobscot County, A Murray, J.) in favor of Leighton on Ring's complaint. Ring contends that the court erred in applying the common law doctrine of res judicata to the earlier small claims judgment obtained by Leighton against McGaw and thereby determining that the judgment conclusively resolved the issue of which driver was at fault.

         [¶2] In this matter of first impression, we conclude that claim preclusion cannot, because of the unique limitations of small claims procedure, operate to bar a subsequent suit brought in District or Superior Court by a person who was not an actual party to the small claims action, but rather was at most in privity with the defendant in the small claims case. Accordingly, we vacate the summary judgment and remand for further proceedings in the trial court.

         I. BACKGROUND

         [¶3] The facts are drawn from the summary judgment record, taken in the light most favorable to Ring as the nonprevailing party. See Estate of Frye v. MMG Ins. Co., 2018 ME 44, ¶ 8, 182 A.3d 158. Following the accident between McGaw and Leighton, Leighton filed a small claims action against McGaw in the District Court (Lincoln). Leighton's statement of claim, seeking $3, 795.57 in damages plus costs, alleged that McGaw had negligently caused the accident.

         [¶4] At the hearing on Leighton's claim, Ring's insurer provided McGaw with counsel and a defense; Ring attended and spoke to McGaw and McGaw's counsel. The court found that McGaw was at fault in the accident and entered judgment in favor of Leighton in the full amount that he had requested- $3, 795.57, plus $106.30 in costs. The judgment did not make any findings regarding Ring, or McGaw's relationship to Ring. A satisfaction of judgment was filed on November 17, 2016.

         [¶5] In January 2017, Ring filed a negligence complaint against Leighton in the Superior Court seeking unspecified damages, alleging that Leighton, not McGaw, had been at fault in the accident. Leighton's answer denied the substantive allegations of the complaint and asserted as defenses, inter alia, that Ring's claim was barred by the doctrines of res judicata and bar and merger. Leighton then filed a third-party complaint against McGaw seeking indemnification if he were found to be liable to Ring, asserting that the small claims judgment established McGaw's negligence.

         [¶6] In July 2017, Leighton moved for summary judgment "based upon the fact that responsibility for [the] accident was previously adjudicated in the Lincoln District Court." Ring opposed the motion, arguing that the small claims judgment had no res judicata effect as to him, in part because he was not a party to that action. Following a nontestimonial hearing, the court granted Leighton's motion and entered a summary judgment, concluding that "the issue of fault for the accident in question has already been determined by a prior final judgment in the 2016 Small Claims proceeding," and that "Ring had a fair opportunity and incentive to litigate the issue in a prior proceeding." (Quotation marks omitted). The court concluded that "collateral estoppel precludes Ring from relitigating the factual issue of who was at fault for the accident[;] . . . [t]herefore, Ring cannot establish that Leighton breached a duty to him, and therefore cannot establish all the necessary elements of a prima facie case for negligence." Ring appealed.


         [¶7] In the ordinary case, the claim preclusion prong of the res judicata doctrine "prohibits relitigation of an entire cause of action between the same parties or their privies, once a valid final judgment has been rendered in an earlier suit on the same cause of action."[1] Pushard v. Bank of Am., N.A., 2017 ME 230, ¶ 19, 175 A.3d 103 (quotation marks omitted). We have not previously addressed the situation presented here, where the person filing suit in the Superior Court subsequent to the entry of judgment in the small claims case-based on the same core set of facts-was not a party in the small claims proceeding.[2]

         [¶8] Leighton, as the party asserting the affirmative defense of res judicata, bears the burden of proving its applicability. See M.R. Civ. P. 8(c); ABNAMRO Mort. Gp. v. Willis, 2003 ME 98, ¶ 5, 829 A.2d 527. "We review the supported facts in the summary judgment record in the light most favorable to [Ring], as the nonprevailing party, to determine de novo if any genuine issue of material fact exists for trial and whether, based on the undisputed facts, [Leighton] was entitled to a judgment as a matter of law." Estate of Frye, 2018 ME 44, ¶ 8, 182 A.3d 158. Likewise, "[w]e review decisions regarding the effect of a prior judgment on a present action, which is a question of law, de novo." Thibeault v. Brackett, 2007 ME 154, ¶ 7, 938 A.2d 27.

         [¶9] Ring contends that the court erred in granting Leighton summary judgment because, for two reasons, the small claims judgment in Leighton's favor did not have preclusive effect in the Superior Court: (1) the Small Claims Act, 14 M.R.S. §§ 7481-7487 (2017), requires that result; and (2) Ring was not a party to the small claims action, nor was he in privity with McGaw in that separate matter. If fault for the accident is not established as a matter of law, Ring reasons, then it remains a material fact in dispute and summary judgment is precluded. See M.R. Civ. P. 56(c); Estate of Frye, 2018 ME 44, ¶ 8, 182A.3dl58.

         [¶10] Because litigation of a small claim is unlike other civil litigation in several important respects, before addressing the merits of Ring's arguments we begin our analysis with a review of the characteristics and limitations that make "small claims proceedings . . . unique and different from other proceedings conducted in the District Court." Thomas v. BFC Marine/Bath Fuel Co., 2004 ME 27, ¶ 11, 843 A.2d 3.

         [¶11] Small claims proceedings are a creature of statute, established by the Legislature with jurisdiction given to the District Court "for the purpose of providing a simple, speedy and informal court procedure for the resolution of small claims." 14 M.R.S. § 7481. It is an alternative, not exclusive, way to resolve a "small claim," which is a claim presently subject to a jurisdictional maximum of $6, 000, [3] exclusive of interest and costs, that does not involve title to real estate. 14 M.R.S. §§ 7481-7482.

         [¶12] Pursuant to statute, "small claims proceedings are governed by separate, succinct procedural rules" that we have promulgated. Midland Funding LLC v. Walton,2017 ME 24, ¶ 16, 155 A.3d 864; 14 M.R.S. § 7484-A(1); see Maine Rules of Small Claims Procedure. In keeping with the Legislature's directive mandating simplicity and expediency, see 14 M.R.S. ยง 7481, those rules must be "construed to secure the just, ...

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