Allen v. Call

Allen v. Call

IN THE UTAH COURT OF APPEALS
 

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Cari Allen and Log Furniture, Inc.,

Plaintiffs and Appellant,

v.

Steven Call; Ray, Quinney and Nebeker; David Harris;
Machinery Hardware & Supply, Inc.; Granite Stone, L.C.;
and John Does one through ten,

Defendants and Appellees.

MEMORANDUM DECISION
(Not For Official Publication)
 

Case No. 20050227-CA
 

F I L E D
(May 19, 2005)
 

2005 UT App 223

 

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Third District, Salt Lake Department, 040904759

The Honorable Glenn K. Iwasaki

Attorneys: Cari Allen, Bountiful, Appellant Pro Se

Steven T. Waterman and Steven C. Strong, Salt Lake City, for Appellees Machinery & Hardware Supply, Inc., Granite Stone, L.C., and David Harris

Richard D. Burbidge and Stephen B. Mitchell, Salt Lake City, for Appellees Steven W. Call and Ray Quinney and Nebeker, P.C.

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Before Judges Billings, Jackson, and Orme.

PER CURIAM:

    Cari Allen appeals the trial court's dismissal of her complaint. This is before the court on Appellees' motion for summary disposition based on the lack of a substantial question for review. The trial court dismissed Allen's claims based on the res judicata effect of an order from the bankruptcy court. Because the bankruptcy court conclusively established that Log Furniture, Inc.'s (LFI) Chapter 7 bankruptcy was properly filed, the trial court did not err in finding Allen's claims were barred by res judicata.(1)

    The issue of whether res judicata bars an action is a question of law reviewed for correctness. See Macris & Assocs., Inc. v. Neways, Inc., 2000 UT 93,¶17, 16 P.3d 1214. Res judicata has two branches, claim preclusion and issue preclusion. Claim preclusion bars the same parties or their privies from re-litigating the same cause of action and those claims that could have been brought in the initial action. See id. at ¶19. Claim preclusion will bar a subsequent action if three requirements are met:

First, both cases must involve the same parties or their privies. Second, the claim that is alleged to be barred must have been presented in the first suit or must be one that could and should have been raised in the first action. Third, the first suit must have resulted in a final judgment on the merits.

Id. at ¶20 (citation omitted).

    Issue preclusion arises from different causes of action but prevents parties or privies "from relitigating particular issues that have been contested and resolved." Id. at ¶34. Issue preclusion will bar relitigation of an issue if four elements are met: first, the challenged issue must be identical in the current action and the prior action; second, the prior action must have determined the issue in a final judgment on the merits; third, the issue must have been fully, competently, and fairly litigated; and fourth, the party in the current action must have been a party or a privy of a party in the prior action. See id. at ¶37.

    Allen's claim for fraud on the courts is barred by claim preclusion. The adversary proceeding filed by LFI in the bankruptcy proceeding alleged essentially the same cause of action as the instant complaint. The adversary proceeding complaint asserted that defendants misrepresented facts to the court and improperly filed the LFI bankruptcy. It alleged that the defendants "have perpetrated a fraud upon the Court in the filing of the Chapter 7 bankruptcy and with respect to opposing its dismissal." The same course of conduct is alleged in the current complaint, asserting fraud on the courts based on alleged misrepresentations. The claim in the current complaint is the same as the claim litigated in the adversary proceeding in the bankruptcy court. Furthermore, the claim was determined on its merits in the bankruptcy court. The bankruptcy court determined after hearing and on the merits that the LFI bankruptcy filing was proper.

    Additionally, Allen was in privity with LFI when it filed the adversary action and thus is bound by the result. In the adversary proceeding, LFI asserted that Allen was, and continued to be at the time of the filing, the president and sole director of LFI. This relationship places Allen in privity with LFI for res judicata purposes here. A person is in privity with another if the person is so "identified in interest with another that he represents the same legal right." Brigham Young Univ. v. Tremco Consultants, 2005 UT 19,¶29, 522 Utah Adv. Rep. 18. In the LFI adversary proceeding, counsel for LFI was acting at the direction of LFI "management," meaning Allen. At that time, Allen's and LFI's interests were one and the same.

    Allen's claim for intentional infliction of emotional distress is also barred by res judicata, although it is the issue preclusion branch. The claim for emotional distress is uniquely personal to Allen and is based on different elements than the other claims in the bankruptcy proceeding, and so could not have been litigated in that forum. Thus, claim preclusion does not apply. However, the key predicate fact upon which her claim is based, that the LFI bankruptcy was improperly filed, has been conclusively determined by the bankruptcy court. Allen is thus barred from relitigating that issue.

    As noted above, Allen was in privity with LFI when the adversary proceeding was filed. Additionally, the challenged issue is the same in both cases, i.e., whether the LFI bankruptcy was proper. Also, the issue was fully, fairly, and competently litigated before the bankruptcy court, with multiple hearings on the matter over the course of the bankruptcy case itself, leading to a final judgment on the merits of the issue. As a result, issue preclusion bars Allen from relitigating the propriety of the LFI bankruptcy filing.

    Furthermore, the preclusive effect "extends to every matter which was or might have been urged to sustain or defeat the determination actually made." Macris & Assocs., Inc. v. Neways, Inc., 2000 UT 93,¶40. Allen alleges in her complaint that the LFI bankruptcy was improperly filed based on various asserted misrepresentations. However, because that contention is precluded by the bankruptcy court's determination, the additional allegations of misconduct, which should have been raised in support of LFI's position in the earlier proceeding, are also precluded from consideration. As a result, absent the key predicate fact upon which her claim for intentional infliction of emotional distress is based, Allen's claim fails as a matter of law.

    Accordingly, the trial court's dismissal of Allen's complaint is affirmed.

______________________________

Judith M. Billings,

Presiding Judge

______________________________

Norman H. Jackson, Judge

______________________________

Gregory K. Orme, Judge

1. Allen also asserts the trial court erred in finding that the bankruptcy court dismissed the causes of action for interference with economic relations and abuse of process claims in its order barring claims based on the LFI bankruptcy. The two claims in the complaint were clearly based on the filing of the bankruptcy, and were thus within the express language of the bankruptcy court's order. Even if not, res judicata principles barring the remaining claims would bar these claims as well.