In this week’s Alabama Law Weekly Update, we review two opinions from the courts of Alabama, one from the Alabama Court of Civil Appeals and one from the Supreme Court of Alabama, which address aspects of the relationship between district/small-claims courts and circuit courts in Alabama.

Midland Funding, LLC v. Smith, Case No. 2130435 (Ala. Civ. App. June 27, 2014) (Voluntary dismissal of case by plaintiff in district court prohibits plaintiff from appealing case to circuit court).

Midland Funding, LLC filed a complaint in the district court for Baldwin County, Alabama against D. Smith.  In its complaint, Midland Funding, LLC asserted claims of breach of contract, money had and received, and account stated.  These claims all arose out of allegations regarding the use of a credit card by Smith.  Midland Funding, LLC requested a judgment against Smith for $1,404.53.

In August 2013, the district court dismissed the case at the request of Midland Funding, LLC.  Shortly thereafter, Midland Funding, LLC filed a notice of appeal to the circuit court for Baldwin County, Alabama.  The circuit court then dismissed the case, stating Midland Funding, LLC had “voluntarily dismissed the case and then appealed to the Circuit Court.  There is no judgment to appeal.”

Midland Funding, LLC appealed to the Alabama Court of Civil Appeals.  Midland Funding, LLC argued that the circuit court erred in dismissing the case.  The Alabama Court of Civil Appeals disagreed, explaining that when “the plaintiff knowingly and willingly agrees to a stipulation of dismissal, he has no standing to appeal.”  As a result, the Alabama Court of Civil Appeals held that the circuit court did not have jurisdiction because Midland Funding, LLC had voluntarily dismissed its case in the district court and affirmed the circuit court’s decision to dismiss the case.

Ex parte Webber, Case No. 1121443 (Ala. June 27, 2014) (Small-claims case, after being tried and the judgment entered and satisfied, barred litigation of same cause of action in circuit court).

In June 2011, Mr. and Mrs. Sherrod hired L. Webber to paint the interior of their home.  A dispute arose regarding whether Webber appropriately covered objects in the house before painting and whether Webber’s painting damaged certain aspects of the home.  In July 2011, Mr. Sherrod sued Webber in small-claims court in Pickens County, Alabama. Mr. Sherrod’s complaint requested $3,000 in damages as a result of Webber’s work.  The case was tried to a judge who found that Mr. Sherrod was entitled to recover the damages he claimed.  Webber paid the judgment amount.

In March 2013, Mr. and Mrs. Sherrod filed a new lawsuit in circuit court against Webber in which they made claims regarding Webber’s work.  Webber filed a motion to dismiss this new lawsuit, arguing the case was barred by “res judicata.” Mr. and Mrs. Sherrod opposed this motion to dismiss and the circuit court judge denied the motion.

Webber then sought review of the circuit court judge’s decision in the Supreme Court of Alabama by filing a petition for a writ of mandamus.  Mr. and Mrs. Sherrod argued that the circuit court judge was correct because the small-claims court did not have jurisdiction over the claims brought in the circuit court (as a result of the amount of damages claimed in the circuit court lawsuit) and because Mrs. Sherrod was not a party to the small-claims court case against Webber.

The Supreme Court of Alabama explained that the elements of “res judicata” are: “(1) a prior judgment on the merits, (2) rendered by a court of competent jurisdiction, (3) with substantial identity of the parties, and (4) with the same cause of action presented in both actions.”  The Supreme Court of Alabama found neither of the Sherrods’ arguments persuasive, stating that the Sherrods’ position would result in “claim-splitting” with multiple cases regarding the same cause of action being filed in separate courts and finding that Mrs. Sherrod’s interests were so closely aligned with Mr. Sherrod’s interests that she would be considered a substantially identical party and therefore could not separately pursue the claim in circuit court.  As a result, the prior small-claims case prevented Mr. and Mrs. Sherrod from pursuing their circuit court lawsuit.