Case 2:10-cv-01026-MHT-TFM Document 79 Filed 07/03/12 Page 1 of 11
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` IN THE UNITED STATES DISTRICT COURT
`FOR THE MIDDLE DISTRICT OF ALABAMA
`NORTHERN DIVISION
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`CASE NO. 2:10-cv-1026-MHT
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`MICHAEL T. CHAPPELL,
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`Plaintiff,
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`v.
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`CHASE BANK/HOME FINANCE
`LLC, et al.,
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`Defendants.
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`REPORT AND RECOMMENDATION OF THE MAGISTRATE JUDGE
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`I. INTRODUCTION
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`The Plaintiff, a prison inmate proceeding pro se, filed this action on December 2,
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`2010 alleging that the Defendants violated his rights when they illegally seized funds in his
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`bank account and wrongfully instituted foreclosure on his home. In the complaint,
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`Plaintiff named as defendants JPMorgan Chase Bank National Association, (“Chase”); Jay
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`Hueling, ostensibly an employee of Chase ; Regions Bank, (“Regions”); Charles Stewart,
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`ostensibly an employee of Regions ; and Compass Bank. (“Compass”). He seeks
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`monetary and injunctive relief against these defendants. See Doc. 1, Complaint.
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`Pursuant to 28 U.S.C. § 636(b)(1) this case was referred to the undersigned United
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`States Magistrate Judge for review and submission of a report with recommended findings
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`1
`The Court granted Chase’s Motion to Quash service on Jay Hueling and directed the Clerk to
`resend the complaint and summons to a different address. (Doc. 68). Hueling has filed an answer in this
`action. (Doc. 76).
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`2
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`The court granted Regions’ Motion to Quash service on Charles Stewart. (Doc. 67)
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`Case 2:10-cv-01026-MHT-TFM Document 79 Filed 07/03/12 Page 2 of 11
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`of fact and conclusions of law (Doc. 3). Plaintiff moved for and was granted leave to
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`proceed in forma pauperis by the court. (Doc. 2 and 17). 28 U.S.C. § 1915 governs cases
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`where a party proceeds in forma pauperis. On September 2, 2011, the Magistrate Judge
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`recommended dismissal prior to service of process pursuant to 28 U.S.C. § 1915(e)(2)(B).3
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`(Doc. 41). After a late motion by Plaintiff to file objections to the Recommendation of the
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`Magistrate Judge, the court vacated the Order adopting the Recommendation and the Final
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`Order entered in this case and allowed Plaintiff to file objections. (Doc. 45). After review
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`of Plaintiff’s objections, the court vacated the Report and Recommendation of the Magistrate
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`Judge filed September 2, 2011. (Doc. 51). The court further directed that each party file
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`evidence of his or her citizenship and suspended time for answer until such was filed. (Doc.
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`52).
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`On the basis of the parties’ evidence of citizenship, and the Plaintiff’s and Compass’
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`and Regions’ motions to dismiss, the Magistrate Judge issued a Report and Recommendation
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`on May 25, 2012 (Doc. 69), recommending that the motions to dismiss be granted and that
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`Compass and Regions be dismissed as parties to this action. Subsequently, the District
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`Judge adopted the Report and Recommendation of the Magistrate Judge and dismissed
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`Compass and Regions with prejudice as parties to this action. (Doc. 78). Thus, Chase and
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`Hueling remain as the sole defendants in this action.
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`The statute provides, in pertinent part: “[T]he court shall dismiss the case at any time if
`the court determines that . . . the action or appeal – (i) is frivolous or malicious, (ii) fails to state a claim
`on which relief may be granted; or (iii) seeks monetary relief against a defendant who is immune from
`such relief.” 28 U.S.C. § 1915(e)(2)(B).
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`II. DISCUSSION AND ANALYSIS
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`Chase and Hueling in their Answers to the Complaint, deny the allegations in the
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`Complaint and raise six affirmative defenses. (Docs. 66 and 76). In their answers, both
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`Chase and Hueling claim as affirmative defenses res judicata and collateral estoppel arising
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`from Chappell’s state court action, Michael T. Chappell v. Chase Bank/Home Finance
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`LLC, Case No. CV - 2010-001327, in the Circuit Court of Montgomery County, Alabama.
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`Summary Judgment was entered in that case against Plaintiff on January 19, 2012, and the
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`case is currently on appeal. 4
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`Pursuant to 28 U.S.C. § 1915(e)(2)(B) this court “shall” dismiss a case
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`“at anytime” if the court concludes that the action “fails to state a claim on which relief
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`maybe granted.” Chase and Hueling argue that plaintiff’s complaint fails to state a
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`claim upon which relief maybe granted because his claims are barred by res judicata as
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`the claims at bar are identical to those raised in and dismissed by the Circuit Court of
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`Montgomery County, Alabama. (Docs. 66 and 76).
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`“Our res judicata analysis has always required a consideration of the facts and
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`legal theories of two causes of action as well as the rights and duties involved in each
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`case.” Draper v. Atlanta Indep. Sch. Sys., 377 Fed. Appx. 937, 940 (11 Cir. 2010)
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`Originally, Chappell filed this action in small claims court, see 03-SM- 2010-1328 and appealed
`the case to Circuit Court in October 2010. In the complaint, Chappell alleges that Chase owes him the
`sum of $1490.00 and that “I have 79 cases of this action that Chase stole from me”. The Court interprets
`that to mean that Chappell alleges Chase has stolen a large sum of money from him.
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`certiorari denied, 131 S.Ct. 342, 178 L.Ed. 2d 223, 79 USLW 3205 (Oct. 4, 2010) citing
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`Manning v. City of Auburn, 953 F.2d 1355, 1359 (11 Cir. 1992). “We have consistently
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`concluded that when the substance and facts of each action are the same, res judicata bars
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`the second suit.” Id. In I.A. Durbin, Inc. v. Jefferson National Bank, 793 F.2d 1541 (11th
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`Cir. 1986), the Court summarized the doctrine of res judicata as follows:
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`Res judicata or claim preclusion refers to the preclusive effect of a
`judgment in foreclosing relitigation of matters that were litigated or could
`have been litigated in an earlier suit. . . . In order for the doctrine of res
`judicata to bar a subsequent suit, four elements must be present: (1) there
`must be a final judgment on the merits; (2) the decision must be rendered by
`a court of competent jurisdiction; (3) the parties, or those in privity with
`them, must be identical in both suits; and (4) the same cause of action must
`be involved in both cases.
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`I.A. Durbin, 793 F.2d at 1549 (citations omitted). It is to these elements the court now
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`turns.
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`(1)
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`A Final Judgment. In June 2010, Chappell filed suit against Chase
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`Bank/Home Finance LLC in the Small Claims Court of Montgomery County, Alabama.
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`See Case Action Summary, in the case of, Michael T. Chappell v. Chase Bank/Home
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`Finance LLC, Case No. CV - 2010-001327, in the Circuit Court of Montgomery
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`County, Alabama. In that case, Chappell sued Chase alleging that Chase “stole” a sum of
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`money from him. See Id., Compl., doc. 1 at 1. On September 14, 2011, Chase filed a
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`motion for summary judgment in state court because Chappell defaulted on his mortgage
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`on 18 Creek Drive Montgomery AL 36117, (“the Property”), a property on which Chase
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`held the note. Indeed, Chase averred Chappell had been in default under the terms of the
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`Note and Mortgage since April 11, 2010. Further, Chase averred that as a result of the
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`state court filing, Chase cancelled a previously scheduled foreclosure sale and as of the
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`date of the filing of the Motion for Summary Judgment, the Property had not been
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`foreclosed. See MSJ at p. 3. Chase moved for Summary Judgment on the basis that
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`“Plaintiff materially breached and defaulted on the provisions of the Mortgage and
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`Plaintiff has presented no evidence to the contrary.” Chase further asked the state court to
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`grant the motion for summary judgment and enter judgment in favor of Chase and against
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`Chappell and to dismiss all Chappell’s claims against Chase with prejudice. Chase
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`further asked to be allowed to proceed with the foreclosure of the Property.” See MSJ at
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`p. 7. The Judge’s hand written notation on the Defendant’s Motion for Summary
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`Judgment reads “1/18/12 Review of All Pleadings. Motion Granted. Dismissed.” See
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`MSJ at p. 1
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`The court now turns to whether the state court’s decision on the defendant’s
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`motion for summary judgment was a decision on the merits.
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`“A judgment is on the merits when it amounts to a decision as to the
`respective rights and liabilities of the parties, based on the ultimate fact or
`state of the parties disclosed by the pleadings or evidence, or both, and on
`which the right of recovery depends, irrespective of formal, technical, or
`dilatory objections or contentions. Key factors in determining whether a
`judgment may be considered as on the merits are that there have been notice
`and an opportunity to be heard . . .
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`“It is not necessary, however, that there should have been a trial. If the
`judgment is general, and not based on any technical defect or objection, and
`the parties had a full legal opportunity to be heard on their respective claims
`and contentions, it is on the merits, although there was no actual hearing on
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`the facts of the case.”
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`Mars Hill Baptist Church of Anniston, Ala., Inc. v. Mars Hill Missionary Baptist Church,
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`761 So.2d 975 (Ala. 2000). See also Bd. of Tr. of the Univ. of Ala. v. Am. Res. Ins. Co.,
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`Inc., 5 So.3d 521, 533 (Ala. 2008) (same); A.B.C. Truck Lines v. Kenemer, 247 Ala. 543,
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`546, 25 So.2d 511, 513 (Ala.1946) (same). The court reviewed all the pleadings,
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`including evidence contained therein, and then granted the defendant’s motion. Thus, it is
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`clear that the court’s dismissal of the plaintiff’s case was a final judgment on the merits.
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`2. Court of Competent Jurisdiction. The Circuit Court of Montgomery County,
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`Alabama is a court of competent jurisdiction. Pursuant to ALA. CODE 1975 § 12-11-
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`30(1), circuit courts in Alabama “shall have exclusive original jurisdiction of all civil
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`actions in which the matter in controversy exceeds ten thousand dollars ($10,000),
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`exclusive of interest and costs, and shall exercise original jurisdiction concurrent with the
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`district court in all civil actions in which the matter in controversy exceeds three thousand
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`dollars ($3,000), exclusive of interest and costs.” Id. (emphasis added). In his complaint
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`filed in the Small Claims Court of Montgomery County, Alabama, Chappell alleged
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`Chase “stole” $1490.00 from him and also alleged “I have 79 cases of this action that
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`Chase stole from me.” Chappell filed his complaint in the Small Claims Court of
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`Montgomery County and then on October 20, 2010 appealed the action to the Circuit
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`Court of Montgomery County. See Compl. at p. 1 and Case Action Summary.
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`Consequently, both the district and the circuit courts had jurisdiction over his claims and,
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`Case 2:10-cv-01026-MHT-TFM Document 79 Filed 07/03/12 Page 7 of 11
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`thus, were courts of competent jurisdiction.
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`(3)
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`Identical Parties. Parties are “identical” for purposes of res judicata when
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`they are the same or in privity with one another. N.A.A.C.P. v. Hunt, 891 F.2d 1555, 1561
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`(11 Cir. 1990). The plaintiff named Chase as a defendant in both the state court action
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`and this case. Thus, the corporate defendant in the present lawsuit is the same as the
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`defendant in the previous state court case.
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`In the instant case the plaintiff also names Jay Hueling an employee of Chase. In
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`Thompson v. SouthTrust Bank, 961 So.2d 876, 883 (Ala. Civ. App. 2007), the court,
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`while noting that in Alabama the term “privity” had not been uniformly defined with
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`respect to res judicata, observed that it was often deemed to arise from
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`“(1) the relationship of one who is privy in blood, estate, or law; (2) the
`mutual or successive relationship to the same rights of property; [or] (3) an
`identity of interest in the subject matter of litigation.” Thus, the existence
`of privity has generally been resolved “on an ad hoc basis in which the
`circumstances determine whether a person should be bound by or entitled to
`the benefits of a judgment.”
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`Hughes v. Martin, 533 So.2d 188, 191 (Ala.1988).
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`Thompson involved a lawsuit in which Thompson sued a bank and two of its
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`employees asserting claims of negligence, wantonness and fraud relating to
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`representations made by the bank concerning an anticipated load for the purchase of
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`apartments. Prior to the filing of the case against SouthTrust and two of its employees,
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`Thompson had filed in 2002 a suit against only the bank, a suit which the court
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`characterized as alleging the same primary wrong; Thompson lost that lawsuit, and for
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`Case 2:10-cv-01026-MHT-TFM Document 79 Filed 07/03/12 Page 8 of 11
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`that reason the two bank employees could “take advantage of the previous adjudication in
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`favor of SouthTrust.” Thompson 961 So.2d at 883.
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`Thompson thus stands for the proposition that an agent and the agent’s employer
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`are in privity with respect to actions in which they have “an identity of interest in the
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`subject matter of the litigation.” 533 So.2d at 191. It follows, therefore, Jay Hueling, an
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`employee of Chase, is in privity with his employer and may take advantage of the
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`previous adjudication in favor of Chase.
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`(4)
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`The Same Cause of Action. In Manning v. City of Auburn, the Court
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`summarized the law regarding when a cause of action is the same for purposes of res
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`judicata as follows:
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`In this circuit, the determination of whether the causes of action in two
`proceedings are the same is governed by whether the primary right and duty
`are the same. Hunt, 891 F.2d at 1561 (quoting Kemp v. Birmingham News
`Co., 608 F.2d 1049, 1052 (5 Cir. 1979)); I.A. Durbin, Inc. v. Jefferson
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`Nat'l Bank, 793 F.2d 1541, 1549 (11 Cir. 1986). The test is one of
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`substance, not form. I.A. Durbin, 793 F.2d at 1549. Res judicata applies
`“not only to the precise legal theory presented in the previous litigation, but
`to all legal theories and claims arising out of the same ‘operative nucleus of
`fact.’” Hunt, 891 F.2d at 1561 (despite variations in legal theories used and
`remedies sought, second suit barred because wrongful act in both cases was
`flying Confederate flag atop state capitol) (quoting Olmstead v. Amoco Oil
`Co., 725 F.2d 627, 632 (11 Cir. 1984)); Jaffree v. Wallace, 837 F.2d 1461,
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`1468 (11 Cir. 1988) (second suit barred because “[b]oth cases raised first
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`amendment (free exercise and establishment clause) challenges to use of
`textbooks and teachings on various subjects”); Nilsen v. City of Moss Point,
`701 F.2d 556, 560 (5 Cir. 1983) (section 1983 action against city that
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`refused to hire plaintiff as firefighter due to her sex precluded by earlier
`Title VII action on same facts).
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`953 F.2d 1355, 1358-59 (11 Cir. 1992).
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`In the earlier case, Chappell sued Chase for stealing his money. Chase’s Motion
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`for Summary Judgment makes clear that these allegations arose from a foreclosure
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`proceeding instituted upon Chappell’s home. (See MSJ at p. 3). This motion was granted
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`by the State Circuit Judge. In the instant action, Chappel; sues Chase for illegally seizing
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`funds from his bank account and instituting foreclosure on his home. Thus, the issues in
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`the prior litigation are identical to the issues raised in this lawsuit.
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`Moreover, “[r]es judicata acts as a bar ‘not only to the precise legal theory
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`presented in the previous litigation, but to all legal theories and claims arising out of the
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`same operative nucleus of fact.’” Pleming v. Universal-Rundle Corp., 142 F.3d 1354,
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`1356 (11 Cir. 1998).
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`“Res judicata is a broad, judicially developed doctrine, which rests upon the
`ground that public policy, and the interest of the litigants alike, mandate that
`there be an end to litigation; that those who have contested an issue shall be
`bound by the ruling of the court; and that issues once tried shall be
`considered forever settled between those same parties and their privies. 46
`Am.Jur.2d Res Judicata § 395 (1969). ‘The principle of res judicata fosters
`reliance on judicial action, and tends to eliminate vexation and expense to
`the parties, wasted use of judicial machinery and the possibility of
`inconsistent results.’ ‘Developments in the Law-Res Judicata,’ 65 Harv.
`L.Rev. 820 (1952).”
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`Thompson v. SouthTrust Bank, 961 So. 2d 876, 885 (Ala. Civ. App. 2007).
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`“Res judicata bars the filing of claims which were raised or could have been raised
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`in an earlier proceeding.” Driessen v. Fla., 401 Fed. Appx. 435 (11 Cir. 2010) quoting
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`Ragsdale v. Rubbermaid, Inc., 193 F.3d 1235, 1238 (11 Cir. 1999). The court therefore
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`concludes that the plaintiff’s claims against Chase and Hueling in the present action are
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`barred by the doctrine of res judicata and should be dismissed.
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`III. CONCLUSION
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`Accordingly, it is the RECOMMENDATION of the Magistrate Judge that this
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`action be dismissed with prejudice.
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`It is further ORDERED that the Plaintiff file any objections to the this
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`Recommendation on or before July 16, 2012. Any objections filed must specifically identify
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`the findings in the Magistrate Judge's Recommendation to which the party is objecting.
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`Frivolous, conclusive or general objections will not be considered by the District Court. The
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`parties are advised that this Recommendation is not a final order of the court and, therefore,
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`it is not appealable.
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`Failure to file written objections to the proposed findings and recommendations in the
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`Magistrate Judge's report shall bar the party from a de novo determination by the District
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`Court of issues covered in the report and shall bar the party from attacking on appeal factual
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`findings in the report accepted or adopted by the District Court except upon grounds of plain
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`error or manifest injustice. Nettles v. Wainwright, 677 F.2d 404 (5th Cir. 1982); see Stein
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`v. Reynolds Securities, Inc., 667 F.2d 33 (11th Cir. 1982); see also Bonner v. City of
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`Prichard, 661 F.2d 1206 (11th Cir. 1981, en banc) (adopting as binding precedent all of the
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`decisions of the former Fifth Circuit handed down prior to the close of business on
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`September 30, 1981).
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`Case 2:10-cv-01026-MHT-TFM Document 79 Filed 07/03/12 Page 11 of 11
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`DONE this 3rd day of July, 2012.
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`/s/ Terry F. Moorer
`TERRY F. MOORER
`UNITED STATES MAGISTRATE JUDGE
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