Schlinkert Sports Associates, Inc. v. Bargeron
Schlinkert Sports Associates, Inc. v. Bargeron
Opinion of the Court
In a legal action by an entity known as The Cincinnati Insurance Companies (“Cincinnati”) against Janet Bargeron, Cincinnati petitions for a writ of mandamus directing the Baldwin Circuit Court to dismiss Bargeron’s counterclaims to the extent those counterclaims are based on the same homeowner’s insurance policy that was the basis of a previously filed declaratory-judgment action in a federal court. Because we conclude that Barger-on’s counterclaims, to the extent they are based on the homeowner’s policy, were compulsory in the federal action, we grant the petition and issue the writ.
In January 1995, Cincinnati issued a homeowner’s insurance policy to Thomas Schlinkert and Bargeron to insure their residence. At that time, Schlinkert and Bargeron were married; they were divorced in 1996. In dividing the marital estate, the trial court awarded Schlinkert possession of, and title to, the marital residence, and one-half of all household furniture and other furnishings. Approximately two weeks after the divorce, on August 14, 1996, while Schlinkert was out of town, Bargeron forcibly entered the marital residence and removed various furnishings and personal property from the home.
Schlinkert filed an insurance claim with Cincinnati on August 19, 1996. According to Schlinkert’s proof-of-loss claim, the val
On March 5, 1997, Cincinnati filed, in the United States District Court for the Southern District of Alabama, a declaratory-judgment action against Schlinkert and Bargeron. Cincinnati asked the federal court to determine the rights and obligations of all parties under the homeowner’s insurance policy. The federal court, in July 1997, stayed the declaratory-judgment action pending resolution of Schlinkert and Bargeron’s appeals in the divorce action.
On October 16, 1997, Schlinkert and the business he controls, Schlinkert’s Sports Associates, Inc. (“SSA”), sued Bargeron in the Baldwin Circuit Court (CV-97-971), alleging civil theft and trespass, based on Bargeron’s alleged removal of $84,000 from various financial accounts of SSA. Specifically, Schlinkert alleged that during 1994 and 1995 Bargaron had illegally transferred funds from SSA accounts to her own personal account.
The federal court then lifted its stay of the declaratory-judgment action, to determine
“whether an insurance company is contractually or otherwise legally obligated to one of its named insureds under its homeowner’s insurance policy for the removal of more than one-half of the personal property from the insured residence by the other named insured (1) when there has been an intervening court decree generally dividing the personal property between the insureds in half and (2) there has not been a formal amendment to the written insurance policy to reflect the provisions of the divorce decree.”
Exhibit M, Federal court order of November 17,1998.
On February 11, 2000, in the state business-theft action (CV-97-971), Bargeron filed a counterclaim against Cincinnati, alleging breach of contract, bad faith, the tort of outrage, negligence, and wantonness. Specifically, Bargeron claimed that Cincinnati had breached its contract by failing to properly investigate Schlinkert’s business- and home-theft claims. Cincinnati moved to dismiss or strike Bargeron’s counterclaim to the extent that it was based on the same homeowner’s policy that was at issue in the federal declaratory-judgment action. The trial court denied that motion.
On July 13, 2000, the federal court entered a judgment in favor of Schlinkert,
Cincinnati has petitioned for a writ of mandamus
Rule 13(a), Ala. R. Civ. P., and Rule 13(a), Fed.R.Civ.P., provide:
“A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.”
(Emphasis added.) The purpose of Rule 13 “is to avoid circuity of actions and to enable the court to settle all related claims in one action and thereby avoid a wasteful multiplicity of litigation on- claims that arose from a single transaction or occurrence.” Grow Group, Inc. v. Industrial Corrosion Control, Inc., 601 So.2d 934, 936 (Ala. 1992), citing 6 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure: Civil § 1409 (2d ed. 1990). To effect the purpose of Rule 13, the consequence for failing to assert a compulsory counterclaim is a bar against the assertion of that claim in any other action. See Brooks v. Peoples Nat'l Bank of Huntsville, 414 So.2d 917, 920 (Ala. 1982); Owens v. Blue Tee Corp., 177 F.R.D. 673, 682 (M.D.Ala. 1998).
The drafters of Rule 13, Ala. R. Civ. P., intended to adopt the “logical-
The United States Court of Appeals for the Eleventh Circuit has also adopted a logical-relationship test for determining whether a counterclaim is compulsory under Rule 13(a), Fed.R.Civ.P. See Republic Health Corp. v. Lifemark Hosps. of Florida, Inc., 755 F.2d 1453, 1455 (11th Cir. 1985). There is a logical relationship “when ‘the same operative facts serve as the basis of both claims or the aggregate core of facts upon which the claim rests activates additional legal rights, otherwise dormant, in the defendant.’ ” Republic Health, 755 F.2d at 1455 (quoting Plant v. Blazer Fin. Servs., Inc., 598 F.2d 1357, 1361 (5th Cir. 1979)). Moreover, the Eleventh Circuit has stated that “[a] determination of whether a counterclaim is compulsory is not discretionary; rather, such a determination is made as a matter of law.” Republic Health, 755 F.2d at 1454. See also Owens v. Blue Tee Corp., 177 F.R.D. 673, 680 (M.D.Ala. 1998).
Cincinnati argues that Bargeron should have asserted her claims in the federal declaratory-judgment action because, it says, those claims arise from the same homeowner’s insurance policy.
Cincinnati’s federal declaratory-judgment action sought a recognition of its “right ... to pursue, via subrogation, any claims which Thomas Robert Schlinkert may have against Janet Bargeron due to the [home theft].” The federal action also sought a “judgment against ... Bargeron for any further amounts [that the] Court determines are owed by Cincinnati to ... Schlinkert.” In her counterclaim, Barger-on alleged breach of contract, bad faith, the tort of outrage, negligence, and wantonness in Cincinnati’s handling of the home-theft and business-theft investigations and in the payment of insurance proceeds to Schlinkert.
PETITION GRANTED AND WRIT ISSUED.'
. Schlinkert testified by deposition that one of his neighbors saw Bergeron and several other people as they loaded two moving vans with the household furnishings. Among the items taken from the home were electronics, rugs, furniture, mirrors, and jewelry and other miscellaneous personal items.
. In January 1997, a Baldwin County grand jury indicted Bargeron on two counts of first-degree theft in connection with her transfers of $30,000 and $25,000 from SSA. In April 1999, a Baldwin County jury acquitted her of first-degree theft in connection with the $30,000 transfer. However, the jury convicted her of first-degree theft in connection with the $25,000 transfer.
. Cincinnati had issued three separate policies to Schlinkert: a homeowner’s policy, a business policy, and an umbrella policy.
. The declaratory-judgment order deferred to the state court's determination of the following: (1) what items constituted the marital property that was divided in half by the divorce judgment; (2) what constituted ''one-half'; (3) which items Bargeron had removed; and (4) the value of the removed items and whether that value exceeded Bar-geron’s one-half share.
. This Court has stated that Rule 5, Ala. R.App. P., "provide[s] a simple and effective method of obtaining appellate review of an order” denying a motion to dismiss a counterclaim. In re Continental Oil Co. v. Williams, 370 So.2d 953, 955 (Ala. 1979). In that case, this Court denied the petition for the writ of mandamus, noting that the proper method of review would be a Rule 5 appeal. See Continental Oil, 370 So.2d at 955. However, this Court has, by a petition for the writ of mandamus, reviewed the denial of a motion to dismiss a counterclaim. See Ex parte Canal Ins. Co., 534 So.2d 582 (Ala. 1988).
The general rule is that a mandamus petition " ‘will not be granted if the matter complained of can be presented ultimately on an appeal.' ” Miller v. Holder, 292 Ala. 554, 557, 297 So.2d 802, 804 (1974). However, mandamus review is " ‘allowed where, because of the particular circumstances involved, adequate redress cannot be afforded by appeal after final judgment.' ” Id. (citations omitted).
. Cincinnati argues that Rule 13(a), Ala. R. Civ. P., when read in conjunction with § 6-5-440, Ala.Code 1975 (prohibiting a party from prosecuting “two actions in the courts of this state at the same time for the same cause and against the same party”) essentially makes the defendant with a compulsory counterclaim in the first action a "plaintiff" in that action (for purposes of § 6-5-440) as of the time of its commencement. See Ex parte Breman Lake View Resort, 729 So.2d at 851. Bargeron argues that § 6-5-440 is inapplicable because, she says, she is not a plaintiff in two separate actions; she argues that the only claim or action she filed is the counterclaim in the business-theft action. We need not address § 6-5-440, because our analysis under Rule 13(a) is dispositive.
. Although Bargeron’s complaint intertwines the home-theft and business-theft actions, they are separate actions.
Reference
- Full Case Name
- Ex Parte the Cincinnati Insurance Companies. (In Re: Schlinkert Sports Associates, Inc., and Thomas R. Schlinkert v. Janet P. Bargeron).
- Cited By
- 1 case
- Status
- Published