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COPE v. BANKAMERICA HOUSING SERV., INC.

United States District Court, M.D. Alabama, Northern Division
Oct 10, 2000
CIVIL ACTION NO. 99-D-653-N (M.D. Ala. Oct. 10, 2000)

Summary

discussing Concordia v. Bendekovic, 693 F.2d 1073, 1075 (11th Cir.1982)

Summary of this case from Cecchini v. Cetera Fin. Grp.

Opinion

CIVIL ACTION NO. 99-D-653-N.

October 10, 2000.

Christina D. Crow, Jinks, Daniel, Crow Seaborn, LLC, Union Springs, AL. Plaintiff represented by Crow.

C. Knox McLaney, III, McLaney Associates, Montgomery, AL. Plaintiff represented by McLaney.

George M. Ritchey, Ritchey Ritchey, P.A., Birmingham, AL. Defendant BANKAMERICA HOUSING SERVICES, INC., FSB, represented by Ritchey.

George M. Ritchey, Ritchey Ritchey, P.A., Birmingham, AL. Defendant BANK of AMERICA, FSB, represented by Ritchey.


MEMORANDUM OPINION AND ORDER


Before the court is Defendants' Motion To Dismiss, which was filed July 21, 1999. Plaintiff filed a Response on August 23, 1999. Defendants issued a Reply on August 30, 1999, and a Supplemental Reply on September 2, 1999. After careful consideration of the arguments of counsel, the relevant law, and the record as a whole, the court finds that Defendants' Motion To Dismiss is due to be denied.

I. JURISDICTION AND VENUE

The court has subject matter jurisdiction over this lawsuit under 28 U.S.C. § 1331 (federal question) and 15 U.S.C. § 1640 (e) (Truth in Lending Act). The parties do not contest personal jurisdiction or venue.

II. MOTION TO DISMISS STANDARD

A defendant may move to dismiss a complaint under Rule 12 (b)(6) of the Federal Rules of Civil Procedure if the plaintiff has failed to state a claim upon which relief may be granted. See FED. R. CIV. P. 12(b)(6). A Rule 12(b)(6) motion attacks the legal sufficiency of the complaint. Therefore, the court assumes that all factual allegations set forth in the complaint are true,see United States v. Gaubert, 499 U.S. 315, 327 (1991); Powell v. Lennon, 914 F.2d 1459, 1463 (11th Cir. 1990), and construes all factual allegations in the light most favorable to the plaintiff.See Brower v. County of Inyo, 489 U.S. 593, 598 (1989). Generally, "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." In re Johannessen, 76 F.3d 347, 349 (11th Cir. 1996) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).

III. FACTUAL BACKGROUND

On December 25, 1995, Plaintiff purchased a mobile home. (Compl. ¶ 6.) In connection with his purchase of the mobile home, Plaintiff entered into a retail installment contract with Defendant Bankamerica Housing Services ("Bankamerica"), a division of Defendant Bank of America, FSB, whereby Bankamerica financed Plaintiff's mobile home purchase. (Id. ¶¶ 6, 10c, 10e.) The retail installment contract required Plaintiff to purchase insurance with an outstanding principal balance protection rider covering the cost to repossess the mobile home in the event that Plaintiff defaulted on his payments. (Id. ¶ 7.) Because Plaintiff did not purchase insurance covering the cost of repossession on his own, Bankamerica force-placed repossession insurance from American Bankers Insurance Company of Florida on Plaintiff for the period of December 25, 1995, until December 25, 1998. Bankamerica did not disclose to Plaintiff the cost of the premium for this insurance. (Id. ¶¶ 8, 10e, 13; Pl. Ex. A.)

Plaintiff filed this lawsuit on June 25, 1999. In his complaint, Plaintiff alleges that Bankamerica violated the Truth in Lending Act ("TILA."), 15 U.S.C. § 1601, et seq., by force-placing repossession insurance on his mobile home without disclosing to him the cost of the premium. (Id. ¶¶ 8, 14, 20.) Plaintiff seeks to represent a class of similarly situated plaintiffs. (Id. ¶¶ 9, 10.) Plaintiff requests damages, attorney's fees, and costs. (Id. at 5.)

IV. DISCUSSION

According to Defendants, Plaintiff was a class member in two earlier federal class action lawsuits in which his TILA claim against Defendants or issues related thereto were considered and resolved. Defendants accordingly argue that Plaintiff's lawsuit is barred by res judicata and/or collateral estoppel. In support of their position, Defendants have attached as exhibits to their Motion and Reply copies of pleadings and orders from these two earlier lawsuits — Adams, et al., v. Security Pacific Housing Services, Inc., et al., CV 95-P-1958-W, filed in the United States District Court for the Northern District of Alabama, and Graham, et al., v. Security Pacific Housing Services, Inc., et al., 2:96-CV-132(P)(S), filed in the United States District Court for the Southern District of Mississippi.

From Adams, Defendants have submitted copies of a "Class Action Complaint," "Preliminary Approval Order," "Final Judgment," and "Notice of Proposed Class Action Settlement and Hearing." The Class Action Complaint alleges that Security Pacific Housing Services, Inc. required collateral protection insurance on mobile homes it financed and force-placed such insurance on the purchasers. The Class Action Complaint further alleges that Security Pacific Housing Services breached its contracts with members of the putative class, misrepresented or failed to disclose material facts, wrongfully collected commissions or other fees, required putative class members to pay for allegedly excessive insurance coverage and excessive premiums and finance charges for such coverage, and otherwise acted wrongfully with respect to force-placed mobile home insurance on the accounts of the putative class members. In the Class Action Complaint, the Adams's sought to represent a class of persons defined as follows: "all Borrowers . . . who were charged for collateral protection casualty insurance policies during the relevant period for mobile homes financed under written agreements with Security Pacific." (Reply Ex. A ¶ 7.)

The Final Judgment shows that the court certified the class, the parties reached a settlement, and the court confirmed the settlement. The settlement class was made up of the following persons:

All Alabama residents who executed retail installment sales agreements for the purchase of a mobile or manufactured home, which agreement was assigned to or serviced by Security Pacific, and whose accounts at Security Pacific were charged any amount of earned insurance premiums as a result of [manufactured home insurance for, among other things, repossession expense coverage], force-placed by Security Pacific between January 1, 1989, and January 1, 1996 with American Modern Home Insurance Company, or between January 1, 1989, and March 14, 1996, with American Bankers Insurance Company of Florida, and whose [manufactured home insurance] was not fully canceled and the amounts charged therefor refunded; provided, however, that no person who has reached a separate accord and satisfaction or settlement of [manufactured home insurance] charges, or whose claims would be barred by release, res judicata, or collateral estoppel, or by other operation of law, shall be included within the Plaintiff Settlement Class.

(Mot. Ex. B at 3.)

The Final Judgment states that, under the settlement, a common fund of $679,349.39 was established and distributed proportionately to the settlement class members. According to the Final Judgment,

the only individuals who have timely elected to be excluded from the Plaintiff Settlement Class and are thus not bound by this Final Judgment and the Permanent Injunction are the persons identified in Exhibit B hereto. This Court specifically finds that no other person of the Plaintiff Settlement Class has timely elected to be excluded from or is hereby excluded from the Plaintiff Settlement Class.

(Id. at 6.) Plaintiff is not listed on Exhibit B to the Final Judgment. The Final Judgment also states that "Security Pacific Housing Services, Inc." is "now known as BankAmerica Housing Services, a division of Bank of America FSB." (Id. at 1.)

From the Graham case, Defendants have submitted copies of a "Complaint," and a "Permanent Injunction." In the Complaint, the Grahams sought to represent a class defined as follows:

All persons residing in the State of Mississippi who had loans or who co-signed or guaranteed loans with [Bankamerica Housing Services, a division of Bank of America, FSB], secured by collateral in the form of mobile homes . . ., who were charged for collateral protection insurance and related charges by [Bankamerica Housing Services], and/or any of its affiliates, agents, representatives or controlled persons.

(Reply Ex. B at 12.) The Complaint alleges, among other things, that Bankamerica Housing Services failed to comply with TILA, 15 U.S.C. § 1601, "by failing to properly disclose the amount of the insurance premium and the term." (Id. at 25.)

The Permanent Injunction enjoins Bankamerica Housing Services from several actions related to the placement of mobile home collateral protection insurance. (Mot. Ex. C1 at 1-4.) The Permanent Injunction refers to, but does not expressly incorporate, a stipulation of settlement and second enhancement to the stipulation of settlement between the plaintiffs and the defendants. In the stipulation of settlement and second enhancement to the stipulation of settlement, the defendants agreed to, among other things, establish a common fund of $10,500,000 in cash and credit to be distributed to class members.

Where a party moves to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted and matters outside the pleadings are presented to and not excluded by the court, the motion is to be treated as if it were a motion for summary judgment under Rule 56. See Jones v. Automobile Ins. Co. of Hartford, 917 F.2d 1528, 1531-32 (11th Cir. 1990); Concordia v. Bendekovic, 693 F.2d 1073, 1075 (11th Cir. 1982). However, before a court converts a motion to dismiss into a motion for summary judgment, it must give the parties ten days notice in order to allow the parties to present all material pertinent to a motion for summary judgment. See FED. R. CIV. P. 12(b)(6); FED. R. Civ. P. 56(c); Jones, 917 F.2d at 1532.

"Matters outside the pleadings" include any written or oral evidence in support of or in opposition to the pleading that provides some substantiation for the pleadings. See Concordia, 693 F.2d at 1075. "`Memorandum of points and authorities as well as briefs and oral arguments, however, are not considered matters outside the pleadings for purposes of conversion.'" Id. (quoting 5 C. WRIGHT A. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1366 (1969)).

In Concordia, 693 F.2d at 1076-77, the Eleventh Circuit held that copies of an answer and final judgment from an earlier lawsuit that were attached to the defendants' Rule 12(b)(6) motion, and which the defendants relied upon to show that the plaintiff's lawsuit was barred by res judicata, were not matters outside the pleadings. The Concordia court, therefore, concluded that the district court was correct to consider the answer and final judgment without converting the motion to dismiss into a motion for summary judgment. See id.

Similarly, in this case, Defendants have attached as exhibits to their Motion and Reply copies of pleadings and orders fromAdams and Graham, upon which they rely to support their motion to dismiss. Therefore, the court finds that these orders and pleadings are not matters outside the pleadings and the court will consider them without converting Defendants' motion to dismiss into a motion for summary judgment.

Defendants have raised the defenses of res judicata and collateral estoppel in a Rule 12(b)(6) motion. Res judicata and collateral estoppel are not defenses under Rule 12(b), but, instead, are affirmative defenses that should be raised under Rule 8(c). See id. at 1075. Even so, a party may raiseres judicata and collateral estoppel as defenses in a Rule 12(b) motion where the existence of the defenses can be judged on the face of the complaint. See id.

Although, as will be discussed, res judicata and collateral estoppel are distinct, but related, doctrines, the Concordia court referred to res judicata and collateral estoppel interchangeably to describe the preclusive effect that should be given to prior adjudications. See 693 F.2d at 1075 n. 2.Concordia, therefore, implies that the principles applicable to ares judicata defense raised in a 12(b)(6) motion to dismiss apply equally to a collateral estoppel defense raised in such a motion. See id. ("The distinction between [res judicata and collateral estoppel] for purposes of this appeal is important only in determining the degree of finality required to apply each doctrine."). See also David Vincent, Inc. v. Broward County, 200 F.3d 1325, 1330 n. 7 (11th Cir. 2000) (recognizing that res judicata and collateral estoppel are often lumped together under the rubric of res judicata); Aquatherm Indus, Inc. v. Florida Power Light Co., 84 F.3d 1388, 1391 n. 1 (11th Cir. 1996) (same).

Consequently, the issue before the court is whether the face of Plaintiff's Complaint provides sufficient information from which the court can dismiss the Complaint on the ground of res judicata and/or collateral estoppel. For the reasons discussed, in deciding this issue, the court will consider those pleadings and orders from Adams and Graham that are attached as exhibits to Defendants' Motion and Reply.

Res judicata and collateral estoppel are related but distinct doctrines that describe the preclusive effect that should be given to prior adjudications. See id. at 1075 n. 2. Under res judicata, also known as claim preclusion, if the later litigation arises from the same cause of action as the earlier litigation, every claim that was actually decided or could have been presented in the earlier lawsuit is barred. See Christo v. Padgett, 2000 WL 1210667, at *10 n. 46 (11th Cir. 2000); Wallis v. Justice Oaks II, Ltd., 898 F.2d 1544, 1549 n. 3 (11th Cir. 1990). Under collateral estoppel, also known as issue preclusion, if the later lawsuit arises from a different cause of action than the earlier lawsuit, relitigation is barred of those matters or issues common to both the earlier and later lawsuits that are either expressly or by necessary implication adjudicated in the earlier lawsuit. See Christo, 2000 WL 1210667, at *10 n. 46;Wallis, 898 F.2d at 1549 n. 3.

Generally, principles of res judicata and collateral estoppel apply to judgments in class actions. See Lyons v. Georgia-Pacific Corp. Salaried Employees Retirement Plan, 221 F.3d 1235, 1253 (11th Cir. 2000) (recognizing that members of the class are bound by the res judicata effect of a judgment); Twigg v. Sears, Roebuck Co., 153 F.3d 1222, 1226 (11th Cir. 1998) ("Generally, principles of res judicata . . . apply to judgments in class actions as in other cases."). Because Defendants have raised bothres judicata and collateral estoppel as a bar to Plaintiff's lawsuit, the court will discuss whether Adams and/or Graham bars Plaintiff's lawsuit under either doctrine.

Res judicata will bar a claim if the following four elements are present: (1) there is a final judgment on the merits in the earlier lawsuit; (2) the decision in the earlier lawsuit was rendered by a court of competent jurisdiction; (3) the parties, or those in privity with them, are identical in both lawsuits; and (4) the later lawsuit involves the same cause of action as the earlier lawsuit. See Jang v. United Tech. Corp., 206 F.3d 1147, 1149 (11th Cir. 2000); Ragsdale v. Rubbermaid. Inc., 193 F.3d 1235, 1238 (11th Cir. 1999); Wallis, 898 F.2d at 1550.

Starting with Adams, the copies of the pleadings and orders from Adams that Defendants have attached to their Motion and Reply suggest that res judicata bars Plaintiff's lawsuit. First, the court in the Adams case rendered a final judgment confirming the settlement of the lawsuit. This constitutes a final judgment on the merits. See Wallis, 898 F.2d at 1549 ("While the court's order authorizing [the bankruptcy] settlement cannot be given preclusive effect, we conclude that the order confirming the plan does satisfy the requirements of a judgment that can be given such effect."). Second, the United States District Court for the Northern District of Alabama, which issued the final judgment inAdams, is a court of competent jurisdiction.

Third, Plaintiff was a party in Adams. The court defined the settlement class as:

All Alabama residents who executed retail installment sales agreements for the purchase of a mobile or manufactured home, which agreement was assigned to or serviced by Security Pacific, and whose accounts at Security Pacific were charged any amount of earned insurance premiums as a result of [manufactured home insurance for, among other things, repossession expense coverage], force-placed by Security Pacific between January 1, 1989, and January 1, 1996 with American Modern Home Insurance Company, or between January 1, 1989, and March 14, 1996, with American Bankers Insurance Company of Florida, and whose [manufactured home insurance] was not fully canceled and the amounts charged therefor refunded; provided, however, that no person who has reached a separate accord and satisfaction or settlement of [manufactured home insurance] charges, or whose claims would be barred by release, res judicata, or collateral estoppel, or by other operation of law, shall be included within the Plaintiff Settlement Class.

(Mot. Ex. B at 3.)

Plaintiff alleges the following in his Complaint: that he is an Alabama resident, that he executed a retail installment sales contract with Bankamerica for the purchase of a mobile home, and that Bankamerica force-placed repossession insurance with American Bankers Insurance Company of Florida on him between December 25, 1995, and December 25, 1998. Based on these allegations, the court finds that Plaintiff was a member of the settlement class, and that he did not opt out of the class. For these reasons, the court finds that Plaintiff was a party inAdams.

Bankamerica was known as Security Pacific at the time of litigation.

Fourth, and finally, Plaintiff's lawsuit and Adams involve the same cause of action. The determination of whether a litigant has asserted the same cause of action in two proceedings depends upon whether the primary right and duty are the same in both cases.See Ragsdale, 193 F.3d at 1239; Pleming v. Universal-Rundle Corp., 142 F.3d 1354, 1356 (11th Cir. 1998). Put another way, "[c]laims are part of the same cause of action when they arise out of the same transaction or series of transactions." Wallis, 898 F.2d at 1551. See also Jang, 206 F.3d at 1149;Plemming, 142 F.3d at 1356.

Both Plaintiff's lawsuit and Adams stem from Bankamerica's financing of mobile homes purchased by Alabamians and Bankamerica allegedly force-placing repossession insurance on those purchasers during a time period that included December 25, 1995, without disclosing to them the premium amount for the insurance. Therefore, the claims in both lawsuits stem from the same transaction or series of transactions and accordingly involve the same cause of action.

However, the Eleventh Circuit has held that evidence in addition to that which Defendants have submitted in Adams is required before a court may apply res judicata in the context of a Rule 12(b)(6) motion to dismiss.

In Concordia, 693 F.2d at 1074, the plaintiff John Concordia filed suit in federal district court alleging that he was denied his civil rights when he was beaten with excessive force by police officer Thomas Bendekovic, one of the defendants. The defendants moved to dismiss Concordia's lawsuit under Rule 12 (b)(6) arguing that collateral estoppel bars the lawsuit. In support of their motion, the defendants argued that in an earlier state court proceeding Concordia initiated a counterclaim against the defendant City alleging that Bendekovic was liable for assault and battery. See id. The defendants attached to their brief a copy of an answer and the counterclaim from the earlier state court proceeding. See id. The counterclaim alleged that Bendekovic assaulted Concordia and it sought damages. See id.

The defendants attached to their brief a copy of a final judgment from the earlier state court proceeding granting Bendekovic compensatory and punitive damages against Concordia and denying Concordia on his counterclaim. See id. Based on this record, the district court found that the earlier state court lawsuit collaterally estopped Concordia's federal lawsuit and accordingly dismissed that lawsuit. See id.

The substantive issue on appeal was whether the record contained sufficient evidence from which the district court could dismiss the complaint on the ground of res judicata. See id. at 1075. The court determined that the defendants'res judicata defense could be sustained only if three elements are satisfied: (1) the issue in the present lawsuit is identical to the one decided in the earlier lawsuit; (2) the earlier lawsuit concluded in a final judgment on the merits; and (3) the party against whom the defense is asserted, Concordia, was a party or in privity with a party to the earlier lawsuit. See id. at 1076.

The court held that although the record suggested that the elements of res judicata are satisfied, the record did not conclusively show that the issue of assault and battery was actually litigated or that there had been a final judgment in the earlier lawsuit. See id. The court reasoned:

In the case at bar, the record of the state court proceedings was not introduced. No certified or exemplified copies of the pleading record or judgmental material were ever presented. The district court accepted the copies of Concordia's state counterclaim and the copy of the state judgment as correct representations of what the state trial court's record contained. This evidence does not satisfy the minimum requirement that the defense of res judicata appear from the face of the complaint.
Id. at 1076-77. The Concordia court stated that the evidence required to satisfy the "minimum requirement" is "preferably a copy of the [record of the case from the court that adjudicated the earlier lawsuit]." Id. at 1076.

In its remand order, the Concordia court instructed the district court that on remand its only objective is to "determine on the basis of a complete record whether th[e] issue [of whether Bendekovic assaulted Concordia] was actually litigated [in the state court proceeding] and whether the state court has rendered a final judgment." Id. at 1078. If those issues are resolved in the affirmative, the appellate court instructed the district court to reinstate its order dismissing the case. See id.

Under Concordia, the final judgment element necessary to sustain a res judicata defense in the context of a Rule 12(b)(6) motion to dismiss requires that the record before the court contain a complete, and preferably certified or exemplified, copy of the record from the earlier lawsuit. See id. 1076.Cf. Jones v. Gann, 703 F.2d 513, 515-16 (11th Cir. 1983).

In this case, neither party asserts that the pleadings and orders from Adams attached to Defendants' Motion and Reply are the complete record of that case. Similar to the situation inConcordia, the pleadings and orders from Adams suggest but do not conclusively show that there was a final judgment on the merits in that case. Under these circumstances, the court cannot conclude that the final judgment on the merits element of the res judicata defense is satisfied.

Therefore, at least at this stage of the litigation, the court cannot find that Adams bars Plaintiff's lawsuit on the ground ofres judicata. If, however, Defendants later move for summary judgment and either: (1) present a complete record from Adams and that record verifies the Final Judgment, see Concordia, 693 F.2d at 1076-77; or (2) Plaintiff does not present evidence showing that the pleadings and orders from Adams that Defendants have presented to the court do not accurately reflect the complete record in Adams, see Jones v. Gann, 703 F.2d 513, 515-16 (11th Cir. 1983), then the court will sustain Defendants' res judicata defense.

Similarly, the court finds that Graham cannot serve as a basis for granting Defendants' Motion on the ground of res judicata. As with Adams, Defendants have not submitted a complete record fromGraham verifying that the Graham court issued a final judgment on the merits. Instead, Defendants have only submitted copies of what is apparently a partial record in Graham — a Complaint and a Permanent Injunction.

Unlike with Adams, however, even if a complete record substantiates the information contained in the Complaint and Permanent Injunction, a complete record from Graham would not work claim preclusion against Plaintiff's lawsuit. That is because the parties, or those in privity with them, are not identical in Plaintiff's lawsuit and Graham. See Jang, 206 F.3d at 1149; Ragsdale, 193 F.3d at 1238; Wallis, 898 F.2d at 1550.

In the Complaint, the Grahams sought to represent a class defined as follows:

All persons residing in the State of Mississippi who had loans or who co-signed or guaranteed loans with [Bankamerica Housing Services, a division of Bank of America, FSB], secured by collateral in the form of mobile homes . . ., who were charged for collateral protection insurance and related charges by [Bankamerica Housing Services], and/or any of its affiliates, agents, representatives or controlled persons.

(Reply Ex. B at 12.) Graham, therefore, only involved Mississippi residents. In contrast, in the present case, Plaintiff identifies himself as an Alabama resident. (See Compl. ¶ 3.) Consequently, Plaintiff was not and could not have been a class member in Graham. Accordingly, Plaintiff's claim against Bankamerica was not and could not have been adjudicated inGraham. For these reasons, Graham does not bar Plaintiff's lawsuit on the ground of res judicata.

In the alternative, as discussed, Defendants contend that Plaintiff's lawsuit is collaterally estopped by Adams and/orGraham. The Eleventh Circuit has held that:

[t]o claim the benefit of collateral estoppel the party relying on the doctrine must show that: (1) the issue at stake is identical to the one involved in the prior proceeding; (2) the issue was actually litigated in the prior proceeding; (3) the determination of the issue in the prior litigation must have been `a critical and necessary part' of the judgment in the first action; and (4) the party against whom collateral estoppel is asserted must have had a full and fair opportunity to litigate the issue in the prior proceeding.
Christo, 2000 WL 1210667, at *11 (quoting Pleming, 142 F.3d at 1359).

In the present case, Plaintiff states that the issues on the merits are (1) whether Bankamerica failed to disclose the cost to the borrowers of the repossession insurance that it required on mobile homes that it financed and (2) if so, whether Bankamerica's failure to disclose violates TILA. (See Compl. ¶¶ 13, 14.) Similarly, one issue in Adams was whether Bankamerica failed to disclose the cost to the borrowers of the repossession insurance that it required on mobile homes that it financed. However, because Adams did not involve a TILA claim, whether Bankamerica's failure to disclose violates the TILA was not at issue. Therefore, the only common issue in the present case and Adams is whether Bankamerica failed to disclose the cost to the borrowers of the repossession insurance that it required on mobile homes.

Regarding the second element of collateral estoppel, the Eleventh Circuit has determined that "`[w]hen an issue is properly raised, by the pleadings or otherwise, and is submitted for determination, and is determined, the issue is actually litigated.'" Christo, 2000 WL 1210667, at *11 (quoting Pleming, 142 F.3d at 1359).

The Final Judgment in Adams provides:

This Court decrees that neither this Settlement Agreement, nor this Final Judgment, nor the Permanent Injunction entered contemporaneously herewith, nor the fact of the settlement is an admission or concession on the part of [Bankamerica] of any claim or any fault or liability or any wrongdoing or damage whatsoever. This Final Judgment is not a finding of the validity or invalidity of any claims asserted in the Action against [Bankamerica] or any alleged wrongdoing by [Bankamerica].

(Mot. Ex. B. ¶ 3.) In other words, in confirming the settlement, the Adams court did not "determine" any issues bearing on Bankamerica's liability. Therefore, the court finds that the issue of whether Bankamerica failed to disclose the cost to the borrowers of the repossession insurance that it required on mobile homes was not actually litigated in Adams. As a result, the second element of collaterally estoppel is not satisfied. Accordingly, Adams cannot form the basis of collateral estoppel against Plaintiff's lawsuit.

The only remaining hope for Defendants, at least at this stage in the litigation, is that Graham collaterally estops Plaintiff's lawsuit.

As in Adams, one issue in Graham was whether Bankamerica failed to disclose the cost to the borrowers of the repossession insurance that it required on mobile homes that it financed. (See Reply Ex. B at 25.) Unlike Adams, however, the Graham plaintiffs alleged that Bankamerica's failure to disclose violated the TILA. (Id. at 25-26.) Consequently, both of the relevant issues in the case at bar are common to Graham.

Even so, the second element necessary for Graham to collaterally estop the Plaintiff's lawsuit is not satisfied. Similar to the Final Judgment in Adams, the Permanent Injunction in Graham states:

None of the terms of this Injunction shall be:

(a) construed as or deemed to be evidence of any presumption, concession or admission by [Bankamerica] of the truth of any fact alleged by the Plaintiffs herein, or the validity of any claim which has been or could have been asserted in any litigation by any putative member of the class, or of any liability, fault, wrongdoing or other wrongful act of [Bankamerica];
(b) offered or received as evidence in any litigation of any presumption, concession or admission of any liability, fault, wrongdoing, or other wrongful act by [Bankamerica];
(c) offered or received as evidence of any presumption, concession or admission of any liability, fault, wrongdoing or other wrongful act in any other action or proceeding other than such proceeding as may be necessary to effectuate the provisions of this Injunction."

(Mot. Ex. C1 ¶ 9.)

In other words, as in Adams, the Graham court did not "determine" any issues and thus those issues common to Plaintiff's lawsuit were not actually litigated in Graham. As a result, the court finds that Defendants cannot rely upon Graham as the basis for collateral estoppel.

V. ORDER

Based on the foregoing, it is hereby CONSIDERED and ORDERED that Defendants' Motion To Dismiss be and the same is hereby DENIED.

DONE this the 10th day of October, 2000.


Summaries of

COPE v. BANKAMERICA HOUSING SERV., INC.

United States District Court, M.D. Alabama, Northern Division
Oct 10, 2000
CIVIL ACTION NO. 99-D-653-N (M.D. Ala. Oct. 10, 2000)

discussing Concordia v. Bendekovic, 693 F.2d 1073, 1075 (11th Cir.1982)

Summary of this case from Cecchini v. Cetera Fin. Grp.
Case details for

COPE v. BANKAMERICA HOUSING SERV., INC.

Case Details

Full title:WILLIE COPE, Plaintiff, v. BANKAMERICA HOUSING SERV., INC., et al.…

Court:United States District Court, M.D. Alabama, Northern Division

Date published: Oct 10, 2000

Citations

CIVIL ACTION NO. 99-D-653-N (M.D. Ala. Oct. 10, 2000)

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