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Peterson v. Newton

Court of Appeals of Arizona, First Division, Department D

August 27, 2013

AMY WELLMAN PETERSON, Plaintiff/Appellant,
BRENDA NEWTON, as personal representative of the Estate of Lou Ann Fenztlaff, Defendant/Appellee.

Appeal from the Superior Court in Maricopa County Cause No. CV2010-099989 The Honorable Karen A. Potts, Judge.

Rooney Law Firm, PLLC Phoenix By Anne M. Brady Attorneys for Plaintiff/Appellant.

Law Offices of Denise L. Siegenthaler Phoenix By Darwin Y. Barney Attorneys for Defendant/Appellee.


MICHAEL J. BROWN, Presiding Judge.

¶1 The question before us is whether entry of a judgment in the small claims division of the justice court ("small claims court") may have claim preclusive effect on a subsequent lawsuit. For the following reasons, we hold that a plaintiff who chooses to litigate a claim under the simplified procedures of small claims court may be barred by the doctrine of claim preclusion from bringing a second lawsuit based on the same claim alleged in the first lawsuit. Because the doctrine applies here, we affirm the superior court's order dismissing a complaint that involved the same negligence claim as a prior complaint filed in small claims court.


¶2 Amy Wellman Peterson and Lou Ann Fentzlaff were involved in an automobile accident in November 2008. Peterson later sued Fentzlaff in small claims court, seeking $2500 and alleging that Fentzlaff "caused an accident that resulted in extensive damages" to Peterson's vehicle. Peterson also alleged she had seen a "neuromuscular massage therapist" for treatment associated with headaches and other pain in her neck, back, arms, and legs, and that further treatment would be required. Following a trial, the court granted judgment in favor of Peterson for $2500, the court's jurisdictional limit, plus court costs.

¶3 In November 2010, Peterson filed a lawsuit in superior court against Fentzlaff[1]for "expenses and compensation" for the November 2008 accident. Fentzlaff moved to dismiss for failure to state a claim, alleging that Peterson's claim was barred by the doctrine of claim preclusion[2] based on the prior adjudication in small claims court. After Peterson failed to file a timely response, the superior court granted Fentzlaff's motion. This appeal followed, and we have jurisdiction pursuant to Arizona Revised Statutes ("A.R.S.") section 12-2101(A)(1).


¶4 We review a trial court's ruling on a motion to dismiss de novo. Coleman v. City of Mesa, 230 Ariz. 352, 355-56, 7, 284 P.3d 863, 866-67 (2012). Dismissal is appropriate under Arizona Rule of Civil Procedure 12(b)(6) only when, as a matter of law, the plaintiff is not "entitled to relief under any interpretation of the facts susceptible of proof." Id. at 356, 8, 284 P.3d at 867 (internal quotation omitted). To determine whether a complaint states a claim on which relief must be granted, "courts must assume the truth of all well- pleaded factual allegations and indulge all reasonable inferences from those facts, but mere conclusory statements are insufficient." Id. at 356, ¶ 9, 284 P.3d at 867. We are bound to affirm if the superior court was "correct in its ruling for any reason." Phelps Dodge Corp. v. El Paso Corp., 213 Ariz. 400, 404 n.7, ¶ 17, 142 P.3d 708, 712 n.7 (App. 2006).

¶5 In her motion to dismiss, Fentzlaff asserted that Peterson's lawsuit in superior court was barred under the doctrine of claim preclusion, which prevents a plaintiff from bringing a second lawsuit when a prior "judgment on the merits was rendered by a court of competent jurisdiction and the matter now in issue between the same parties or their privities was, or might have been, determined in the former action." Hall v. Lalli, 194 Ariz. 54, 57, ¶ 7, 977 P.2d 776, 779 (1999). In Arizona, the doctrine rests on the long-accepted principle that "[i]t is against public policy to split a cause of action and to make two or more suits of it when one is sufficient." Williams v. Williams, 32 Ariz. 164, 168, 256 P. 356, 357 (1927); see also Phoenix Newspapers, Inc. v. Dep't of Corr., State of Ariz., 188 Ariz. 237, 241, 934 P.2d 801, 805 (App. 1997) (noting that a purpose of the claim preclusion doctrine is "barring the splitting of claims"). To successfully assert the defense of claim preclusion, a party must prove: "(1) an identity of claims in the suit in which a judgment was entered and the current litigation, (2) a final judgment on the merits in the previous litigation, and (3) identity or privity between parties in the two suits." Gila River, 212 Ariz. at 69-70, 14, 127 P.3d at 887-88 (citing Blonder-Tongue Lab., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 323-24 (1971)).

¶6 In challenging the application of the claim preclusion doctrine, Peterson does not contest that these three elements are satisfied here. Rather, she argues that the claim preclusion doctrine should not be applied to a judgment obtained in small claims court. Alternatively, Peterson asserts the doctrine does not apply in this case because the personal injury damages she seeks exceeded the jurisdictional limit of small claims court.

¶7 Under Arizona law, the small claims court is intended to allow "inexpensive, speedy and informal resolution of small claims." A.R.S. § 22-501. The court has jurisdiction over "all civil actions in which the debt, damage, tort, injury or value of the personal property claims either by plaintiff or defendant does not exceed two thousand five hundred dollars[.]" A.R.S. § 22-503(A). Decisions from that court are not appealable and are "final and binding on both parties." A.R.S. § 22-519.

¶8 Peterson has not cited, and our research has not revealed, any authority suggesting that adjudication in small claims court is not subject to a claim preclusion defense. Absent such controlling authority, we generally look to the Restatement. See Tierra Ranchos Homeowners Ass'n v. Kitchukov, 216 Ariz. 195, 201, ¶ 24, 165 P.3d 173, 179 (App. 2007). The Restatement (Second) of Judgments ...

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