Swindle v. State Farm Mut. Auto. Ins. Co. , 533 S.W.3d 665 ( 2017 )

Cite as 2017 Ark. App. 632
ARKANSAS COURT OF APPEALS
DIVISION IV
No. CV-17-310
Opinion Delivered: November 15, 2017
KEN DAVID SWINDLE APPEAL FROM THE BENTON COUNTY
APPELLANT CIRCUIT COURT
[NO. 04CV-16-341]
V.
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY HONORABLE BRADLEY LEWIS KARREN,
APPELLEE JUDGE
REVERSED AND REMANDED
WAYMOND M. BROWN, Judge
Appellant Ken Swindle appeals the Benton County Circuit Court’s order dismissing
his complaint against appellee State Farm. He contends that the court erred in finding that
his claim was barred by res judicata. We agree and reverse and remand.
Appellant, an attorney, filed a lawsuit (CV-13-1501-6) on behalf of Dulce Estevez
in the Benton County Circuit Court and subsequently voluntarily dismissed that case in
August 2014. Estevez refiled the lawsuit pro se (CV-15-1692-6) on November 6, 2015.
She accepted a settlement offer from State Farm on November 11, 2015, in the amount of
$2,000. Estevez filed a petition to determine lien on February 4, 2016. In that petition,
she asked the court to determine that appellant’s lien was invalid or that the amount claimed
was incorrect. Appellant was notified about the petition via hand delivery and an email.
Cite as 2017 Ark. App. 632
He advised the court that he would attend the hearing only if he was made a party or was
subpoenaed. The hearing on the petition took place on March 29, 2016. The court filed
an order on April 15, 2016, stating in pertinent part:
7. That this case was filed previously as Dulce Estevez v. Phyllis Allard, CV-13-1501-
6. That in a telephone conference with the Court on August 12, 2014, Ken Swindle
represented that he did not represent the plaintiff in the previous case. Ken Swindle
then filed a Motion and Brief to Voluntarily Dismiss, representing he had the
authority to dismiss the case, and the case was dismissed on August 13, 2014.
8. That according to the plaintiff, she did not give anyone authority to dismiss the
case. . . .
9. That the Court finds that Ken Swindle was given notice of the Petition to
Determine Lien, and that a hearing was being scheduled on the Petition, and Mr.
Swindle neither entered an appearance nor appeared at the hearing.
10. That the Court finds that Mr. Swindle’s [sic] cannot represent to the court that
he does not represent the plaintiff, and then claim an attorney’s lien on a settlement
entered into by the plaintiff and defendant. The court finds that Mr. Swindle’s
representation that he did not represent the plaintiff serves as a waiver of any claim
for an attorney’s lien.
11. The Court hereby finds that any attorney’s lien claim by Ken Swindle on the
settlement in this case is invalid, and that State Farm is hereby ordered to issue a
settlement payment to the plaintiff in the amount of $2,000.
Appellant filed a complaint against State Farm on March 8, 2016, prior to the hearing
on Estevez’s petition, regarding attorney’s fees for a separate client. He amended the
complaint on March 28, 2016, to include his claim of an attorney’s lien of $800 plus $354.44
in costs in Estevez’s case. In total, he requested $3,696 for litigation costs, attorney’s fees,
punitive damages, and interest associated with the Estevez case. 1 State Farm filed an answer
1
He also requested a jury trial and all other proper relief.
2
Cite as 2017 Ark. App. 632
to the amended complaint on April 5, 2015, seeking to either have the complaint transferred
or dismissed. State Farm filed a motion for judgment on the pleadings and supporting brief
on May 2, 2016, contending that appellant’s claim concerning Estevez was barred by issue
preclusion because appellant’s lien was declared invalid by an order filed on April 15, 2016.
Appellant filed a response and affidavit on May 5, 2016, contending that res judicata was
inapplicable because none of the elements of res judicata could be satisfied in this case.
Appellant and State Farm subsequently settled the claim concerning the initial client, and a
partial order of dismissal with prejudice was filed on November 7, 2016. A hearing took
place on January 3, 2017, regarding appellant’s rights to a lien in the Estevez case. The
court dismissed appellant’s complaint against State Farm in an order filed on January 12,
2017, stating in pertinent part:
Upon consideration of the pleadings, the facts and evidence offered in support
thereof, including arguments by Mr. Smiley and Mr. Swindle, this Court finds that
the Court in Estevez v. Allard, CV-15-1692-6, had jurisdiction pursuant to Arkansas
Code Annotated § 16-22-304(e) and invalidated Mr. Swindle’s attorney’s lien. The
appropriate avenue for Mr. Swindle to seek redress would have been to appeal the
final order in [that case], which was issued on April 15, 2016. However, Mr. Swindle
failed to appeal the final order in [that case].
Additionally, this Court finds that the doctrine of issue preclusion bars the relitigation
of Mr. Swindle’s attorney’s lien, which was invalidated by the court in Estevez v.
Allard, CV-15-1692-6, in conjunction with his alleged representation of Dulce
Estevez. Specifically, each element of issue preclusion has been satisfied. As such,
the Court doth find that Defendant’s Motion for Judgment on the Pleadings is hereby
granted and as a result, Plaintiff’s Motion to Compel 2 is moot.
Appellant field a timely notice of appeal on January 15, 2017. This appeal followed.
2
Appellant filed a motion to compel on January 12, 2016, seeking information on all
payments State Farm had made on Estevez’s claim.
3
Cite as 2017 Ark. App. 632
We generally review a circuit court’s decision on a motion to dismiss by treating the
facts alleged in the complaint as true and viewing them in the light most favorable to the
plaintiff. 3 On those occasions where the circuit court is presented with documents outside
the pleadings, we treat the case as an appeal from a summary judgment 4 and view the
evidence in the light most favorable to the party opposing the motion. 5 However, when
the issues on appeal do not involve factual questions but rather the application of a legal
doctrine such as res judicata, we simply determine whether the appellee was entitled to
judgment as a matter of law. 6
Res judicata means that “a thing or matter has been definitely and finally settled and
determined on its merits by the decision of a court of competent jurisdiction.” 7 Res judicata
consists of two facets, one being issue preclusion and the other claim preclusion. 8 Under
issue preclusion (collateral estoppel), a decision by a court of competent jurisdiction on
matters which were at issue, and which were directly and necessarily adjudicated, bars any
further litigation on those issues by the plaintiff or his privies against the defendant or his
3
Winrock Grass Farm, Inc. v. Affiliated Real Estate Appraisers of Ark., Inc., 2010 Ark.
App. 279, 373 S.W.3d 907.
4
See Bayird v. Floyd, 2009 Ark. 455, 344 S.W.3d 80.
5
Winrock, supra.
6
Baptist Health v. Murphy, 2010 Ark. 358, 373 S.W.3d 269; Winrock, supra.
7
Baptist Health, supra.
8
Id.
4
Cite as 2017 Ark. App. 632
privies on the same issue. 9 Privity exists when two parties are so identified with one another
that they represent the same legal right. 10 We have never required strict privity in the
application of res judicata, but instead have supported the idea that there must be a
“substantial identity of parties” to apply the doctrine. 11 However, there is no privity when
the interests of the parties are in conflict. 12
Here, the court found that res judicata based on issue preclusion applied and
dismissed appellant’s complaint. We hold that this was in error. Although an attorney-
client relationship is usually sufficient to satisfy the privity requirement, 13 we hold that this
is not the case when the parties’ interests are adversary to each other. Thus, the trial court
erred by finding that res judicata supported dismissal of appellant’s claim against State Farm.
We therefore reverse and remand.
Reversed and remanded.
VIRDEN and KLAPPENBACH, JJ., agree.
Baker Schulze Murphy & Patterson, by: J.G. “Gerry” Schulze; and Ken Swindle, for
appellant.
Munson, Rowlett, Moore & Boone, P.A., by: Emily M. Runyon, for appellee.
9
Linn v. NationsBank, 341 Ark. 57, 14 S.W.3d 500 (2000).
10
Jayel Corp. v. Cochran, 366 Ark. 175, 234 S.W.3d 278 (2006).
11
Wells v. Heath, 269 Ark. 473, 602 S.W.2d 665 (1980); Rose v. Jacobs, 231 Ark. 286,
329 S.W.2d 170 (1959).
12
See Spears v. State Farm Fire and Cas. Ins., 291 Ark. 465, 725 S.W.2d 835 (1987);
State Farm Bureau Cas. Ins. Co. v. Jackson, 262 Ark. 152, 555 S.W.2d 4 (1977).
13
Jayel, supra.
5