Franklin Collection Serv., Inc., et al. v. Stewart
| Docket Number: | 2002-IA-00591-SCT | |
| Supreme Court: | Opinion Link Opinion Date: 12-31-2003 Opinion Author: Cobb, J. Holding: Reversed and Rendered |
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| Additional Case Information: |
Topic: Action on open account - Res judicata - Section 11-53-81 - Attorneys’ fees - Default judgment - Section 11-9-127 - Abuse of process Judge(s) Concurring: Smith, P.J., Waller and Carlson, JJ. Non Participating Judge(s): Pittman, C.J., Diaz and Easley, JJ. Dissenting Author : Graves, J. Dissenting Author : McRae, P.J. Procedural History: Summary Judgment Nature of the Case: CIVIL - OTHER |
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| Trial Court: |
Date of Trial Judgment: 04-04-2002 Appealed from: NOXUBEE COUNTY CIRCUIT COURT Judge: Lee J. Howard Disposition: Noxubee County Circuit Court entered an order denying the motion to dismiss or for summary judgment filed by Franklin, and certified four issues for interlocutory appeal to this Court, which are consolidated into the three issues discussed below. Case Number: 2000-198 |
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| Consolidated: 2002-IA-00592-SCT Franklin Collection Service, Inc. and Attorney T. Dale Beavers v. R. D. Malone; Noxubee Circuit Court; LC Case #: 2000-199; Ruling Date: 04/04/2002; Ruling Judge: Lee Howard; 2002-IA-00593-SCT Franklin Collection Service, Inc. and Attorney Jeffrey Waldo v. Brenda Cockrell; Noxubee Circuit Court; LC Case #: 2000-205; Ruling Date: 04/04/2002; Ruling Judge: Lee Howard; 2002-IA-00594-SCT Franklin Collection Service, Inc. and Attorney Mary E. Mason v. Walter & Ethel Woods; Noxubee Circuit Court; LC Case #: 2000-203; Ruling Date: 04/04/2002; Ruling Judge: Lee Howard; 2002-IA-00595-SCT Franklin Collection Service, Inc. and Attorney Jeffrey Waldo v. William D. Binion; Noxubee Circuit Court; LC Case #: 2000-206; Ruling Date: 04/04/2002; Ruling Judge: Lee Howard; 2002-IA-00596-SCT Franklin Collection Service, Inc. and Attorney T. Dale Beavers v. Shalonda Jones a/k/a Shalonda Smart; Noxubee Circuit Court; LC Case #: 2000-202; Ruling Date: 04/04/2002; Ruling Judge: Lee Howard; 2002-IA-00597-SCT Franklin Collection Service, Inc. and Attorney T. Dale Beavers v. Annie P. Tate; Noxubee Circuit Court; LC Case #: 2000-201; Ruling Date: 04/04/2002; Ruling Judge: Lee Howard; 2002-IA-00598-SCT Franklin Collection Service, Inc. and Attorney T. Dale Beavers v. Lee V. Wilkerson; Noxubee Circuit Court; LC Case #: 2000-200; Ruling Date: 04/04/2002; Ruling Judge: Lee Howard; 2002-IA-00599-SCT Franklin Collection Service, Inc. and Attorney Mary E. Mason v. Bessie M. Neal; Noxubee Circuit Court; LC Case #: 2000-204; Ruling Date: 04/04/2002; Ruling Judge: Lee Howard | ||
| Party Name: | Attorney Name: | |||
| Appellant: | Franklin Collection Service, Inc. and Unknown Attorney "A" |
WILLIAM V. WESTBROOK, III
JOHN PAUL BARBER
CHARLES G. PERKINS |
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| Appellee: | Jerry Stewart and Leola Stewart | ARMSTRONG WALTERS THOMAS L. KESLER BENNIE L. TURNER |
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| Topic: | Action on open account - Res judicata - Section 11-53-81 - Attorneys’ fees - Default judgment - Section 11-9-127 - Abuse of process |
| Summary of the Facts: | Franklin Collection Service, Inc. filed nine separate actions in the Noxubee County Justice Court over a period of four and a half years between June 1996 and December 2000, seeking to obtain judgments for unpaid medical bills owed to various medical service providers plus attorney’s fees and court costs. None of the justice court defendants answered the complaint filed against them, and default judgments were entered against each one. Each of the debtors filed separate civil actions against Franklin in the Noxubee County Circuit Court, alleging that the debts sued upon were not open accounts and that Franklin and its attorneys perpetrated a fraud on the court and abuse of process on the debtors. The case was removed to federal court which remanded it to the Noxubee County Circuit Court, after the federal court held that the debtor’s action was not completely preempted by the Fair Debt Collections Practices Act. The circuit court entered an order denying the motion to dismiss or for summary judgment filed by Franklin, and certified four issues for interlocutory appeal to the Supreme Court. |
| Summary of Opinion Analysis: | Issue 1: Res judicata The plaintiffs argue that res judicata is inapplicable because their failure to appear and to perfect an appeal in the justice court action does not bar this subsequent litigation which is based on a scheme to cheat and defraud. Res judicata bars all issues that might have been (or could have been) raised and decided in the initial suit, in addition to all issues that were actually decided in the first action. A judgment by default is given the same effect as if a verdict was entered for the plaintiff and accordingly can have preclusive effect on other litigation. The plaintiffs cannot simply fail to defend a suit to collect a debt and also fail to appeal the default judgment entered against them and then file suit and argue that the judgment, though not in dispute, was the result of fraud or abuse of process. The plaintiffs are procedurally barred by the doctrine of res judicata from bringing any action concerning the default judgments of the justice court. Issue 2: Open accounts The plaintiffs argue that the debts are not open accounts within the meaning of section 11-53-81 and that the court erred in entering a default judgment on open accounts and awarding attorneys’ fees. Section 11-53-81 is applicable in the collection of medical bills, either in a direct action by the unpaid medical provider or by a collection agent or agency acting on behalf of the medical provider. Section 11-9-127 provides that a justice court judge can enter a default judgment against one or more parties that fail to appear before the court on the specified trial date. Given statutory law, the justice court was not in error by entering a default judgment, which included reasonable attorney’s fees, on Franklin’s collection actions against the plaintiffs. Issue 3: Abuse of process The plaintiffs argue that Franklin and its attorneys are liable for an abuse of process in the collection of attorney’s fees. The elements of abuse of process are that the party made an illegal use of the process, a use neither warranted nor authorized by the process; the party had an ulterior motive; and damage resulted from the perverted use of process. The record is devoid of any evidence to support the plaintiffs’ claims of abuse of process. Franklin had ample cause to file the collection actions against the plaintiffs. |
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