Eric Ring v. Daniel Leighton v. Clinton McGaw

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2019 ME 8
Docket: Pen-17-549
Argued: July 19, 2018
Decided: January 22, 2019
Revised: July 16, 2019

Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.
Majority: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.
Concurrence: SAUFLEY, C.J., and ALEXANDER, J.

ERIC RING

v.

DANIEL LEIGHTON

v.

CLINTON McGAW

MEAD, J.

[¶1] On February 8, 2016, Clinton McGaw, driving a vehicle owned by

Eric Ring, was on his way to pick up a customer in furtherance of Ring’s

business when he was involved in a collision with a vehicle driven by

Daniel Leighton. In a small claims matter filed by Leighton against McGaw, the

District Court (Lincoln, Stitham, J.) found that McGaw was negligent and

awarded Leighton just over $3,900 in damages and costs. No appeal was filed

and the judgment was paid. Ring then filed a complaint in the Superior Court

asserting that Leighton was negligent and had caused Ring economic harm.
2

Ring appeals from a summary judgment entered by the Superior Court

(Penobscot County, A. Murray, J.) in favor of Leighton on Ring’s complaint. Ring

contends that the court erred in applying the common law doctrine of

res judicata to the earlier small claims judgment obtained by Leighton against

McGaw and thereby determining that the judgment conclusively resolved the

issue of which driver was at fault.

[¶2] In this matter of first impression, we conclude that claim preclusion

cannot, because of the unique limitations of small claims procedure, operate to

bar a subsequent suit brought in District or Superior Court by a person who

was not an actual party to the small claims action, but rather was at most in

privity with the defendant in the small claims case. Accordingly, we vacate the

summary judgment and remand for further proceedings in the trial court.

I. BACKGROUND

[¶3] The facts are drawn from the summary judgment record, taken in

the light most favorable to Ring as the nonprevailing party. See Estate of Frye v.

MMG Ins. Co., 2018 ME 44, ¶ 8, 182 A.3d 158. Following the accident between

McGaw and Leighton, Leighton filed a small claims action against McGaw in the

District Court (Lincoln). Leighton’s statement of claim, seeking $3,795.57 in

damages plus costs, alleged that McGaw had negligently caused the accident.
 3

[¶4] At the hearing on Leighton’s claim, Ring’s insurer provided McGaw

with counsel and a defense; Ring attended and spoke to McGaw and McGaw’s

counsel. The court found that McGaw was at fault in the accident and entered

judgment in favor of Leighton in the full amount that he had requested—

$3,795.57, plus $106.30 in costs. The judgment did not make any findings

regarding Ring, or McGaw’s relationship to Ring. A satisfaction of judgment was

filed on November 17, 2016.

[¶5] In January 2017, Ring filed a negligence complaint against Leighton

in the Superior Court seeking unspecified damages, alleging that Leighton, not

McGaw, had been at fault in the accident. Leighton’s answer denied the

substantive allegations of the complaint and asserted as defenses, inter alia,

that Ring’s claim was barred by the doctrines of res judicata and bar and

merger. Leighton then filed a third-party complaint against McGaw seeking

indemnification if he were found to be liable to Ring, asserting that the small

claims judgment established McGaw’s negligence.

[¶6] In July 2017, Leighton moved for summary judgment “based upon

the fact that responsibility for [the] accident was previously adjudicated in the

Lincoln District Court.” Ring opposed the motion, arguing that the small claims

judgment had no res judicata effect as to him, in part because he was not a party
4

to that action. Following a nontestimonial hearing, the court granted Leighton’s

motion and entered a summary judgment, concluding that “the issue of fault for

the accident in question has already been determined by a prior final judgment

in the 2016 Small Claims proceeding,” and that “Ring had a fair opportunity and

incentive to litigate the issue in a prior proceeding.” (Quotation marks

omitted). The court concluded that “collateral estoppel precludes Ring from

relitigating the factual issue of who was at fault for the accident[;] . . .

[t]herefore, Ring cannot establish that Leighton breached a duty to him, and

therefore cannot establish all the necessary elements of a prima facie case for

negligence.” Ring appealed.

II. DISCUSSION

[¶7] In the ordinary case, the claim preclusion prong of the res judicata

doctrine “prohibits relitigation of an entire cause of action between the same

parties or their privies, once a valid final judgment has been rendered in an

earlier suit on the same cause of action.”1 Pushard v. Bank of Am., N.A.,

2017 ME 230, ¶ 19, 175 A.3d 103 (quotation marks omitted). We have not

1 Because Ring’s argument that 14 M.R.S. § 7485 (2017) prohibits giving the small claims
judgment preclusive effect in the Superior Court “depends on the legal effect of the . . . [District Court]
cause of action, as opposed to particular factual issues litigated in connection with that claim, the
question here involves claim preclusion.” Pushard v. Bank of Am., N.A., 2017 ME 230, ¶ 19,
175 A.3d 103.
 5

previously addressed the situation presented here, where the person filing suit

in the Superior Court subsequent to the entry of judgment in the small claims

case—based on the same core set of facts—was not a party in the small claims

proceeding.2

[¶8] Leighton, as the party asserting the affirmative defense of

res judicata, bears the burden of proving its applicability. See M.R. Civ. P. 8(c);

ABN AMRO Mort. Gp. v. Willis, 2003 ME 98, ¶ 5, 829 A.2d 527. “We review the

supported facts in the summary judgment record in the light most favorable to

[Ring], as the nonprevailing party, to determine de novo if any genuine issue of

material fact exists for trial and whether, based on the undisputed facts,

[Leighton] was entitled to a judgment as a matter of law.” Estate of Frye,

2018 ME 44, ¶ 8, 182 A.3d 158. Likewise, “[w]e review decisions regarding the

effect of a prior judgment on a present action, which is a question of law,

de novo.” Thibeault v. Brackett, 2007 ME 154, ¶ 7, 938 A.2d 27.

[¶9] Ring contends that the court erred in granting Leighton summary

judgment because, for two reasons, the small claims judgment in Leighton’s

favor did not have preclusive effect in the Superior Court: (1) the Small Claims

2 In fact, we have only addressed this issue where the person bringing the second suit was the
plaintiff in the small claims action. See Thibeault v. Brackett, 2007 ME 154, ¶ 4, 938 A.2d 27;
Caporino v. Lacasse, 511 A.2d 445, 446 (Me. 1986).
6

Act, 14 M.R.S. §§ 7481-7487 (2017), requires that result; and (2) Ring was not

a party to the small claims action, nor was he in privity with McGaw in that

separate matter. If fault for the accident is not established as a matter of law,

Ring reasons, then it remains a material fact in dispute and summary judgment

is precluded. See M.R. Civ. P. 56(c); Estate of Frye, 2018 ME 44, ¶ 8,

182 A.3d 158.

[¶10] Because litigation of a small claim is unlike other civil litigation in

several important respects, before addressing the merits of Ring’s arguments

we begin our analysis with a review of the characteristics and limitations that

make “small claims proceedings . . . unique and different from other

proceedings conducted in the District Court.” Thomas v. BFC Marine/Bath Fuel

Co., 2004 ME 27, ¶ 11, 843 A.2d 3.

[¶11] Small claims proceedings are a creature of statute, established by

the Legislature with jurisdiction given to the District Court “for the purpose of

providing a simple, speedy and informal court procedure for the resolution of

small claims.” 14 M.R.S. § 7481. It is an alternative, not exclusive, way to

resolve a “small claim,” which is a claim presently subject to a jurisdictional
 7

maximum of $6,000,3 exclusive of interest and costs, that does not involve title

to real estate. 14 M.R.S. §§ 7481-7482.

[¶12] Pursuant to statute, “small claims proceedings are governed by

separate, succinct procedural rules” that we have promulgated.

Midland Funding LLC v. Walton, 2017 ME 24, ¶ 16, 155 A.3d 864; 14 M.R.S.

§ 7484-A(1); see Maine Rules of Small Claims Procedure. In keeping with the

Legislature’s directive mandating simplicity and expediency, see 14 M.R.S.

§ 7481, those rules must be “construed to secure the just, speedy, and

inexpensive determination of every action in a simple and informal way.”4

M.R.S.C.P. 1, 15.

[¶13] Accordingly, in stark contrast to the procedure used in other civil

cases, the rules of evidence, other than with respect to privileges, do not apply

in a small claims hearing; “[t]he court may receive any oral or documentary

evidence [that is] not privileged”; the presiding judge is required to “assist in

developing all relevant facts”; and the court is not required to articulate any

findings of fact or conclusions of law following the hearing. M.R.S.C.P. 6(b);

3 The jurisdictional limit is reviewed by the Legislature every four years. 14 M.R.S. § 7482 (2017).

4 We have observed that the Maine Rules of Civil Procedure, which govern other civil actions in
the District Court or Superior Court, do not contain a similar specification that proceedings be
informal. Thomas v. BFC Marine/Bath Fuel Co., 2004 ME 27, ¶ 11, 843 A.2d 3; see M.R. Civ. P. 1.
8

M.R. Civ. P. 52(a), 81(b)(2)(A); M.R. Evid. 101(b)(4). At the conclusion of the

hearing, the court must “promptly enter judgment for the prevailing party for

the relief to which that party is entitled, even if that party has not demanded

such relief.” M.R.S.C.P. 8(c).

[¶14] Either party may appeal a small claims judgment to the Superior

Court, 14 M.R.S. § 7485; M.R.S.C.P. 11(a), but the plaintiff may appeal “questions

of law only,” and a plaintiff’s appeal “shall be determined by the Superior Court

without jury.” M.R.S.C.P. 11(d)(1). An appeal taken by the defendant on

questions of law may likewise be resolved by the court, but if the defendant’s

appeal concerns factual issues those issues may be resolved “by jury trial

de novo at the election of the defendant.” M.R.S.C.P. 11(d)(2). A defendant

requesting a jury trial must file affidavits sufficient to “set[] forth specific facts

showing that there is a genuine issue of material fact as to which there is a right

to trial by jury.” Id. In that event, the small claims judgment becomes a nullity

and the case is tried to a jury. Id. In accordance with M.R. Civ. P. 80L,5 however,

at that trial many of the rules of civil procedure still do not apply; the defendant

5 Maine Rule of Civil Procedure 80L is a special rule “govern[ing] proceedings in jury trials de novo

on appeal to the Superior Court from judgments of the District Court in small claims actions. The
other provisions of the Rules of Civil Procedure do not apply to such proceedings except as provided
in [Rule 80L].” M.R. Civ. P. 80L(a).
 9

may not add counterclaims;6 and, regardless of the size of the jury’s verdict, any

judgment remains subject to the jurisdictional limit set by 14 M.R.S. § 7482.

M.R. Civ. P. 80L(a), (d)(2); M.R. Civ. P. 80L Advisory Committee’s Notes 1986.

[¶15] We now turn to Ring’s arguments, keeping in mind the unique

characteristics and significant limitations of small claims procedure.

[¶16] Ring first argues that the plain language of the Small Claims Act

prevents the District Court’s judgment from having preclusive effect in the

Superior Court action. Section 7485 of the Act provides:

Any fact found or issue adjudicated in a proceeding under this
chapter may not be deemed found or adjudicated for the purpose of
any other cause of action. The judgment obtained is res judicata as
to the amount in controversy. If a plaintiff has reduced the amount
of a claim or contract to meet the jurisdictional limits of this
chapter, the judgment obtained is res judicata as to the full amount
of the debt or contract in controversy. The only recourse from an
adverse decision is by appeal.

6 The Maine Rules of Small Claims Procedure provide very specific rules for “Commencement of
Proceedings” (Rule 2) and “Pleadings” (Rule 3). The reference in Rule 3(b) to responsive pleadings
by the defendant falls under the heading of “Defenses” and the rule notably does not provide for
claims by a defendant against a plaintiff by counterclaim.

Additionally, the Advisory Committee’s notes accompanying M.R. Civ. P. 80L make clear that the
rules governing small claims appeals do not anticipate counterclaims:

Rule 80L(d)(2) limits the amount of judgment that may be entered to reflect the
jurisdictional limitations of the Small Claims Act, 14 M.R.S.A. §§ 7481, 7482. The limit
controls regardless of the size of the jury’s verdict. This limit is imposed, because to
do otherwise would require that the defendant be allowed to amend to add
counterclaims.

M.R. Civ. P. 80L Advisory Committee’s Notes 1986.
10

14 M.R.S. § 7485 (emphasis added).

[¶17] Ring is correct in asserting that the statute plainly bars the District

Court’s finding that McGaw was at fault in the accident7 from being res judicata

in “any other cause of action.” Id. (emphasis added). In the two cases where we

have addressed this section, we have focused on the “cause of action” language,

and held that “the doctrine of bar and merger applies to section 7485, and . . . a

small claims judgment does bar relitigation of the same cause of action . . . even

when different relief is sought and different theories are advanced.” Thibeault,

2007 ME 154, ¶ 7, 938 A.2d 27 (citation omitted); see Caporino v. Lacasse,

511 A.2d 445, 447 (Me. 1986) (holding that the phrase “‘any other cause of

action’ . . . does not prevent application of bar and merger to the instant case

that represents the identical cause of action for the claimed negligence . . . as

did the prior small claims proceeding”).

[¶18] In both Thibeault and Caporino, however, the plaintiff in the

subsequent civil case had also been the plaintiff in the earlier small claims

action, and our analysis was narrowly directed to the question of whether the

7 Although the District Court’s small claims notice of judgment does not contain an express finding

that McGaw was wholly at fault in the accident, the court necessarily made that finding when it
awarded Leighton the entire amount he requested after claiming that McGaw “negligently caused
[the] automobile accident.”
 11

second case was based on the same cause of action. Thibeault, 2007 ME 154,

¶¶ 4, 8, 938 A.2d 27; Caporino, 511 A.2d at 446-47.8 Here, Ring—the plaintiff

in the second case—was not the plaintiff, or even a party, in the small claims

action. We have not had occasion to construe 14 M.R.S. § 7485 in a case where

a small claims judgment is asserted as a bar against a small claims defendant,

let alone a nonparty who was at most in privity with the defendant.9

[¶19] In this case of first impression we address section 7485 in the

context of (1) a nonparty who would, at most, be deemed a privy to the

defendant in the small claims case; (2) the existence of potential damages

claimed by that party that would exceed the jurisdictional limit of the small

claims court; and (3) distinctions between court rules governing small claims

cases in the District Court and civil suits to which the Maine Rules of Civil

Procedure apply.

8 In Thibeault, the initial small claims action brought by Thibeault sought the return of certain

items of personal property claimed to be in the defendant’s possession. Thibeault, 2007 ME 154, ¶ 4,
938 A.2d 27. The subsequent action, filed in Superior Court by Thibeault, alleged breach of contract
and unjust enrichment arising out of her claimed improvements to real estate. Id. We concluded that
the two matters did not involve the same cause of action and 14 M.R.S. § 7485 prevented the
application of the doctrine of bar and merger. Id. ¶¶ 7-8. By contrast, in Caporino both the small
claims action, in which Caporino recovered a judgment of $163.95, and a subsequent action in
District Court involved identical claims for injuries sustained by Caporino on premises owned by the
defendant. Caporino, 511 A.2d at 446-47. We thus concluded that section 7485 allowed the
application of bar and merger and that Caporino’s second suit was barred. Id. at 447-48.

9 The question of whether Ring was McGaw’s privy in the District Court is contested by the parties;
for purposes of this opinion, we assume—without deciding—that Ring was McGaw’s privy.
12

[¶20] As noted above, small claims judgments result from special

proceedings governed by unique rules and procedures and are subject to a

strict statutory limitation on recoverable damages. Here, Leighton made the

choice to pursue a small claim solely against McGaw in the District Court. He

could have chosen a different forum, or joined Ring as a defendant in the small

claims action if he believed, as he attempted to establish in the summary

judgment record, that McGaw was acting as Ring’s agent or employee. See

M.R.S.C.P. 3(e); 14 M.R.S. § 7481 (stating that a small claims proceeding is “an

alternative, not an exclusive, proceeding”).

[¶21] Once Leighton chose his forum and his defendant, even if Ring had

sought to intervene in the small claims proceeding to protect his own claim

against Leighton, neither the Small Claims Act nor the small claims rules

provide a basis for doing so.10 More importantly, if Ring were able to intervene

The small claims statutes make no provision for an interested party to intervene. See 14 M.R.S.
10

§§ 7481-7487 (2017). As for the Maine Rules of Small Claims Procedure, Rule 3(e) provides:

Joinder of Parties. Persons may join as plaintiffs or be joined as defendants in one
small claims action if the claims asserted by or against each arise out of the same
transaction, occurrence, or series of transactions or occurrences and if any question
of law or fact common to all of these persons will arise in the action.

The specific use of the active voice relating to joining as plaintiffs and the passive voice relating to
being joined as defendants suggests that a party may join as a plaintiff as a matter of right, but can
only be joined as a defendant by an existing party.

Furthermore, contrary to Leighton’s suggestion at oral argument, Ring could not have appealed
from an action to which he was not a party. See M.R.S.C.P. 11(a) (“an aggrieved party may appeal
 13

indirectly by filing a separate small claim against Leighton that could be joined

with Leighton’s action against McGaw, see M.R.S.C.P. 6(c)(1), as a practical

matter his claim against Leighton would then have been adjudicated in an

informal, nonjury hearing where the rules of evidence did not apply11 and,

significantly, his recoverable damages would have been limited by a $6,000

statutory cap. 14 M.R.S. § 7482; M.R.S.C.P. 6(b). Ring would have lost his

opportunity to choose his forum because a small claims action cannot be

removed to the Superior Court. Ela v. Pelletier, 495 A.2d 1225, 1227

(Me. 1985); see 14 M.R.S. § 7481 (“The District Court shall have jurisdiction of

small claims actions.”). Regardless of whether Ring sought to intervene in

Leighton’s action against McGaw directly, or sought to intervene indirectly by

having his own small claim against Leighton joined with Leighton’s claim, either

alternative produces manifest injustice: Ring would be precluded from ever

from a judgment of the District Court in a small claims action” (emphasis added)); M.R. Civ. P. 80L(e)
(“[a] party entitled to appeal to the Law Court from a decision of the Superior Court may do so”
(emphasis added)).

11 We note that the motion practice that routinely occurs during litigation in the trial courts is not

consistent with the Small Claims Act’s objective of providing simplicity and expediency, see 14 M.R.S.
§ 7481, or with the rules’ stated objective that they be “construed to secure the just, speedy, and
inexpensive determination of every action in a simple and informal way.” M.R.S.C.P. 1, 15.
14

seeking to recover whatever damages he may have suffered in excess of the

statutory cap.12 14 M.R.S. § 7482; M.R. Civ. P. 80L(d)(2).

[¶22] Under these circumstances, Ring’s action against Leighton for

damages exceeding the small claims jurisdictional limit, for which he could not

effectively intervene as a claimant against Leighton in small claims court, is

within the scope of the phrase “any other cause of action” as used in 14 M.R.S.

§ 7485. His action is not barred by the doctrine of res judicata or the language

of Section 7485. To the extent that Thibeault and Caporino suggest otherwise,

we clarify the holdings of those cases and now hold that 14 M.R.S. § 7485 does

not operate to bar an action against a small claims plaintiff by a nonparty who

was at most in privity with a small claims court defendant.

[¶23] Because the question of whether Leighton was at fault in the

accident and thereby breached a duty remains a genuine issue of material fact

in dispute, Leighton was not entitled to a judgment as a matter of law on Ring’s

complaint alleging negligence. M.R. Civ. P. 56(c); see Estate of Frye, 2018 ME 44,

¶ 8, 182 A.3d 158.

12 Although the specific amount of Ring’s claimed damages does not appear in the summary

judgment record, in his opposition to the motion for summary judgment Ring asserted that “the
$6,000 jurisdictional limit . . . is far below what Mr. Ring hopes to obtain in a judgment.”
 15

[¶24] We recognize that in this case the small claims process results in

Leighton being required to relitigate liability issues previously addressed in his

earlier small claims case against McGaw—a result that, in other contexts, would

ordinarily be precluded by res judicata principles if Ring were found to be in

privity with McGaw. See Pushard, 2017 ME 230, ¶¶ 19-20, 175 A.3d 103.

However, that said, Leighton made the choice to pursue a small claim solely

against McGaw in small claims court. Having sought the benefits of the small

claims process, Leighton is subject to the limitations of 14 M.R.S. § 7485.13

The entry is:

Judgment vacated; remanded to the
Superior Court for further proceedings
consistent with this opinion.

___________________________

SAUFLEY, C.J., with whom ALEXANDER, J., joins concurring.

[¶25] We reluctantly concur, but we write separately to address the

confusion and potential inequities that today’s opinion exposes regarding small

claims actions. The Court’s effort to parse through the thicket of the

13 We expressly limit our holding to the facts of this case, where res judicata has been asserted
against a nonparty to the small claims action who was at most a privy of the defendant in that matter.
We do not opine upon the effect, if any, of section 7485 when the doctrine of res judicata has been
asserted as a bar to a subsequent action by a person who was a defendant in an earlier small claims
action.
16

intersecting statutory provisions of title 14, chapter 738 of the Maine Revised

Statutes is laudable. It has, however, disclosed a latent unfairness to Leighton

created by the design of the small claims proceedings.

[¶26] The facts are simple enough. Leighton suffered property damage

when his car was hit by a car that was driven by McGaw and owned by Ring.

Leighton brought suit against McGaw in small claims court. The court

adjudicated the issues presented—who was negligent and what were the

damages—and Leighton was awarded a judgment of just less than $4,000. Ring

was present, aware of, and active in the case. The damages were paid, and

Leighton went on with life.

[¶27] Unfortunately, given results of the current statutory small claims

process, Leighton now finds himself in Superior Court, this time facing Ring,

again to resolve the same dispute adjudicated in the small claims case—who

was negligent and what were the damages. The small claims decision will not

be admissible in the case, and there is no cap on the damages that Leighton may

now be required to pay Ring if a different fact-finder concludes—contrary to

the small claims judge’s finding—that it was Leighton who was at fault, not

McGaw.
 17

[¶28] The small claims statutes, in effect for several decades,14 have

rarely been challenged in an appellate context, and as a result, the odd

circumstance that Leighton finds himself in has not been previously addressed

by the Court. We are forced by the language of the statute to agree that the

Court has done the best that it can. The Court’s holding, however, is cold

comfort to Leighton who believed that he had resolved the matter in the small

claims proceeding. Moreover, the Court’s analysis has exposed additional traps

for the unwary.15

[¶29] Therefore, while we cannot conclude that claim preclusion applies

to small claims actions to bar a subsequent suit brought in the District or

Superior Court by a person who was not an actual party to the small claims

action, we can say that the unfairness of this situation—the cost of the second

suit brought by Ring and the second adjudication of exactly the same action—

14 See P.L. 1981, ch. 667 (effective Nov. 1, 1982).

15 The small claims statutes appear to be additionally flawed in that they seem to restrict the small

claims defendant’s right to a jury trial; a preliminary review of the statutory restrictions indicates
that a small claims defendant’s jury trial right on appeal from that small claims judgment would be
limited by the statutory cap of $6,000 for damages, see 14 M.R.S. § 7482 (2017), a restriction that
does not apply to Ring in this suit. Thus, although it is likely unintended by the Legislature, the
current statutory provision may encourage a race to the small claims courtroom that could,
potentially in violation of the constitution, eliminate a party’s right to a previously available jury trial
seeking reasonable damages. The potential confusion and loss of rights should encourage the
Legislature to clarify the small claims statutes.
18

should encourage the Legislature to review and amend the small claims

statutes to avoid further, duplicative adjudication of the same issue.

[¶30] Small claims proceedings were created “for the purpose of

providing a simple, speedy and informal court procedure for the resolution of

small claims.” Court’s Opinion ¶ 11 (quoting 14 M.R.S. § 7481). By allowing

Leighton to be subjected to a complete and unrestricted re-adjudication of the

determination of negligence and damages, the statutes’ procedures directly

conflict with the Legislature’s goal regarding small claims actions. We urge a

thorough review of the small claims statutes.

Zachary J. Smith, Esq. (orally), Lawsmith Legal Services, LLC, Bangor, for
appellant Eric Ring

Thomas G. Mundhenk, Esq. (orally), Mundhenk & Bell, LLC, Portland, for
appellee Daniel Leighton

Penobscot County Superior Court docket number CV-2017-06
FOR CLERK REFERENCE ONLY