DiSaia v. Capital Industries, Inc.

320 A.2d 604, 113 R.I. 292, 1974 R.I. LEXIS 1176
CourtSupreme Court of Rhode Island
DecidedJune 10, 1974
Docket73-10-Appeal
StatusPublished
Cited by8 cases

This text of 320 A.2d 604 (DiSaia v. Capital Industries, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DiSaia v. Capital Industries, Inc., 320 A.2d 604, 113 R.I. 292, 1974 R.I. LEXIS 1176 (R.I. 1974).

Opinion

*293 Paolino, J.

This is an action for breach of contract. The cause was heard before a justice of the Superior Court without a jury and resulted in a judgment for the plaintiff. The matter is before this court on the defendant’s appeal. 1

The plaintiff commenced this action by attaching a mobile home which defendant, a Pennsylvania corporation engaged in the business of manufacturing mobile homes, had delivered to plaintiff pursuant to an order allegedly placed with it by plaintiff. The writ is dated June 1, 1965 and was filed in the office of the sheriff for Newport County on the same day. It was served a week later on June 8, 1965. On June 21, 1965, defendant gave a bond to release the attachment.

The writ and declaration were filed in the clerk’s office in the Superior Court in Newport on July 27, 1965. On *294 August 25, 1965 a “Special Appearance to Challenge Jurisdiction” and a “Plea in Abatement to the Jurisdiction of the Court” were filed by defendant.

While this action was pending in the Superior Court here, defendant, on March 27, 1968, filed a petition in the United States District Court for the Middle District of Pennsylvania, 2 seeking to enter into an arrangement with its creditors under the provisions of ch. XI of the Bankruptcy Act. The plaintiff filed proofs of claim with the Bankruptcy Court, 3 dated June 12, 1968 and July 1, 1968, respectively, based upon the same claims in issue in the instant case and for the full amount allegedly owed to him by defendant.

Notice of defendant’s objection to plaintiff’s proofs of claim and notice of a hearing before the Bankruptcy Court on the allowance of those proofs of claim were both given to plaintiff. On September 12, 1968, plaintiff’s claims were adjudicated by the Bankruptcy Court and an order was entered disallowing the claims. The plaintiff did not seek a review of the order disallowing his claim. The arrangement proceeding was successful and was terminated when an order of confirmation was entered by the Federal District Court. On October 8, 1969, the estate was closed.

Thereafter, on June 11, 1969 defendant filed a motion for summary judgment in the Superior Court, claiming that the disallowance of plaintiff’s claim in the bankruptcy proceeding was res judicata of the action in this case. The plaintiff filed an objection to defendant’s motion for summary judgment. He admitted that his claim had been disallowed, but he claimed it had not ben adjudicated by the Federal District Court. After a hearing, defendant’s motion for sum *295 mary judgment was denied by a justice of the Superior Court, without rescript or oral decision.

The defendant thereafter filed a motion to file answer, seeking to add the defense of res judicata to its pleadings so that it might rely thereon at the trial of this action. A justice of the Superior Court, after hearing, granted defendant’s motion and defendant then filed an amended answer which contained three defenses. Only the second defense is pertinent in this proceeding. It reads as follows:

“The Defendant avers that judgment should be entered in its favor in the within action on the ground that Plaintiff is bound by the doctrine of res judicata, which doctrine in this matter requires judgment to be entered for Defendant for the following reason: The claim set forth by Plaintiff in the within action was made the subject of a Proof of Claim filed by Defendant in proceedings for an arrangement filed by Defendant in the United States District Court in Pennsylvania subsequent to' initiation of the within proceeding, and the Plaintiff, having submitted himself to the jurisdiction of said United States District Court, is bound by the decision of said Court on the merits of his claim as aforesaid, which claim was denied and disallowed by said Court after due and proper notice to Plaintiff of hearing thereon, and the appeal period from said disallowance has expired without any appeal therefrom having been filed.”

A hearing on the merits was held before a justice of the Superior Court without a jury. The trial justice held that the order of the Federal District Court affirming the dis-allowance of plaintiff’s claim by the Bankruptcy Court was not res judicata of the Rhode Island proceedings. She awarded plaintiff damages in the sum of $6,085, and a judgment for that amount was entered. The case is here on defendant’s appeal.

The defendant, as appellant, has briefed and argued this appeal under two main points in which it raises four ques *296 tions. The plaintiff has replied in like manner. Since there is almost a direct clash between the adversary briefs and arguments, we shall, for the sake of convenience and clarity, discuss and consider the questions raised in the order adopted by the contending parties.

For reasons that follow we hold that the trial justice erred in holding that the disallowance of plaintiff’s claim by the Bankruptcy Court and the Federal District Court is not res judicata in this proceeding.

I

The defendant’s first main point is that the order of the Federal District Court disallowing plaintiff’s claim in the ch. XI arrangement proceeding under the Bankruptcy Act, after notice and an opportunity to be heard, is res judicata in this proceeding in the instant case, wherein plaintiff seeks recovery of the exact same amount.

A

The defendant argues that plaintiff’s filing of proofs of claim in the Bankruptcy Court invoked the jurisdiction of that court and constituted consent by plaintiff to have its rights adjudicated by that forum on the claims asserted.

As we understand plaintiff’s position, he does not deny that when a proof of claim is filed in the Bankruptcy Court, that invokes the jurisdiction of the court and constitutes consent by the claimant to have his rights adjudicated by that forum on the claims asserted. The plaintiff’s argument is that he did not file a proof of claim “per se” or “* * * to a degree which would submit him to the general jurisdiction of the Bankruptcy Court.” He claims that he was merely supplying information requested by the Bankruptcy Court and he argues that he continued to object to the inclusion of his claim in the bankruptcy action.

The exhibits in the record before us do not support plaintiff’s claim that he did not file proofs of claim in the Bank *297 ruptcy Court. As the trial justice pointed out in her decision:

“The plaintiff filed proofs of claim in said cause, dated June 12, 1968, and July 1, 1968, respectively, based upon the same matters in issue in this action, and by order entered September 12, 1968, plaintiff’s claim was disallowed * * * .”

The proofs of claim sought recovery for the full amount allegedly due plaintiff and they indicate that the claims asserted therein were also pending in the Rhode Island action and that a bond had been given to release the attachment.

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Cite This Page — Counsel Stack

Bluebook (online)
320 A.2d 604, 113 R.I. 292, 1974 R.I. LEXIS 1176, Counsel Stack Legal Research, https://law.counselstack.com/opinion/disaia-v-capital-industries-inc-ri-1974.