McCall et al v. Household Finance Corporation of Alabama et al

Filing 2

OPINION. An appropriate judgment will be entered. Signed by Honorable Judge Myron H. Thompson on 7/29/2016. (dmn, )

IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION

IN RE

)
)
ETHEL L. McCALL and
)
GEORGE R. McCALL,
)
)
Debtors.
)
)
ETHEL L. McCALL and
)
GEORGE R. McCALL,
)
)
Plaintiffs,
)
)
v.
)
)
HOUSEHOLD FINANCE
)
CORPORATION OF ALABAMA and )
HSBC MORTGAGE SERVICES,
)
INC.,
)
)
Defendants.
)

CIVIL ACTION NO.
2:15cv833-MHT
(WO)

OPINION
In this adversary proceeding, plaintiffs Ethel L.
and George R. McCall have objected to the proof of
claim and the notice of post-petition mortgage fees,
expenses,
Finance

and

charges

Corporation

filed

of

by

Alabama

defendants
and

HSBC

Household
Mortgage

Services, Inc., in the underlying bankruptcy proceeding

(Count

I).

Plaintiffs

defendants
(II),

breached

made

fraudulently

have

their

contract

fraudulent
suppressed

also

alleged

with

plaintiffs

misrepresentations
material

facts

that

(III),

(IV),

and

violated Alabama’s Deceptive Trade Practice Act, 1975
Code of Ala. § 8-19-5 (V).

Defendants have filed a

motion to dismiss counts II through V of the adversary
proceeding pursuant to Fed. R. Bankr. P. 7012(b)(6),
arguing that these claims are barred by res judicata
due to a prior decision in the Circuit Court of Autauga
County, Alabama.
This

matter

is

now

before

the

court

on

the

recommendation of the United States Bankruptcy Judge
that the motion be granted.

Plaintiffs have objected

to this recommendation, but only on a single ground:
they contend that the state court judgment dismissing
that action as time-barred was not a resolution on the
merits,

as

Plaintiffs

required
have

raised

for

res

no

other

Bankruptcy Judge’s recommendation.

2

judicata

to

objections

apply.
to

the

In

support

of

their

objection,

plaintiffs

have

cited a single case, Romar Development Co. v. Gulf View
Management Corp., 644 So. 2d 462 (Ala. 1994), but this
case reached no holding regarding the question at hand;
it

merely

addressed

whether

compulsory

counterclaims

were subject to the statute of limitations.
the

language

plaintiffs

cite

from

(Indeed,

Romar--that

the

“expiration of a statute of limitation does not resolve
the underlying merits of the consequently barred claim
in favor of either party; it merely cuts off the remedy
of the party who has slept on his rights”--is not only
dicta, it is dicta appearing in a lengthy quotation
from

an

out-of-state

case

cited

for

its

reasoning

regarding the application of statutes of limitations to
compulsory counterclaims.)
As

noted

in

the

recommendation,

this

court

and

other federal courts in Alabama have consistently held
that a dismissal based on the statute of limitations by
an Alabama court is a final judgment on the merits.
See Cagle v. Rubley, 2014 WL 5339314, at *3 (M.D. Ala.

3

Oct. 20, 2014) (Coody, M.J.); Mykins v. Ala. Dep’t of
Human Res., 2012 WL 6213300, at *1 (S.D. Ala. Dec. 12,
2012) (Steele, J.); see also Ala. R. Civ. P. 41(b)
(“Involuntary Dismissal: Effect Thereof.
the

court

in

its

order

for

...

dismissal

Unless

otherwise

specifies, a dismissal under this subdivision and any
dismissal not provided for in this rule, other than a
dismissal for lack of jurisdiction, for improper venue,
or for failure to join a party under Rule 19, operates
as an adjudication on the merits.”).

Plaintiffs’ sole

objection will therefore be overruled.
After an independent and de novo review

of the

record and of the portion of the bankruptcy judge’s
recommendation to which an objection has been raised,
the court concludes that the recommendation should be
adopted.

See Messer v. Peykar Intern. Co., Inc., 510

B.R. 31, 38 (S.D.N.Y. 2014) (Sweet, J.) (“Pursuant to
Bankruptcy

Rule

9033(d),

the

district

court

‘shall

[only] make a de novo review ... of any portion of the
bankruptcy judge’s findings of fact or conclusion[s] of

4

law to which specific written objection has been made
in accordance with this rule.’” (alteration in original
and emphasis omitted); cf. Thomas v. Arn, 474 U.S. 140,
148-153 (1985) (explaining that neither the text nor
the history of the provision of the Federal Magistrates
Act parallel to Bankruptcy Rule 9033(d), requiring de
novo

review

of

the

portions

of

a

recommendation

to

which specific objections have been made, “require[s]
district
legal

court

review

conclusions,

standard,

when

of

a

magistrate’s

under

a

de

neither

party

novo

or

objects

factual

or

any

other

to

those

findings”).
An appropriate judgment will be entered.
DONE, this the 29th day of July, 2016.
/s/ Myron H. Thompson____
UNITED STATES DISTRICT JUDGE