In 2008, Peterson and Fentzlaff were involved in an automobile accident. Peterson sued Fentzlaff in small claims court, where Peterson won a $2,500 judgment plus her court costs. In 2010, Peterson filed a second lawsuit against Fentzlaff in superior court seeking damages for the same accident. Fentzlaff moved to dismiss the action, arguing that the claim was barred by claim preclusion, and the trial court granted the motion.
Peterson appealed the dismissal. She argued that the claim preclusion doctrine should not be applied to a judgment obtained in small claims court and, in the alternative, that the doctrine should not apply where the damages sought exceed the jurisdictional limit of the small claims court.
The doctrine of claim preclusion generally bars a claim when there exists: “(1) an identity of claims in the suit in which a judgment was entered and the current litigation, (2) a final judgment on the merits in the previous litigation, and (3) identity or privity between the parties in the two suits.” In re Gen. Adjudication of All Rights to Use Water in Gila River Sys. and Source, 212 Ariz. 69-70 ¶ 14 , 127 P.3d 887-88 (2006) (internal citation omitted). The Court of Appeals held that the doctrine of claim preclusion applied to Peterson’s second suit. Emphasizing that Peterson voluntarily pursued her initial lawsuit in small claims court rather than superior court, the Court held that the final judgment entered in Peterson’s favor in small claims court precluded her second suit in superior court that arose from the same automobile accident. Exceptions to the doctrine exist, but the Court found that none applied to Peterson’s suit because nothing prohibited her from bringing her action in the superior court in the first instance.
The Court also dismissed Peterson’s argument that claim preclusion could not apply because her damages exceeded the jurisdictional limit of the small claims court. The decision to file suit in small claims court can be a strategic decision. Peterson chose to file and pursue a lawsuit in small claims even though her total damages—which she did not plead in small claims court—might have exceeded the jurisdictional limit of the court. Under the circumstances, the Court of Appeals held that Fentzlaff should not be compelled to re-litigate the dispute. The Court noted that such “a policy would run afoul of the small claims court’s stated purpose of allowing the inexpensive, speedy, and final resolution of legal disputes, A.R.S. 22-501, as well as Arizona’s longstanding presumption against splitting of claims.”
Judge Brown authored the unanimous opinion; Judges Gould and Kessler concurred.
Posted by: Grace Rebling