Clusiau v. Clusiau Enterprises, Inc

In Clusiau v. Clusiau Enterprises, Inc., 225 Ariz. 247, 236 P.3d 1194 (App. 2010), the plaintiff's husband had entered into an agreement with the defendant company in 1986 to pay plaintiff $350 per month until her death. Id. at 248,2, 236 P.3d at 1195. The plaintiff received the payments per the agreement for twenty years until October 2006, when the payments ceased. Id. In September 2007, the plaintiff sued the defendant in small claims court for breach of contract and was awarded $2400 in damages. Id. at3. In May 2008, the plaintiff filed another suit in small claims court, this time seeking payments under the contract from October 2007 to April 2008. Id. at 248-49,4, 236 P.3d at 1195-96. In the second action, the defendant denied liability and sought $50,000 in damages on a counterclaim. Id. Because the counterclaim sought damages in excess of the jurisdictional limit of the court, the case was transferred to superior court where the plaintiff moved for summary judgment on her claim for breach of contract, arguing that issue preclusion prevented the defendant from denying liability based on the prior judgment. Id. at5. The trial court ruled in favor of the plaintiff. Id. at6. On appeal, this court reversed, holding that issue preclusion did not apply to the adjudication conducted in small claims court. Id. at 253,26, 236 P.3d at 1200. The Court explained that because small claims court does not provide the same procedural protections as superior court, including the right to appeal, the small claims court judgment could not serve as the basis for offensive use of issue preclusion. Id. at 251-52,14-20, 236 P.3d at 1198-99. Nonetheless, we left open the "possibility that a small claims court judgment may be afforded issue preclusive effect under different circumstances." Id. at 253,26, 236 P.3d at 1200.