Plaintiff appeals from a judgment of the superior court ordering him to pay defendant the sum of $10,500 plus interest, the balance due under an asset purchase agreement executed by the parties regarding restaurant equipment.
On or about 4 September 1984, plaintiff Ernest A. Shaw (hereinafter “Shaw”), entered into an asset purchase agreement, security agreement, and deed of trust with defendant LaNotte, Inc., wherein he agreed to purchase the assets and restaurant equipment of defendant’s business for the sum of $20,500 plus interest of twelve percent per annum. Under the terms of the transaction, the sum of $500 was to be paid on or before the date of closing and the balance of $20,000 was to be paid in sеventeen equal monthly installments of $500 which were to be applied first to the payment of interest on the outstanding balance and then to the principal. The remaining balance of principal and interest was due in a balloon payment on or before 4 March 1986. The first payment was due on 4 October 1984. In the event of default, La-Notte, Inc. had the option to demand the entire balance of principal and accumulated interest be paid in full immediately.
Prior to the filing of the complaint herein, the parties were involved in litigation arising out of the same asset purchase agreement, security agreement, and deed of trust. LaNotte, Inc. filed the prior lawsuit on 9 September 1985 alleging that Ernеst A. Shaw was in default by failing to make monthly installments for the months of Juñe, July, and August 1985. Based on the alleged default, LaNotte, Inc. sought to accelerate the entire balance due undеr the agreement. Pursuant to the security agreement, LaNotte, Inc. sought and obtained an Order of Claim and Delivery for the restaurant equipment involved. LaNotte, Inc. filed an amеnded complaint on 15 October 1985 setting forth two additional claims for relief pertaining to a promissory note executed in connection with the asset purchase agreement and an alleged lease assumption by Shaw.
Shaw thereafter filed this action against LaNоtte, Inc. and its surety, the Netherlands Insurance Company for damages incurred as a result of the alleged wrongful seizure and detention of the restaurant equipment made pursuant tо the aforementioned Order of Claim and Delivery. Defendant LaNotte, Inc. answered, denied the allegations and filed a counterclaim wherein it sought to recover $10,500, the bаlance due and owing since 4 March 1986 under the terms of the asset purchase agreement. Plaintiffs reply denied the allegations of the counterclaim and set forth as an аffirmative defense a plea of res judicata based upon the actions of the prior civil suit.
The plaintiff voluntarily dismissed his complaint with prejudice on 2 December 1987, thereby resolving all the claims contained in the complaint. Defendant made a motion for summary judgment on its counterclaim which came on for hearing on 11 December 1987. Plaintiff agreed to and admitted the following factual stipulations for purрoses of evidence at the summary judgment hearing:
1. That the voluntary dismissal with prejudice taken by the plaintiff on December 2, 1987, was with respect to any and all claims alleged by plаintiff in his Complaint.
2. That the restaurant equipment referred to in this action had been returned to the plaintiff Shaw on or about January 5, 1987.
3. That on or about September 4, 1984, plaintiff, Ernest A. Shaw еxecuted the Asset Purchase Agreement and Security [agreement in favor of the defendant Lanotte, Inc. whereby the plaintiff Shaw purchased from Lanotte, Inc. the assets аnd restaurant equipment which is the subject of this lawsuit.
4.That the purchase price pursuant to the Asset Purchase Agreement and Security Agreement was a total sum of $20,500.00 together with interеst thereon at the rate of 12%,*201 and that the full purchase price of $20,500.00 was to be paid on or before March 4, 1986, according to the aforesaid Agreements.
5. That the plaintiff Ernest A. Shaw has paid to defendant Lanotte, Inc., the total sum of $10,000.00 under the aforesaid Asset Purchase Agreement and Security Agreement as of the date of the Summary Judgment hearing on December 11, 1987, and said total payments of $10,000.00 under the aforesaid agreements were made by the plaintiff Shaw to the defendant Lanotte, prior to March 4, 1986.
6. That the plaintiff Shaw paid no further sums under the aforesaid agreements other than the $10,000.00 referred to above, and has made no payments under said agreements since March 4, 1986.
After considering thе evidence offered by the parties, including the stipulations, and arguments of counsel, the trial court granted summary judgment in favor of the defendant on its counterclaim and plaintiff appeals.
The sole issue presented for review is whether the doctrine of res judicata applies to this case so as to preclude summary judgment for the defendant on his counterclaim.
Plaintiffs sole defense to defendant’s counterclaim is a plea of res judicata. Shaw contends that resolution of the prior lawsuit in his favor in which LaNotte, Inc. sued for default and acceleration of the entire balance due bars LaNotte’s counterclaim in this case. We disagree.
The plea of res judicata may be maintained only where there has been “a prior аdjudication on the merits of an action involving the same parties and issues as the action in which the defense of res judicata is asserted.” Kabatnik v. Westminster Co.,
Although in the prior action LaNotte, Inc. sought to accelerate the entire sum due under the asset purchase agreement, thе issue was whether plaintiff was in default for three particular installment payments. Under the terms of the deed of trust executed simultaneously with the agreement, acceleratiоn of the entire amount due would occur only at the option of LaNotte, Inc. “in the case of non-payment of any installments of principal or of interest thereon, whеn due as provided, or of default in the performance of any of the agreements or conditions of the Deed of Trust.” A similar provision was included in the security agreement. See generally Crockett v. First Fed. Sav. & Loan Ass’n,
LaNotte’s counterclaim herein involves the issue of whether Shaw paid the total amount due under the asset purchase agreement by the date required. Shaw stipulated to the fact that “the full purchase price of $20,500 was to be paid on or before March 4, 1986 . . . .” Shaw further stiрulated he has paid LaNotte, Inc. the total sum of $10,000 as of 4 March 1986 and has made no further payments since that time. Despite these stipulations, Shaw asserts he does not owe the balance of the purchase price because he was found not in default for three monthly installments by rea
Accordingly, the judgment of the trial court is
Affirmed.