Opinion
Civil Action No. 3:98cv20-D-A
May 27, 1998
MEMORANDUM OPINION
Presently before the court is the motion of the defendant, United Fire and Casualty Company ("United"), to dismiss the plaintiff's claims in this cause. Finding that the motion is well taken, the court shall grant the defendant's motion and dismiss the plaintiff's claims.
Factual Background
On or about November 24, 1995, law enforcement officials with the Benton County, Mississippi Sheriff's Department arrested the plaintiff Daniel S. Tucker. After release from his incarceration some weeks later, Mr. Tucker instituted a civil action in this court against Benton County Sheriff Arnie McMullen, former Benton County Deputy Sheriff Willie Thompson and Benton County, Mississippi. After the parties to that action reached a settlement agreement, United States District Judge Neal Biggers, Jr. of this court dismissed the action in early November of 1997. Tucker v. Arnie A. McMullen. et al., Civil Action No. 3:96cv75-B (N.D. Miss. Nov. 3, 1997) (Order of Dismissal).
On February 4, 1998, the plaintiff filed the present action. In his complaint, the plaintiff notes that the defendant United Fire and Casualty Company acted as the surety on the official bonds maintained by the Benton County officials involved in the previous action in this court. Plaintiff's Complaint, ¶ 5. The plaintiff seeks to recover on those bonds for the acts of Sheriff McMullen and Deputy Sheriff Thompson which were the nucleus of the plaintiff's prior action. Plaintiff's Complaint, ¶¶ 9, 11. The defendant has now moved this court to dismiss the plaintiff's claims based upon the doctrine of res judicata, The parties have completed their submissions to the undersigned on the matter and the court has reviewed the record in this cause.
Discussion
Standard for a Motion to Dismiss
A Rule 12(b)(6) motion is disfavored, and it is rarely granted.Clark v. Amoco. Prod. Co., 794 F.2d 967, 970 (5th Cir. 1986);Sosa v. Coleman, 646 F.2d 991, 993 (5th Cir. 1981). In deciding a motion to dismiss under Rule 12(b)(1) or (6), the district court accepts as true those well-pleaded factual allegations in the complaint.C.C. Port. Ltd. v. Davis-Penn Mortgage Co., 61 F.3d 288, 289 (5th Cir. 1995). "Taking the facts alleged in the complaint as true, if it appears certain that the plaintiff cannot prove any set of facts that would entitle it to the relief it seeks," dismissal is proper.Id., It must appear beyond doubt that the plaintiff "can prove no set of facts in support of his claim which would entitle him to relief." Campbell v. City of San Antonio, 43 F.3d 973, 975 (5th Cir. 1995) (alterations and citations omitted). "However, `the complaint must contain either direct allegations on every material point necessarey to sustain a recovery . . . or contain allegations from which an inference fairly maybe drawn that evidence on these material points will be introduced at trial.'" Id., (quoting 3 WRIGHT MILLER, FEDERAL PRACTICE PROCEDURE: CIVIL 2d 1216, pp. 156-59).
On the other hand, dismissal is never warranted because the court believes the plaintiff is unlikely to prevail on the merits. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). Even if it appears an almost certainty that the facts alleged cannot be proved to support the claim, the complaint cannot be dismissed so long as the complaint states a claim. Clark, 794 F.2d at 970; Boudeloche v. Grow Chem. Coatings Corp., 728 F.2d 759, 762 (5th Cir. 1984). "To qualify for dismissal under Rule 12(b)(6), a complaint must on its face show a bar to relief." Clark, 794 F.2d at 970; see also Mahone v. Addicks Util. Dist., 836 F.2d 921, 926 (5th Cir. 1988); United States v. Uvalde Consol. Indep. Sch. Dist., 625 F.2d 547, 549 (5th Cir. 1980), cert. denied, 451 U.S. 1002. If a required element, a prerequisite to obtaining the requested relief, is lacking in the complaint, dismissal is proper. Id.; see also Blackburn v. City of Marshall, 42 F.3d 925, 931 (5th Cir. 1995) ("Conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss.").
While dismissal under Rule 12(b)(6) ordinarily is determined by whether the facts alleged, if true, give rise to a cause of action, a claim may also be dismissed if a successful affirmative defense appears clearly on the face of the pleadings. Clark, 794 F.2d at 970; Kaiser Aluminum Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982), cert. denied, 459 U.S. 1105. Furthermore, Rule 12 states that
If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.
Fed.R.Civ.P. 12(b). Nevertheless, district courts are "permitted to refer to matters of public record when deciding a 12(b)(6) motion to dismiss." Davis v. Bayless, 1995 WL 692991, *7 n. 3 (5th Cir.) (citing Cinel v. Connick, 15 F.3d 1338, 1343 n. 6 (5th Cir. 1994)). Even though affidavits might be present in the record, the court is not required to treat the motion as one for summary judgment if it does not rely upon such documents. Id.
Res Judicata
Central to the defendant's argument in this matter is that the settlement and dismissal of the plaintiff's prior suit against the defendant's principals — Arnie McMullen, Willie Thompson and Benton County — operate as res judicata, as against the plaintiff's claims in this case. United asserts that it, as a surety, is in sufficient privity with its principals to take advantage of the preclusive effect of the prior dismissal. While the court finds that the defendant's argument is not precisely legally correct, the undersigned is of the opinion that United is entitled to the protection of res judicata, against the plaintiff's claims at bar.
One of the most venerable doctrines in American jurisprudence is that of res judicata, United States v. Shanbaum, 10 F.3d 305, 310 (5th Cir. 1994) ("Claim preclusion, or `pure' res judicata, is the `venerable legal canon' that insures the finality of judgments and thereby conserves judicial resources and protects litigants from multiple lawsuits.") (citing Medina v. I.N.S., 993 F.2d 499, 503 (5th Cir. 1993)). The applicable standard within the Fifth Circuit is well established. For res judicata to apply, the following requirements must be met:
1. the parties in the later action are identical to, or at least in privity with, the parties in the prior action;
2. the judgment in the prior action was rendered by a court of competent jurisdiction;
3. the prior action concluded with a final judgment on the merits; and
4. the same claim or cause of action is involved in both actions.Rivet v. Regions Bank of Louisiana. F.S.B., 108 F.3d 576, 586 (5th Cir. 1997); see also Eubanks v. FDIC, 977 F.2d 166, 169 (5th Cir. 1992); Russell v. SunAmerica Secs., Inc., 962 F.2d 1169, 1172 (5th Cir. 1992); Hendrick v. Avent, 891 F.2d 583, 585 (5th Cir.), cert. denied, 498 U.S. 819 (1990).
The first element of res judicata is commonly referred to as the mutuality requirement. Nevada v. United States, 463 U.S. 110, 142, 103 S.Ct. 2906, 2924, 77 L.Ed.2d 509 (1983) ("While mutuality has been for the most part abandoned in cases involving [federal] collateral estoppel . . . it has remained a part of the doctrine of res judicata") As the court has already noted, United asserts that mutuality requirement is satisfied because, as surety of the defendants in the prior suit for the claims sued upon in this case, it claims that it is in privity with those defendants. See, e.g., Gulf Island-IV. Inc. v. Blue Streak-Gulf Is Ops, 24 F.3d 743, 746 (5th Cir. 1994) ("A non-party defendant can assert res judicata so long as it is in `privity' with the named defendant."); Russell v. SunAmerica Securities, Inc., 962 F.2d 1169, 1172-76 (5th Cir. 1992).
This court disagrees, and finds that a mere suretyship relationship is insufficient to create privity.
Sureties generally may not plead judgments as res judicata to which only their principals were parties, because a surety-principal relationship does not by itself establish privity.Pye v. Department of Transp. of State of Ga., 513 F.2d 290, 292 (5th Cir. 1975). Nevertheless, exceptions to the mutuality requirement exist, and have been recognized by the federal courts.E.g., Nevada v. United States, 463 U.S. at 142, 103 S.Ct. at 2924; Pye, 513 F.2d at 292; Terrell v. DeConna, 877 F.2d 1267, 1271 (5th Cir. 1989). A common justification for an exception is the existence of various or derivative liability on the part of the party seeking to obtain the preclusive benefit of res judicata:
Indemnification relationships have given rise to the most important departure from mutuality, one that was widely recognized before any general trend to abandon mutuality and that remains important even after abandonment. Often dubbed the "narrow exception," this principle makes the benefits of preclusion available to anyone who, if defeated in the second action, would be entitled to demand indemnification from the party who won the first action. By far the most common illustrations in the 20th Century have involved a judgment in favor of an employee in an action for negligence, followed by an action against the employer to recover for the same negligence. If the employee won the first action, the employer can assert claim preclusion; if the employee lost, the employer is free to relitigate all issues but the maximum recovery by the plaintiff is limited to the amount of the judgment in the first action. Other relationships commonly involved in narrow exception cases have included the driver of an automobile and an owner sued under an owner's liability statute, a subcontractor and a contractor liable for proper performance of the entire contract, a contractor and a property owner subject to a nondelegable duty to protect others against injury, a primary obligor and a surety or guarantor, and businesses that have extended comparable warranties or similar protections in successive sales transactions.
18 CHARLES ALAN WRIGHT ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 4463 (1981). The Fifth Circuit has noted that such an exception exists to the mutuality requirement where the only potential liability of the party asserting res judicata is derivative of the defendant in the prior action. Terrell, 877 F.2d at 1271. The undersigned finds no reason why the principle should not apply in this case. The mutuality requirement is not met in this case, by privity or otherwise. Rather, in light of the nature of the plaintiff's claims, the mutuality requirement need not be met.
There does not appear to be any dispute regarding the next two elements of res judicata. Neither party disputes that this court did not have jurisdiction over the prior action. Likewise, the parties do not dispute that Judge Biggers' order was a "final judgment on the merits" of the prior action. Ho v. Martin Marietta Corp., 845 F.2d 545, 547 (5th Cir. 1988) ("Judicial consent decrees are not only final judgments on the merits, but also settlements to which adversarial parties have consented."). The only remaining question, then, is whether "the same claim is involved in both actions."
In conducting our search for the presence of the fourth element required for the applicability of claim preclusion, we employ the transactional test of Section 24 of the Restatement (Second) of Judgments to determine whether the two suits in question involve the same claim for purposes of claim preclusion. Under the "same claim" inquiry, the critical issue is whether the two actions under consideration are based on the same nucleus of operative facts.
Rivet, 108 F.3d at 588: see also Matter of Baudoin, 981 F.2d 736, 743 (5th Cir. 1993); Southmark Properties v. Charles House Corp., 742 F.2d 862, 870-71 (5th Cir. 1984). It has been long acknowledged that the federal law of res judicata establishes that a judgment in a prior suit bars a subsequent cause of action not only as to all matters actually litigated in the first suit but also as to all issues or causes of action that could have been litigated in light of the facts underlying the first action. See, e.g., Matter of West Texas Marketing Corp., 12 F.3d 497, 501 (5th Cir. 1994) ( "Res judicata operates to bar any claim which could have been brought in the previous action.") (emphasis added); Pickens v. Lockheed Corp., 990 F.2d 1488, 1489 (5th Cir. 1993) (noting claims barred by res judicata because they "either could have been brought in the many previous proceedings or they were brought and ultimately rejected.") (emphasis added); Langston v. Insurance Company of North America, 827 F.2d 1044, 1047-48 (5th Cir. 1987) (noting res judicata barred all claims that were or could have been brought in the original suit) (emphasis added). As the claims and issues which arose in this case either were or could have been raised in the initial action, this final element of res judicata is satisfied. As such, the plaintiff's claims in this action are barred.
III. Conclusion
Upon careful review of the defendant's motion, the submissions to the court and the record as a whole, the undersigned is of the opinion that the defendant's motion is well taken and should be granted. The plaintiff's claims are preclusively barred by the operation of Judge Bigger's prior order of dismissal in a related case. As such, the plaintiff may not pursue his claims against the present defendant. The defendant's motion shall be granted and the plaintiff's claims shall be dismissed.
A separate order in accordance with this opinion shall issue this day.
ORDER GRANTING MOTION TO DISMISS
Pursuant to a memorandum opinion issued this day, it is hereby ORDERED THAT:) the defendant's motion to dismiss the plaintiff's claims is hereby GRANTED;
) the plaintiff's claims in this cause are hereby DISMISSED; and
) this case is CLOSED.
All memoranda, depositions and other matters considered by the court in granting the defendant's motion to dismiss are hereby incorporated and made a part of the record in this cause.
SO ORDERED.