Opinion
Civil Action No. 03-CV-6577.
August 19, 2004
MEMORANDUM AND ORDER
Presently before this Court is Defendant Alan Bredt's Motion to Dismiss for failure to state a claim upon which relief can be granted and for Sanctions (Doc. 5). For the reasons set forth below, upon consideration of Defendant's Motion and Plaintiff's Response (Doc. 31), this Court will grant in part and deny in part Defendant's Motion to Dismiss and for Sanctions.
BACKGROUND
Plaintiff alleges that in late Fall of 2001, Alan M. Bredt, Esq., Plaintiff's attorney, arranged a conference between Herb Glass and Steven Glass of the Hazzard Company, LLC, Plaintiff and Bredt to be held in his office at the Bainbridge Law Center, Inc. At this conference, Herb Glass offered $500,000.00, not including liquor license R13590, for the purchase of Plaintiff's property located at 252-254 South Street in Philadelphia. Plaintiff rejected the offer, however, Mr. Glass forwarded an Agreement of Sale for the offered amount to Plaintiff's attorney, Mr. Bredt.
In his complaint, Plaintiff claims that Mr. Bredt, while acting as his attorney, contacted an attorney, John Winter, at Wachovia SBC, the holder of the second and third mortgages on Plaintiff's real properties located at 252-254 South Street. Plaintiff states that Bredt and Winter, by a "gentleman's agreement," arranged for Plaintiff to purchase the second and third mortgages on his properties from the bank for the settlement figure of $100,000.00.
The attorney, John Winter, and Wachovia SBC, are also named Defendants in this action.
Plaintiff avers that he never gave Bredt authorization to discuss the terms of the "gentleman's agreement" reached between Plaintiff and Wachovia SBC with Herb Glass, Steven Glass, or any other representative of the Hazzard Company, LLC. In violation of attorney/client privilege, Bredt disclosed the terms of Plaintiff's "gentleman's agreement" to the above-mentioned third-party, and the Hazzard Company, LLC, was able to purchase Plaintiff's mortgages from Wachovia SBC before Plaintiff could acquire the necessary funds to purchase the same.
LEGAL STANDARD
A motion to dismiss a complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) ("Rule 12(b)(6) should be granted only if the court finds that the plaintiff cannot prove any set of facts which would entitle him to relief. Hishon v. King Spalding, 467 U.S. 69, 73 (1984). The question is not whether the plaintiffs will ultimately prevail, but whether they are entitled to offer evidence to support their claims. Nami v. Fauver, 82 F.3d 63, 65 (3d Cir. 1996). The Court must determine whether, under any reasonable reading of the pleadings, the plaintiffs may be entitled to relief. Holder v. City of Allentown, 987 F.2d 188, 194 (3d Cir. 1993).
DISCUSSION
Defendant, Alan Bredt, filed the instant motion pursuant to Rule 12(b)(6) to dismiss this action in its entirety because claims identical to the ones alleged by Plaintiff before this Court were previously dismissed with prejudice before the Honorable Judge William H. Yohn, Jr., United States District Judge for the Eastern District of Pennsylvania, in civil case number 02-CV-2116.
A. Claim Preclusion
"Under the doctrine of claim preclusion, a final judgment on the merits of an action involving the same parties (or their privies) bars a subsequent suit based on the same cause of action." Eastern Minerals Chems. Co. v. Mahan, 225 F.3d 330, 336 (3d Cir. 2000) (citations omitted). A dismissal with prejudice serves as a final judgment on the merits. Napier v. Thirty or More Unidentified Federal Agents, etc., 855 F.2d 1080, 1087 (3d Cir. 1988); Kuzma v. Bessemer Lake Erie R.R., 259 F.2d 456, 457 (3d Cir. 1958) (holding that "a dismissal with prejudice or even a dismissal without qualification under Rule 41(b) operates as an adjudication on the merits by the very words of the rule"). "Whether two lawsuits are based on the identical cause of action `turns on the essential similarity of the underlying events giving rise to the various legal claims.'"Board of Trustees of Trucking Employees of New Jersey Welfare Fund, Inc.-Pension Fund v. Centra, 983 F.2d 495, 504 (3d Cir. 1992) (quoting U.S. v. Athlone Industries, Inc., 746 F.2d 977, 983 (3d Cir. 1984). "Courts should not apply this conceptual test mechanically, but should focus on the central purpose of the doctrine, to require a plaintiff to present all claims arising out the same occurrence in a single suit." Id.
"Claim preclusion requires: (1) a final judgment on the merits in a prior suit involving; (2) the same parties or their privities; and (3) a subsequent suit based on the same cause of action." Corestates Bank v. Huls America, Inc., 176 F.3d 187, 194 (3d Cir. 1999) (quoting Bd. of Trs. of Trucking Employees Welfare Fund, Inc. v. Centra, 983 F.2d 495, 508 (3d Cir. 1992)). Clearly, the doctrine of claim preclusion applies to the Plaintiff's claims presently before this Court against Defendant Bredt. Plaintiff's 2002 Complaint was dismissed with prejudice, and thus serves as a final judgment on the merits, satisfying the first prong of the claim preclusion doctrine. Plaintiff and Defendant were both parties in the 2002 action. The "essential similarity" of the factual events giving rise to the legal claims of the first suit and the instant action is clearly evident here, as the factual events giving rise to Plaintiff's current claim against Defendant are practically identical to those alleged in his 2002 Complaint. Moreover, in the case at bar, Plaintiff has not raised any new claims against Defendant. This satisfies the third prong of the claim preclusion doctrine. Consequently, Defendant's motion to dismiss Plaintiff's complaint is granted.
According to Judge Yohn's order, Plaintiff had previously filed a civil action before the Court that was dismissed with leave to amend the complaint. Rather than amend the complaint, Plaintiff filed civil action number 02-CV-2116. Judge Yohn found that the facts alleged in the second suit arose from the same set of transactional facts and thus considered the new complaint an amendment to complaint in the prior action. However, because the second suit was filed well outside the time granted to amend the complaint in the first action, Judge Yohn dismissed the action with prejudice by Order dated May 16, 2002. See Defendant's Exhibit C.
B. Motion for Sanctions
Defendant's motion to impose sanctions against Plaintiff for filing this action before this Court is denied. Instituting a suit based on the same cause of action as a previous suit is not alone grounds for sanctions. However, Plaintiff is advised that he is precluded from bringing these claims against this Defendant in any future civil action.
CONCLUSION
For the foregoing reasons, Defendant's motion to dismiss is granted. Defendant's motion for sanctions is denied. An appropriate order follows.