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holding that attorney acted as an "agent" for client based upon the representation in prior lawsuit and therefore was in privity with the client for res judicata purposes
Summary of this case from Iseley v. TalaberOpinion
Civil Action No. 02-9131.
July 15, 2004
MEMORANDUM
Presently pending before this Court are Cross-Motions for Summary Judgment of Plaintiff Raymond A. Jett, Jr. ("Jett") and Defendants Beech Interplex, Inc. ("Beech Interplex"), Floyd Alston, Craig Alston, Beech Capital Venture Corporation ("Beech Capital") and Larry Griffin ("Griffin") (collectively the "Defendants"). For the following reasons, Jett's pro se Motion will be denied and the Defendants' Motion will be granted. I. BACKGROUND
In his Complaint, Jett identifies this party as Beech Ventura Capital. Defendants state that the proper name for this entity is Beech Capital Venture Corporation. Jett does not dispute that this entity was improperly named in the Complaint. For purposes of clarity, this Court will consistently refer to this business as Beech Capital Venture Corporation ("Beech Capital") throughout this Memorandum Opinion.
Jett's Motion for Summary Judgment is devoid of any meritorious arguments that would support summary judgment in favor of Jett. Thus, this Court will focus on the arguments in Defendant's Summary Judgment Motion in this Memorandum Opinion.
This case arose from a landlord/tenant dispute between Jett and Beech Interplex. In September 2000, Jett entered into a leasing agreement with Beech Interplex through which Jett rented office space from Beech Interplex for his business. After a short time into the lease's term, a dispute arose between the parties that resulted in Jett and his business vacating the premises and terminating rent payments. Subsequently, a controversy arose between the parties concerning the ownership and entitlement to the property that Jett left behind when he and his business vacated the rented office space.
Jett leased the office space for the use of his business named Escapade Investigations, Inc.
In October 2001, Jett, individually and doing business as Escapade Investigations, Inc., sued Beech Interplex and Floyd Alston in the Court of Common Pleas of Philadelphia County. ("Jett I"). In Jett I, Jett's claims against Beech Interplex and Floyd Alston were as follows: (1) unjust enrichment; (2) loss of business; (3) loss of security; and (4) breach of contract. As the state proceedings progressed, the disputed property in Jett's former office space became a critical issue. Eventually, the parties agreed in open court that Jett would secure a rental facility to store the property at issue pending disposition of the Jett I case. Subsequently, on November 7, 2002, Jett loaded the disputed property into a truck and it was expected that he would store the property at a rental facility as per the agreement approved by the State Court. Nevertheless, rather than place the disputed property in the rental facility as mandated by the parties' agreement, Jett took the truckload of disputed property to his home in North Carolina.
Floyd Alston is the President of Beech Interplex.
For the sake of clarity, Jett's lawsuit in the state court will be referred to as "Jett I" throughout this Memorandum Opinion.
The substance of Jett's claims in Jett I were that Beech Interplex and Floyd Alston had wrongfully locked him out of the office space, unjustly possessed specific property, unlawfully retained his security deposit and wrongfully harmed his business as a result of the dispute.
As a result of these events, the State Court entered a Rule on Jett to show cause why the Jett I action should not be dismissed with prejudice because of Jett's actions concerning the disputed property that amounted to contempt of court. After a hearing on the matter, on January 30, 2003, the State Court dismissed Jett I "with prejudice" and entered judgment for Beech Interplex and Floyd Alston on all claims. Subsequently, Jett filed a pro se action in this Court ("Jett II") raising almost identical legal claims as in Jett I and based on the same landlord/tenant dispute as in Jett I.
For the sake of clarity, Jett's lawsuit in this Court will be referred to as "Jett II" throughout this Memorandum Opinion.
The instant action raises the same claims as Jett brought inJett I. The only differences from the Jett I suit and this action are that Jett adds certain additional parties and adds one additional claim. Specifically, Jett includes Craig Alston, Beech Capital, and Larry Griffin as additional defendants in the Complaint filed in this Court. Further, Jett adds one additional Count in Jett II alleging conspiracy/burglary/theft. On May 26, 2004, the Defendants filed the instant Motion for Summary Judgment. On June 14, 2004, Jett filed his Response and filed a Cross-Motion for Summary Judgment.
All of the claims raised in Jett I have been raised in this action. The claims for unjust enrichment, loss of business, loss of security and breach of contract are all a part of Jett's Complaint in this Court.
The identity of these parties and the role they played in the underlying dispute that initiated this litigation will be revealed infra.
II. STANDARD
Pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is proper "if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c). Essentially, the inquiry is "whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). The moving party has the initial burden of informing the court of the basis for the motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact.Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). An issue is genuine only if there is a sufficient evidentiary basis on which a reasonable jury could find for the non-moving party.Anderson, 477 U.S. at 249. A factual dispute is material only if it might affect the outcome of the suit under governing law.Id. at 248.
To defeat summary judgment, the non-moving party cannot rest on the pleadings, but rather that party must go beyond the pleadings and present "specific facts showing that there is a genuine issue for trial." FED. R. CIV. P. 56(e). Similarly, the non-moving party cannot rely on unsupported assertions, conclusory allegations, or mere suspicions in attempting to survive a summary judgment motion. Williams v. Borough of W. Chester, 891 F.2d 458, 460 (3d Cir. 1989) (citing Celotex, 477 U.S. at 325 (1986)). Further, the non-moving party has the burden of producing evidence to establish prima facie each element of its claim. Celotex, 477 U.S. at 322-23. If the court, in viewing all reasonable inferences in favor of the non-moving party, determines that there is no genuine issue of material fact, then summary judgment is proper. Id. at 322; Wisniewski v. Johns-Manville Corp., 812 F.2d 81, 83 (3d Cir. 1987).
III. DISCUSSION
In their Motion, the Defendants argue that they are entitled to summary judgment based on the res judicata doctrine. Specifically, the Defendants claim that Jett is precluded from going forward with the instant lawsuit because of the State Court's dismissal of the nearly identical Jett I action. This Court agrees with the Defendants' res judicata argument and finds that the Jett II action fails as a matter of law based on this well established doctrine.
A. Res Judicata Standard
According to the doctrine of res judicata under Pennsylvania law, "a final judgment on the merits by a court of competent jurisdiction will bar any future suit between the parties or their privies in connection with the same cause of action." Radakovich v. Radakovich, 846 A.2d 709, 714 (Pa.Super. 2004). The purposes underlying the doctrine are to conserve judicial resources, establish certainty and respect for court judgments, and to protect the party that relies on prior adjudication from vexatious litigation. Id. The application of res judicata requires the concurrence of four elements: "(1) identity of the thing sued upon; (2) identity of the cause of action; (3) identity of the parties; (4) identity of the capacity of the parties." Taylor v. Shiley, Inc., 714 A.2d 1064, 1066 (Pa.Super. 1998). Importantly, "res judicata will `not be defeated by minor differences of form, parties or allegations' where the `controlling issues have been resolved in a prior proceeding in which the present parties had an opportunity to appear and assert their rights.'" Massullo, M.D. et al. v. Hamburg, Rubin, Mullin, Maxwell Lupin, P.C., No. 98-116, 1999 WL 313830, at *5 (E.D. Pa. May 17, 1999) (quotingHelmig v. Rockwell Mfg. Co., 131 A.2d 622, 627 (Pa. 1957)). In this case, this Court finds that all four res judicata elements are satisfied and that the Defendants are therefore entitled to summary judgment. This Court will now address each of these elements in turn.
This Court addresses two preliminary matters. First, it is clear that Pennsylvania res judicata law is applicable because this is a diversity case and this Court is analyzing the impact of a state court judgment. Charter Oak Fire Ins. Co. v. Sumitomo Marine and Fire Ins. Co., Ltd., 750 F.2d 267, 270 (3d Cir. 1984). "A federal court must give the same preclusive effect to a state court judgment as would be given that judgment under the law of the state in which it was rendered." Massullo, M.D., et al. v. Hamburg, Rubin, Mullin, Maxwell Lupin, P.C., No. 98-116, 1999 WL 313830, at *5 (E.D. Pa. May 17, 1999). Second, Jett does not dispute that the State Court's dismissal "with prejudice" of the Jett I action based on Jett's contempt of court was a "final judgment on the merits." "Under Pennsylvania law, the doctrine of res judicata holds that a dismissal with prejudice constitutes an adjudication on the merits. . . ."Adelman v. Mercy Catholic Med. Ctr., No. 95-7256, 1996 WL 635661, at *5 (E.D. Pa. Oct. 31, 1996).
1. Identity of the Thing Sued Upon
The first factor for this Court to consider is the similarity of the thing sued upon in both Jett I and Jett II. Taylor, 714 A.2d at 1066. In this case, the operative facts and the subject matter of this action are identical to the prior State Court proceedings. Specifically, Jett's claims in both actions center around alleged agreements reached during the landlord/tenant relationship and property that became at issue because of the deterioration of the landlord/tenant relationship. Thus, this Court concludes that the first element of the res judicata doctrine is satisfied.
2. Identity of the Causes of Action
The second element for this Court to examine is the likeness of the causes of action in both the state and federal actions. Id. "[I]dentity of causes of action exists when, in both the prior and the subsequent proceedings the subject matter and the ultimate issues are the same. . . . Res judicata applies not only to matters which were actually litigated, but also to those matters which should have been litigated. . . ." Patel v. Workmen's Comp. Appeal Bd. (Sauquoit Fibers Co.), 488 A.2d 1177, 1179 (Pa.Commw. 1985). The central focus concerning this factor should be whether the "ultimate and controlling issues" have been decided. Dempsey v. Cessna Aircraft Co., 653 A.2d 679, 681 (Pa.Super. 1995). The identity relating to the causes of action "may be determined by considering the similarity in the acts complained of and the demand for recovery as well as the identity of the witnesses, documents and facts alleged." Id.
In this controversy, Jett's causes of action are almost identical to the claims he made in Jett I. In both cases, Jett sued pursuant to the following theories: (1) unjust enrichment; (2) loss of business; (3) loss of security; and (4) breach of contract. It is clear that res judicata applies to these four causes of action. The only other claim Jett makes in this federal action is one additional Count for conspiracy/burglary/theft. This Court concludes that this one additional Count does not destroy the identity that is needed to apply res judicata. As previously noted, a minor difference in allegations is not sufficient to defeat res judicata. Massullo, M.D., 1999 WL 313830, at *5. Further, this additional Count inJett II is based on the same set of facts as Jett sued on inJett I, necessitates the same witnesses as the other claims in both actions and involves the same property that was at issue inJett I. Finally, res judicata applies despite this additional cause of action because the doctrine applies to matters that should have been litigated just as it applies to matters that were litigated. Based on the above discussion, it is clear that the second factor of the res judicata doctrine is fulfilled.
3. Identity of the Parties
The third factor for this Court to consider is whether there is identity of the parties in Jett I and Jett II. Taylor, 714 A.2d at 1066. It is clear that application of the res judicata doctrine is appropriate as to Floyd Alston and Beech Interplex because they were named Defendants in both actions. The critical issue is whether this Court should apply the doctrine even though the following new Defendants were named in Jett II: (1) Craig Alston; (2) Beech Capital; and (3) Larry Griffin.
It is well established that res judicata applies to parties who were involved in the previous litigation (i.e. Floyd Alston and Beech Interplex) and those in privity with parties who were involved in the previous litigation. Day v. Volkswagenwerk Aktiengesellschaft, 464 A.2d 1313, 1317 (Pa.Super. 1983). As previously mentioned, res judicata will not be defeated by minor differences in parties when the controlling issues have been resolved in a prior proceeding. Massullo, M.D., 1999 WL 313830, at *5. The concept of privity in the res judicata area means that "the relationship between one who is a party on the record and another is close enough to include the other within the res judicata." Equal Employment Opportunity Comm'n v. U.S. Steel Corp., 921 F.2d 489, 493 (3d Cir. 1990) (citations omitted). Courts have found privity to exist when the actual party in the previous litigation adequately represented the nonparty's interest in the prior proceeding. Bruszewski v. U.S., 181 F.2d 419, 422 (3d Cir. 1972) ("res judicata may be invoked against a plaintiff who has previously asserted essentially the same claim against different defendants where there is a close or significant relationship between successive defendants"); Myers v. Kim, 55 Pa. D. C. 4th 93, 100 (Pa. Com. Pl. 2001) (citations omitted).
This Court will now examine each of the new Defendants and explain why the concept of privity makes the res judicata doctrine applicable to each one of them. First, in relation to Craig Alston, Jett does not dispute that Craig Alston's only connection to this lawsuit is that he was Beech Interplex's lawyer and was, therefore, Beech Interplex's agent. Principals and agents are parties in privity for purposes of applying the res judicata doctrine. Day, 464 A.2d at 1317. Thus, the res judicata doctrine is appropriate as to Craig Alston because he was in privity with a party to the Jett I litigation. Second, in relation to Beech Capital and Griffin, res judicata is also appropriate for these new parties. Beech Capital is a closely related business to Beech Interplex. Further, Jett does not dispute that Griffin's only connection to this controversy is that he is the Vice-President of Beech Capital. It appears Beech Capital and Griffin were only added to the Jett II lawsuit because Jett realized that these parties were doing business out of Jett's former leased suite and were allegedly in possession of some of the disputed property because they were operating out of the same location. This Court concludes that Beech Capital and Griffin were in privity with the defendants in Jett I based on the closeness of the relationship between all the defendants. It is clear that the interests of both Beech Capital and Griffin were adequately represented in Jett I because their interests were so closely aligned with the named defendants in the prior state proceedings. This conclusion to apply the res judicata doctrine based on the privity concept is supported by the fact that the same property that is at issue in the conspiracy/burglary/theft Count against Beech Capital and Griffin was at issue in Jett I. Thus, the res judicata doctrine is appropriate as to Beech Capital and Griffin because they were in privity with the named parties to the Jett I litigation.
Jett does not dispute the Defendants' claim that Beech Interplex provided the initial start-up capital for Beech Capital and designated it to administer an economic development fund as its only form of business.
In Jett II, Count VII against Griffin and Beech Capital was added alleging conspiracy, burglary and theft in relation to the disputed property in Jett's former office space.
4. Identity of the Capacity of the Parties
The final element for this Court to examine is the likeness of the capacities of the parties in both Jett I and Jett II. Taylor, 714 A.2d at 1066. In this case, Jett has sued in the same capacity in both lawsuits. Further, the Defendants that Jett has named in both actions have been sued in the same capacities in both Jett I and Jett II. Consequently, this Court concludes that the fourth element of the res judicata doctrine is satisfied.
IV. CONCLUSION
In summary, based on the doctrine of res judicata, this Court finds that Jett is precluded from continuing with the instant lawsuit because of the State Court's dismissal of a nearly identical action. This Court finds that all four prongs of the res judicata standard have been met and that the Jett II action, therefore, fails as a matter of law. Thus, the Defendants are entitled to summary judgment on all claims.