Opinion
No. 5-871 / 05-0488
Filed February 15, 2006
Appeal from the Iowa District Court for Webster County, William C. Ostlund, Judge.
The plaintiff appeals from the district court's order granting the defendant's motion for summary judgment. AFFIRMED.
James L. Sayre of James L. Sayre, P.C., Clive, for appellant.
Blake Parker of Blake Parker Law Office, Fort Dodge, for appellee.
Considered by Sackett, C.J., and Vogel and Eisenhauer, JJ.
Kris Marvin appeals the district court's order granting North Central Iowa Mental Health Center, Inc.'s motion for summary judgment and dismissing Marvin's cause of action. We agree with the district court that both claims in the state suit are precluded by Marvin's earlier federal action and affirm the grant of summary judgment.
I. Background Facts and Proceedings.
Kris Marvin was formerly employed by North Central Iowa Mental Health Center (North Central), having been terminated on May 29, 2003. Marvin filed suit against North Central on October 30, 2003, in the United States District Court for the Northern District of Iowa, asserting federal question jurisdiction and causes of action under 42 U.S.C. § 1983 for violations of procedural due process and free speech. Judge Mark Bennett converted North Central's pre-answer motion to dismiss to a motion for summary judgment. Following an opportunity for the parties to supplement their initial filings, Judge Bennett granted summary judgment in favor of North Central on the basis that it was not a state actor, which is a required element for a cause of action under § 1983.
Marvin then filed a petition against North Central in the Iowa District Court for Webster County, again asserting a violation of procedural due process but also asserting an entirely new cause of action for breach of contract. North Central answered the petition and raised both issue and claim preclusion as affirmative defenses. In ruling in favor of North Central on its motion for summary judgment, the district court decided both claims were barred either by issue or claim preclusion stemming from Judge Bennett's ruling in federal court. Marvin now appeals.
II. Scope of Review.
We review rulings on summary judgment for correction of errors of law. Mason v. Vision Iowa Bd., 700 N.W.2d 349, 353 (Iowa 2005). Summary judgment is appropriate under Iowa Rule of Civil Procedure 1.981 only when the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law. We examine the record before the district court to determine whether any genuine issue of material fact exists and whether that court correctly applied the law. Wernimont v. Wernimont, 686 N.W.2d 186, 189 (Iowa 2004). If the conflict in the record concerns only the legal consequences flowing from undisputed facts, entry of summary judgment is proper. Delaney v. Int'l Union UAW Local No. 94 of John Deere Mfg. Co., 675 N.W.2d 832, 834 (Iowa 2004).
III. Grant of Summary Judgment Based on Preclusion.
Marvin appeals the district court's grant of summary judgment finding that Judge Bennett's ruling precluded relitigation of the procedural due process claim, as the state actor issue had already been decided against Marvin. The district court also found that claim preclusion barred Marvin from bringing the new cause of action, a breach of contract claim, in state court because he could have brought it with his federal claim.
A. Issue Preclusion (Collateral Estoppel).
Marvin asserts the district court erred by finding his procedural due process claim barred by issue preclusion. He argues that Judge Bennett's ruling reached no "ultimate fact" on the § 1983 due process claim, but instead decided a jurisdictional issue. However, Marvin does not contest that the federal ruling focused on whether North Central was acting under the color of state law and ultimately found North Central was not a state actor. On a motion for summary judgment, this was not a mere initial determination of whether the court had jurisdiction to hear the case, but rather went to the substance of Marvin's § 1983 cause of action that requires state action as a threshold element. Because Judge Bennett determined North Central was not a state actor, Marvin's § 1983 claims substantively failed as a matter of law and the case was dismissed "in its entirety." A claim for procedural due process violations brought in state court is grounded in the same proof required of alleged federal violations — a threshold question is whether state action is involved. See Putensen v. Hawkeye Bank of Clay County, 564 N.W.2d 404, 408 (Iowa 1997). Therefore we agree with the district court that Judge Bennett's ruling on the issue of state action by North Central precludes relitigation of the issue in Marvin's due process claim in state court. We affirm the grant of summary judgment as to the due process claim.
B. Claim Preclusion (Res Judicata).
Marvin next asserts the district court erred in ruling his breach of contract claim was precluded in state court. After having his petition dismissed "in its entirety" in federal court, Marvin turned to the state court, adding breach of contract as a completely new cause of action.The district court found that the contract claim was precluded because Marvin did not, but could have, requested the federal court to exercise supplemental jurisdiction under 28 U.S.C. § 1367(a) to resolve his claim.
In contrast to issue preclusion, claim preclusion is a bar to further litigation of a claim following a final adjudication or judgment on the merits. Penn v. Iowa State Bd. of Regents, 577 N.W.2d 393, 398 (Iowa 1998) (citation omitted). Claim preclusion, however, forwards similar purposes of judicial economy and efficiency: it prevents piecemeal litigation by requiring a party to try the entire claim or defense in the case at trial. Id. It is necessary to determine whether plaintiff's first and second actions were the same claim or cause of action within the meaning of this principle: preclusion applies if the acts complained of and the recovery demanded in the second claim are the same or when the same evidence will support both actions. Shumaker v. Iowa Dept. of Transp., 541 N.W.2d 850, 852 (Iowa 1995) (citation omitted).
The district court based its ruling on Shumaker, which holds that when a party is silent in a federal action on joinder by supplemental jurisdiction of a purely state-based claim, the state court is left to presume claim preclusion of the later suit. Id. Claim preclusion applies not only to matters actually determined in an earlier action but to all relevant matters that could have been determined. United States v. Gurley, 43 F.3d 1188, 1195 (8th Cir. 1994); see also Lane v. Peterson, 899 F.2d 737, 741 (8th Cir. 1990) ("[R]es judicata precludes the relitigation of a claim on grounds that were raised or could have been raised in the prior action"), cert. denied, 498 U.S. 823, 111 S.Ct. 74, 112 L.Ed.2d 48 (1990). Shumaker explicitly states that:
The Restatement explains:
When the plaintiff brings an action on the claim in a court, either state or federal, in which there is no jurisdictional obstacle to his advancing both theories or grounds, but he presents only one of them, and judgment is entered with respect to it, he may not maintain a second action in which he tenders the other theory or ground. If, however, the court in the first action would clearly not have had jurisdiction to entertain the omitted theory or ground (or, having jurisdiction, would clearly have declined to exercise it as a matter of discretion), then a second action in a competent court presenting the admitted theory or ground should be held not precluded. The reasoning behind this rule is that, when there are barriers that prevent a litigant from advancing a theory in an initial suit, it is unfair to preclude a second action in which those claims can be presented. . . .
Under the Restatement, preclusion will apply unless:
the court in the first action would clearly not have had jurisdiction to entertain the omitted theory or ground (or, having jurisdiction, would clearly have declined to exercise it as a matter of discretion), then a second action in a competent court presenting the omitted theory or ground should be held not precluded.
Shumaker, 541 N.W.2d at 853-854 (citing Restatement (Second) of Judgments § 25 (1982)).
While federal courts may decline to exercise supplemental jurisdiction if "the district court has dismissed all claims over which it has original jurisdiction . . ." under 28 U.S.C. § 1367(c)(3), it is within the court's discretion. From the record available on this appeal, we cannot conclusively say that the federal court clearly would have declined to exercise supplemental jurisdiction over Marvin's breach of contract claim. "By requiring plaintiffs to at least attempt joinder of their state claims to a federal action, it will be perfectly clear whether the federal court would choose to hear them." Buchanan v. Dain Bosworth Inc., 469 N.W.2d 508, 511 (Minn.Ct.App. 1991). We conclude Marvin could have joined the state claim, breach of contract, with his federal action under supplemental jurisdiction, giving the federal court the opportunity to decide whether it would retain or decline the breach of contract claim. If it would have declined, dismissing the state claim without prejudice and preserving the claim, then Marvin would have been able to turn to the state courts for a determination of his breach of contract claim. See American Civil Liberties Union v. City of Florissant, 186 F.3d 1095, 1098 (8th Cir. 1999) (citing 28 U.S.C. § 1367(c)(3) and noting that when all federal claims are dismissed on a motion for summary judgment, the state claims are ordinarily dismissed without prejudice). The controversy, meaning all claims arising from Marvin's termination from North Central, was disposed of with the grant of summary judgment by the federal court as a final adjudication on the merits. See generally Peppmeier v. Murphy, ___ N.W.2d ___ (Iowa 2005) (holding a vicarious liability malpractice claim was precluded by a grant of summary judgment in previous suit against the alleged agent, where the lack of any genuine issue of material fact going to the merits of the underlying liability was a final adjudication and disposed of all issues and controversies between the parties). But cf. Dickens v. Associated Anesthesiologists, P.C., ___ N.W.2d ___ (Iowa 2006) (holding a dismissal for failure to timely serve original notice is not res judicata because it is not an adjudication on the merits but a procedural failure of jurisdiction). Therefore the district court did not err in finding Marvin's state claim for breach of contract precluded, and we affirm the grant of summary judgment.