United States District Court, D. Arizona
Stephen S. Edwards, Plaintiff,
PHH Mortgage Corporation, et al., Defendants.
Honorable Steven P. Logan United States District Judge
the Court is (i) Defendant Clear Recon Corporation's
(“CRC”) Motion to Dismiss Complaint for Failure
to State a Claim Upon Which Relief Can Be Granted (Doc. 12)
and (ii) Defendant PHH Mortgage Corporation's
(“PHH”) Motion to Dismiss with Prejudice (Doc.
14). CRC and PHH (together, the “Defendants”)
move to dismiss the Plaintiff's complaint (Doc. 1-4)
pursuant to Federal Rule of Civil Procedure 12(b)(6) because
the Defendants argue that the Plaintiff's claims are
barred by the doctrine of res judicata. For the reasons that
follow, both motions are granted.
Plaintiff originally filed this action in Maricopa County
Superior Court on July 17, 2018 (Doc. 1-4 at 2), and the case
was removed to this Court on November 12, 2018 (Doc. 1).
Plaintiff alleges that the Defendants wrongfully foreclosed
on his property. (Doc. 1-4 at 7)
Plaintiff filed a nearly identical complaint alleging
identical claims based on the same facts in a prior
proceeding in the Maricopa County Superior Court before Judge
Sherry K. Stephens (CV 2017-012833) (the “State Court
Case”). The State Court Case resulted in a dismissal of
the action with prejudice.
judicata, or claim preclusion, bars the subsequent litigation
of a claim by the parties and their privies if the issues
were or could have been raised in the prior action.
ProShipLine Inc. v. Aspen Infrastructures Ltd., 609
F.3d 960, 968 (9th Cir. 2010). In a federal question case,
“res judicata applies when there is (1) an identity of
claims; (2) a final judgment on the merits; and (3) identity
of privity between parties.” Id. (citation and
internal quotation marks omitted).
Identity of Claims
determining whether an identity of claims exists, the Court
looks at the following four factors:
(1) whether the two suits arise out of the same transactional
nucleus of facts; (2) whether rights or interests established
in the prior judgment would be destroyed or impaired by
prosecution of the second action; (3) whether the two suits
involve the same infringement of the same right; and (4)
whether substantially the same evidence is presented in the
ProShipLine Inc., 609 F.3d at 968. Here, the
Defendants argue that the claims present in the complaint are
identical to the claims brought in the State Court Case. The
Plaintiff does not make any cognizable arguments in response
to the motions, nor does the Plaintiff dispute that the
claims are identical and arise out of the same transactional
nucleus. (Doc. 47) It is clear that the same rights are at
issue and would be impaired by the prosecution of this case.
It is also clear to the Court that the Plaintiff is relying
on substantially similar facts to argue the same infringement
on the rights giving rise to his claims. Accordingly, for
purposes of res judicata, the Court finds that the first
criterion of identity of claims is met as both actions allege
claims for injunctive relief, fraud and misrepresentation,
negligent misrepresentation, civil conspiracy, and quiet
title based on identical facts. (Doc. 13-5 at 1-25; Doc. 1-4
Final Judgment on the Merits
United States Supreme Court has confirmed that if a court
“determine[s] that the allegations in the complaint do
not state a ground for relief, then dismissal of the case
would be on the merits, not for want of jurisdiction.”
Bell v. Hood, 327 U.S. 678, 682 (1946); see
also Fed. R. Civ. P. 41(b) (“[A]ny dismissal not
under this rule-except one for lack of jurisdiction, improper
venue, or failure to join a party under Rule 19-operates as
an adjudication on the merits.”). In the November 20,
2018 order dismissing the State Court Case (the
“Dismissal Order”), Judge Sherry K. Stephens does
not state the grounds for granting the Defendants'
“Motion for Summary Disposition.” (Doc. 13-6 at 2)
However, the Dismissal Order makes it clear that it is
dismissing the State Court Case with prejudice. (Doc. 13-6 at
2); Semtek Int'l Inc. v. Lockheed Martin Corp.,
531 U.S. 497, 505, (2001) (stating “[W]ith prejudice is
an acceptable form of shorthand for an adjudication upon the
merits”); Ruiz v. Snohomish Cty. Pub. Util. Dist.
No. 1, 824 F.3d 1161, 1168 (9th Cir. 2016) (stating
“[t]he phrase ‘final judgment on the merits'
is often used interchangeably with ‘dismissal with
prejudice.'”). Therefore, the Court finds the
judgment in the State Court Case was a final adjudication on
Identity of ...