846 F.2d 1382
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.
David Allen MANN, Plaintiff-Appellant,
Paul M. MAY; A. Bates Butler; A. Bates Butler III &
Associates, P.C., an Arizona corporation; Terry Regnier;
Trayner Murray, Inc., a Florida corporation; the Traveler's
Insurance Company, a Connecticut corporation, Defendants-Appellees.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Jan. 12, 1988.
Decided April 27, 1988.
Before GOODWIN, FARRIS and NELSON, Circuit Judges.
Appeal from the United States District Court for the District of Arizona; Alfredo C. Marquez, District Judge Presiding.
David Mann appeals the district court's dismissal of his diversity action against several attorneys and their clients for libel, negligence, abuse of process, and other torts based on their filing of allegedly fraudulent pleadings in Mann's previous civil rights suit. The district court had jurisdiction pursuant to 28 U.S.C. Sec. 1332 and we have jurisdiction pursuant to 28 U.S.C. Sec. 1291. We affirm.
In 1984, Mann filed suit against Trayner-Murray, Inc., and its president, Terry Regnier, and others for illegally taking a crystal collection from Mann's home after service of a search warrant. In pleadings in that action, the defendants alleged that Mann was charged and pleaded guilty to the theft of the crystal. The district court dismissed that suit with prejudice upon Mann's motion as to all defendants and all causes of action.
Mann brought this action against Trayner-Murray, Regnier, their attorneys, Paul May, A. Bates Butler III, and A. Bates Butler III & Associates, P.C., and Traveler's Insurance Company. In his first amended complaint, Mann alleged libel, negligence, and two claims of abusive process relating to the statements made in the prior pleadings.
The district court dismissed the action on January 30, 1986, determining that the statements were privileged for purposes of Mann's libel claim and dismissing Mann's other contentions for failure to state a claim. Mann timely appeals.
We can affirm on any basis fairly presented in the record before us. Hatch v. Reliance Ins. Co., 758 F.2d 409, 414 (9th Cir.), cert. denied, 474 U.S. 1021 (1985). We apply Arizona law in this diversity action to determine if Mann's current action is barred by res judicata principles. See Ronish v. St. Louis, 621 F.2d 949, 950 (9th Cir.1980). Res judicata can bar Mann's claims that were raised or could have been raised under the pleadings of his prior Sec. 1983 action. See Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 83-85 (1984).
Arizona law provides that res judicata bars the resolution of issues in subsequent actions between the same parties or those in privity with the parties if the issues were actually adjudicated in or necessary to a final judgment on the merits. Rousselle v. Jewett, 101 Ariz. 510, 421 P.2d 529, 531 (1966). A dismissal with prejudice is a judgment on the merits under Arizona law and is res judicata as to every issue reasonably framed by the pleadings. Torres v. Kennecott Copper Corp., 15 Ariz.App. 272, 488 P.2d 477, 479 (1971). "The relevant test is ... whether the same cause of action, or one so closely related that its proof depends on the same facts, has once been litigated." Rousselle, 421 P.2d at 532. Collateral estoppel bars relitigation of an issue properly raised in a prior action which is submitted for determination and actually determined. Chaney Bldg. Co. v. City of Tuscon, 148 Ariz. 571, 716 P.2d 28, 30 (1986) (en banc).
We conclude that Mann's current causes of action depend on the same facts alleged in his prior suit and involve an issue actually litigated in that suit. We can take judicial notice of the pleadings and evidence in Mann's prior action, as Arizona courts do to determine if res judicata is applicable. See Pierpont v. Hydro Mfg. Co., 22 Ariz.App. 252, 526 P.2d 776, 778 (1974). In Mann's prior suit, which included a defamation claim, he alleged that Trayner-Murray and Regnier falsely told police that Mann had stolen the crystal collection. Mann v. City of Tuscon, 782 F.2d 790, 792 (9th Cir.1986). In their defense, Trayner-Murray and Regnier stated that Mann had pled guilty to theft of the crystal in Florida, intending the guilty plea to function as collateral estoppel, barring the defamation claim. The attorneys reiterated those statements in the pleadings throughout the suit in their clients' defense. Thus, the same statements were at issue in the prior action, and the district court necessarily determined the issue. The district court denied Mann's motion for sanctions, declining to strike the allegedly false statements in the pleadings. Sanctions are mandatory if a pleading is not well grounded in fact. Fed.R.Civ.P. 11. Mann's claims in this action depend entirely upon those alleged falsities in the pleadings in the prior action.
Mann concedes that the same allegedly false statements are presented in this action, and that the filings before the district court and the court of appeals in the prior action involved the same statements. Thus, there are no "intervening material facts" which lead us to conclude that the application of res judicata or collateral estoppel would not be appropriate here. See Rousselle, 421 P.2d at 532. Further, Mann cannot rely on Nienstedt v. Wetzel, 133 Ariz. 348, 651 P.2d 876 (1982). In Nienstedt, a subsequent action between the same parties for abuse of process in the prior proceedings was not barred by res judicata because the same issues and facts were not before the court in the second action. 651 P.2d at 833. The record shows that Mann had his day in court against these same defendants and that the facts at issue in the prior litigation would govern Mann's current claims. See Rousselle, 421 P.2d at 532. Mann's dismissal of that action with prejudice as to Trayner-Murray and Regnier bars Mann's current action against them. See Torres, 488 P.2d at 479.
The claims against the defendants' lawyers are also barred. The lawyers were included in Mann's sanctions motion, and the only claim in the current action is that they made the same statements on behalf of the defendants. The issue of the false pleadings was actually determined by the denial of sanctions. See Chaney, 716 P.2d at 30-31; Nienstedt, 651 P.2d at 833.
Mann also claims that Traveler's had a duty to monitor the attorneys' pleadings, although Traveler's was not a party to the prior suit. The claim against Traveler's was properly dismissed because the lawyers are independent contractors and Mann has alleged no facts showing that Traveler's actually or apparently authorized the statements. See Green Acres Trust v. London, 688 F.2d 658, 664 (1983), vacated in part on other grounds, 141 Ariz. 609, 688 P.2d 617 (1984). Even if Traveler's were sufficiently connected to the statements, the issue of the falsity of the pleadings has already been determined.
The appellees' failure to raise res judicata as an affirmative defense below does not bar our consideration of it on appeal because Mann's Sec. 1983 action was not dismissed with prejudice until after the district court dismissed the current action on other grounds.
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3