341 F.3d 1148 (9th Cir. 2003), 00-35988, Noel v. Hall

Docket Nº:00-35988
Citation:341 F.3d 1148
Party Name:Noel v. Hall
Case Date:September 02, 2003
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 1148

341 F.3d 1148 (9th Cir. 2003)

Eric NOEL, Plaintiff-Appellant,

v.

Brian C. HALL; Sandra A. Hall, fka Sandra Johnson, Defendants-Appellees,

and

Gabrielle S. Lennartz; Herb Weisser; Michelle A. Merchant, Defendants.

No. 00-35988.

United States Court of Appeals, Ninth Circuit

September 2, 2003.

Argued and Submitted Nov. 4, 2002.

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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Richard L. Grant, Portland, OR, for the plaintiff-appellant.

Bryan W. Dawson, West Linn, OR, for the defendants-appellees.

Appeal from the United States District Court for the District of Oregon; Ancer L. Haggerty, District Judge, Presiding. D.C. No. CV-99-00649-DCA.

Before REAVLEY, [*] KOZINSKI and W. FLETCHER, Circuit Judges.

WILLIAM W. FLETCHER, Circuit Judge.

Eric Noel and Sandra and Brian Hall are no strangers to the inside of a courtroom. This lawsuit is the fifth between Noel and Sandra Hall, and the second between Noel and Brian Hall. In this suit, Noel brought ten claims.

The district court dismissed one of Noel's claims against the Halls for lack of subject matter jurisdiction under the Rooker-Feldman doctrine. We reverse this dismissal. The district court dismissed Noel's nine other claims against the Halls as claim-precluded, on the ground that they should have been asserted as compulsory counterclaims in earlier state-court litigation. We affirm the district court's dismissal of six of these nine claims against Sandra Hall as claim-precluded. However, we reverse its dismissal of three of these nine claims against Sandra Hall and all nine claims against Brian Hall.

I. Background

This unfortunate saga began in May 1995 when Eric Noel and Sandra Hall (née Johnson) 1 agreed to buy, train, and sell Red Hot Prospect--a horse that was no such thing. Hall paid the purchase price of $750, and Noel agreed to train Red as a show jumper and to pay the expenses. Noel and Hall agreed that they would eventually sell Red and share equally in what they incorrectly imagined would be a substantial profit of $30,000 to $50,000.

As part of this ill-fated bargain, Hall sold her mobile home to Noel, the $5000 sale price due and payable when they sold Red. In February 1996, Hall parked the mobile home on land leased by Noel at the Vancouver Riding Academy in Washington State, and she lived there for approximately six months. While Hall lived and worked at the Riding Academy, Noel secretly tape recorded a number of her telephone conversations. On August 15, 1996, Hall left the Riding Academy, taking Red with her. She kept Red until October 11, 1996, when she shipped Red to Noel with the understanding that he would sell Red and complete the sale for the mobile home. Red spent some time on a farm in California while Noel attempted to find buyers. Finally, in July 1998 the investment came to an unremunerative end when, pursuant to a court order, Sandra Hall consigned Red to an auction, where Brian Hall (who had become Sandra Hall's husband in 1997) purchased the horse for $710.

After Hall left the Riding Academy, Noel moved into the mobile home on October

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18, 1996, although at that time Red had not yet sold and Noel had not paid Hall. Noel alleges that after he moved into the mobile home, the Halls broke windows and locks on the mobile home, damaged the interior, barred Noel from entering, disconnected the power, and shut off the water. In addition, Noel alleges that in May 1997, the Halls entered the mobile home and stole the tape recordings Noel had made of Sandra Hall's telephone conversations. Noel alleges that the Halls attempted to use the recordings to force him to relinquish his interest in Red and the mobile home and to damage his business.

A. State-Court Litigation

The unhappy collaboration between Sandra Hall and Noel resulted in four suits litigated in Washington State courts (a fifth suit was filed but never litigated): two actions concerning the mobile home in the small claims department of the Clark County District Court (eventually consolidated on appeal), one action concerning the investment in Red in the Skamania County Superior Court, and one action for violation of privacy and wiretapping laws in the Clark County District Court. We discuss each action below.

1. Small Claims Suits Concerning the Mobile Home

Two separate actions related to the mobile home were litigated in the small claims department of the district court in Clark County. In the first action, Sandra Hall (alone) sued Noel for $2500 in rent. The court awarded Hall $2000 plus costs on August 27, 1997. Two months later, Sandra Hall returned to small claims court with her husband Brian. The second action, brought by both Sandra and Brian Hall against Noel, sought $2500 for physical damage to the mobile home and for compensation for Noel's employees' allegedly unauthorized use of the home. In December 1997, the small claims court awarded the Halls $1400 plus costs for the period from June through December 1997.

Noel appealed both decisions. He claimed that he owned the mobile home based on his agreement to pay Hall $5000 upon the sale of Red and asked for an injunction to stop the Halls from interfering with his use of the mobile home. The Clark County Superior Court consolidated the two appeals and held that Noel and Hall had a valid contract for the sale of the mobile home, with the $5000 purchase price payable upon the sale of Red. The court awarded Noel ownership of the home beginning October 11, 1996, the date Sandra Hall sent Red to Noel to sell it. The superior court awarded the Halls the $5000 purchase price of the mobile home plus interest from the sale date of Red.

2. Skamania County Superior Court Suit Concerning the Investment in Red

While the mobile home suits were pending against him, Noel filed a separate action in May 1997 in the Skamania County Superior Court against Sandra Hall for an accounting and dissolution of the partnership involving Red. Noel claimed that he and Hall had entered into a partnership agreement to purchase and train Red, which Hall had wrongfully dissolved. Hall denied the existence of a partnership in her answer. She also counterclaimed, contending that, in the event the court found a valid partnership, Noel had breached the partnership agreement, and that by tape recording her telephone conversations, he had violated state and federal wiretap statutes and had invaded her privacy.

In response to the counterclaims, Noel asserted his own counterclaims, alleging that Hall wrongfully entered his property, converted his property, slandered him by accusing him of illegal wiretapping, and violated federal wiretapping statutes herself.

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Hall moved to voluntarily dismiss her counterclaims (to which Noel had in turn counterclaimed) arising out of the tape recordings based on a pending suit in Clark County District Court. (The Clark County suit is discussed below.) Noel did not oppose the motion. In May 1998, the court dismissed the counterclaims of both Hall and Noel that were related to wiretapping and privacy, based on the pendency of the suit in Clark County District Court.

The court found that Noel and Hall had entered into an oral agreement, but not a partnership, and awarded Noel $4909 plus costs and attorney's fees. Noel appealed. In September 2000, the Washington Court of Appeals held that Noel and Hall had formed a partnership and remanded to the superior court. This suit was still pending in the superior court when the federal district court dismissed the claims in the case now before us.

3. Clark County District Court Suit Concerning Wiretapping and Privacy

Sandra Hall filed the final state action against Noel in Clark County District Court in January 1998, alleging violations of state and federal wiretapping statutes and violation of privacy. She alleged that Noel had intercepted private communications without her consent, had violated her right to privacy by listening to the recordings, and had used the recordings to interfere with her impending marriage by telling her fiancé of her affair with another person.

Noel's answer stated that an action asserting these claims was already pending in Skamania County Superior Court, and that that action had priority. He did not assert any counterclaims, even after his counterclaims were dismissed in the Skamania County suit. In August 1999, one year and three months after the counterclaims were dismissed in the Skamania County suit, the court granted summary judgment to Hall. It found that Noel had tape recorded Hall's telephone conversations without her permission in violation of Wash. Rev.Code § 9.73.030 and 18 U.S.C. § 2511, and awarded her $2500 in damages and $2866 in attorney's fees and costs.

B. The Present Suit

Noel and the Halls finally arrived in federal district court in 1999, when Noel filed the present action against Sandra and Brian Hall, as well as three other defendants, in the District of Oregon. None of the prior state-court suits had resulted in a judgment greater than $5000, but Noel--perhaps inspired (or deluded) by the grandeur of the federal setting--upped the ante. He now sought $891,563.46 in compensatory damages and $1,500,000 in punitive damages. Noel made ten claims against the Halls: (1) violation of federal wiretap law, 28 U.S.C. § 2511; (2) violation of Oregon wiretap laws, Or.Rev.Stat. § 133.739; (3) loss of use of the mobile home; (4) damage to the mobile home; (5) damage to personal property; (6) intentional interference with contractual relations; (7) breach of fiduciary duty; (8) blackmail in violation of 18 U.S.C. § 873; (9) extortion; and (10) injurious falsehood.

Claims 1, 2, 6, 8, 9, and 10 relate to Noel's wiretapping and tape recording of Sandra Hall's telephone conversations (the "wiretapping claims"). Noel alleges that the Halls removed his tape recordings of Sandra Hall's conversations from...

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