Folsom Inv. Co., Inc. v. Moore

• Citation: 681 F.2d 1032
• Decision Date: 06 August 1982
• Docket Number: No. 80-3342,80-3342
• Parties: FOLSOM INVESTMENT COMPANY, INC., et al., Plaintiffs-Appellants, v. Maxie R. MOORE, et al., Defendants-Appellees. FOLSOM INVESTMENT COMPANY, INC., and Daniel R. Scullin, Plaintiffs-Appellants, v. ST. PAUL FIRE & MARINE INS. CO., et al., Defendants-Appellees. Kenneth C. SCULLIN, Plaintiff-Appellant, v. ST. PAUL FIRE & MARINE INS. CO., et al., Defendants-Appellees. . Unit A *
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 1032

681 F.2d 1032

FOLSOM INVESTMENT COMPANY, INC., et al., Plaintiffs-Appellants, v. Maxie R. MOORE, et al., Defendants-Appellees.

FOLSOM INVESTMENT COMPANY, INC., and Daniel R. Scullin, Plaintiffs-Appellants, v. ST. PAUL FIRE & MARINE INS. CO., et al., Defendants-Appellees.

Kenneth C. SCULLIN, Plaintiff-Appellant, v. ST. PAUL FIRE & MARINE INS. CO., et al., Defendants-Appellees.

No. 80-3342.

United States Court of Appeals, Fifth Circuit.

Unit A ^*

Aug. 6, 1982.

Kenneth C. Scullin, pro se.

Daniel R. Scullin, pro se.

David R. Katner, New Orleans, La., for Folsom Inv. Co., Inc.

Louis M. Jones, New Orleans, La., for Governor Edwards.

M. J. Le Gardeur, Jr., Covington, La., for T. M. Burns.

A. W. Mysing, Jr., Covington, La., for Max Moore and J. Holliday.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before CHARLES CLARK and RANDALL, Circuit Judges, and SHARP, ^** District Judge.

CHARLES CLARK, Circuit Judge:

The district court dismissed an action brought under 42 U.S.C. § 1983 for money damages and declaratory relief based on an allegedly wrongful and unconstitutional attachment in a Louisiana state court proceeding on the ground that the Louisiana court's determinations were res judicata. Plaintiffs appealed and argued that the Louisiana judgment was not res judicata. At oral argument, we requested the parties to address an additional question: Whether the setting in motion of a state attachment provision by a private party constituted action under color of state law. After oral argument was held, the Supreme Court granted certiorari to decide the latter question. The Supreme Court has now determined that the invocation of a state attachment statute is action under color of state law. Lugar v. Edmondson Oil Co., --- U.S. ----, 102 S.Ct. 2744, 72 L.Ed.2d ---- (1982). The Supreme Court's decision forecloses an affirmance on state action grounds. Our conclusion that the district court erred in granting the defendants summary judgment on res judicata grounds requires that we reverse. However, we hold that a private party who invokes a presumptively valid state attachment statute is entitled to a good faith immunity from monetary liability under § 1983. We remand to the district court for appropriate findings on the issue.

I

Max Moore, Julian Holliday, and Tom Burns were involved in a real estate transaction with Kenneth Scullin. As agents, they waived a $40,000 commission fee in consideration of an exclusive listing arrangement. Moore and Holliday, defendants-appellees in the instant action, brought suit on April 22, 1974 against Folsom Investment Company, Inc., Daniel Scullin, and Kenneth Scullin in the 22nd Judicial District Court for the Parish of St. Tammany, State of Louisiana. Burns, also an appellee in this action, intervened as a party plaintiff, joining in the allegations by Moore and Holliday that Folsom and the Scullins had breached an exclusive real estate listing arrangement and thus, were liable for damages.

In the fall of 1974, the State court plaintiffs sought a writ of attachment against approximately 200 acres of land in St. Tammany Parish owned by Daniel Scullin, a resident of Mississippi. A nonresident writ of attachment was duly issued by the Louisiana trial court judge on September 30, 1974. In early November, the judge, responding to a subsequent petition, issued a nonresident writ of attachment against an additional 42.15 acres of land allegedly owned by Daniel Scullin.

On January 29, 1975, Kenneth Scullin moved to dissolve the attachment of the 42.15 acres on the ground that the land was wrongfully and illegally attached. The trial court judge dissolved the attachment of the 42.15 acres, increased bond on the approximately 200 acres already attached, and refused to award Kenneth Scullin damages for wrongful attachment of the 42.15 acres.

During the period between late 1976 and the summer of 1977, the Scullins made several unsuccessful attempts to get all or parts of their case into federal court. In November 1976, Folsom and the Scullins filed a notice of removal in Louisiana state court and a petition for removal in federal district court. On February 9, 1977, the case was remanded without opposition to the Louisiana state court. Daniel Scullin filed two diversity actions against his state court adversaries in federal court on July 13, 1977. The first was a $1,000,000 damage action alleging wrongful attachment of approximately 200 acres. The second was a $1,800,000 damage action sounding in defamation. The first action was dismissed on the ground that the matter was already in the process of being adjudicated in the Louisiana courts. The second was dismissed on the motion of plaintiff Scullin. Kenneth Scullin also instituted a federal action alleging wrongful attachment. That action was dismissed for want of diversity of citizenship.

On June 23, 1977, Folsom and the Scullins re-focused on the Louisiana proceeding and filed a motion to dissolve the nonresident writ of attachment on the 200 acres, alleging that it was "wrongfully and illegally obtained," and reserving "their rights to seek reimbursement for the damage and injury sustained by them." The Louisiana court rendered judgment on the underlying action for the attaching plaintiffs in November 1977, awarding damages of $48,500 for breach of the exclusive listing arrangement and ordering that the nonresident attachment of the 200 acres be maintained.

Folsom and the Scullins sought a new trial which was denied. They appealed to the First Circuit Court of Appeal, and after affirmance, sought a rehearing. When that was unsuccessful they petitioned for review in the Louisiana Supreme Court. That was denied. Folsom and the Scullins chose not to petition the United States Supreme Court for a writ of certiorari and satisfied the judgment against them. In 1979, the writ of attachment on the 200 acre tract was vacated.

Upon completion of the above-described action in the Louisiana state courts, which was interrupted by several attempted forays into federal court, Folsom and the Scullins brought the instant action claiming damages for the wrongful and unconstitutional attachment of their 200 acres and seeking a judgment declaring the Louisiana nonresident attachment scheme to be invalid under the due process and equal protection clauses of the Constitution of the United States. Plaintiffs specifically based their causes of action on 42 U.S.C. § 1983, the fifth and fourteenth amendments of the United States Constitution, and pendent state claims. ¹

Folsom and the two Scullins each sought $1,000,000 in damages from Moore, Holliday, and Burns, the successful plaintiffs in the Louisiana state court action. Plaintiffs also named Louisiana Governor Edwin W. Edwards as a defendant in the federal action, and sought a declaration that Louisiana's statutory nonresident attachment provisions are unconstitutional. The insurance carriers of the attorneys who represented Moore, Holliday, and Burns in the state action, St. Paul Fire & Marine Insurance Company, Allegheny Insurance Company, and National Union Fire Insurance Company of Pittsburgh, Pennsylvania, were named as defendants in two actions brought by Folsom and the Scullins. These actions were later consolidated with the main action.

The defendants in the consolidated cases promptly filed a motion for summary judgment, attorney's fees, damages for the filing of frivolous complaints, and protective orders enjoining further litigation of the matter. The district court granted the motion for summary judgment as to all of the defendants. ² The court held that the action was barred by res judicata based on the Louisiana proceedings. Appellants argue here that since the constitutional validity of the attachment was not litigated in the Louisiana court, res judicata does not apply.

II

A

The manner in which state court judgments are to be given preclusive effect in federal court is explicitly governed by federal statutory law. The Full Faith and Credit Act, 28 U.S.C. § 1738, ³ "requires federal courts to give the same preclusive effect to state court judgments that those judgments would be given in the courts of the state from which the judgments emerged." Kremer v. Chemical Construction Corp., --- U.S. ----, ----, 102 S.Ct. 1883, 1889, 72 L.Ed.2d 262 (1982). See also Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 415, 66 L.Ed.2d 308 (1980); Howell v. State Bar of Texas, 674 F.2d 1027, 1031 (5th Cir. 1982).

McCurry, which held that cross-forum preclusion ⁴ is applicable in § 1983 actions, did not explain precisely how a federal court is to ascertain the scope of a prior state court decision's preclusive effect. 449 U.S. at 93 n.2, 105 n.25, 101 S.Ct. at 414 n.2, 420 n.25. In Kremer, the Court explained that the words of the Full Faith and Credit Act are to be taken at face value:

It has long been established that § 1738 does not allow federal courts to employ their own rules of res judicata in determining the effect of state judgments. Rather, it goes beyond the common law and commands a federal court to accept the rules chosen by the state from which the judgment is taken.

Kremer, --- U.S. at ----, 102 S.Ct. at 1897. Kremer apparently dooms the assumption of many courts and commentators that federal courts may be free to grant greater preclusive effect to state court judgments than would the courts of the judgment-rendering state. ⁵ Thus, we are not free to apply federal preclusion principles and must determine the preclusive effect of the Louisiana judgment by resort to the Louisiana law of res judicata.

B

Folsom and the Scullins, as defendants in the state court action brought by Moore, Holliday, and Burns, filed a motion to dissolve a nonresident writ of attachment placed on 200 acres, stating only that it had been "wrongfully and illegally obtained." The movants in the Louisiana action explicitly reserved "their rights to seek...