National Diversified Business Services, Inc. v. Corporate Financial Opportunities, Inc., 84,331

• Decision Date: 01 April 1997
• Docket Number: No. 84,331,84,331
• Parties: NATIONAL DIVERSIFIED BUSINESS SERVICES, INC., Plaintiff-Appellant, v. CORPORATE FINANCIAL OPPORTUNITIES, INC., Bill D. Burnett, and Bob Bell, Defendants-Appellees.
• Court: Oklahoma Supreme Court

Page 662

946 P.2d 662

1997 OK 36

NATIONAL DIVERSIFIED BUSINESS SERVICES, INC., Plaintiff-Appellant, v. CORPORATE FINANCIAL OPPORTUNITIES, INC., Bill D. Burnett and Bob Bell, Defendants-Appellees.

No. 84,331.

Supreme Court of Oklahoma.

April 1, 1997.

Rehearing Denied Sept. 17, 1997.

John B. Davis, John B. Davis, P.C., Metheny, Mitchell, Davis & Klein, Oklahoma City, for Appellant.

Herman D. Brandon, Oklahoma City, for Appellees.

OPALA, Justice.

The dispositive issue on certiorari is whether the earlier dismissal without prejudice (National I ) ¹ operates as a bar against relitigation of the forum-selection issue that is pressed in the present case (National II )? We answer in the affirmative.

I THE ANATOMY OF LITIGATION

Corporate Financial Opportunities, Inc. [CFO or Texas company] is a business incorporated under the laws of the State of Texas. In January 1991 CFO published an advertisement in an Oklahoma newspaper, which contained a solicitation for inquiries regarding financial brokerage opportunities. When National Diversified Business Services, Inc. [National or Oklahoma company], an entity incorporated under the laws of Oklahoma, responded to the ad, CFO's agents made representations of CFO's ability to provide access to numerous lenders and informational databases.

CFO and National entered into a written contract (entitled broker agreement), dated February 22, 1991, by which CFO agreed to furnish National with services, information, and materials for the establishment of a brokerage business. The contract includes a forum-selection clause ² that requires the

parties to litigate in a Texas forum any dispute arising from their agreement.

National I Litigation

National brought suit in Oklahoma against CFO in 1991, alleging (a) breach of contract, (b) fraud in the inducement, and (c) fraud. ³ CFO moved to dismiss for (a) lack of in personam jurisdiction, (b) mislaid venue, and (c) failure to state a claim upon which relief can be granted. On September 11, 1991 the trial court dismissed the claim without prejudice to its refiling in a Texas forum. ⁴ The dismissal was explicitly grounded on the contract's forum-selection clause. No appeal was taken from that decision.

National II Litigation

On September 8, 1993 National brought the present suit against CFO and two of its agents. By changing its theory of recovery from a contractual to a noncontractual basis (violations of the Oklahoma Business Opportunity Sales Act [OBOSA or Act] ), ⁵ National now seeks to escape the prior decision's preclusive effect. The earlier suit was rested on the contractual character of the claim. The present petition, although abandoning the theories urged in National I (i.e., fraud, fraud in the inducement, and breach of contract), alleges many of the same facts and seeks the same relief as that pressed in the first suit. ⁶

CFO moved to dismiss on the ground that the petition fails to state a claim upon which relief may be granted. According to CFO, the first (September 11) dismissal order bars the second suit by interposition of res judicata (claim preclusion). The earlier dismissal order is binding on the parties, CFO urged, because (a) National did not appeal from that ruling and (b) the present (National II ) litigation is based on the same facts and transactions as those in the first suit. ⁷

National's response urged that (a) CFO's motion to dismiss is but a quest for summary relief because CFO was relying on facts not found in the petition, ⁸ (b) the second suit The trial court dismissed the second suit, resting its decision on the earlier (September 11 ) adverse (to National) adjudication of the forum-selection clause. ¹⁰ The Court of Civil Appeals reversed, holding that the prior dismissal order does not bar National's later OBOSA-based action in Oklahoma. The appellate court reasoned that (a) because the dismissal of an action for mislaid venue is not a decision on the merits, the first dismissal did not have preclusive effect under the doctrine of "res judicata or [of] collateral estoppel," (b) National could not relitigate any fact or law issue settled by the first dismissal, ¹¹ (c) a forum-selection clause in a contract does not prevent a court from exercising its jurisdiction, ¹² (d) the dismissal of the first suit did not become the "law of the case" since there was no appellate pronouncement upon the correctness of the trial court's ruling, and (e) a forum-selection clause, which would require that suit to enforce a statutory civil remedy must be brought in another state, is unenforceable on public policy grounds.

                which is based entirely on the OBOSA, sufficiently distinguishes the claim (in National II ) from the first action to avoid a res judicata bar, and (c) as a result of extensive litigation between the Oklahoma Department of Securities and CFO, the latter entity is under a permanent cease and desist order. 9  According to National, the September 11 dismissal was rested on a forum-selection clause the parties intended to apply solely to ex contractu claims (or suits).  National also urged that it did not relinquish its right to pursue in an Oklahoma forum statutory violations of this State's law
                

II

THE STANDARD OF REVIEW

A motion to dismiss for failure to state a claim upon which relief can be granted may not be sustained unless it should appear without doubt that the plaintiff can prove no set of facts in support of the stated claim for relief. ¹³ Under this State's pleading regime, ¹⁴

                14 if the dismissal motion also tenders for consideration materials dehors the pleadings, summary process must be utilized. 15  Since evidentiary materials were indeed presented for nisi prius consideration, 16 CFO's quest for dismissal must be treated as though it were one for summary adjudication.  A motion for summary disposition submits the controversy to the court for application of the pertinent law to uncontroverted facts.  The tendered evidentiary materials will warrant summary relief if all material facts are undisputed and supportive of but a single inference that favors the movant. 17  For the reasons to be stated, we hold, on de novo review of the record, that the trial court's summary ruling for CFO is free from error. 18
                

III

SINCE NATIONAL II IS PREDICATED ON A RELATIONSHIP CREATED BY

AND THEREFORE ARISING OUT OF THE UNDERLYING

CONTRACT, IT FALLS WITHIN THE OUTER

RANGE OF ISSUE PRECLUSION

A.

The Relitigation Bar

CFO's quest for dismissal at nisi prius was rested on a claim-preclusion bar, but we conclude that issue preclusion is the correct concept that governs here.

Under the doctrine of issue preclusion (formerly known as collateral estoppel), ¹⁹ once a court has decided an issue of fact or of law necessary to its judgment, the same parties or their privies may not relitigate that issue in a suit brought upon a different claim. ²⁰ Although the principle of issue preclusion operates to bar from relitigation both correct and erroneous resolutions of jurisdictional and nonjurisdictional challenges, ²¹ the doctrine The issue-preclusion bar is distinct from that of claim preclusion (formerly known as res judicata ). Under the latter principle, a final judgment on the merits of an action precludes the parties from relitigating not only the adjudicated claim but also any theories or issues that were actually decided, or could have been decided, in that action. ²⁴

                may not be invoked if the party against whom the earlier decision is interposed did not have a "full and fair opportunity" to litigate the critical issue in the previous case. 22  The law affords no more than a single opportunity to litigate a disputed question of a tribunal's jurisdiction. 23
                

The first lawsuit came in the framework of a cause of action different from the statutory claim that is now asserted in this case. For invocation of issue preclusion, there need not be a judgment on the merits (as it is often the case with res judicata ), but only a final determination of a material issue (common to both cases). ²⁵ An order is final within the meaning of 12 O.S.1991 § 953 ²⁶ if it prevents judgment upon the process in progress, even though the aggrieved party would have been free to abandon the course then in pursuit to relaunch or press the same claim along a different remedial track. The September 11 dismissal clearly meets the standards of a final and appealable order. ²⁷

The first (September 11, 1991) dismissal, based on an adjudication upon the tendered forum-selection clause, determined a single issue dehors the merits. It decided no issues upon the claim or defenses pressed in National I. ²⁸ The sole remedy for correcting that determination was by appeal. Absent such appeal, the ruling became final in the issue-preclusion sense. Its terms are conclusive insofar as they declare that (a) Oklahoma is not an available forum to litigate rights derived from the parties' contract in which the forum-selection clause is found and (b) litigation of those rights may be conducted in a Texas forum.

B.

The Forum-Selection Issue That Stands Precluded By National

I is Co-Extensive With The National II Controversy

That Owes Its Origin To The Contractual

Relationship Between The Parties

National rests its second lawsuit on violations of the statutory (OBOSA) requirements Although this theory of liability is different from that pressed in National I, the underlying foundation of the tendered controversy remains the same. Both lawsuits are predicated on a relationship that was created by--and therefore arises out of--the very same contract of which the forum-selection clause is a part.

for the offer and sale of a business opportunity in Oklahoma. It seeks recovery for lost profits caused by CFO's failure to furnish reliable lender data under the agreement's terms.

The precluded issue in National I clearly targets the contract-based relationship that limited litigation to the situs prescribed in that document. Even though issue...