Austin v. Super Valu Stores, Inc.

Decision Date21 July 1994
Docket NumberNo. 93-2899,93-2899
PartiesRussell AUSTIN, Appellant, v. SUPER VALU STORES, INC., a foreign corporation; B & H Industrial Services; Dean Bourne, individually and as owner of B & H Industrial Services; David Fish, individually; Wayne Fish, individually, Appellees.
CourtU.S. Court of Appeals — Eighth Circuit

Stephen C. Fiebiger, Minneapolis, MN, argued and on brief (Richard H. Barker IV, New Orleans, LA, on brief), for appellant.

William Moran, St. Paul, MN, argued, for Super Valu Stores.

Victor E. Lund, Minneapolis, MN, argued (Joseph M. Goldberg and Victor E. Lund, Minneapolis, MN, on brief for appellee B & H Industrial), for B & H Industrial Services, Dean Bourne, David Fish and Wayne Fish.

Before RICHARD S. ARNOLD, Chief Judge, ROSS, Senior Circuit Judge, and McMILLIAN, Circuit Judge.

McMILLIAN, Circuit Judge.

Russell Austin appeals from a final order entered in the United States District Court 1 for the District of Minnesota granting summary judgment in favor of defendants Super Valu Stores, Inc. (Super Valu), B & H Industrial Services (B & H), Dean Bourne, individually and as owner of B & H, David Fish, and Wayne Fish on the ground of res judicata. Austin v. Super Valu Stores, Inc., No. Civil 4-92-1059, 1994 WL 409473 (D.Minn. May 17, 1993) (order granting summary judgment in favor of all defendants except David Fish); id. (June 22, 1993) (order granting summary judgment in favor of David Fish). For reversal, Austin argues the district court erred in granting summary judgment in favor of all defendants on the ground of res judicata because the prior judgment was not a decision on the merits and the causes of action and the parties in the two cases are not the same. He also argues there were genuine issues of material fact in dispute about the organizational capacity of B & H. For the reasons discussed below, we affirm the judgment of the district court.

On January 26, 1987, Austin fell off a forklift and was injured. Austin was installing scaffolding-storage racks at the Lewis Grocery warehouse owned and operated by Super Valu in Hammond, Louisiana. Konstant Products had manufactured the racks; Super Valu bought the racks from Bill Lind Co., the distributor; B & H installed the racks. David Fish and Wayne Fish were employees of B & H and supervised the actual installation of the storage racks at the warehouse.

Austin first filed a lawsuit against Konstant Products in the United States District Court for the Eastern District of Louisiana. That lawsuit was settled with a reservation of rights against other defendants. In October 1988 Austin filed a second lawsuit against Bill Lind Co., Super Valu, B & H, David Fish, and Wayne Fish, also in the United States District Court for the Eastern District of Louisiana. That complaint mistakenly described B & H as a corporation; B & H was not a corporation. According to counsel for B & H, B & H was initially a partnership but, at the times relevant to this litigation, was a sole proprietorship owned by Dean Bourne. The basis for subject matter jurisdiction was diversity of citizenship. Austin asserted liability on negligence and strict liability theories. 2 The district court dismissed the action on the ground that it was barred by Louisiana's one-year statute of limitations for personal injury actions. Austin v. Bill Lind Co., No. 88-4447(F), 1994 WL 592835 (E.D.La. Mar. 23, 1990). Austin did not appeal.

In October 1992 Austin filed the present action in the United States District Court for the District of Minnesota against defendants Super Valu, B & H, Dean Bourne, individually and as the owner of B & H, David Fish, and Wayne Fish. 3 The complaint described B & H as a business but not as a corporation. The basis for subject matter jurisdiction was diversity of citizenship. Austin alleged that defendants had negligently directed and supervised his installation of the scaffolding-storage racks and had failed to keep the premises in a safe condition, thus causing his serious injuries. The applicable Minnesota statute of limitations for personal injury actions is six years. 4 All defendants except David Fish filed motions for summary judgment on the ground of res judicata.

The district court granted summary judgment in favor of all defendants except David Fish on the ground of res judicata. The district court noted that in this circuit the application of res judicata in diversity cases is a question of state law, although it was not clear whether the law of the forum state or the law of the state of the prior judgment applied. Slip op. at 5. The district court decided that it need not decide whether to apply Minnesota or Louisiana preclusion law because the result was the same under either state's law. Id. at 6. The district court noted that both Minnesota and Louisiana law, as well as some federal courts, grant preclusive effect to dismissals based on statute of limitations grounds. Id. at 7-8. The district court decided that res judicata applied because the Louisiana dismissal was a final decision on the merits, the cause of action in each case was the same (using the same nucleus of operative fact test), and the parties were identical or in privity. Id. at 9-12. The district court specifically found that the B & H which had been mistakenly described in the Louisiana complaint as a corporation was the same B & H described in the complaint in the present case as a sole proprietorship owned by Bourne. Id. at 13-15. The district court later granted summary judgment in favor of David Fish on the ground of res judicata. This appeal followed.

For reversal, Austin argues the district court erred in granting summary judgment in favor of defendants on the ground of res judicata. He argues res judicata does not apply because the second Louisiana action was dismissed on statute of limitations grounds and therefore was not a final decision on the merits, the causes of action were not the same, and the parties in the two cases were not the same. Austin also argues that he raised genuine issues of material fact about the organizational capacity of B & H sufficient to defeat summary judgment. Super Valu argues the district court correctly determined that the second Louisiana judgment barred relitigation. Super Valu argues that the dismissal on statute of limitations grounds was a final decision on the merits, the causes of action were the same and the parties in both actions were the same or in privity. With respect to the organizational capacity of B & H, B & H and Dean Bourne argue that B & H was the same party sued as a defendant in the second Louisiana action and that both B & H and Dean Bourne, as the owner of B & H, were protected by the dismissal of that action for purposes of res judicata.

We review a grant of summary judgment de novo. The question before the district court, and this court on appeal, is whether the record, when viewed in the light most favorable to the non-moving party, shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); see, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986); Get Away Club, Inc. v. Coleman, 969 F.2d 664, 666 (8th Cir.1992); St. Paul Fire & Marine Insurance Co. v. FDIC, 968 F.2d 695, 699 (8th Cir.1992).

As noted by the district court, the threshold issue is whether state or federal law controls the application of res judicata. The judgment which is sought to be given preclusive effect was entered by a federal district court sitting in diversity. The district court here also had diversity jurisdiction. Thus, if res judicata applied, one federal court would be giving preclusive effect to the judgment of another federal court, a question which arguably would be a matter of federal law. See, e.g., Steve D. Thompson Trucking, Inc. v. Dorsey Trailers, Inc., 870 F.2d 1044, 1045 (5th Cir.1989) (applying federal res judicata rules); Hauser v. Krupp Steel Producers, Inc., 761 F.2d 204, 207 (5th Cir.1985) (same); cf. Shoup v. Bell & Howell Co., 872 F.2d 1178, 1180 (4th Cir.1989) (applying Fed.R.Civ.P. 41(b)); see also 18 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure Sec. 4472 (1981 & Supp.1994). "However, cases from [this circuit] have consistently concluded that collateral estoppel in a diversity action is a question of substantive law controlled by state common law." Lane v. Sullivan, 900 F.2d 1247, 1250 (8th Cir.), cert. denied, 498 U.S. 847, 111 S.Ct. 134, 112 L.Ed.2d 101 (1990); see Iowa Electric Light & Power Co. v. Mobile Aerial Towers, Inc., 723 F.2d 50, 52 (8th Cir.1983); Gatzemeyer v. Vogel, 589 F.2d 360, 362 (8th Cir.1978); cf. Gerrard v. Larsen, 517 F.2d 1127, 1131-32 (8th Cir.1975) (noting conflict but refusing to decide because same result under either state or federal preclusion law). Therefore, we apply state, not federal, law.

The next question is which state's law should be applied--Minnesota or Louisiana. The district court did not decide whether to apply Minnesota or Louisiana law because the result was the same under either Minnesota or Louisiana law. 5 Both Minnesota and Louisiana law, as well as some federal courts, grant preclusive effect to dismissals based on statute of limitations grounds. Slip op. at 5-6, citing Guidry v. Bayly, Martin & Fay of Louisiana, Inc., 545 So.2d 567, 569-70 (La.Ct.App.) (dismissal on statute of limitations ground is decision on the merits for preclusion purposes), writ denied, 551 So.2d 638 (La.1989), and Nitz v. Nitz, 456 N.W.2d 450, 452-53 (Minn.Ct.App.1990) (same); see also Myers v. Bull, 599 F.2d 863, 865 (8th Cir.) (per curiam) (same), cert. denied, 444 U.S. 901, 100 S.Ct. 213, 62 L.Ed.2d 138 (1979). Which state's law...

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