Braselton v. Clearfield State Bank

• Decision Date: 29 October 1979
• Docket Number: No. 78-1007,78-1007
• Citation: 606 F.2d 285
• Parties: Sherma G. BRASELTON, aka Sherma G. Dausses, Plaintiff-Appellant, v. CLEARFIELD STATE BANK and Russell F. Braselton, Defendants-Appellees. CLEARFIELD STATE BANK, Third Party Plaintiff, v. Jerry K. MALAN and Berniece Malan, Third Party Defendants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 285

606 F.2d 285

Sherma G. BRASELTON, aka Sherma G. Dausses, Plaintiff-Appellant, v. CLEARFIELD STATE BANK and Russell F. Braselton,

Defendants-Appellees.

CLEARFIELD STATE BANK, Third Party Plaintiff, v. Jerry K. MALAN and Berniece Malan, Third Party Defendants.

No. 78-1007.

United States Court of Appeals Tenth Circuit.

Argued March 16, 1979.

Decided Sept. 25, 1979.

Rehearing Denied Oct. 29, 1979.

John R. Weber of Weber & Drake, Sacramento, Cal., for plaintiff-appellant.

Raymond W. Gee of Kirton, McConkie, Boyer & Boyle, Salt Lake City, Utah, for defendant-appellee Clearfield State Bank.

Peter Toft Combs, Reno, Nev., for defendant-appellee Braselton.

Before SETH, Chief Judge, and DOYLE and McKAY, Circuit Judges.

McKAY, Circuit Judge.

This appeal primarily involves the res judicata effect on appellant's federal district court complaint of a prior California state court divorce decree.

In 1959 appellee Russell Braselton entered into an escrow agreement and uniform real estate contract relating to the sale of real property located in Ogden, Utah. Appellee Clearfield State Bank was the escrow agent under the escrow agreement. In February of 1963, Braselton and appellant married. Later that year, Braselton gave appellant an assignment of all his rights in the two agreements.

Thereafter, and until June of 1973, the Bank paid all money received pursuant to the agreements to appellant. On June 7, 1973, one day following Braselton's filing of a divorce petition in California, Braselton and the purchasers gave the Bank a power of attorney purportedly signed by appellant. This document supposedly authorized Braselton to "transact all matters" in connection with the agreements. Thereupon, the Bank delivered the escrow money and documents to Braselton.

In November of 1975, Braselton was granted an "interlocutory judgment of dissolution of marriage" by a California state court. The court concluded that the Ogden property was Braselton's separate property. This judgment became final in January of 1976.

In March 1977 appellant filed her complaint in federal district court. Jurisdiction was based on diversity of citizenship. Appellant claimed she had not signed the power of attorney in question and sought damages from appellees. The district court granted summary judgment in favor of appellees, concluding that appellant's claim was barred by the res judicata effect of the California divorce judgment. The court denied appellant's request to file supplemental pleadings and her request that formal findings of fact and conclusions of law be entered.

I.

The latter two actions of the district court are among the challenges on appeal. We are not persuaded by appellant's arguments on these two points. Whether to permit the filing of supplemental pleadings was within the sound discretion of the trial court. We see no abuse of discretion in its decision. As to the other contention, findings of fact and conclusions of law are simply not required on decisions of motions for summary judgment. Fed.R.Civ.P. 52(a).

II.

The principal issue raised on appeal is whether the trial court correctly determined that appellant's district court complaint was barred by the res judicata effect of the California divorce judgment. "As stated in many cases, the doctrine of res judicata is that an existing final judgment rendered upon the merits, without fraud or collusion, by a court of competent jurisdiction, is conclusive of causes of action and of facts or issues thereby litigated, as to the parties and their privies, in all other actions . . . ." 46 Am.Jur. Judgments § 394 (1969) (footnotes omitted). The doctrine encompasses two aspects: "pure" res judicata and what is generally referred to as collateral estoppel. As explained by the Supreme Court,

under the doctrine of Res judicata, a judgment "on the merits" in a prior suit involving the same parties or their privies bars a second suit based on the same cause of action. Under the doctrine of collateral estoppel, on the other hand, such a judgment precludes relitigation of issues actually litigated and determined in the prior suit, regardless of whether it was based on the same cause of action as the second suit.

Lawlor v. National Screen Service Corp., 349 U.S. 322, 326, 75 S.Ct. 865, 867, 99 L.Ed. 1122 (1955) (footnote omitted).

Res judicata is a doctrine of constitutional significance. The Full Faith and Credit Clause, U.S.Const. art. IV, § 1, requires that "Full Faith and Credit shall be given in each State to the . . . Judicial Proceedings of every other State." State courts are therefore required "to give to a judgment at least the Res judicata effect which the judgment would be accorded in the State which rendered it." Durfee v. Duke, 375 U.S. 106, 109, 84 S.Ct. 242, 244, 11 L.Ed.2d 186 (1963). The collateral estoppel aspect of res judicata is included within the operation of the Full Faith and Credit Clause. United States v. Silliman, 167 F.2d 607, 621 (3d Cir.), Cert. denied, 335 U.S. 825, 69 S.Ct. 48, 93 L.Ed. 379 (1948). Although federal judicial proceedings are not expressly included within the Full Faith and Credit Clause, it is clear that full faith and credit must be given by federal courts to state court judgments. Davis v. Davis, 305 U.S. 32, 40, 59 S.Ct. 3, 83 L.Ed. 26 (1938); Mills v. Duryee, 11 U.S. (7 Cranch) 481, 485, 3 L.Ed. 411 (1813). ¹

Applying these doctrinal threads to the fabric of the instant case, it is clear that the district court was required to determine the applicability of res judicata to appellant's action by a determination of what res judicata effect would be given the divorce decree by the courts of California.

III.

Consistent with the general view, the courts of California conceptualize the res judicata doctrine as having two distinct prongs the one being to bar a second litigation of a cause of action already adjudicated and the other being what is generally referred to as collateral estoppel. See, e. g., Clemmer v. Hartford Insurance Co., 22 Cal.3d 865, 151 Cal.Rptr. 285, 288-89, 587 P.2d 1098, 1101-02 (1978) (en banc); Panos v. Great Western Packing Co., 21 Cal.2d 636, 134 P.2d 242, 243 (1943); McNulty v. Copp, 125 Cal.App.2d 697, 271 P.2d 90, 94 (1954).

California courts adhere to the view that res judicata, in either of its two major forms, requires, among other things, that the court rendering the prior judgment was jurisdictionally competent to do so. E. g., Panos v. Great Western Packing Co., 21 Cal.2d 636, 134 P.2d 242, 243 (1943). It is the question of the extent of the California divorce court's jurisdiction which principally divides the parties.

The nature and extent of the California divorce court's orders and rulings concerning the Ogden property must be reviewed to determine whether they were within its jurisdiction. The final judgment of dissolution of appellant's marriage to Braselton incorporated by reference and made final the terms set forth in the court's earlier interlocutory judgment of dissolution of the marriage. Record, vol. 2, at 55. The interlocutory decree treated the Ogden property in these terms:

6. The following property is confirmed to Petitioner as his separate property: the (Ogden,) Utah property . . . .

Record, vol. 2, at 54. The court's earlier "Notice of Intended Decision" further explained:

UTAH PROPERTY:

Although there were suspicious circumstances concerning the legal title to this property, the evidence is insufficient to find that Respondent has any interest therein. It is therefore found to be the separate property of Petitioner.

Record, vol. 2, at 45. Curiously, the court made this additional comment in its "Notice of Intended Decision" in discussing its conclusion that another parcel of real estate had remained community property:

All circumstances surrounding the execution of the deed support her testimony. Petitioner himself prepared the deed, took her to a notary, and further evidenced to what great lengths he will go to achieve his purposes By forging the power of attorney regarding the Utah property.

Record, vol. 2, at 44 (emphasis added).

It is clear that the California court sought to make a binding disposition of the interest in the Ogden, Utah, property by confirming it to Braselton as his separate property. Appellant argues that it lacked jurisdiction to make such a determination, claiming that "(t)he California Divorce Court's jurisdiction over the parties' separate property is limited only to the characterization of same as separate." Appellant's Brief at 12. It is claimed that resolution of Whose separate property an item of separate property is may only be determined in a subsequent action by a court of general jurisdiction.

Appellees acknowledge the general accuracy of appellant's description of the divorce court's jurisdiction. However, they urge that Allen v. Allen, 159 Cal. 197, 113 P. 160 (1911), carves out an exception to the general rule which authorizes the court to dispose of separate property when "an issue is made by the pleadings as to separate property and both parties, without objection, have submitted the question to the court." Appellee Bank's Brief at 9.

The court in Allen broadly stated:

(I)t is no doubt true . . . that as a general rule the superior court in a divorce proceeding has no jurisdiction to deal with the separate property of the spouses. But the superior court in which the action for divorce must be brought is also invested with general jurisdiction to determine title to real property, whether based on legal or equitable claims, and if the parties in a divorce proceeding see fit to make the character of property held by them whether separate or community an issue in the proceeding, as the court is vested with jurisdiction to determine that question as fully as if the title were put in issue in a direct action brought for that purpose, the same effect must be given to its judgment as if such an action had in fact been brought.

113 P....