Browning v. Navarro

Decision Date23 October 1989
Docket NumberNos. 88-1761,88-1894,s. 88-1761
Citation887 F.2d 553
Parties, Bankr. L. Rep. P 73,148 Jane H. BROWNING, Individually and as Co-Independent Executrix of the Estate of William W. Browning, Jr., et al., Plaintiffs-Appellees, v. Don NAVARRO, Individually and as Trustee for Pat S. Holloway, et al., Defendants, Pat S. Holloway, Defendant-Appellant. Jane H. BROWNING, et al., Plaintiffs-Appellants, v. Don NAVARRO, et al., Defendants-Appellees.
CourtU.S. Court of Appeals — Fifth Circuit

R. Jack Ayres, Jr., Thomas V. Murto, III, Law Offices of R. Jack Ayres, Jr., Dallas, Tex., for Jane H. Browning, et al.

Pat S. Holloway, Austin, Tex., pro se.

Marshall Simmons, Dallas, Tex., for Don Navarro et al.

Andrew L. Smith, Dallas, Tex., for Robbie Holloway.

Appeals from the United States District Court For the Northern District of Texas.

Before POLITZ, DAVIS and DUHE, Circuit Judges.

DUHE, Circuit Judge:

Plenty of process has been provided to the parties in this dispute. 1 It is fair to say that seldom have so many judgments decided so little. We must decide whether any process is still due. We conclude that the litigants have had their day in court and that it is time to end this dispute.

I. The Hatfields and the McCoys

The dispute began in 1979 when the Brownings sued Holloway in Texas state court. 2 Holloway filed for bankruptcy under Chapter 11 on November 19, 1979 and removed the case to a federal bankruptcy court which remanded it back to state court. The bankruptcy court modified the automatic stay so as to permit the trial to go forward. In 1982 a group of investors sued Holloway and the Brownings in state court. The Brownings cross-claimed against Holloway. The 1982 case was presided over by Judge Walker who consolidated it with the 1979 case. Judge Walker later severed the 1979 case from the 1982 case and the Brownings won a judgment of $82 million. 3 The 1982 case remained dormant until 1987 when the Brownings' third party complaint against Holloway was dismissed with prejudice upon joint motion of the parties. 4

Holloway and the Brownings did not meekly accept the hand dealt them by Judge Walker's $82 million judgment. In addition to the convoluted proceedings in state court, the feud between the parties spawned two federal lawsuits. Holloway drew first blood by suing the Brownings and Judge Walker under 42 U.S.C. Sec. 1983 on November 18, 1982 and the Brownings reciprocated by suing the trustee of Holloway's bankrupt estate to enforce the Walker judgment on March 2, 1983.

Holloway sued the Brownings and Judge Walker in federal court under Sec. 1983 alleging that they conspired to deny his right to a fair trial in the 1979 state court suit. The district court dismissed the suit on the ground that Holloway had an adequate state court remedy because he could appeal the 1979 judgment. Holloway's claim under 42 U.S.C. Sec. 1983 was dismissed with prejudice and the pendent state law claims were dismissed without prejudice. The judgment was affirmed on appeal. Holloway v. Walker, 784 F.2d 1287 (5th Cir.) (per curiam), cert. denied, 479 U.S. 984, 107 S.Ct. 571, 93 L.Ed.2d 576 (1986). 5

After filing the Sec. 1983 claim, Holloway appealed the Walker judgment but posted no supersedeas bond to stay its execution. The appeal was dismissed. 6 On October 12, 1982, Holloway converted his Chapter 11 proceeding to Chapter 7. A trustee was appointed. He refused to satisfy the Walker judgment and the Brownings brought suit in federal court to enforce the judgment. The suit was heard by a federal district court sitting in bankruptcy. See Browning v. Navarro, 37 B.R. 201, 207 (N.D.Tex.1983), rev'd, 743 F.2d 1069 (5th Cir.1984).

II. Issues on Appeal

The present appeals stem from the suit brought by the Brownings to enforce the Walker judgment. The disposition of the various stages in this suit play an important role in shaping the issues on appeal. In Browning I we held that Judge Walker's court had jurisdiction to render the $82 million judgment. Browning I, 743 F.2d 1069 (5th Cir.1984). In Browning II we stated that there were only two issues left to be decided on remand. Browning II, 826 F.2d 335, 346 (5th Cir.1987). Holloway could argue that the Walker judgment was void because it was obtained by fraud. The Brownings could argue that Holloway was precluded by res judicata from raising the issue of fraud. On remand from Browning II, the district court denied the Brownings' motion for summary judgment and held that Holloway was not precluded by res judicata from attacking the Walker judgment. This issue was certified for interlocutory appeal under 28 U.S.C. Sec. 1292(b) and the Brownings now appeal.

The district court also denied Holloway's motions for summary judgment which sought to enjoin enforcement of the Walker judgment. The denial of summary judgment was appealed as of right under 28 U.S.C. Sec. 1292(a)(1). In 88-1761 Holloway raises five issues on appeal: (1) whether the Walker judgment is unenforceable because there is a later inconsistent judgment; (2) whether the Brownings are precluded by res judicata from enforcing the Walker judgment; (3) whether the Brownings are precluded by the clean hands doctrine from enforcing the Walker judgment; (4) whether Holloway is entitled to summary judgment on his fraud on the court claim; and (5) whether our decision in Browning II required the district court to vacate its enforcement of the Walker judgment.

We will not address all of the issues raised by Holloway. The cumulative weight of past and present dispositions of this case limits the issues that may be raised. Issue four, we decide, is precluded by res judicata and issue five is rendered moot by that decision. Holloway may not seek summary judgment on his fraud on the court claim because we hold that res judicata precludes him from raising it. Nor can Holloway ask us to vacate the enforcement of the Walker judgment because it is valid and enforceable.

The other three issues raised by Holloway, moreover, conflict with our previous remand order. In Browning II we held that the only issue which Holloway could raise on remand was his fraud on the court claim. Language permitting other issues to be raised was noticeably absent from our opinion. The decision of an appellate court on an issue of law becomes the law of the case on remand. See Ex parte Sibbald v. United States, 37 U.S. (12 Pet.) 488, 492, 9 L.Ed. 1167 (1838) and E.E.O.C. v. Int'l Longshoremen's Ass'n, 623 F.2d 1054, 1058 (5th Cir.1980). The law of the case doctrine does not bar a later court from considering matters that "could have been, but were not, raised and resolved in the earlier proceeding." Signal Oil & Gas Co. v. Barge W-701, 654 F.2d 1164 (5th Cir.1981), cert. denied, 455 U.S. 944, 102 S.Ct. 1440, 71 L.Ed.2d 656 (1982). See also In re Sanford Fork & Tool Co., 160 U.S. 247, 16 S.Ct. 291, 40 L.Ed. 414 (1895). Later courts may not consider matters which were " 'decided by necessary implication as well as those decided explicitly.' " Morrow v. Dillard, 580 F.2d 1284, 1290 (5th Cir.1978) (quoting Carpa, Inc. v. Ward Foods, Inc., 567 F.2d 1316, 1320 (5th Cir.1978)). When we stated in Browning II that the only issue which Holloway could raise on remand was his fraud on the court claim, we necessarily implied that Holloway could raise no other issues. Thus, all of the remaining issues raised by Holloway run afoul of our mandate in Browning II.

There are exceptions, however, to the law of the case doctrine. The law of the case doctrine "merely expresses the practice of courts generally to refuse to reopen what has been decided, not a limit to their power." Messinger v. Anderson, 225 U.S. 436, 443, 32 S.Ct. 739, 740, 56 L.Ed. 1152 (1912). See also Loumar v. Smith, 698 F.2d 759, 762 (5th Cir.1983). We have the discretion to ignore a previous decision if substantially different evidence has been presented, there has been an intervening change in the law, or the prior decision was clearly erroneous and it would work a manifest injustice. See Falcon v. General Tel. Co., 815 F.2d 317, 310 (5th Cir.1987) and White v. Murtha, 377 F.2d 428, 431-32 (5th Cir.1967).

Issues (1) and (3) present substantially different evidence than was available when Browning II was decided and, therefore, will be considered today. Browning II was decided on August 26, 1987 whereas the allegedly inconsistent judgment was rendered on September 17, 1987. The actions of the Brownings which allegedly rendered their hands unclean also occurred, at least in part, after Browning II was decided. These two issues, therefore, present new evidence.

Although issues (1) and (3) are properly before us, the same cannot be said for issue (2). Holloway claims that the Walker judgment should have been asserted as a compulsory counterclaim in Holloway v. Walker. Holloway argues that since the Brownings failed to raise the Walker judgment in the previous litigation, it is now barred by res judicata. This issue does not fall within any of the exceptions to the law of the case doctrine and, therefore, will not be considered.

In short, the parties raise three issues that deal with whether the Walker judgment may be enforced. One is raised by the Brownings in 88-1894 and two are raised by Holloway in 88-1761. Before we may deal with the merits of this dispute, however, we dispose of two jurisdictional issues in Part III of this opinion. In Part IV of this opinion we reverse the district court and hold that Holloway is precluded by res judicata from claiming that the Walker judgment was fraudulent. In Part V we hold that the clean hands doctrine does not provide a basis for setting aside the Walker judgment. In Part VI we hold that the 1987 state court judgment does not nullify the Walker judgment.

III. Jurisdiction

The present appeal presents two jurisdictional issues. First, we must decide whether a court of appeals may hear an interlocutory appeal from a district court...

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