Cleckner v. Republic Van & Storage Co., Inc.

• Decision Date: 29 July 1977
• Docket Number: No. 75-3952,75-3952
• Citation: 556 F.2d 766
• Parties: John J. CLECKNER and Ruth Cleckner, his wife, Plaintiffs-Appellants, v. REPUBLIC VAN AND STORAGE COMPANY, INC., et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 766

556 F.2d 766

John J. CLECKNER and Ruth Cleckner, his wife, Plaintiffs-Appellants, v. REPUBLIC VAN AND STORAGE COMPANY, INC., et al., Defendants-Appellees.

No. 75-3952.

United States Court of Appeals Fifth Circuit.

July 29, 1977.

Edward F. O'Connor, Palm Beach, Fla., for plaintiffs-appellants.

Marvin I. Moss, Philip S. Vova, No. Miami, Fla., Melvyn Trute, Bay Harbor Islands, Fla., for defendants-appellees.

Appeal from the United States District Court for the Southern District of Florida.

Before WISDOM and GEE, Circuit Judges, and BOOTLE, ^* District Judge.

GEE, Circuit Judge:

Appellants filed a claim in the district court for damages to household goods transported by the defendant moving company. The trial court granted summary judgment for defendants because of plaintiffs' failure to bring their claim as a compulsory counterclaim in an earlier suit brought in the county court of Dade County, Florida. We affirm.

In June 1973, John and Ruth Cleckner engaged Republic Van and Storage Company (Republic) to move their household possessions from Maryland to Florida. John Cleckner made these arrangements through Republic's local booking agent, Weber Moving Company; he alone signed the contract. When the goods were uncrated in Florida the Cleckners found some furnishings and antiques damaged and others missing. They filed a claim with Republic, but in October 1973, their claim was denied. The Cleckners responded by not paying Republic's transportation fees. In April 1974, Republic sued John Cleckner and the Cleckner Insurance Agency in state court to collect its past due moving fee of $2,217.58. The two parties entered into negotiations which resulted in Cleckner's agreeing to pay the amount due and Republic's agreeing to dismiss its complaint voluntarily. Cleckner forwarded the $2,217.58, but Republic insisted that he also pay $110.87 interest and court costs of $30.00 before it would dismiss the suit. Cleckner received this demand for the additional sums on April 29, 1974, the date set for a hearing on Republic's motion for summary judgment. Although Cleckner promptly forwarded the additional money, Republic did not receive it before the hearing and so did not dismiss its complaint. Summary judgment was entered for Republic on April 29, 1974, in Dade County Court. In February 1975, John and Ruth Cleckner filed this diversity suit in the federal district court seeking to collect $22,875 in damages from Republic and its agent Weber Moving Company. The defendants asserted that the earlier state court judgment, in combination with Florida's compulsory counterclaim rule, operated to bar this suit for damages arising out of the same transaction or occurrence. The district court agreed, citing both the federal compulsory counterclaim rule, Fed.R.Civ.P. 13(a), and the virtually identical Florida rule, Fla.R.Civ.P. 1.170. ¹ Appellants here urge: (1) that Mrs. Cleckner was not a party to the earlier suit and therefore cannot be barred by her husband's failure to assert his compulsory counterclaim; (2) that Weber Moving Company was not a party to the earlier suit and may not assert any bar arising from that judgment; (3) that equity entitles Mr. Cleckner to bring his suit for damages against Republic because he was lulled into forsaking his state court counterclaim by Republic's settlement agreement to dismiss its complaint; (4) that this tort action cannot be barred by the earlier contract action which never raised the issue of negligence; and, finally, (5) that the question whether the husband properly represented the interests of his wife in the former suit and the nature of the agent/principal relationship between Weber and Republic presented factual questions which could not be disposed of on a motion for summary judgment. We review the district court's judgment in light of these complaints.

There are two steps in our analysis. We must determine whether failure to bring a compulsory counterclaim in a prior state proceeding bars a diversity action on that claim in federal district court. If it does, we must then ask if the addition of Mrs. Cleckner as a plaintiff or the addition of Weber Moving as a defendant removes this bar. We begin by returning to the teaching of Guaranty Trust Co. v. York, 326 U.S. 99, 108-09, 65 S.Ct. 1464, 1469, 89 L.Ed. 2079 (1945): "(S)ince a federal court adjudicating a state-created right solely because of the diversity of citizenship of the parties is for that purpose, in effect, only another court of the State, it cannot afford recovery if the right to recover is made unavailable by the State . . . ." In Angel v. Bullington, 330 U.S. 183, 67 S.Ct. 657, 91 L.Ed. 832 (1947), the Supreme Court held that state law governs whether a state court judgment bars a subsequent federal diversity action. The specific holding of Angel v. Bullington that an action barred in state courts cannot be brought as a federal diversity suit was upheld two years later in Woods v. Interstate Realty Co., 337 U.S. 535, 69 S.Ct. 1235, 93 L.Ed. 1524 (1949). The doctrine of these two cases is alive and well in the Fifth Circuit today. In Anderson v. Moorer, 372 F.2d 747 (5th Cir. 1967), this court held that a claim barred by the state law of res judicata from relitigation in state court may not be maintained in a federal diversity action. ² Although the bar resulting from failure to bring a compulsory counterclaim is not identical to the bar of res judicata, ³ our court has held that the "principles of res judicata" govern. Dupuy-Busching General Agency v. Ambassador Ins., 524 F.2d 1275, 1277 (5th Cir. 1975). See also Aerojet-General Corp. v. Askew, 511 F.2d 710, 717 (5th Cir. 1975) (classification of compulsory counterclaims is often determinative of pleas of res judicata). The purpose of the bar imposed by Fla.R.Civ.P. 1.13(1) is to avoid a multiplicity of suits by compelling all related claims to be brought in a single action. As such it is a policy closing the state courtroom doors, which like other state door-closing policies should control what diversity actions can be brought in federal courts under the principles announced in Woods v. Interstate Realty Co., supra, and Angel v. Bullington, supra. ⁴ See, e. g., Witherow v. Firestone Tire & Rubber Co., 530 F.2d 160 (3d Cir. 1976) (state statute of limitations defeats federal diversity claim); Maher v. City of New Orleans, 516 F.2d 1051 (5th Cir. 1975) (state principles of collateral estoppel govern in diversity matter); Aerosonic Corp. v. Trodyne Corp., 402 F.2d 223 (5th Cir. 1968) (federal court may not allow recovery which is denied by the state). Therefore, to determine if this suit is barred we must ask whether the same suit would be barred in Florida courts.

The answer to that question is found in the frequently cited case of Pesce v. Linaido, 123 So.2d 747 (Fla.App.1960), which involved a two-car collision in which the occupants of both vehicles suffered injuries. Appellant Pesce stood by while her insurance carrier settled the claims of an infant riding in the other car. After judgment was entered in this "friendly suit," Pesce attempted to sue the owner of the other car for her personal injuries. Despite the state district court's finding that the earlier friendly proceedings were brought without Pesce's knowledge, depriving her of the opportunity to file a counterclaim, the appellate court ruled that under the Florida compulsory counterclaim rule her second suit was barred. Pesce's claim for equitable relief was surely stronger than appellant Cleckner's, and yet the Florida courts strictly enforced the Florida compulsory counterclaim rule to preclude her separate action.

We think this disposes of John Cleckner's argument that he should not be barred because he was lulled into abandoning his counterclaim by Republic's agreement to dismiss its suit voluntarily. Whatever the earlier misunderstanding about how much Cleckner was to pay before Republic would dismiss its suit, Republic's letter of April 26, 1974, made it clear that the suit would not be dismissed until an additional $140.87 was received. ⁵ Although Cleckner's counsel did not receive the letter until April 29, 1974, the date set for a hearing on the motion for summary judgment in state court, it was clear that the claim would not be voluntarily dismissed that day. Further action was required, either an appearance at the hearing in state court, or a request that the hearing be postponed, or some immediate communication with Republic's counsel. But Cleckner's counsel did nothing and allowed the summary judgment to be entered against his client. A motion to dismiss that judgment was not made until August 1975, after Cleckner's failure to assert the compulsory counterclaim was pleaded as a defense in federal court. The motion was denied by the state court, and the judgment stands. We think that judgment would preclude John Cleckner from bringing this suit against Republic in a Florida court. ⁶ There is no merit in appellants' assertion that the former contract suit cannot bar this tort action because negligence was never litigated. In McDonald Air Conditioning v. 1041 Corporation, the Florida appellate court held that a negligence action to recover for damage caused by water leaks in certain air conditioning equipment was barred for failure to assert it as a compulsory counterclaim in the earlier suit to recover on the installation contract. 251 So.2d 319 (Fla.App.1971). Relying on Pesce v. Linaido and McDonald Air Conditioning as the applicable Florida law, we affirm the district court's holding that John Cleckner may not sue Republic in a diversity action.

Proceeding to the second level of analysis, we must determine if the addition of Ruth Cleckner as plaintiff or Weber Moving as defendant enables plaintiffs to avoid the bar resulting from the Florida compulsory counterclaim rule. Under Florida law neither appellant appears to have a cause of action against Republic's...