Cooper v. Glasser

• Decision Date: 26 November 2013
• Docket Number: No. M2012–00344–SC–R11–CV.,M2012–00344–SC–R11–CV.
• Citation: 419 S.W.3d 924
• Court: Tennessee Supreme Court
• Parties: Jeffrey R. COOPER v. Phillip GLASSER et al.

419 S.W.3d 924

Jeffrey R. COOPER

v.Phillip GLASSER et al.

No. M2012–00344–SC–R11–CV.

Supreme Court of Tennessee, at Nashville.

May 31, 2013 Session.

Nov. 26, 2013.

Andrew W. Coffman, Philip K. Lyon, and Richard S. Busch, Nashville, Tennessee, and Neville L. Johnson, Beverly Hills, California, for the appellant, Jeffrey R. Cooper.

Cheyenne K. Kinghorn, Nashville, Tennessee, for the appellees, Phillip Glasser and David Glasser.

Stephen Andrew Lund, Dallas, Texas, for the appellee, Richard Glasser.

OPINION

JANICE M. HOLDER, J., delivered the opinion of the Court, in which GARY R. WADE, C.J., and CORNELIA A. CLARK, WILLIAM C. KOCH, JR., and SHARON G. LEE, JJ., joined.

JANICE M. HOLDER, J.

The plaintiff filed a lawsuit against the defendants in California state court, alleging a number of business-related torts. After one of the defendants moved to dismiss based on a forum selection clause contained in the parties' contract, the plaintiff voluntarily dismissed his California complaint and refiled his action in the United States District Court for the Middle District of Tennessee. In his federal court complaint, the plaintiff invoked federal-question jurisdiction by pleading a number of federal securities law violations. In its discretion, the federal district court exercised supplemental jurisdiction over the plaintiff's state-law claims. One of the defendants moved to dismiss the plaintiff's complaint, arguing that the statute of limitations applicable to the plaintiff's federal securities law claims had expired. Before the federal court could dispose of the motion, the plaintiff voluntarily dismissed his complaint without court approval pursuant to Federal Rule of Civil Procedure 41(a). The plaintiff later filed the present action in the Circuit Court for Davidson County, Tennessee, pleading only three of the state-law claims that formed the basis for his two previously dismissed lawsuits. The defendants moved for summary judgment, alleging that the plaintiff's claims were barred by the plaintiff's second voluntary dismissal in federal court. The trial court granted summary judgment, and the Court of Appeals affirmed. We granted the plaintiff permission to appeal. We conclude that a plaintiff's second voluntary dismissal of supplemental state-law claims filed in federal court does not, under Tennessee law, preclude the plaintiff from later refiling an action based on the same claims in Tennessee state court. We therefore reverse the judgment of the Court of Appeals and remand this case to the trial court for further proceedings.

I. Facts and Procedural History

On June 24, 2010, Jeffrey Cooper filed a lawsuit against Phillip Glasser, Richard Glasser, and David Glasser (“the Glassers”) in the Superior Court for Los Angeles County, California. Mr. Cooper alleged that the Glassers materially misrepresented certain facts to induce him to invest $500,000.00 in the Glassers' start-up movie-production company, HiDef Entertainment, LLC. ¹ Mr. Cooper sought compensatory, declaratory, and injunctive relief for the Glassers' alleged fraud, breach of contract, conversion, promissory estoppel, tortious interference with contractual relations, and violations of California securities law. Before any of the Glassers filed an answer, Richard Glasser moved to dismiss Mr. Cooper's complaint based on a forum selection clause in the parties' contract that limited the appropriate fora to courts sitting in either Williamson or Davidson County, Tennessee. Without opposing the motion, Mr. Cooper voluntarily dismissed his complaint without prejudice on September 15, 2010.

Less than two months after voluntarily dismissing his California state court action, Mr. Cooper filed a complaint in the United States District Court for the Middle District of Tennessee. In addition to the causes of action he pleaded in his first complaint, Mr. Cooper alleged violations of federal and Tennessee securities law. Shortly after receiving the complaint, Phillip Glasser moved to dismiss the federal action on federal statute of limitations grounds. Mr. Cooper, again without opposing the motion, filed a notice of voluntary dismissal on February 15, 2011. SeeFed.R.Civ.P. 41(a)(1)(A)(i) (permitting a plaintiff to dismiss his action without court approval by filing “a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment.”).

On October 5, 2011, Mr. Cooper filed the present lawsuit in the Circuit Court for Davidson County, Tennessee, in which Mr. Cooper alleges only the fraud, promissory estoppel, and breach-of-contract claims that he had previously dismissed in both California and federal court. The Glassers quickly moved for summary judgment, arguing that Mr. Cooper's second voluntary dismissal in federal court precluded him from refiling a lawsuit based on the same claims. SeeFed.R.Civ.P. 41(a)(1)(B) (providing that a plaintiff's notice of dismissal results in a dismissal “without prejudice” unless “the plaintiff previously dismissed any federal—or state-court action based on or including the same claim”). Mr. Cooper, however, argued that his claim was properly filed pursuant to Tennessee's three-dismissal rule. SeeTenn. R. Civ. P. 41.01(2) (stating that “a notice of dismissal operates as an adjudication upon the merits when filed by a plaintiff who has twice dismissed in any court an action based on or including the same claim.”).² The trial court ultimately determined that Federal Rule of Civil Procedure 41(a)(1)(B) governed the claim-preclusive effect of Mr. Cooper's notice of voluntary dismissal.³ The trial court therefore granted the Glassers' motion for summary judgment, which the Court of Appeals affirmed. We granted Mr. Cooper permission to appeal.

II. Analysis

This case is on appeal following the trial court's grant of summary judgment. Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Tenn. R. Civ. P. 56.04. Because the parties do not dispute the underlying facts in this case, we are presented with a pure question of law, which we review de novo with no presumption of correctness. Abshure v. Methodist Healthcare–Memphis Hosps., 325 S.W.3d 98, 103 (Tenn.2010); Frye v. Blue Ridge Neuroscience Ctr., P.C., 70 S.W.3d 710, 712 (Tenn.2002).

Mr. Cooper argues that Tennessee's claim-preclusion law governs his ability to refile the present action in Tennessee state court. The Glassers, however, maintain that federal claim-preclusion law is binding on our courts because the federal district court exercised federal-question jurisdiction over Mr. Cooper's lawsuit. We must therefore determine whether a plaintiff's second voluntary dismissal of supplemental state-law claims filed in federal court precludes the plaintiff from later refiling an action based on the same state-law claims in Tennessee state court.

Because this is an issue of first impression, we find it helpful to examine the approaches taken by other jurisdictions. Our research reveals, however, that only Georgia has examined the issue presented in this case. In Austin v. Coca–Cola Co., 217 Ga.App. 621, 458 S.E.2d 409 (1995), the plaintiffs filed suit against several defendants on two separate occasions in a Texas state court for the same business-related claims. On both occasions, the defendants removed the action to federal court, and the plaintiffs voluntarily dismissed their complaints without court approval. Austin, 458 S.E.2d at 411. The plaintiffs later filed another complaint in a Georgia state court in reliance on Georgia's voluntary dismissal statute, which at the time permitted a plaintiff to refile a lawsuit after two voluntary dismissals. SeeGa.Code. Ann. § 9–11–41(a)(3) (1995).⁴ The defendants moved for summary judgment, contending that the plaintiffs' claims were precluded by the plaintiffs' second voluntary dismissal in federal court. Austin, 458 S.E.2d at 410.

Without explaining whether Georgia law or federal law controlled, the Georgia Court of Appeals determined that the plaintiffs' claims were resolved “on the merits” in federal court and were therefore barred. Austin, 458 S.E.2d at 411. The Georgia Court of Appeals' brief analysis in Austin provides little assistance in resolving the issue in this case. Moreover, Austin preceded the United States Supreme Court's decision in Semtek International Inc. v. Lockheed Martin Corp., in which the Court held that a federal district court exercising diversity jurisdiction should apply the claim-preclusion law of the state “in which the federal court sits.” 531 U.S. 497, 508, 121 S.Ct. 1021, 149 L.Ed.2d 32 (2001).

In Semtek, the plaintiff filed suit against the defendant in a California state court alleging a number of business torts. 531 U.S. at 499, 121 S.Ct. 1021. After removing the case to federal court under the diversity-of-citizenship statute, 28 U.S.C. §§ 1332, 1441 (2013), the defendant moved to dismiss the plaintiff's claims because California's two-year statute of limitations had expired. Semtek, 531 U.S. at 499, 121 S.Ct. 1021. The federal district court granted the motion and entered an order dismissing the plaintiff's claims “in their entirety[,] on the merits[,] and with prejudice.” Id. at 499, 121 S.Ct. 1021 (alterations omitted). Shortly after the federal dismissal, the plaintiff filed a lawsuit in Maryland state court because Maryland state law imposed a three-year statute of limitations on the plaintiff's underlying claims. Id. The defendant moved for summary judgment, arguing that the involuntarydismissal in federal court barred the plaintiff from refiling in any court for the same claims. Id. at 500, 121 S.Ct. 1021. The Maryland trial court granted summary judgment, and the Maryland Court of Special Appeals affirmed. Id. After Maryland's highest court declined review, the United States Supreme Court granted the plaintiff's petition for certiorari. Id.

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