Lee v. Rapid City Area School Dist., No. 51-4, Nos. 18683

• Court: Supreme Court of South Dakota
• Writing for the Court: KONENKAMP; MILLER, C.J., SABERS and AMUNDSON, JJ., and WUEST
• Citation: 97 Ed.LawRep. 501,526 N.W.2d 738
• Decision Date: 25 January 1995
• Docket Number: Nos. 18683,18684
• Parties: 97 Ed. Law Rep. 501 Robert L. LEE, Plaintiff and Appellant, v. RAPID CITY AREA SCHOOL DISTRICT, NO. 51-4, Defendant and Appellee.

Page 738

526 N.W.2d 738 97 Ed. Law Rep. 501 Robert L. LEE, Plaintiff and Appellant,
v.
RAPID CITY AREA SCHOOL DISTRICT, NO. 51-4, Defendant and Appellee. Nos. 18683, 18684. Supreme Court of South Dakota. Submitted on Briefs Nov. 30, 1994.
Decided Jan. 25, 1995.

Kenneth E. Jasper, Rapid City, for plaintiff and appellant.

Thomas E. Simmons of Bangs, McCullen, Butler, Foye and Simmons, Rapid City, for defendant and appellee.

KONENKAMP, Justice.

After prevailing in an age discrimination claim in federal court, a retired teacher sought employee contract benefits in state court, but was denied on summary judgment. We affirm.

FACTS

On April 2, 1987 the Rapid City Area School District (School District) notified sixty-five-year-old Robert L. Lee that pursuant to SDCL 13-43-10 it would not renew his teacher's contract for the 1987-88 school year. Lee requested a hearing before the Board of Education. He also filed grievances through his union. While these proceedings were still pending, Lee and the School District reached a settlement. In exchange for Lee's resignation and withdrawal of his grievances, the School District agreed to pay Lee $20,000. Lee signed a settlement agreement dated May 27, 1987 and accepted the $20,000, but refused to sign a release so as to preserve his federal age discrimination claim. Lee filed suit in United States District Court pursuant to the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-634 (ADEA), which resulted in an award of $128,612. Lee v. Rapid City Area School Dist., 981 F.2d 316 (8th Cir.1992). This award took into account the $20,000 settlement.

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On June 24, 1993, Lee started suit in circuit court to recover his early retirement benefits and severance pay. Both sides moved for summary judgment. The School District contended Lee previously recovered these benefits when he accepted the School District's $20,000 settlement; Lee maintained that the $20,000 was paid solely for his resignation and withdrawal of his grievances. The settlement agreement did not itemize the $20,000, but the School District offered an affidavit from its Assistant Superintendent-Business Affairs to prove how it was computed and why the School District agreed to pay it. The trial court declined to consider the affidavit, however, because the language of the settlement agreement was unambiguous and parol evidence would be inadmissible to controvert its terms. SDCL 53-8-5. In its memorandum the trial court wrote:

The plaintiff has received a verdict which awarded him the difference between what he was paid by the school versus what he should have been paid had he not been forcibly retired. Clearly any retirement benefit he was entitled to receive should have, and would have, been deducted from any amount of recovery obtained under the discrimination action. It would constitute double payment and would be patently unfair to require the school to pay an additional sum to cover a loss which already [has] been compensated. The defendant cannot lie in the weeds with an undisclosed claim for recovery, receive monies in judgment on one cause of action and then seek to recover monies on a separate cause of action which would have clearly been considered a set-off to the original claim resolved in Federal Court. Under the circumstances, the matter before this Court is one which could have and should have been presented to the Federal Court for its consideration to insure that a just verdict was rendered by that Court.

The court granted summary judgment against Lee based on res judicata concluding that the federal district court would have taken jurisdiction of Lee's state contract claim had Lee submitted it. The court also summarily denied the School District's request for sanctions. On appeal we address the following issues:

I. Is Lee's action barred by res judicata? If not,

II. Do other grounds exist to justify the trial court's grant of summary judgment?

III. Did the circuit court err in denying the School District's request for sanctions under SDCL 15-6-11?

ANALYSIS

I. Res Judicata and Federal Pendent Jurisdiction

The School District points out that Lee made no claim during the federal proceedings that he was entitled to additional teacher benefits distinct from the $20,000. Lee counters that he was not required to assert such claims in a federal age discrimination suit and that such claim was not in fact considered. The pivotal question is: could Lee have raised his claim for lost benefits in his federal action? Res judicata precludes relitigation of issues previously heard and resolved; it also bars prosecution of claims that could have been raised in the earlier proceeding, even though not actually raised. Wintersteen v. Benning, 513 N.W.2d 920, 921 (S.D.1994); Hogg v. Siebrecht, 464 N.W.2d 209, 211 (S.D.1990). "When a party to litigation fails to develop all of the issues and evidence available in a case, the party is not justified in later trying the omitted issues or facts in a second action based on the same claim." Wintersteen, 513 N.W.2d at 922; Du-Al Mfg. Co. v. Sioux Falls Const. Co., 487 N.W.2d 29 (S.D.1992); Melbourn v. Benham, 292 N.W.2d 335 (S.D.1980).

For reasons of "judicial economy, convenience and fairness to litigants," federal courts may join state and federal claims whenever these claims "derive from a common nucleus of operative fact" and are such that a claimant "would ordinarily be expected to try them all in one judicial proceeding." United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966). Although the Federal Rules of Civil Procedure permit joinder of these claims,...