Perry v. Globe Auto Recycling et al, 99-1976

• Citation: 227 F.3d 950
• Decision Date: 19 September 2000
• Docket Number: No. 99-1976,99-1976
• Parties: (7th Cir. 2000) Rixson Merle Perry, Plaintiff-Appellant, v. Globe Auto Recycling, Inc., William J. Zuccaro, William M. Zuccaro, Robert Zuccaro, and Daniel Carmin Tarry, Defendants-Appellees
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 950

227 F.3d 950 (7th Cir. 2000)

Rixson Merle Perry, Plaintiff-Appellant, v. Globe Auto Recycling, Inc., William J. Zuccaro, William M. Zuccaro, Robert Zuccaro, and Daniel Carmin Tarry, Defendants-Appellees.

No. 99-1976

In the United States Court of Appeals For the Seventh Circuit

Argued January 4, 2000

Decided September 19, 2000

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 98 C 4092--William T. Hart, Judge.

Before Cudahy, Kanne, and Diane P. Wood, Circuit Judges.

Diane P. Wood, Circuit Judge.

Rixson Perry is a well- known user of this court's services. See Perry v. Sheahan, 207 F.3d 309(7th Cir.2000); Perry v. Sullivan, 207 F.3d 379 (7th Cir. 2000); Perry v. Village of Arlington Heights, 186 F.3d 826 (7th Cir. 1999); Perry v. Pogemiller, 16 F.3d 138 (7th Cir. 1993); and Perry v. Federal Bureau of Investigation, 759 F.2d 1271 (7th Cir. 1985), on rehearing en banc, 781 F.2d 1294 (7th Cir. 1986). The present case arises out of his challenges to the ordinances maintained by the Village of Arlington Heights, Illinois, regarding the seizure of abandoned automobiles. (His standing to pursue some of these claims was at issue in the earlier Arlington Heights litigation, 186 F.3d 826, supra.) In the course of challenging the vehicle seizure ordinances, Perry claimed to have discovered evidence of municipal corruption that prompted him to sue Daniel Tarry, a Village employee, and Globe Auto Recycling (Globe) under the civil RICO provisions, 18 U.S.C. sec. 1964(c).

Perry's own RICO case was dismissed with prejudice and is not now before us. Instead, Perry purchased for $100 the claims of another Arlington Heights resident, Roy Lahucik, and is now pursuing those claims. The district court dismissed the case on the ground that it was barred by claim preclusion. This, we conclude, was error. It is possible that the Lahucik claims may be barred by the RICO statute of limitations, but the record as it now stands is not developed enough for us to make a judgment on that point. We therefore remand the case to the district court for further proceedings.

Perry's crusade against the Arlington Heights vehicle seizure ordinance began on October 27, 1992, when Arlington Heights Code Enforcement Officer Daniel Tarry ordered the seizure of Perry's 1975 Ford LTD. The Village ordinance then permitted seizure of abandoned vehicles without prior notice to the owner of record. In order to get his vehicle back, Perry had to pay certain fees, despite the fact that he was not given the opportunity to have a hearing concerning the validity of the seizure in the first place. Perry sued both the Village and Tarry, claiming that his federal due process rights have been violated by the Village's procedure. The district court agreed, to the extent of granting partial summary judgment in Perry's favor on the question whether the practice was unconstitutional. In the damages phase of the case, however, Perry failed to comply with various discovery requests, and eventually the judge dismissed the action as a sanction.

Down but not out, Perry responded with a number of actions based on the civil provisions of the Racketeer Influenced and Corrupt Organizations Act, more commonly known as RICO. He believed that Tarry and Globe, the company that the Village used to provide towing services, were engaged in a corrupt conspiracy to violate the rights of the hapless individuals who left their cars unattended on the streets of Arlington Heights. This group of cases, exemplified by Perry v. Tarry, No. 96-C-7027, 1997 WL 361453 (N.D. Ill. June 20, 1997), arose out of the seizure of Perry's own car. At least one of the later cases was dismissed on res judicata grounds, and an exasperated district judge ordered that "in any civil litigation commenced by Perry within this circuit against the defendants involved in this motion, the defendants may ignore his filing unless the court explicitly orders them to respond." Perry v. Tarry, No. 96-C-7027, slip op. at 9-10 (N.D. Ill. Apr. 16, 1997).

Determined to right the wrongs he perceived, Perry then went out and paid Roy Lahucik $100 for "all claims, demands, and causes of action of whatever kind and nature" arising out of the seizure and towing of Lahucik's 1984 Chevy Suburban. The assignment was dated July 1, 1998, but the record does not reveal when the Suburban was towed. On July 2, 1998, Perry was back in court, suing in his capacity as Lahucik's assignee, again raising the RICO theory that had failed in his own lawsuits. The district court dismissed in a brief order relying on res judicata. The order stated that "[t]he assignment of the claim does not preclude privity," found that all the requirements for claim preclusion were satisfied, and bounced the case out.

It is impossible to fault the district judge for having the reaction he did to this case. At least with respect to the towing claims, Perry has been an abusive litigant, and it is easy to see why the judge concluded that the expedient of persuading other individuals to assign their claims to him should not be enough to avoid the ban on Perry's own filings. But we are concerned with the breadth of the judge's rationale, which we think would--if generalized--cast doubt on many legitimate assignments that occur every day in the world of civil litigation. There are other ways to control the misuse of judicial processes by a person like Perry, which the court will be free to consider on remand.

The court's claim preclusion rationale properly focused on the three elements of federal claim preclusion: identity of claims, identity of parties, and a prior final judgment on the merits. See, e.g., Roboserve, Inc. v. Kato Kagaku Co., 121 F.3d 1027, 1034 (7th Cir. 1997). The only element at issue here is identity of parties; Perry concedes that the claims were exactly the same (in the sense that they arose out of exactly the same ordinances and procedures used by the Village) and that there was a prior final judgment on the merits in his own case. But what about the parties? Globe argues that if Lahucik himself had brought the present case he too would be claim precluded, because of the "virtual representation" theory, but that is wrong. Indeed, one of the cases on which Globe relies is the district court's opinion in Tice v. American Airlines, Inc., 959 F. Supp. 928 (N.D. Ill. 1997), which this court later reversed in Tice v. American Airlines, Inc., 162 F.3d 966 (7th Cir. 1998), expressly finding that the idea of "virtual representation" cannot override an individual's right to his own day in court unless the facts show a strong reason why the first litigant was, in effect, a real representative (not a virtual one) of the second. See also DeBraska v. City of Milwaukee, 189 F.3d 650, 653 (7th Cir. 1999) (noting that this circuit takes a "dim view of preclusion by virtual representation in suits other than class actions"). Perry was not Lahucik's representative in any sense of the term, and thus Lahucik would have been fully entitled to bring the present litigation on his own.

The question thus becomes whether Lahucik's decision to assign his claim to Perry transforms the claim from one that could be brought to one that is barred by Perry's earlier unsuccessful efforts. We see no reason why this should be so. Indeed, it is routine for institutions like banks or insurance companies to take assignments of large numbers of claims arising out of a single transaction or occurrence, and given the vagaries of litigation they undoubtedly win some and lose some. The more common problem arises when the assignor tries to evade claim preclusion by selling the claim to another party; in that situation, the district court's statement that assignment does not prevent a finding of privity is certainly true. As the Supreme Court put it long ago in Postal Telegraph Cable Co. v. City of Newport, 247 U.S. 464, 474-75 (1918), "[t]he ground upon which, and upon which alone, a judgment against a prior owner is held conclusive against his successor in interest, is that the estoppel runs with the property, that the grantor can transfer no better right or title than he himself has."

But we have the opposite situation here. The applicable rule is therefore the one holding that "the assignee stands in the shoes of the assignor and assumes the same rights, title and interest possessed by the assignor." Plumb v. Fluid Pump Service, Inc., 124 F.3d 849, 864 (7th Cir. 1997) (internal quotation marks and citations omitted). So, even though Perry could receive no more than Lahucik had, it is also true that he received no less. Since Lahucik had the right to bring his own claim, that is what he conveyed to Perry in the assignment. See also Kane v. Magna Mixer Co., 71 F.3d 555, 563 (6th Cir. 1995) (holding that assignee is bound by assignor's waiver); Rhode Island Hospital Trust...