Portillo v. Cunningham

• Decision Date: 06 October 2017
• Docket Number: No. 16-20633.,16-20633.
• Citation: 872 F.3d 728
• Parties: JohnJay PORTILLO, Plaintiff–Appellant, v. Gregory E. CUNNINGHAM; David E. Moore; John Dziedzic; Heliodoro Martinez; Navidad Martinez; Edwin Johnson; Thomas M. Anderson; Joshua M. Murray; Houston Community College System, Defendants–Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

872 F.3d 728

JohnJay PORTILLO, Plaintiff–Appellant,

v.Gregory E. CUNNINGHAM; David E. Moore; John Dziedzic; Heliodoro Martinez; Navidad Martinez; Edwin Johnson; Thomas M. Anderson; Joshua M. Murray; Houston Community College System, Defendants–Appellees.

No. 16-20633.

United States Court of Appeals, Fifth Circuit.

FILED October 6, 2017

Sean Michael Reagan, Leyh, Payne & Mallia, P.L.L.C., Armando Lopez, Esq., Houston, TX, for Plaintiff–Appellant.

Daniel Nicholas Ramirez, Monty & Ramirez, L.L.P., Houston, TX, for Defendants–Appellees.

Before SMITH, OWEN, and HIGGINSON, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

JohnJay Portillo appeals the dismissal of his claims under common law, Texas statutes, and 42 U.S.C. § 1983. He contends that the court erred by dismissing for res judicata, and he challenges the order to pay costs under Federal Rule of Civil Procedure 41(d). We affirm the dismissal and vacate and remand the fee award.

I.

A.

Portillo was a police officer for Houston Community College ("HCC"). In 2010, he approached several of his supervisors, including Chief of Police Gregory Cunningham, about "serious substantive and procedural deficiencies concerning safety in the operation of the HCC police department." Portillo alleges that none of his supervisors addressed the issues, so he wrote a letter to the president of HCC. Shortly thereafter, a newspaper published an article that referenced that letter. Although Portillo claims he did not leak any information, he says Cunningham accused him of doing so.

Several weeks later, Portillo and two other officers, Navidad Martinez and Edwin Johnson, responded to a disturbance call at HCC and discovered that Joshua Murray, a student, had engaged in vandalism. The officers ultimately arrested Murray, and Portillo filed an incident report. Murray later complained to HCC's Board of Trustees that Portillo had profiled him because of his race and had used excessive force. Immediately afterward, Cunningham ordered David Moore to begin an investigation. Portillo claims that the purpose of that investigation was not to review Murray's complaints about profiling or excessive force but instead was to discover whether Portillo had made false statements in his incident report. Portillo asserts that Moore was biased and unfit to be an investigator.

At the beginning of the investigation, Cunningham placed Portillo on administrative leave and ordered him not to engage in any police work during the leave. Thomas Anderson, from the HCC Human Resources Department, also instructed Portillo that he was not permitted to enter any HCC building. Moore's investigation revealed that Portillo had made false statements in the incident report. That finding was based in large part on statements from Johnson and Martinez; Portillo contends that those statements conflict with those officers' supplementary reports after Murray's arrest.

As a result of the investigation, Cunningham fired Portillo. Cunningham also filed a "Separation of License" ("F-5") report with the Texas Commission on Law Enforcement, asking that Portillo's separation be labeled as a dishonorable discharge, which the Commission apparently accepted. Around the same time, Moore, at either Cunningham's or John Dziedzic's direction, "procured" a criminal prosecution of Portillo by making an affidavit stating that Portillo had made false statements in a government record. Portillo was indicted for various offenses but was ultimately found not guilty.

Portillo then petitioned the State Office of Administrative Hearings to change his F-5 report to reflect an honorable discharge. Portillo claims that he cannot find law-enforcement employment with a dishonorable discharge on his record. The administrative judge ordered that the F-5 be changed. Portillo contends that HCC is violating that order by informing potential employers that he was "terminated and is ineligible for rehire."

B.

In January 2015, Portillo filed his first action in Texas state court. He raised various claims under common law and Texas statutes, naming Cunningham, Moore, Dziedzic, Johnson, Heliodoro Martinez, Navidad Martinez, HCC, and several John Does as defendants. A few months later, Portillo nonsuited the case under Texas Rule of Civil Procedure 162.

Several weeks after nonsuiting, Portillo filed a new petition in state court, naming all of the same defendants but adding Anderson and Murray. Portillo raised largely the same claims from his first suit with the addition of constitutional claims: He asserted, under § 1983, that the defendants had violated the First, Fourth, Fifth, and Fourteenth Amendments. In September 2015, the state court dismissed with prejudice all of Portillo's claims, with the exception of his § 1983 claims and his claims against Murray, who had not moved for dismissal. Several months later, Portillo nonsuited the case.

In March 2016, Portillo brought his third action, this time in federal court. He alleged the same claims from state court, minus a Texas statutory claim. He named all of the same defendants. The defendants moved to dismiss on a number of grounds, including res judicata, qualified immunity, and timeliness. The court dismissed for failure to state a claim. The defendants moved for attorneys' fees and costs under Federal Rule of Civil Procedure 41(d). The court granted the motion, ordering Portillo to pay $110,000.

II.

"Dismissal of a complaint for failure to state a claim is reviewed de novo." Gines v. D.R. Horton, Inc. , 699 F.3d 812, 816 (5th Cir. 2012). "The res judicata effect of a prior judgment is a question of law that this court reviews de novo." Test Masters Educ. Servs., Inc. v. Singh , 428 F.3d 559, 571 (5th Cir. 2005).

The parties dispute whether the court dismissed all of the claims as res judicata or merely some of them. Portillo claims the court dismissed everything, including his § 1983 claims, as res judicata. The defendants counter that the court dismissed only the common-law claims as res judicata; they assert that it relied on other reasons to dismiss the § 1983 claims.

Portillo has the better understanding of the record. Though the order of dismissal is nonspecific, stating only that the "case is dismissed with prejudice for failure to state a claim and as rendered,"¹ the record suggests that res judicata was the basis. At the initial conference, the court began by stating, "This case is dismissed as res judicata."² Most of the argument centered on that issue, and the court essentially stated its view that Portillo's claims were precluded. For example, it said,

You have to bring, in one action, all the claims that you could have brought. So if in the first suit you pleaded a whole bunch of legal theories, just full of legal theories, and if you left off the United States Constitution, if you left off interstate conspiracies, they're gone. You cannot replead them.³

At the conference on the defendants' motion for costs—held after the court entered the order of dismissal—the court reiterated its position: "The problem, Mr. Kallinen, is that when Mr. Portillo brings a case and dismisses a case or has it dismissed, it is not what fine points he may have pleaded that are affected, it is the essence of the transaction."

Regardless of the district court's analysis, "[w]e may affirm for any reason supported by the record, even if not relied on by the district court."⁴ Because the court could have dismissed all of the claims as res judicata, we do not reach the parties contentions over the other potential grounds supporting dismissal.

The issue is thus whether, as a matter of law, res judicata was a proper basis for dismissal. Portillo presents two reasons why it was not.⁵ First, he asserts that the defendants did not request dismissal of the § 1983 claim as res judicata; he theorizes that this prevents the court from dismissing on that basis. Second, Portillo contends that res judicata cannot bar his § 1983 claims because the state court dismissed them without prejudice. Each of those theories fails.

A.

As Portillo notes, the defendants did not explicitly ask the court to dismiss the § 1983 claims as precluded. Rather, they pointed out that the common-law claims were res judicata, and they raised other grounds, such as qualified immunity, against the § 1983 claims. But Federal Rule of Procedure 54(c) provides that "final judgment should grant the relief to which each party is entitled, even if the party has not demanded that relief in its pleadings." Portillo acknowledges that rule but asserts that it should not apply because he had insufficient notice of the possibility of res-judicata dismissal.

Rule 54(c) does not permit unrequested relief when it "operate[s] to the prejudice of the opposing party," such as when "relief is finally sought at a [ ] late[ ] stage of the proceedings."⁶ "Conversely, there is no prejudice when all of the elements justifying such relief were fully established before the district court."⁷ Where this court has found relief improper under Rule 54(c), the relief has generally been of a substantially different character from that requested. For example, this court held that injunctive relief was improper where the plaintiff had proceeded through trial seeking only money damages and did not request injunctive relief until after final judgment.⁸ Similarly, this court held that rescission was improper where "the party seeking relief not only failed affirmatively to ask for rescission in his complaint but specifically disavowed any intention of seeking such relief."⁹

This is not a case in which the court ordered substantially different relief to the surprise of the parties. To the contrary, the court repeatedly questioned Portillo's lawyer about the preclusive effect of the state-court judgment, and it specifically addressed the § 1983 claims. Not only did Portillo have every reason to expect that the court might dismiss his § 1983 claims as precluded, but he also presented his arguments why the court should not. In...