Puckett v. City of Emmett, 16534

• Decision Date: 30 October 1987
• Docket Number: No. 16534,16534
• Citation: 113 Idaho 639,747 P.2d 48
• Parties: Royal Von PUCKETT, Plaintiff-Appellant, v. The CITY OF EMMETT, Idaho, a municipal corporation; Michael John Priest, Emmett City Chief of Police; Dale Olson, Larry Downer, Clarence Mitchell, William Jewell, Tom Hewlett, and Larry Harshfield, Emmett City Council Members, and Rod Morgan, Mayor of the City of Emmett, Idaho, Defendants-Respondents.
• Court: Idaho Supreme Court

Page 48

747 P.2d 48

113 Idaho 639

Royal Von PUCKETT, Plaintiff-Appellant, v. The CITY OF EMMETT, Idaho, a municipal corporation; Michael John Priest, Emmett City Chief of Police; Dale Olson, Larry Downer, Clarence Mitchell, William Jewell, Tom Hewlett, and Larry Harshfield, Emmett City Council Members, and Rod Morgan, Mayor of the City of Emmett, Idaho, Defendants-Respondents.

No. 16534.

Supreme Court of Idaho.

Oct. 30, 1987.

Rehearing Denied Jan. 7, 1988.

Vernon K. Smith, Boise, for plaintiff-appellant.

Quane, Smith, Howard & Hull, Boise, for defendants-respondents. Kathryn A. Sticklen argued.

BISTLINE, Justice.

In April 1979, Puckett, an Emmett police officer, observed a vehicle owned by Audrey and David Rhoton which displayed cancelled license plates. Puckett arrested the Rhotons. In July 1979, the Emmett City Attorney dismissed the charges against the Rhotons.

Two months later, in August 1979, Puckett persuaded the Gem County Prosecutor to file the same charges against the Rhotons. Despite the fact that misdemeanor charges cannot be refiled, Puckett illegally re-arrested the Rhotons on August 19, 1979. On August 20, 1979, the Emmett Chief of Police placed Puckett on informal probation.

The Chief of Police wrote a note stating that Puckett was on probation for six months at the end of which the note would be removed from his personnel file if there had been no problems with Puckett's performance.

The Rhotons filed an action in federal court against the city for the illegal arrest. Puckett was a named defendant, as also was the city. While the Rhotons' suit was pending, the city fired Puckett on June 2, 1980. Puckett sought unemployment compensation and was denied. During his appeal from that denial, the city contends it agreed not to contest the unemployment claim in return for Puckett's waiver of claims against the city. The city stipulated to Puckett's eligibility and his appeal was successful.

Then, in the Rhotons' federal action, ¹ Puckett filed a crossclaim against the city. He alleged sweeping violations of "Title 42, Chapter 21" of the federal statutes. Judge Callister construed that claim liberally to state a claim only under 42 U.S.C. § 1983 for deprivation of due process rights under color of state law. R., p. 386. Prior to termination, Puckett had received no notice, nor was he given a hearing. Puckett prayed for relief including back wages, reinstatement, and elimination from his personnel file of any reference to the disciplinary action against him.

The parties filed cross-motions for summary judgment on Puckett's cross-claim. The case was submitted to the court upon briefs, affidavits, and oral argument. Two days before the court rendered its memorandum decision, Puckett filed a motion to amend his cross-claim to include a state law cause of action. The new claim alleged breach of the settlement agreement entered into during the course of the unemployment compensation proceedings and prayed for damages. It is this non-federal claim, or cause of action, that the City of Emmett seeks to extinguish through application of the doctrine of res judicata.

There is nothing in the record to show that Judge Callister ruled on this motion to amend. His opinion of April 29, 1983 makes no mention of it. Neither does an order of August 12, 1983 that denied Puckett's motion to reconsider. The sole issue at the summary judgment hearing was whether Puckett could prove the elements of a 42 U.S.C. § 1983 action against a municipality under the requirements of Monell v. New York City Dept. of Soc. Serv., 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978). The court found that he could not, and dismissed his claim against the city.

Puckett appealed to the Ninth Circuit on or about September 6, 1983. The day after the Ninth Circuit filed its unpublished memorandum opinion affirming the district court judgment, Puckett refiled his state claim for breach of settlement agreement in our Third Judicial District Court of the State of Idaho, in and for Gem County. His complaint joined the chief of police, mayor and council members as defendants.

The appeal taken to the Ninth Circuit did not include Judge Callister's failure to rule on Puckett's motion to amend. The opinion of the circuit panel stated briefly: "Breach of the settlement agreement is not an issue before this Court.... We do not address whether Puckett has a state law remedy for breach of contract against the City of Emmett." R. pp. 714-715.

The sole issue before Judge Goff, and on appeal, is whether the federal court decision which dismissed Puckett's federal claim pursuant to a motion for summary judgment, bars Puckett from asserting his state cause of action in state court. The able Third District judge, in a well-structured and thoughtful opinion, held that all elements of the doctrine of res judicata were satisfied and granted defendants' motion to dismiss.

However, the district court failed to fully explore this case in the federal law context of pendent jurisdiction ² and did not properly apply the guidelines set out in United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966). For reasons discussed below, we must reverse and remand to the Third District Court for further proceedings.

This case requires us to examine the interplay between the concepts of res judicata and pendent jurisdiction. Res judicata is a judicially created doctrine. There is nothing in the U.S. Constitution, nor in our federal statutes, that requires state courts to give full faith and credit, and the preclusive effect of res judicata, to federal court judgments. See Ronan E. Degnan, "Federalized Res Judicata," 85 Yale Law Journal, 741, 755 (1976).

Res judicata, or claim preclusion, denotes that a valid, final judgment by a prior court, between the same parties or their privies, concludes the litigation as to all matters that were or should have been litigated in the first action. Joyce v. Murphy Land & Irrigation Co., 35 Idaho 549, 553, 208 P. 241, 242-43 (1922). The existence of a judgment by a prior court between the same parties or privies is not here at issue. The question we address today is whether Puckett's state law claim of breach of settlement agreement, raised by Puckett in federal court by means of a motion to amend his complaint, was a matter which was or should have been litigated in the federal court action.

At this point the analysis becomes and remains an examination of the effect of federal pendent jurisdiction upon the doctrine of res judicata. The Restatement (Second) of Judgments (1982) has been cited with approval by this Court in Houser v. Southern Idaho Pipe & Steel, Inc., 103 Idaho 441, 446, 649 P.2d 1197, 1202 (1982) and Ramseyer v. Ramseyer, 98 Idaho 554, 556, 569 P.2d 358, 360 (1977). In Section 87, the Restatement takes the position based on leading commentators and the better reasoned cases, that "Federal law determines the effects under the rules of res judicata of a judgment of a federal court." Thus, our analysis must rest upon a review of federal case law.

The leading case is United Mine Workers of America v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966). In Gibbs the court reviewed a federal district court decision which allowed a federal question claim and a state claim based on the common law of Tennessee to proceed to a jury verdict and judgment. The court found that the district court did not exceed its discretion in carrying the state claim forward. Id. 86 S.Ct. at 1140.

The Gibbs court analyzed pendent jurisdiction in terms of judicial power and judicial discretion. Federal courts, as courts of limited jurisdiction, have the power to hear a state claim when that claim and the federal one derive from a common nucleus of operative fact:

"... [I]f, ... a plaintiff's claims are such that he would ordinarily be expected to try them all in one judicial proceeding, then ... there is power in federal courts to hear the whole." Id. at 1138.

However, the court viewed the exercise of that power as a matter of judicial discretion, not of plaintiff's right. It delineated guidelines for the application of that discretion as follows:

That power need not be exercised in every case in which it is found to exist. It has consistently been recognized that pendent jurisdiction is a doctrine of discretion, not of plaintiff's right. Its justification lies in considerations of judicial economy, convenience and fairness to litigants; if these are not present a federal court should hesitate to exercise jurisdiction over state claims, even though bound to apply state law to them. [citation omitted]. Needless decisions of state law should be avoided both as a matter of comity and to promote justice between the parties, by procuring for them a surer-footed reading of applicable law. Certainly, if the federal claims are dismissed before trial, even though not insubstantial in a jurisdictional sense, the state claims should be dismissed as well. ³ Similarly, if it appears that the state issues substantially predominate, whether in terms of proof, of the scope of the issues raised, or of the comprehensiveness of the remedy sought, the state claims may be dismissed without prejudice and left for resolution to state tribunals. Id. p. 1139 (emphasis added).

Applying these principles to the facts of Puckett's case, it is clear that the federal district court had the discretionary power to hear his state law claim for breach of a settlement agreement. There was no challenge to the substantiality of his federal question cause of action under 42 U.S.C. § 1983 for denial of due process in the course of his termination. In addition, the state claim shared a common nucleus of operative fact with the federal claim. Both arose out of his termination by the Emmett City Police Chief. The city alleges that it offered to not contest Puckett's claim for unemployment compensation in exchange for Puckett's waiver of any...