Snell v. Mayor and City Council of Havre de Grace

• Decision Date: 25 January 1988
• Docket Number: No. 87-3010,87-3010
• Citation: 837 F.2d 173
• Parties: Ernest SNELL, Plaintiff-Appellant, v. MAYOR AND CITY COUNCIL OF HAVRE de GRACE, a Municipal Corporation of the State of Maryland; Charles D. Montgomery, Mayor; John Correri, Jr.; Frank Hertsch, Esq., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 173

837 F.2d 173

Ernest SNELL, Plaintiff-Appellant, v. MAYOR AND CITY COUNCIL OF HAVRE de GRACE, a Municipal Corporation of the State of Maryland; Charles D Montgomery, Mayor; John Correri, Jr. Frank Hertsch, Esq. Defendants-Appellees.

No. 87-3010.

United States Court of Appeals Fourth Circuit.

Argued Dec. 3, 1987.

Decided Jan. 25, 1988.

Mercedes Casado Samborsky, Joppatowne, Md., for plaintiff-appellant.

Daniel J. Moore (Semmes, Bowen & Semmes, Baltimore, Md., on brief), for defendants-appellees.

Before PHILLIPS, CHAPMAN, and WILKINSON, Circuit Judges.

JAMES DICKSON PHILLIPS, Circuit Judge:

Ernest Snell appeals from an adverse summary judgment in his civil rights action against the mayor and members of the city council of Havre de Grace growing out of the City's termination of Snell's lease of municipal property. Concluding that the district court properly found Snell's action barred by res judicata, we affirm.

I

In 1976, Snell and the Town of Havre de Grace, Maryland, entered into a lease agreement which gave Snell the exclusive use of the gasoline pier and concession area at the Tyding's Park Marina. Under the terms of the lease, Snell was to operate "a concession at the city-owned gas pier for the sale of gasoline, diesel fuel, motor oil, and boat and fishing supplies." The lease required Snell to submit, as a condition precedent to its effectiveness, a performance bond and a certificate of insurance; in addition, it required him to pay all water and sewage charges in the off-season months. The City retained the right to terminate the lease if Snell breached any of these covenants.

For several years, Snell's fuel business was limited to sales to boats docking at the pier. In April of 1976, however, he began to peddle gas to automobiles as well. At that point, his relations with the City began to deteriorate. On November 6, 1979, following a heated exchange of correspondence, the City notified Snell that it was terminating his lease because of his failure to pay water and sewage bills or to furnish the required certificate of insurance and performance bond. Though he protested that the City's action was itself a violation of the terms of the lease, Snell vacated the premises voluntarily, before the City could bring an action in ejectment.

In December of 1979, Snell brought suit in Maryland state court against the Mayor and City Council of Havre de Grace, asserting claims of trespass, breach of contract, and defamation. In Count I Snell alleged that the City had committed a trespass by coming on the leasehold property and posting a sign announcing that gas would be sold only to boats. In Count II, he alleged that the City had breached the lease's covenant of quiet enjoyment by permitting a disco to be operated next door to his business. In Count III, he claimed that the City had defamed him by publishing false statements about his alleged noncompliance with the terms of the lease.

The state trial judge directed a verdict for the defendants on the breach of contract claim and submitted the rest of the case to the jury. The jury returned a verdict for Snell on both the trespass and defamation counts, but the judge granted the defendants' motion for judgment notwithstanding the verdict. Snell appealed to the Maryland Court of Special Appeals, which affirmed in an unpublished per curiam opinion. The Maryland Court of Appeals denied Snell's petition for a writ of certiorari.

In August of 1980, while the state court action was pending for trial, Snell filed this federal civil rights action against the same defendants. The factual allegations contained in the federal complaint were virtually identical to those in the state complaint, with one exception: the former contained the additional allegation that the defendants' actions had been motivated by racial animosity and discrimination against Snell, who is black. The theory of recovery asserted in the federal complaint was also different from that in the earlier action: the federal complaint alleged that by trespassing on his property, permitting a disco to operate nearby, and making defamatory comments about his non-compliance with the terms of the lease, the defendants had deprived him of property without due process of law and denied him the equal protection of the laws, in violation of his rights under the fourteenth amendment and 42 U.S.C. Secs. 1981, 1982, 1983, 1985(3), and 1988. The complaint also asserted a pendent state claim of tortious interference with contract and with business advantage, based on the same facts.

After final judgment was entered in the state court action, the defendants moved for summary judgment in the federal action, asserting the bar of res judicata. Snell responded by filing a second suit in federal court against the defendants, which was later consolidated with the earlier action. In his second federal complaint, Snell claimed that the defendants had wrongfully terminated his lease, without just cause or proper notice and for racially discriminatory reasons, in violation of his rights under the fourteenth amendment and 42 U.S.C. Secs. 1981, 1982, 1983, and 1988. The second federal complaint was markedly different than its predecessors. Instead of focussing on the sign posting, the disco, and the allegedly defamatory statements, which preceded the formal termination of the lease, this complaint focused exclusively on the formal termination. Snell alleged that he had in fact paid all his water and sewer bills; that he had furnished a certificate of insurance; and that, while he had not furnished a performance bond, the city had never required a white lessee to furnish such a bond, nor had it ever terminated a white lessee's lease for failure to do so.

In April of 1983, the defendants renewed their motion for summary judgment in the federal action, claiming once again that Snell's claims were barred by the judgment in the state court action. The district court granted the defendants' motion for summary judgment on all claims. This appeal followed.

II

The full faith and credit clause of article IV, as implemented by 28 U.S.C. Sec. 1738 (1948), requires federal courts to give state court judgments the same preclusive effect as those judgments would be accorded by a court in the rendering state. Kremer v. Chemical Construction Corp., 456 U.S. 461, 466, 102 S.Ct. 1883, 1889, 72 L.Ed.2d 262 (1982). This principle applies to federal civil rights actions following state court actions. Migra v. Warren City School District Bd. of Educ., 465 U.S. 75, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984) (federal action under 42 U.S.C. Sec. 1983). We must therefore look to the law of the State of Maryland, in whose courts Snell first sought relief against these defendants, to determine whether this action is barred. Mears v. Town of Oxford, 762 F.2d 368, 371 (4th Cir.1985).

Under Maryland law, as generally, there are three requirements for the application of claim preclusion. First, there must have been a final judgment on the merits in the earlier litigation. Second, there must be an identity of parties or their privies. Third, the causes of action in the successive actions must be the same. Alvey v. Alvey, 225 Md. 386, 171 A.2d 92, 94 (1961). In this case, it is undisputed that the first two conditions for the application of res judicata are met; the only question, therefore, is whether this federal action is based on the same "cause of action" as the earlier state court suit.

To determine whether two suits involve the same "cause of action," for res judicata purposes, Maryland courts have traditionally applied the so-called "same evidence" test. MPC, Inc. v. Kenny, 279 Md. 29, 367 A.2d 486, 489 (1977). Under this test, as stated, the second suit is barred if the evidence necessary to support a verdict for the plaintiff in it would have been sufficient to sustain a judgment for him in the first suit. Klein v. Whitehead, 40 Md.App. 1, 389 A.2d 374, 384 (1978).

In its literal formulation, this test could dictate a fairly narrow approach to claim preclusion. The Maryland courts' actual applications, however, have been decidedly pragmatic rather than technical, with "claim" being construed more broadly than the test might seem to imply. Thus, the Maryland courts have emphasized, for example, that so long as the subject matter of the two suits is substantially the same, a plaintiff cannot avoid the bar of res judicata simply by changing the theory of recovery or seeking a different remedy. See Mettee v. Boone, 251 Md. 332, 247 A.2d 390, 395 (1968) ("the same facts, having once been used, without success, in pursuit of one conclusion, cannot, under another label, still be used to obtain a different conclusion"); see also Alvey, 171 A.2d at 93-94. A recent decision of this court, Kutzik v. Young, 730 F.2d 149 (4th Cir.1984), applying Maryland law, illustrates application of this broad reading. In Kutzik, a visiting professor brought an action in Maryland state court against the University of Maryland and several of its officials, seeking damages for the defendants' refusal to renew his appointment. When the state court dismissed his suit on the ground of sovereign immunity, the plaintiff filed a Sec. 1983 action in federal court, alleging that, in failing to renew his contract, the state defendants...