Crooked Creek Properties, Inc. v. Richard Ensley , 380 F. App'x 914 ( 2010 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 09-15988 MAY 28, 2010
Non-Argument Calendar JOHN LEY
________________________ CLERK
D. C. Docket No. 08-01002-CV-N
CROOKED CREEK PROPERTIES, INC.,
a Nevada corporation, whose principle place
of business is located in Bakersfield, California,
Plaintiff-Appellant,
versus
RICHARD ENSLEY, PATRICIA ENSLEY,
ANITA LILES, CHARLES EDMONDSON,
ES CAPITAL, LLC, et al.,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Alabama
_________________________
(May 28, 2010)
Before PRYOR, MARTIN and ANDERSON, Circuit Judges.
PER CURIAM:
Crooked Creek Properties, Inc. (“Crooked Creek”) appeals from the district
court’s order dismissing its amended complaint under Federal Rule of Civil
Procedure 12(b)(6). Asserting that the defendants had improperly taken control of
the Danya Apartments in Autauga County, Alabama, Crooked Creek brought
claims under the Racketeer Influenced and Corrupt Organization Act (“RICO”), 18
U.S.C. §§ 1961–1968, various federal criminal statutes, and state law. The district
court found that Crooked Creek’s claims were foreclosed by the doctrine of res
judicata, because these claims had previously been adjudicated by the Autauga
County Circuit Court.1 We affirm.
We review the grant of a motion to dismiss under Rule 12(b)(6) de novo,
accepting the allegations in the complaint as true and construing them in the light
most favorable to the plaintiff. Swann v. S. Health Partners, Inc., 388 F.3d 834,
836 (11th Cir. 2004). “The district court’s application of res judicata is a question
of law which is reviewed de novo.” Griswold v. County of Hillsborough, 598 F.3d
1289, 1292 (11th Cir. 2010).
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The district court also determined that (1) no private cause of action existed for the
claims alleging violations of federal and state criminal statutes, and (2) Crooked Creek failed to
state a RICO claim against Charles Edmondson, because the allegations focused solely on his
provision of legal services to the other defendants. Crooked Creek has not challenged these
aspects of the district court’s ruling, and we therefore deem these claims abandoned. See Access
Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1330 (11th Cir. 2004) (“[T]he law is by now well
settled in this Circuit that a legal claim or argument that has not been briefed before the court is
deemed abandoned and its merits will not be addressed.”).
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“When we are considering whether to give res judicata effect to a state court
judgment, we ‘must apply the res judicata principles of the law of the state whose
decision is set up as a bar to further litigation.’” Green v. Jefferson County
Comm’n, 563 F.3d 1243, 1252 (11th Cir. 2009) (quoting Kizzire v. Baptist Health
Sys., Inc., 441 F.3d 1306, 1308–09 (11th Cir. 2006)). Accordingly, in this case,
Alabama’s res judicata principles apply. Under Alabama law, “[t]he elements of
res judicata, or claim preclusion, are (1) a prior judgment on the merits, (2)
rendered by a court of competent jurisdiction, (3) with substantial identity of the
parties, and (4) with the same cause of action presented in both suits.” Dairyland
Ins. Co. v. Jackson, 566 So. 2d 723, 725 (Ala. 1990). “‘If those four elements are
present, then any claim that was, or that could have been, adjudicated in the prior
action is barred from further litigation.’” Chapman Nursing Home, Inc. v.
McDonald, 985 So. 2d 914, 919 (Ala. 2007) (quoting Equity Res. Mgmt., Inc. v.
Vinson, 723 So. 2d 634, 636 (Ala. 1998)).
The district court found each element of res judicata satisfied. On appeal,
Crooked Creek does not contest the district court’s findings with respect to the first
or third elements. It does, however, assert that the second element was not met
because the Autauga Court lacked subject-matter jurisdiction to enter its judgment.
Crooked Creek next disputes the existence of the fourth element, contending that
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the causes of action were different because the defendants’ illegal conduct
occurred after the entry of the Autauga Court judgment in 2006. Finally, Crooked
Creek asserts that the Autauga Court judgment is void for want of due process
because issues relating to the validity of Richard Ensley’s employment contract
should have been decided by a jury. None of Crooked Creek’s arguments are
persuasive.
First, Crooked Creek is incorrect in asserting that the Autauga Court
judgment is void for lack of subject-matter jurisdiction. Although Crooked Creek
argues that the Autauga Court judgment was an impermissible collateral attack on
a consent order entered by a different state court, it was Crooked Creek’s
predecessor in interest that initiated the Autauga Court litigation in order to
establish the priorities of the parties’ claims to the Danya Apartments. In
Alabama, an action to determine the validity of title to real estate “must be
commenced where the land is situated,” which in this case is Autauga County. Ex
parte Pratt, 514 So. 2d 947, 949 (Ala. 1987). An action to quiet title, such as the
one brought by Crooked Creek’s predecessor in interest, gives the circuit court
jurisdiction “‘to determine and settle [title] as between the [plaintiff] and the
defendants.’” Woodland Grove Baptist Church v. Woodland Grove Cmty.
Cemetery Ass’n, 947 So. 2d 1031, 1036 (Ala. 2006) (alteration in original)
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(quoting Dake v. Inglis, 194 So. 673, 674 (Ala. 1940)). And “[w]hen jurisdiction
has attached the court has a right to decide every question duly presented and
arising on the case.” Fife v. Pioneer Lumber Co., 185 So. 759, 762 (Ala. 1939).
Having lost before the Autauga Court, Crooked Creek is now assailing that
court’s judgment by arguing that the Autauga Court erroneously disregarded a
consent order entered by another Alabama state court. Even if it were true that the
Autauga Court erred, however, this would not mean that the Autauga Court lacked
subject-matter jurisdiction. “‘The simple fact that a court has erroneously applied
the law does not render its judgment void.’” Neal v. Neal, 856 So. 2d 766, 781
(Ala. 2002) (quoting Halstead v. Halstead, 299 So. 2d 300, 301 (Ala. 1974)).
Second, Crooked Creek is incorrect in asserting that res judicata is
inapplicable because the defendants’ wrongful conduct occurred after the Autauga
Court entered its judgment in 2006. Crooked Creek’s amended complaint in this
action does not differentiate between pre- and post-2006 conduct. Rather, it
alleges that the defendants have engaged in ongoing wrongs such as extortion,
trespass, conspiracy, conversion of rental checks, and tortious interference with
Crooked Creek’s business relations. All of these claims rest on the same
underlying theory: that Crooked Creek is the legal owner of the Danya
Apartments. Because ownership of the Danya Apartments was fully litigated and
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decided adverse to Crooked Creek’s predecessor in interest during the Autauga
Court proceeding, Crooked Creek’s present assertions concerning the defendants’
post-2006 conduct do not preclude the application of res judicata in this case. See
Chapman Nursing Home, 985 So. 2d at 921 (“‘Res judicata applies not only to the
exact legal theories advanced in the prior case, but to all legal theories and claims
arising out of the same nucleus of operative facts.’” (quoting Old Republic Ins. Co.
v. Lanier, 790 So. 2d 922, 928 (Ala. 2000))).
Finally, Crooked Creek is incorrect in asserting that the Autauga Court
judgment was void for lack of due process. “It is established by the decisions in
this and in Federal jurisdictions that due process of law means notice, a hearing
according to that notice, and a judgment entered in accordance with such notice
and hearing.” Frahn v. Greyling Realization Corp., 195 So. 758, 761 (Ala. 1940).
Crooked Creek’s predecessor in interest was accorded due process in the Autauga
Court proceedings: she was represented by counsel, filed her own summary
judgment motion, responded to the defendants’ summary judgment motion, and
presented oral argument to the court. Crooked Creek’s argument on appeal—that
it offered sufficient evidence to create a jury issue as to the validity of Ensley’s
employment contract—is nothing more than an attack on the Autauga Court’s
application of the summary judgment standard. As set out above, even an
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erroneous application of law does not render a judgment void for purposes of res
judicata. See Neal, 856 So. 2d at 781.
We agree with the district court that res judicata forecloses Crooked Creek’s
claims. Accordingly, we AFFIRM the district court’s dismissal of Crooked
Creek’s amended complaint.
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