Witthohn v. Federal Insurance , 164 F. App'x 395 ( 2006 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-1378
CHRISTINE WITTHOHN, d/b/a Green Parrot
Enterprises,
Plaintiff - Appellant,
versus
FEDERAL INSURANCE COMPANY, a corporation;
CHUBB & SON, INCORPORATED, a corporation,
Defendants - Appellees.
Appeal from the United States District Court for the Southern
District of West Virginia, at Charleston. John T. Copenhaver, Jr.,
District Judge. (CA-04-848)
Submitted: December 16, 2005 Decided: January 31, 2006
Before WILKINSON and MICHAEL, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Affirmed by unpublished per curiam opinion.
Jeffrey V. Mehalic, LAW OFFICES OF JEFFREY V. MEHALIC, Charleston,
West Virginia, for Appellant. Thomas V. Flaherty, Tammy R. Harvey,
FLAHERTY, SENSABAUGH & BONASSO, PLLC, Charleston, West Virginia,
for Appellees.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Christine Witthohn appeals from the district court’s
order dismissing her complaint under Fed. R. Civ. P. 12(b)(6) on
the basis of res judicata. On appeal, Witthohn contends that the
district court erred by considering documents not referred to in
the complaint without converting the motion to dismiss into a
motion for summary judgment. Witthohn also asserts that her
complaint is not barred by res judicata. We affirm.
In 2002, Christine Witthohn filed suit against EZNET in
West Virginia state court, alleging that EZNET had breached certain
contractual obligations in connection with the creation and
development of Witthohn’s website. In June 2003, the parties
reached a settlement. Pursuant to the settlement, Witthohn
executed a “Settlement Agreement and Release” wherein she
specifically released “any and all claims that were or could have
been asserted” against EZNET and its “insurers and adjusters.”
Thereafter, Witthohn filed a motion to amend her
complaint to assert claims against Appellees, EZNET’s insurers, for
violations of the West Virginia Unfair Trade Practices Act (“UTPA”)
related to their handling of Witthohn’s suit against EZNET. The
state court denied the motion, determining that any amendment of
the complaint would be a “fruitless act” because Witthohn had
released any claim it might have against Appellees in the
settlement agreement. Witthohn’s appeal was denied.
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Witthohn then filed the instant action against Appellees
in West Virginia state court, again raising UTPA claims. Appellees
removed the case to federal court and filed a motion to dismiss
under Fed. R. Civ. P. 12(b)(6) on the grounds that Witthohn’s cause
of action was barred by res judicata and collateral estoppel.
Appellees attached the following to their motion: the settlement
agreement, the state court’s orders denying leave to amend and
dismissing the action, the order of the West Virginia Supreme Court
denying the petition for appeal, and the transcript of the state
court motion hearing. After considering these submissions, the
district court granted the motion to dismiss, finding that the
action was barred by res judicata.
This court reviews a dismissal for failure to state a
claim de novo. Mylan Labs, Inc. v. Matkari, 7 F.3d 1130, 1134 (4th
Cir. 1993). Dismissal under Rule 12(b)(6) is inappropriate unless
it appears beyond doubt that the plaintiff cannot prove any set of
facts to support his or her allegations. Revene v. Charles County
Comm’rs, 882 F.2d 870, 872 (4th Cir. 1989). Ordinarily, a court
may not consider any documents that are outside of the complaint,
or not expressly incorporated therein, unless the motion is
converted into one for summary judgment. Alternative Energy,
Inc. v. St. Paul Fire and Marine Ins. Co., 267 F.3d 30, 33 (1st
Cir. 2001).
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However, there are exceptions to the rule that a court
may not consider any documents outside of the complaint.
Specifically, a court may consider official public records,
documents central to plaintiff’s claim, and documents sufficiently
referred to in the complaint so long as the authenticity of these
documents is not disputed. Alternative Energy, 267 F.3d at 33; see
also Phillips v. LCI Int’l, Inc., 190 F.3d 609, 618 (4th Cir. 1999)
(permitting consideration of extraneous material if such materials
are “integral to and explicitly relied on in the complaint”);
Gasner v. Dinwiddie, 162 F.R.D. 280, 282 (E.D. Va. 1995)
(permitting district court to take judicial notice of public
documents, such as court records, even when the documents are
neither referenced by nor integral to plaintiff’s complaint).
Witthohn marshalls no plausible argument that the state
court records should not have been reviewed on a motion to dismiss.
A district court may clearly take judicial notice of these public
records, and Witthohn does not dispute their authenticity. See
Blue Tree Hotels v. Starwood Hotels & Resorts, 369 F.3d 212, 217
(2d Cir. 2004) (stating that courts “may also look to public
records, including complaints filed in state court, in deciding a
motion to dismiss”). Consideration of the settlement agreement is
a closer question, since it does not appear to have been filed in
the state court action and Witthohn does not explicitly mention it
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in her complaint.1 However, as discussed below, the fact that
Witthohn’s complaint is barred by res judicata is evident from
review of the state court documents, even without consideration of
the settlement agreement. Thus, the issue of the propriety of the
review of the settlement agreement need not be resolved, and the
court’s consideration of the prior judicial record did not convert
Appellees’ motion to dismiss into a motion for summary judgment.
A lawsuit is barred by res judicata when three elements
have been satisfied: (1) there was a prior final adjudication on
the merits; (2) the two actions involve either the same parties or
persons in privity with those parties, and (3) the cause of action
identified for resolution in the subsequent proceedings either is
identical to the cause of action in the first proceeding or is such
that it could have been resolved in the prior action, had it been
presented. Slider v. State Farm Mut. Auto Ins. Co., 557 S.E.2d
883, 887 (W. Va. 2001).2 Witthohn does not dispute that the first
two elements are satisfied; however, she claims that her UTPA
claims raised in the present action are substantially different
1
In her complaint, Witthohn states that the state case was
settled but does not mention a written agreement.
2
The issue of whether Witthohn’s claim is barred by res
judicata is decided by application of West Virginia law. See
Graves v. Associated Transport, Inc., 344 F.2d 894, 896 (4th Cir.
1965) (holding that, when case is presented in federal court solely
on the basis of diversity of citizenship, the rights and
obligations of the parties is governed by state law); Braxton v.
Matthews, 883 F. Supp. 1068 (S.D. W. Va. 1995) (applying West
Virginia law on res judicata).
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than her claims against EZNET and could not have been brought in
that action.
We conclude that Witthohn is focusing on the wrong issue.
The issue is not whether the evidence required to prove Witthohn’s
claims against EZNET is substantially different than that required
to prove her claims against the Appellees. Instead, the question
is whether the current claim is substantially different from the
claim sought to be raised against Appellees in Witthohn’s motion to
amend in state court. That question is easily resolved, because
Witthohn does not dispute that her current complaint and her motion
to amend raise the same cause of action.
The denial of a motion to amend a complaint in one action
is a final judgment on the merits barring the same complaint in a
later action. Professional Mgmt. Assocs. v. KPMG, 345 F.3d 1030,
1032 (8th Cir. 2003). Thus, denial of leave to amend constitutes
res judicata on the merits of the claims which were the subject of
the proposed amended pleading. Id. This is so even when denial of
leave to amend was legally or factually erroneous. Conley v.
Spillers, 301 S.E.2d 216, 219 (W. Va. 1983). The parties do not
dispute that the UTPA claim in the motion to amend is identical to
the UTPA claim raised in the present lawsuit. Thus, the state
court’s denial of leave to amend on the basis of the settlement
agreement bars the filing of the same pleading in this lawsuit.
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Accordingly, the district court properly found the present suit
barred by res judicata.
Thus, we affirm the district court’s order. We dispense
with oral argument because the facts and legal contentions are
adequately presented in the materials before the court and argument
would not aid the decisional process.
AFFIRMED
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