Title: Holzemer v. Urbanski

State: ohio

Issuer: Ohio Supreme Court

Document:

HOLZEMER, APPELLEE, v. URBANSKI ET AL., APPELLANTS. 
[Cite as Holzemer v. Urbanski (1999), 86 Ohio St.3d 129.] 
Constitutional law — Full faith and credit doctrine requires that Ohio give to those 
acts, records, and judicial proceedings of another state the same faith and 
credit as they have by law or usage in the courts of the state from which they 
are taken — Section 1738, Title 28, U.S.Code, and Section 1, Article IV, 
United States Constitution, applied. 
The doctrine of full faith and credit requires that the state of Ohio give to those 
acts, records, and judicial proceedings of another state the same faith and 
credit as they have by law or usage in the courts of the state from which they 
are taken.  (Section 1738, Title 28, U.S.Code, and Section 1, Article IV, 
United States Constitution, applied.) 
(No. 98-1291 — Submitted April 14, 1999 — Decided July 28, 1999.) 
APPEAL from the Court of Appeals for Lucas County, No. L-97-1257. 
 
Shortly before his death, William A. Urbanski (“decedent”) revised his 
estate plan so that many of his assets were placed into a newly created revocable 
trust.  His sons, defendants-appellants William G. Urbanski and Jordan S. 
Urbanski, were named as the beneficiaries of the bulk of the property in the trust.  
Decedent’s daughter, plaintiff-appellee Monica Holzemer, was also a beneficiary 
of the trust, but was not named as a beneficiary of most of the property that made 
up the trust corpus. 
 
Decedent died on March 3, 1995, leaving a will that treated the three 
children equally.  However, because most of decedent’s property was not to pass 
through the will, but was to pass through the trust described above, decedent’s 
estate plan allocated to Holzemer a much smaller percentage of her father’s 
property than it did to her brothers. 
2 
 
On April 25, 1995, decedent’s attorney and personal representative, 
defendant-appellant David A. Nowicki, filed a “Petition for Commencement of 
[Independent] Proceedings” in Lenawee County, Michigan, Probate Court, 
asserting that decedent was a resident of that county, and requesting that the will be 
admitted to probate and that administration be granted to him.  By filing for 
independent probate proceedings, Nowicki chose to utilize a Michigan statutory 
procedure whereby he, the personal representative, could administer the estate 
without court supervision or approval.  See Mich.Comp.Laws Ann. 700.357. 
 
Holzemer undisputedly received notice of the Michigan probate proceedings 
from Nowicki and did not respond to the notice.  On October 4, 1995, Nowicki 
filed with the Lenawee County Probate Court a “closing statement” for the 
independent probate, indicating that the estate had been fully administered and that 
there were “[n]o exceptions.”  On November 6, 1995, a deputy register of the 
probate court issued a “certificate of completion,” indicating that Nowicki “appears 
to have fully administered the estate.” 
 
On March 4, 1996, Holzemer filed a complaint in the Court of Common 
Pleas of Lucas County, claiming, inter alia, that the trust drawn up shortly before 
decedent’s death was invalid.  In her complaint, Holzemer alleged that, prior to the 
revision made shortly before decedent’s death, decedent’s estate plan had 
essentially treated the three children equally.  Holzemer detailed the circumstances 
under which decedent had earlier created an “irrevocable” trust and had issued 
deeds to the three children to actually pass real property owned by him to them.  
Holzemer further detailed that decedent, through Nowicki, had requested the deeds 
back from the children, that Holzemer had surrendered her deed, and that decedent 
had then accomplished the revisions to his estate plan with which Holzemer takes 
issue. 
3 
 
Holzemer claimed that the revisions to the estate plan were accomplished in 
circumstances involving incompetency of the decedent, undue influence, fraud, 
mistake, and duress.  She alleged that defendants were liable, inter alia, for 
conversion for depriving her of the right to receive one-third of decedent’s assets.  
Holzemer asked that a constructive trust be imposed for her benefit over one-third 
of decedent’s assets, and also asked for further relief. 
 
In response to the complaint, defendants filed motions to dismiss and 
memoranda, arguing that the completed Michigan independent probate proceeding 
was entitled to full faith and credit in Ohio courts.  Defendants contended that the 
Ohio trial court lacked jurisdiction over Holzemer’s claims because the claims 
could have been raised in the Michigan probate proceedings had Holzemer taken 
advantage of the opportunity provided by Michigan law to convert the independent 
proceedings into proceedings supervised by the court.  Holzemer urged in 
opposition that defendants’ motions to dismiss were actually based on res judicata 
arguments that procedurally could not be raised in a motion to dismiss.  She further 
contended that she was not challenging the terms of the will, but instead was 
challenging the validity of the acts of decedent, and of defendants, concerning the 
substitution of the second trust for the earlier one.  She asserted that since she had 
had no dispute with the distributions made under the will, she should not be 
foreclosed from raising her claims.  The trial court granted defendants’ motions to 
dismiss. 
 
On appeal, the Court of Appeals for Lucas County reversed the judgment of 
the trial court and remanded the cause.  The court of appeals held (1) that the trial 
court did not lack subject-matter jurisdiction over Holzemer’s claims, (2) that the 
essence of defendants’ full faith and credit argument actually relied on res judicata 
grounds for purposes of foreclosing Holzemer’s claims for relief in this situation, 
4 
and (3) that res judicata is an affirmative defense that cannot be raised in a motion 
to dismiss. 
 
Upon remand, defendants filed motions for summary judgment, arguing that 
res judicata barred Holzemer’s claims because all of those claims could have been, 
or should have been, raised in the Michigan proceeding.  Holzemer responded that 
the Michigan probate court’s certificate of completion was not a “judgment” and 
therefore could not have res judicata effect, and also renewed her earlier 
arguments that res judicata did not bar her claims.  The trial court granted 
summary judgment in favor of defendants. 
 
On appeal, the court of appeals reversed the judgment of the trial court and 
again remanded the cause for further proceedings, holding that the completed 
Michigan probate proceeding was not a res judicata bar to Holzemer’s claims. 
 
This cause is now before this court upon the allowance of a discretionary 
appeal. 
__________________ 
 
Kolb & Heban, Richard Kolb and Kevin A. Heban, for appellee. 
 
Robison, Curphey & O’Connell and Ronald S. Moening; Kroncke, 
D’Arcangelo, Sutter & Furey and Thomas R. Furey, for appellants. 
__________________ 
 
ALICE ROBIE RESNICK, J.  The issue presented is whether, in the 
circumstances of this case, the doctrine of res judicata operates to preclude 
Holzemer from moving forward to litigate the claims set forth in her complaint.  
For the reasons that follow, we determine that Holzemer’s claims are not precluded 
by res judicata and so affirm the judgment of the court of appeals. 
 
Defendants support the trial court’s grant of summary judgment under 
Civ.R. 56, arguing that the trial court correctly found that there is no genuine issue 
of material fact and that they are entitled to judgment as a matter of law.  
5 
Defendants in essence argue that the courts of Ohio must give full faith and credit 
to the Michigan probate proceeding and that under the doctrine of res judicata, 
because Holzemer could have raised her claims in the Michigan proceeding and 
did not, Holzemer is now barred from raising those claims.  To evaluate this 
argument, we must examine the terms of the Full Faith and Credit Clause, consider 
the application of res judicata to the claims, and look to Michigan law to determine 
whether Holzemer should be barred from raising her claims.  The essence of this 
case is whether Holzemer had a mandatory duty to raise her claims in the 
completed Michigan probate proceeding, and whether her failure to raise them at 
that time means that she is unable to raise them now.  We answer these questions 
in the negative. 
 
The Full Faith and Credit Clause, Section 1, Article IV, United States 
Constitution, provides that “Full Faith and Credit shall be given in each State to the 
public Acts, Records, and judicial Proceedings of every other State.  * * * ”  See 
Wyatt v. Wyatt (1992), 65 Ohio St.3d 268, 269, 602 N.E.2d 1166, 1167 (pursuant 
to Full Faith and Credit Clause, Ohio courts must recognize the validity of 
judgments rendered in sister states). 
 
The doctrine of full faith and credit requires that the state of Ohio give to 
these acts, records, and judicial proceedings of another state the same faith and 
credit “as they have by law or usage in the courts of such State  * * * from which 
they are taken.”  See Section 1738, Title 28, U.S.Code.  Thus, Ohio courts must 
give the same “credit” to the Michigan probate proceeding at issue in this case as 
that proceeding would carry in Michigan’s own courts.  See Durfee v. Duke 
(1963), 375 U.S. 106, 109, 84 S.Ct. 242, 244, 11 L.Ed.2d 186, 190. 
 
We must first determine what effect or credit Michigan courts would have 
given to the completed expedited probate proceeding if Holzemer had attempted to 
file in a Michigan court a suit similar to the one she filed in Ohio, and if defendants 
6 
had interposed the completed probate proceeding as a defense to attempt to bar her 
claims.  Then, we must give the completed Michigan probate proceeding the same 
effect or credit in Ohio that it would have carried in that hypothetical suit in 
Michigan.1  See Miller v. Bock Laundry Machine Co. (1980), 64 Ohio St.2d 265, 
266, 18 O.O.3d 455, 456, 416 N.E.2d 620, 622; Titus v. Wallick (1939), 306 U.S. 
282, 287, 59 S.Ct. 557, 560, 83 L.Ed. 653, 657.  If Holzemer would have been 
precluded from litigating her claims in that hypothetical suit in Michigan, then 
under full faith and credit principles, she is precluded from litigating her claims in 
Ohio.  If she would not have been precluded from litigating her claims in that 
hypothetical Michigan suit, then the Full Faith and Credit Clause does not prevent 
her from litigating them in Ohio. 
 
This inquiry implicates the doctrine of res judicata.  Black’s Law Dictionary 
(6 Ed.1990) 1305 gives the traditional definition of res judicata:  “Rule that a final 
judgment rendered by a court of competent jurisdiction on the merits is conclusive 
as to the rights of the parties and their privies, and, as to them, constitutes an 
absolute bar to a subsequent action involving the same claim, demand or cause of 
action.”  See Norwood v. McDonald (1943), 142 Ohio St. 299, 27 O.O. 240, 52 
N.E.2d 67, paragraph one of the syllabus. 
 
The term “res judicata” has several different meanings, depending on the 
context in which the term is used.  Historically in Ohio, res judicata, used in a 
narrow sense (the same sense as in the Black’s definition above), has often been 
synonymous with what in the favored terminology of today is referred to as claim 
preclusion.  This concept has also been identified as the rules of merger and bar.  
In referring to the other major component of the overall concept of former 
adjudication, Ohio courts in the past have frequently used the term “collateral 
estoppel” to describe what in the favored terminology of today is referred to as 
7 
“issue preclusion.”  We are not required to conduct any consideration of issue 
preclusion in the instant case. 
 
Res judicata has also been used in a broad way to include both major aspects 
of former adjudication, encompassing claim preclusion and issue preclusion.  In 
order to give more consistency to the use of terms in this area of the law, the 
accepted modern usage of res judicata falls within this broad sense.  Authorities 
today generally prefer the use of the term “claim preclusion” to refer to what in the 
past has been the narrow use of res judicata, and also prefer the use of the term 
“issue preclusion” to refer to what in the past has been called collateral estoppel.  
See 18 Wright, Miller & Cooper, Federal Practice & Procedure (1981 & 
Supp.1999), Chapter 13, Section 4402, at 6-11. 
 
Thus, in the accepted terminology of today, the type of res judicata at issue 
in this case is referred to as claim preclusion.  In Grava v. Parkman Twp. (1995), 
73 Ohio St.3d 379, 653 N.E.2d 226, this court adopted an expansive view of claim 
preclusion, holding at the syllabus that “[a] valid, final judgment rendered upon the 
merits bars all subsequent actions based upon any claim arising out of the 
transaction or occurrence that was the subject matter of the previous action.”  In 
addition, “an existing final judgment or decree between the parties to litigation is 
conclusive as to all claims which were or might have been litigated in a first 
lawsuit.”  Rogers v. Whitehall (1986), 25 Ohio St.3d 67, 69, 25 OBR 89, 90, 494 
N.E.2d 1387, 1388; Natl. Amusements, Inc. v. Springdale (1990), 53 Ohio St.3d 
60, 62, 558 N.E.2d 1178, 1180; Grava, 73 Ohio St.3d at 382, 653 N.E.2d at 229.2 
 
However, in our full faith and credit inquiry in this case, Ohio’s views on res 
judicata do not play a role.  What matters is whether Michigan law would preclude 
Holzemer from raising her claims in the hypothetical suit mentioned above.  See 
Erichson, Interjurisdictional Preclusion (1998), 96 Mich.L.Rev. 945, 949 
(concluding that the preclusion law of the state that rendered the first decision 
8 
should virtually always be applied to determine whether the claims raised in the 
suit filed in the second state should be precluded). See, generally, Lilly, The 
Symmetry of Preclusion (1993), 54 Ohio St.L.J. 289, 290.  Since the way we 
resolve this case does not require us to consider any of the exceptions that could 
call into question the application of Michigan preclusion principles, we apply 
Michigan preclusion law in this case. 
 
Consequently, to the extent that defendants rely on the “might have been 
litigated” phraseology in cases such as Grava and Natl. Amusements to argue their 
res judicata position, defendants’ reliance is misplaced.  Those cases involved the 
question whether a previous proceeding in Ohio precluded a second proceeding in 
Ohio.  Because this case instead involves a previous proceeding in Michigan, we 
do not look to Ohio law to determine if Holzemer’s claims are barred. 
 
Holzemer does concede that she “could have” raised at least some of her 
claims in the Michigan probate proceeding by converting the proceeding to a 
judicially supervised one and then raising her claims, given that the Michigan 
probate court appears to have concurrent jurisdiction to determine issues involving 
trusts.  See Mich.Comp.Laws Ann. 700.22.  However, for the following reasons, 
Holzemer’s concession in that regard is basically irrelevant to our full faith and 
credit inquiry. 
 
At this point, it is important to recognize a key facet of Holzemer’s suit, a 
facet that is crucial in our consideration of Michigan law.  Holzemer does not 
challenge the distribution of assets under the will.  Instead, she challenges the 
creation of the trust accomplished shortly before decedent’s death.  She also 
challenges the attempted termination of the earlier “irrevocable” trust, as well as 
the circumstances surrounding her surrender of the deed that she had received at 
the time the earlier trust was created. 
9 
 
If Holzemer were challenging the distribution of assets under the will, 
general Michigan principles of res judicata would very likely be relevant to 
determine whether her claims would be precluded in the hypothetical Michigan 
suit.  (Michigan courts take a “broad” view of claim preclusion.  See Gose v. 
Monroe Auto Equip. Co. [1980], 409 Mich. 147, 160-161, 294 N.W.2d 165, 167-
168.)  In that situation, questions such as whether she was required to convert the 
proceeding to a judicially supervised one and whether she was required to object to 
the distributions under the will may have had to be answered, as threshold 
questions, before a determination could have been made whether Michigan 
principles of res judicata would prevent her from litigating her claims.  In that 
situation, too, her other arguments regarding the limited scope of the completed 
Michigan proceeding would appear to be relevant. 
 
However, we do not need to consider these or other threshold questions, or 
to delve deeply into Michigan res judicata principles, to resolve our inquiry.  The 
answer is more fundamental and specific than that.  Based on specific Michigan 
law, we can dispense with a consideration of other res judicata factors and focus 
directly on the factor that resolves this case. 
 
Michigan precedents indicate that Michigan allows a challenge to a trust 
created by one who later dies to proceed, even where the decedent’s will has been 
completely and finally probated.  See Vanderlinde v. Bankers’ Trust Co. of 
Muskegon (1935), 270 Mich. 599, 604, 259 N.W. 337, 338.  Moreover, in 
Michigan, an heir or distributee can maintain an action pertaining to property not 
mentioned or accounted for in an estate proceeding after the estate has been closed.  
See Powell v. Pennock (1914), 181 Mich. 588, 593, 148 N.W. 430, 431.  
Furthermore, in Michigan, the right of action to set aside a fraudulent inter vivos 
conveyance of real property belongs to the heirs or devisees and not to the 
decedent’s personal representative.  Union Trust Co. v. Kirchberg (1913), 174 
10 
Mich. 161, 165-166, 140 N.W. 464, 466.  Defendants have not pointed out any 
Michigan precedents that call into question the holdings of these cases. 
 
Michigan law thus treats the substance of Holzemer’s claims in this case as 
fundamentally different from claims that would be put forth in a challenge to the 
will.  In res judicata terminology, Holzemer’s hypothetical Michigan suit would 
involve “claims, demands or causes of action” separate from those in the 
completed probate proceeding.  Thus, her claims would not be barred in that 
hypothetical Michigan suit. 
 
In addition, we agree with the court of appeals below that Holzemer’s claims 
were not compulsory counterclaims in the Michigan probate proceeding.  We are 
cognizant that Holzemer never was a “party” in the Michigan independent probate 
proceeding and also that Holzemer never really had a “claim” advanced against her 
in that proceeding.  It would seem that “counterclaims” can by definition be raised 
only by parties who have first had claims advanced against them.  For Holzemer’s 
claims to have been considered compulsory counterclaims in that completed 
probate proceeding, it would have to be found that she was under an obligation to 
become involved in the proceeding, that she was under an obligation to have 
converted the proceeding to a judicially supervised one, that she was required to 
challenge the trust in that proceeding, and that she could legitimately be considered 
to be in the position of a defendant in that probate proceeding.  The entire inquiry 
becomes more and more speculative as each step must be satisfied before 
proceeding to the next one.  Furthermore, in light of the Michigan precedents 
detailed above, her challenge to the trust, in these circumstances, is viewed as 
separate from any challenge to the distributions under the will, so that there was no 
need for her to raise her claims as counterclaims in the Michigan probate 
proceeding. 
11 
 
Moreover, even if we were willing to assume that she was in the “position of 
a defendant” in the completed Michigan probate proceeding, her claims still would 
not have been compulsory counterclaims in that proceeding.  Michigan Court Rule 
2.203(A)(1) provides that once a defendant advances a claim against an opposing 
party, all claims arising out of the same transaction or occurrence are compulsory 
counterclaims.  Michigan’s court rule on compulsory counterclaims is unique 
among the fifty states.  See Oakley & Coon, The Federal Rules in State Courts:  A 
Survey of State Court Systems of Civil Procedure (1986), 61 Wash.L.Rev. 1367, 
1403 (Michigan has no compulsory counterclaim rule similar to Fed.R.Civ.P. 
13[A].). 
 
Under Michigan Court Rule 2.203(A)(1), “[n]o counterclaims are 
compulsory initially, but if a counterclaim is asserted, then the counterclaim 
pleader must join all other claims that arise out of the same transaction or 
occurrence as the original action.”  Erichson, supra, 96 Mich.L.Rev. at 977-978.  
See, also, Bank of the Commonwealth v. Hulett (1978), 82 Mich.App. 442, 444, 
266 N.W.2d 841 (A counterclaim in Michigan is compulsory only when a previous 
counterclaim has been raised.).  Because Holzemer obviously never raised an 
initial counterclaim in the Michigan probate proceeding, none of her claims can be 
considered to have been compulsory counterclaims there, and she would have the 
option of raising her claims in a separate suit, even if she could be considered to 
have been a “defendant” in the probate proceeding. 
 
In light of all the above considerations, there is no reason for us to address in 
this case the possible ramifications of 1 Restatement of the Law 2d, Judgments 
(1982), Sections 22 and 23, at 185 and 194, which concern the res judicata effects 
of a defendant’s actual or potential counterclaims. 
 
Because Michigan law treats a trust challenge as separate from a will 
challenge in these circumstances, Holzemer would be able to proceed with her 
12 
hypothetical suit in a Michigan court, and those claims would not be claim 
precluded in that case.  Therefore, the Full Faith and Credit Clause does not require 
us to find that she cannot proceed with her suit in Ohio.  Defendants actually are 
asking that Ohio’s courts give more “faith and credit” to the Michigan completed 
probate proceeding than the Michigan courts themselves would give it. 
 
The key word in the Full Faith and Credit Clause for our inquiry here is 
“full.”  Full faith and credit simply means that Ohio courts must give the same 
effect to the Michigan probate court proceeding as that proceeding would be given 
by Michigan courts.  See Section 1738, Title 28, U.S.Code.  Full faith and credit 
does not mean that we must give full claim-preclusive effect to everything in any 
way determined under Michigan law, with no regard for how Michigan law would 
view the determination at issue. 
 
For all of the foregoing reasons, the judgment of the court of appeals is 
affirmed. 
Judgment affirmed. 
 
MOYER, C.J., DOUGLAS, F.E. SWEENEY, PFEIFER, COOK and LUNDBERG 
STRATTON, JJ., concur. 
FOOTNOTES: 
1. 
For purposes of our inquiry, we must ignore the procedural problems that 
would most likely arise if she had actually tried to file such a suit in Michigan  — 
the posited Michigan suit is purely a hypothetical one. 
2. 
In order to avoid the possible misleading connotations in this context of the 
phrase “claims which might have been litigated” in the first lawsuit, some courts 
prefer to refer instead to “claims which should have been litigated” in the first 
lawsuit.  See, e.g., Wilkins v. Jakeway (S.D.Ohio 1998), 993 F.Supp. 635, 645.