Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-89-07032/USCOURTS-ca10-89-07032-0/pdf.json

Parties Involved:
Arkansas Louisiana Gas Company
Appellee
Arkla
Appellee
Hold Oil Corporation
Appellant

Document Text:

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

HOLD OIL CORPORATION, 

a Florida corporation, 

Plaintiff-Appellant, 

FI LED 

Uflited State, Courc: ol Appeals 

Tenth Circuit 

AUG 8 1989 

ROBERT L. HOECKER 

Clerk 

vs. 

ARKANSAS LOUISIANA GAS COMPANY 

and ARKLA, INC., successor in 

interest to Arkansas Louisiana 

Gas Company, a Delaware 

corporation, 

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No. 89-703 2 

(D.C. No. 88-642-C) 

(E.D. Okla.) 

Defendants-Appellees. 

ORDER AND JUDGMENT* 

Before LOGAN, SEYMOUR and BALDOCK, Circuit Judges.** 

In Hold Oil Corp. v. Arkansas Louisiana Gas Co., No. 86-C53 2-E (N.D. Okla. filed May 30, 1986), Hold Oil sued Arkla, 

s uccessor in interest to Arkansas Louisiana Gas, for (1) breach of 

a gas purchase contract (Count I), (2) malicious, willful and 

tortious breach of a gas purchase contract (Count II), (3) breach 

* This order and judgment has no precedential value and shall not 

be cited, or used by any court within the Tenth Circuit, except 

for purposes of establishing the doctrines of the law of the case, 

res judicata, or collateral estoppel. 10th Cir. R. 36.3. 

** After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. The cause therefore is ordered 

submitted without oral argument. 

Appellate Case: 89-7032 Document: 01019974328 Date Filed: 08/08/1989 Page: 1 
of a settlement agreement (Count III), (4) breach of an agreement 

to transport gas (Count IV), (5) intentional and tortious breach 

of an agreement to transport gas (Count V), and (6) malicious, 

willful and wanton breach of an agreement to transport gas (Count 

VI). On November 2, 1987, Hold Oil, by amendment to its 

complaint, dismissed Counts IV-VI without prejudice. Thereafter, 

on April 22, 1988, the parties executed a settlement agreement. 

The statement of purpose contained in the agreement provided in 

pertinent part: 

WHEREAS, after balancing their hopes of prevailing 

in, against the possibility of losing, the aforesaid 

disputes and in order to resolve other controversies 

between the parties and to avoid further litigation, the 

parties have freely and voluntarily agreed to settle and 

compromise all aspects of their disputes upon the terms 

and conditions hereinafter set forth: 

Rec. vol. I doc. 4, ex.Fat 5 (emphasis added). Paragraph seven 

of the agreement further provided: 

In consideration of the premises, Seller and Buyer do 

hereby fully, finally and forever release, acquit and 

discharge each other, its successors, assigns, 

subsidiaries or affiliated corporations, from any and 

all liability and from any and all demands and causes of 

action of whatever kind or nature, which were asserted 

by Buyer or Seller in the Hold Proceeding. 

Id. at 9 (emphasis added). 

Despite the terms of the settlement agreement, Hold Oil then 

instituted this diversity action in the Eastern District of 

Oklahoma on October 31, 1988, again seeking damages against Arkla 

in three counts under the exact same legal theories asserted in 

Count IV-VI of its complaint in the prior litigation. Rec. vol. I 

doc. 1. The district court promptly awarded Arkla summary 

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Appellate Case: 89-7032 Document: 01019974328 Date Filed: 08/08/1989 Page: 2 
judgment on the basis of res judicata. Id. doc. 5. Hold Oil now 

appeals pursuant to 28 U.S.C. § 1291 asserting (1) its present 

claims are not identical to its former claims because the damages 

sought for the respective claims differ and (2) the settlement 

agreement released only the claims remaining after the amendment 

dismissing Counts IV-VI in the original complaint, or in the 

alternative, the settlement agreement is ambiguous and requires 

interpretation by a jury. 

This court considers the grant of a summary judgment motion 

under the same standard employed by the district court. Gray v. 

Phillips Petroleum Co., 858 F.2d 610, 613 (10th Cir. 1988). 

Because a ruling on the motion involves purely legal 

determinations, our review is de novo. 

859 F.2d 1466, 1467 (10th Cir. 1988). 

Goichman v. City of Aspen, 

Applying the summary 

judgment standard recently set forth in Missouri Pac. R.R. Co. v. 

Kansas Gas & Elec. Co., 862 F.2d 796, 798 (10th Cir. 1988), we 

reject Hold Oil's contentions and affirm the judgment of the 

district court. 

Federal preclusion law applies in successive diversity 

actions . Petromanagement Corp. v. Acme-Thomas Joint Venture, 835 

F.2d 1329, 1332-34 (10th Cir. 1988). The essential elements of 

res judicata are (1) a final judgment on the merits in a prior 

action, (2) an identity of the cause of action in the earlier and 

later suit and (3) an identity of parties or their privies in the 

two suits. Lee v. City of Peoria, 685 F.2d 196, 199 (7th Cir. 

1982). "Where a second suit between the same parties or their 

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Appellate Case: 89-7032 Document: 01019974328 Date Filed: 08/08/1989 Page: 3 
privies is on the same cause of action, the final judgment in the 

prior action is conclusive as to all matters which were actually 

litigated as well as those which could have been litigated." 

Jarrett v. Gramling, 841 F.2d 354, 358 (10th Cir. 1988). 

Moreover, res judicata applies to final settlements and 

compromises between the parties because such agreements resolve 

the disputed claims. See Brooks v. Barbour Energy Corp., 804 F.2d 

1144, 1146 (10th Cir. 1986); Torres v. Rebarchak, 814 F.2d 1219, 

1223 (7th Cir. 1987). 

In this instance, there can be no doubt that Hold Oil is 

barred from pursuing this action. The language of the settlement 

agreement is clear, unambiguous and construed as a matter of law. 

Under the terms of the settlement, Arkla was released from all 

claims which were asserted in the prior litigation. The 

settlement agreement does not distinguish between claims asserted 

in the initial complaint and the amended complaint, but rather 

expresses the parties intent to resolve all controversies between 

them and avoid further litigation. Hold Oil's attempt to 

differentiate its claims by altering the damages sought must fail 

because it easily could have sought such damages in its prior 

action. That it failed to do so is no excuse. 

The judgment is AFFIRMED. 

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Entered for the Court 

Bobby R. Baldock 

Circuit Judge 

Appellate Case: 89-7032 Document: 01019974328 Date Filed: 08/08/1989 Page: 4