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Parties Involved:
Martha S. Griego
Appellant
Raymond E. Padilla
Appellee

Document Text:

PUBLISH 

FILED . UNITED STATES COURT OF APPE~edStatesCo~t«?f Arpco...:; Tenth Carcuat 

In re MARTHA S. GRIEGO, 

Debtor. 

MARTHA S. GRIEGO, 

Appellant, 

v. 

RAYMOND E. PADILLA, 

Appellee. 

TENTH CIRCUIT SEP 01 1995 

PATRICK FISHER - Clerk 

No. 94-2264 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF NEW MEXICO 

(D.C. No. CIV 93-1069 JP/WWD) 

Submitted on the briefs: 

Harold Worland, Albuquerque, New Mexico, for Appellant. 

W. Anthony Sawtell of Catron, Catron, & Sawtell, P.A., Santa Fe, 

New Mexico, for Appellee. 

Before TACHA, LOGAN, and BRISCOE, Circuit Judges. 

LOGAN, Circuit Judge. 

Appellate Case: 94-2264 Document: 01019276727 Date Filed: 09/01/1995 Page: 1 
Appellant Martha Griego appeals the district court's 

affirmance of the bankruptcy court's dismissal of her "Complaint 

to Determine Dischargeability of Debt and Determine Value of 

Claim" filed in connection with her Chapter 7 bankruptcy 

petition.l That petition sought to discharge a state court 

judgment against Ms. Griego in favor of Raymond E. Padilla. The 

issues on appeal are whether (1) the magistrate judge had 

jurisdiction to make proposed findings and recommended disposition 

to the district court on appeal from the bankruptcy court, (2) the 

district court reviewed de novo that recommended disposition, and 

(3) the district court was correct in holding that Padilla's state 

court judgment precluded litigation of the issue in the bankruptcy 

proceeding. We have jurisdiction under 28 U.S.C. § 158(d) and 

affirm. 

The genesis of this litigation was a beating that Padilla 

suffered at the hands of Tomas Griego, Ms. Griego's son and 

employee, in a bar owned and operated by Ms. Griego. Padilla 

commenced a state action against the estate of Tomas Griego2 and 

Ms. Griego (collectively, the Griego defendants), seeking 

compensatory damages of $250,000 and punitive damages of $50,000. 

The suit alleged liability against Ms. Griego under the doctrine 

of respondeat superior. 

1 After examining the briefs and appellate record, this panel 

has determined unanimously to grant the parties' request for a 

decision on the briefs without oral argument. See Fed. R. App. P. 

34(f) and lOth Cir. R. 34.1.9. The case is therefore ordered 

submitted without oral argument. 

2 Tomas Griego died sometime between the assault and the filing 

of the complaint, apparently for reasons unrelated to the lawsuit. 

2 

Appellate Case: 94-2264 Document: 01019276727 Date Filed: 09/01/1995 Page: 2 
The Griego defendants employed attorney Lance Bailey who 

entered an appearance on their behalf. Bailey later informed 

counsel for Padilla that he no longer would be representing the 

Griego estate and the matter would be handled by attorney Lee 

Deschamps. Through her attorneys Ms. Griego answered Padilla's 

first set of interrogatories but not his second set. She did not 

respond to a first request for admissions, which asked her to 

admit or deny that Padilla's medical bills totalled $927.55, or to 

a second request for admissions. 

Padilla moved for summary 

affidavit, his second request for 

judgment supported by his 

admissions, photographs 

depicting his wounds, and the emergency room report. The motion 

was served on Bailey, Deschamps, and another attorney, Patsy 

Reinard, but not on Ms. Griego personally. Neither Bailey, 

Deschamps, nor Reinard responded to the motion or notified 

Ms. Griego of its pendency. The trial court,granted summary 

judgment on the merits against the Griego defendants jointly and 

severally for compensatory damages in the amount of $250,000, and 

against Ms. Griego for punitive damages in the amount of $50,000. 

The Griego defendants employed new counsel and unsuccessfully 

moved for relief from judgment and reconsideration. They asserted 

they were unaware that discovery requests had been served on their 

attorneys, that the case had been set for a hearing, or that a 

proposed judgment had been presented. They also asserted they had 

a meritorious defense. On appeal after denial of that motion, the 

New Mexico Court of Appeals affirmed, concluding the neglect by 

3 

Appellate Case: 94-2264 Document: 01019276727 Date Filed: 09/01/1995 Page: 3 
the Griego attorneys was inexcusable but the Griego defendants 

were bound by that conduct. 

The Griego defendants next commenced a state court action for 

relief from judgment, contending it was procured by fraud on the 

court. Specifically, they asserted that Padilla had falsified 

information concerning the extent of his injuries. The trial 

court concluded that res judicata applied because the information 

concerning Padilla's claim for damages could have been discovered 

before the date of the original judgment. It therefore granted 

Padilla summary judgment. Apparently the Griego defendants never 

appealed that judgment. 

Ms. Griego then filed a petition in the bankruptcy court for 

relief under Chapter 7 of the Bankruptcy Code. She there 

requested a determination that Padilla's $300,000 judgment was 

dischargeable and a valuation of his claim. The bankruptcy court 

determined there was no issue of dischargeability as Padilla 

conceded his debt was dischargeable. But the bankruptcy court 

determined that Ms. Griego's remaining claims were barred by res 

judicata. The district court adopted its magistrate judge's 

recommendation to affirm the bankruptcy court order. 

I 

Ms. Griego first claims that the magistrate judge had no 

jurisdiction to make proposed findings and a recommendation 

because the record is devoid of an order referring the case to 

him, as required by statute. She asserts that the only evidence 

of record a referral had been made was a letter from the clerk 

4 

Appellate Case: 94-2264 Document: 01019276727 Date Filed: 09/01/1995 Page: 4 
stating that the case had been reassigned to a magistrate judge 

for discovery purposes.3 

A magistrate judge's lack of statutory authority is not a 

jurisdictional defect; thus, objection to such authority is waived 

if not timely raised. Clark v. Poulton, 963 F.2d 1361, 1367 (lOth 

Cir.), cert. denied, 113 S. Ct. 635 (1992). Objections to a 

magistrate judge's recommendation must be filed within ten days of 

service of the recommendation. Fed. R. Civ. P. 72(b). 

Ms. Griego argues that she raised this jurisdictional issue 

in her objections to the magistrate judge's recommendation. We do 

not agree. The magistrate judge's recommendations were stated in 

eight numbered paragraphs. Ms. Griego's objections were stated in 

four numbered paragraphs. The first three specifically referenced 

paragraphs 2, 5 and 6 of the magistrate judge's proposed findings. 

The fourth states as follows: "Mrs. Griego objects to the 

jurisdiction of the Magistrate Court and the Magistrate Judge's 

proposed recommended disposition of affirmance based on the 

arguments previously made." App. 70 (emphasis added). No 

reasonable construction of this sentence would put the district 

3 The district court docket sheet does reflect an order of 

referral on 8/18/94 as follows: 

MINUTE ORDER: terminating case referral to Magistrate 

Lorenzo F. Garcia, Case referred to Magistrate William 

Deaton; all further pleadings should reflect case No. 

CIV 93-1069JP/WWD (cc: all counsel) (ddc) 

App. 127. The district court has informed us that this notation 

on the docket is the entire order of referral to Magistrate Judge 

Deaton. That docket sheet contains no reference to an order of 

referral to Magistrate Judge Garcia. For the reasons explained in 

the text of our opinion, the lack of any explicit order of referral or statutory reference or limitation on the magistrate judge's 

authority in a referral order is not critical to our decision. 

5 

Appellate Case: 94-2264 Document: 01019276727 Date Filed: 09/01/1995 Page: 5 
court on notice that a basis for Ms. Griego's objection was the 

alleged lack of a referral order. We conclude that she waived her 

objection to the magistrate judge's authority. 

II 

The next issue is whether the district court failed to 

conduct a de novo review of the magistrate judge's recommendation 

as required by 28 U.S.C. § 636(b) .4 De novo review is required 

when a party files timely written objections to the magistrate 

judge's recommendation. Bratcher v. Bray-Doyle Indep. Sch. Dist. 

No. 42, 8 F.3d 722, 724 (lOth Cir. 1993). De novo review requires 

the district court to consider relevant evidence of record and not 

merely review the magistrate judge's recommendation. Id. We 

presume the district court is aware of this requirement. Id. 

Ms. Griego claims the district court's order providing that 

"the Court having made a de novo determination of those portions 

of the Magistrate Judge's proposed findings and recommended 

disposition objected to," App. 1, shows the district court merely 

4 Ms. Griego assumes that § 636(b) (1) (B) is the appropriate 

statutory basis for the referral in this case. This subsection 

allows a district court to designate a magistrate judge to make 

proposed recommendations concerning motions that are excepted from 

subsection 636(b) (1) (A). A bankruptcy appeal is not one of these 

excepted motions. Section 636(b) (3) permits assignment to a magistrate judge of "such additional duties as are not inconsistent 

with the Constitution and laws of the United States." We held in 

Hall v. Vance, 887 F.2d 1041, 1046 (lOth Cir. 1989), that a district court could refer a bankruptcy appeal to a magistrate judge 

as long as the referral was solely to define and focus the issues 

on appeal and the district court reserved for itself the final 

decision. We did not indicate under which provision of § 636(b) 

the referral could be made. We need not resolve this issue here 

because de novo review is required in both § 636(b) (1) and 

§ 636(b) (3) referrals. See Rajaratnam v. Moyer, 47 F.3d 922, 924 

n.8 (7th Cir. 1995); NLRB v. Frazier, 966 F.2d 812, 816 (3d Cir. 

1992); McLeod. Alexander, Powel & Apffel, P.C. v. Quarles, 925 

F.2d 853, 856 n.S (5th Cir. 1991). 

6 

Appellate Case: 94-2264 Document: 01019276727 Date Filed: 09/01/1995 Page: 6 
reviewed the magistrate judge's recommendation. We disagree. 

Section 636(b) (1) requires that "[a] judge of the court shall make 

a de novo determination of those portions of the report or 

specified proposed findings or recommendations to which objection 

is made." The district court merely repeated the language of 

§ 636(b) (1) to indicate its compliance. It is common practice 

among district judges in this circuit to make such a statement and 

adopt the magistrate judges' recommended dispositions when they 

find that magistrate judges have dealt with the issues fully and 

accurately and that they could add little of value to that 

analysis. We cannot interpret the district court's statement as 

establishing that it failed to perform the required de novo 

review. As Ms. Griego offers no other support for her contention 

that the district court failed to conduct a de novo review, we 

reject it. 

III 

Finally, we turn to whether the district court erred in 

concluding that res judicata precluded the bankruptcy court from 

redetermining the amount of Padilla's damages. The preclusive 

effect of a judgment is a question of law reviewed de novo. 

Johnson v. Laing (In re Laing), 945 F.2d 354, 357 (lOth Cir. 

1991). 

The doctrine of res judicata applies generally to bankruptcy 

proceedings. DePaolo v. United States (In re DePaolo), 45 F.3d 

373, 376 (lOth Cir. 1995). An exception exists for certain issues 

regarding dischargeability of debts. Brown v. Felsen, 442 U.S. 

127, 138-39 (1979); see RTC v. McKendry (In re McKendry), 40.F.3d 

7 

Appellate Case: 94-2264 Document: 01019276727 Date Filed: 09/01/1995 Page: 7 
331, 335 (lOth Cir. 1994). However, because Padilla has conceded 

dischargeability this exception is inapplicable. 

The question is whether the New Mexico courts would give 

preclusive effect to Padilla's $300,000 judgment. See Laing, 945 

F.2d at 358. In New Mexico, res judicata is applicable "if the 

parties to the two separate actions are the same or in privity, 

the two causes of action are substantially the same, and there has 

been a final decision adjudicated on the merits in the first 

suit." Johnson v. Aztec Well Servicing Co., 875 P.2d 1128, 

1130-31 (N.M. Ct. App. 1994) . Ms. Griego contends res judicata 

should not apply because Padilla's $300,000 judgment was not a 

final decision on the merits. We disagree. The New Mexico Court 

of Appeals has already concluded the judgment was a summary 

judgment, not a default judgment. Even if it were a default 

judgment, however, res judicata would still apply. First State 

Bank v. Muzio, 666 P.2d 777, 780 (N.M. 1983), overruled Qll other 

grounds, Huntington Nat'l Bank v. Sproul, 861 P.2d 935 (N.M. 

1993) . 

Ms. Griego also argues that res judicata should not apply 

because her attorneys' negligence denied her an opportunity to be 

heard before entry of the $300,000 judgment. Res judicata does 

not apply if the party against whom an earlier decision is 

asserted did not have a "full and fair opportunity" to litigate a 

claim or issue. Kremer v. Chemical Constr. Corp., 456 U.S. 461, 

480-81 & 481 n.22 (1982) (citations omitted). "Redetermination of 

issues is warranted if there is reason to doubt the quality, 

extensiveness, or fairness of procedures followed in 

8 

prior 

Appellate Case: 94-2264 Document: 01019276727 Date Filed: 09/01/1995 Page: 8 
litigation." Id. at 481 (citations omitted); see also Morgan v. 

City of Rawlins, 792 F.2d 975, 979 (lOth Cir. 1986). However, 

"where the issue of due process [requiring notice and an 

opportunity to be heard] has been litigated and a final judgment 

entered, the determination of that issue, right or wrong, is res 

judicata." Hanley v. Four Corners Vacation Properties, Inc., 480 

F.2d 536, 538 (lOth Cir. 1973). Ms. Griego raised the issue of 

her attorneys' negligence in her motion for relief from judgment 

and reconsideration. The state trial and appellate courts 

considered and rejected this issue. It cannot be relitigated.5 

Finally, Ms. Griego contends that res judicata is 

inapplicable because the question of Padilla's attorney's 

noncompliance with N.M. Stat. Ann. § 36-2-15 was not raised in any 

prior proceeding.6 Res judicata, however, precludes litigation of 

issues that could have been determined in earlier proceedings. 

Muzio, 666 P.2d at 780. Ms. Griego contends this issue could not 

have been raised in the earlier proceedings because she only 

learned of the attorney's lack of compliance in a later legal 

malpractice action. However, the attorney's noncompliance was not 

a new fact that occurred after completion of the earlier 

proceedings. Rather, Ms. Griego simply did not learn of that fact 

5 Ms. Griego also cannot contend that res judicata is 

unavailable because Padilla's $300,000 judgment was procured by 

fraud. This issue was decided adversely to her in her petition 

for relief from judgment and cannot be relitigated. See Heiser v. 

Woodruff, 327 U.S. 726, 736 (1946). 

6 N.M. Stat. Ann. § 36-2-15 provides, "When an attorney 

ceases to act as such, a party to an action or proceeding for whom 

he was acting must, before any further proceedings are had against 

him, be required by the adverse party, by written notice to 

appoint another attorney or to appear in person." 

9 

Appellate Case: 94-2264 Document: 01019276727 Date Filed: 09/01/1995 Page: 9 
until later. This is insufficient to establish the issue could 

not have been determined in either the original action or the 

action to set aside the $300,000 judgment. Cf. Johnson v. 

Flemming, 264 F.2d 322, 324 (lOth Cir. 1959) (res judicata 

precludes litigation concerning facts and conditions as they 

existed at time judgment rendered, but does not apply to new facts 

not existing at time of prior judgment) . 

AFFIRMED. 

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