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Parties Involved:
First National Bank of Bethany, Oklahoma
Appellee
Sophie Germano
Appellant
Vincent Germano
Appellant

Document Text:

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT FEB 8 1980 

VINCENT GERMANO; SOPHIE GERMANO, 

Plaintiffs-Appellants, 

v. 

FIRST NATIONAL BANK OF BETHANY, 

OKLAHOMA, 

Defendant-Appel lee. 

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ORDER AND JUDGMENT* 

ROBERT L. HOECKER 

Clerk 

No. 88-1244 

(D.C. No. 87-525-P) 

(W.D. Okla.) 

Before TACHA, BALDOCK, and BRORBY, Circuit Judges. 

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. 

submitted without oral argument. 

The case is therefore ordered 

Plaintiffs-appellants appeal the district court's order of 

November 23, 1987, denying plaintiffs' request for an extension of 

the discovery cutoff date and the court's order of January 19, 

1988, dismissing counts two, three, and four of plaintiffs' 

* 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. 

Appellate Case: 88-1244 Document: 01019962986 Date Filed: 02/08/1990 Page: 1 
complaint with 

plaintiffs on 

the complaint 

prejudice, entering summary judgment against 

count one, denying their motion for leave to amend 

and add another party-defendant, denying their 

motion to disqualify the judge, and denying their motion for a 

continuance of the trial and other deadlines. Plaintiffs also 

appeal the court's order of February 9, 1988, authorizing the 

unsealing of an affidavit filed by James Craig Dodd, plaintiffs' 

prior counsel. 

Plaintiffs instituted the underlying action against 

defendant-appellee First National Bank of Bethany, Oklahoma 

(Bank), seeking damages and declaratory relief for the Bank's 

alleged violations of the Equal Credit Opportunity Act (ECOA), 15 

U.S.C. § 1691, common law fraud, impairment of collateral, and 

breach of fiduciary duty and the duty to deal in good faith. The 

Bank filed a "motion to dismiss, motion to abstain from Count III, 

and motion for summary judgment," with a supporting brief and 

evidentiary appendix. Thereafter, the district court entered 

summary judgment against plaintiffs on their ECOA claim on the 

grounds that they were not "aggrieved applicants" within the 

meaning of the ECOA and, therefore, had no standing to sue under 

that statute. The court dismissed plaintiffs' remaining claims on 

the basis of res judicata, concluding that plaintiffs "have had an 

opportunity to litigate the claims they have asserted in the 

present action." (R. Vol. III, Doc. 103 at 6.) 

On appeal, plaintiffs argue that they had no time in which to 

complete discovery prior to responding to the Bank's motion to 

dismiss and that the Bank relied on conclusory statements about 

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Appellate Case: 88-1244 Document: 01019962986 Date Filed: 02/08/1990 Page: 2 
the evidence in its motion. Plaintiffs responded to the Bank's 

motion without indicating that they could not respond fully 

without further specific discovery. They cannot be heard to argue 

otherwise on appeal. See Friedel v. City of Madison, 832 F.2d 

965, 968 (7th Cir. 1987). Contrary to plaintiffs' assertion, the 

Bank did not rely on conclusory statements of the evidence in 

support of its motion, rather, it submitted and relied upon 

detailed documentary evidence. 

Plaintiffs concede that the district court properly entered 

summary judgment against them on their ECOA claim, but contend 

that genuine issues of material fact existed as to the other 

claims, which should have been submitted to the jury. We 

disagree. The district court properly concluded that plaintiffs' 

claims were barred by virtue of the two prior state court actions, 

the first a foreclosure action by the Bank against American Inn, 

Inc. (American), and the second a fraud action by American against 

the Bank. 

"[A] federal court must give to a state-court judgment the 

same preclusive effect as would be given that judgment under the 

law of the State in which the judgment was rendered." Migra v. 

Warren City School Dist. Bd. of Educ., 465 U.S. 75, 81 (1984). 

Therefore, we must look to Oklahoma law to determine the 

preclusive effect to be given the judgments rendered by the state 

courts in the actions involving the Bank and American. Id.; see 

also Jarrett v. Gramling, 841 F.2d 354, 356 (10th Cir. 1988). 

Under Oklahoma law, the preclusive effect of a judgment 

applies to privies of the named litigants. See American Bank of 

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Okla. v. Adams, 514 P.2d 1191, 1193 (Okla. 1973)("The same cause 

of action between the same parties and their privies cannot be 

reopened and subsequently reconsidered."). Plaintiffs have never 

denied that they were privies of American at all relevant times. 

They are, therefore, bound by the judgments entered against 

American in the two state court actions. 

Plaintiffs asserted below that they were not bound by the 

judgment in the foreclosure action because the Bank committed 

fraud in that action. American, however, raised the same claims 

of fraud in its state court action against the Bank in June of 

1985. Therefore, the judgment in the latter action disposed of 

all the claims arising from the foreclosure action that plaintiffs 

asserted below. 

Plaintiffs argued that they were not bound by the judgment in 

the second action because the Bank procured that judgment through 

fraud. We have reviewed the extensive record and seriously doubt 

that the allegations asserted by plaintiffs below were sufficient 

to state a claim for fraud that would relieve them of the 

preclusive effect of the judgment in the second state court 

action. Moreover, the record reflects that the facts upon which 

plaintiffs predicated their fraud claim below were before the 

state court when it rendered judgment in the second action. 

Plaintiffs cannot reassert those facts in this action to lift the 

bar of the state court judgment. 

The other allegations of fraud that plaintiffs raised below 

stemmed from American's bankruptcy proceedings and have no effect 

on the present action. Based upon our review of the record, we 

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conclude that the district court properly found that plaintiffs' 

second, third, and fourth claims for relief in this action were 

barred. 

Plaintiffs also argue on appeal that the district court 

abused its discretion when it vacated the motions hearing set for 

January 19, 1988, and entered its order disposing of the case. We 

have held that a formal evidentiary hearing on a motion for 

summary judgment is not necessary. "Rather, the parties' right to 

be heard may be fulfilled by the court's review of the briefs and 

supporting affidavits and materials submitted to the court.'' 

Geear v. Boulder Community Hosp., 844 F.2d 764, 766 (10th Cir.), 

cert. denied, 109 S. Ct. 312 (1988). The court did not err in 

ruling on the Bank's motion without a hearing. 

Plaintiffs assert that the district court erred in refusing 

to hold that defendant was estopped, as a result of its own 

unclean hands, from relying on the doctrines of issue preclusion 

and claim preclusion. We do not find plaintiffs' argument 

persuasive and, therefore, turn to the district court's rulings on 

plaintiffs' various motions. 

First, plaintiffs assert the court abused its discretion in 

refusing to permit them to amend their complaint and add another 

party-defendant. This court reviews the denial of a motion to 

amend under an abuse of discretion standard. LeaseAmerica Corp. 

v. Eckel, 710 F.2d 1470, 1473 (10th Cir. 1983). 

Leave to amend 

justice so requires." 

however, when the 

a complaint should be "freely given when 

Fed. R. Civ. P. 15(a). It may be denied, 

court finds reason to do so, such as "undue 

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delay, bad faith or dilatory motive on the part of the rnovant, 

repeated failure to cure deficiencies by amendments previously 

allowed, undue prejudice to the opposing party ... [or] futility 

of amendment." Fernan v. Davis, 371 U.S. 178, 182 (1962). Our 

review of the record leads us to conclude that plaintiffs' 

proposed amendment of their complaint would have been futile. 

Therefore, the district court did not abuse its discretion in 

denying plaintiffs' motion. 

Next, plaintiffs contend the district court abused its 

discretion in denying their request, made shortly before trial, 

for an extension of time in which to complete discovery. The 

denial of an extension of time is within the sound discretion of 

the trial court, see United States v. West, 828 F.2d 1468, 1469 

(10th Cir. 1987), as are discovery matters in general, see Willner 

v. Budig, 848 F.2d 1032, 1035-36 (10th Cir. 1988), cert. denied, 

109 S. Ct. 840 (1989). The court did not abuse its discretion in 

denying plaintiffs' motion. 

Plaintiffs also argue that the district court erred in 

failing to conduct an evidentiary hearing on their motion to 

disqualify the Bank's counsel. An evidentiary hearing was 

unnecessary, however, because the grounds alleged by plaintiffs in 

their motion either were insufficient or were rendered moot by the 

court's disposition of plaintiffs' other claims. 

Although not listed as an issue on appeal, plaintiffs discuss 

the district court's 

Phillips in the body 

disqualify a judge 

denial of their motion to disqualify Judge 

of their appellate brief. A motion to 

is addressed to the court's sound discretion 

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and the court's decision will not be disturbed on appeal absent an 

abuse of that discretion. See Weatherhead v. Globe Int'l, Inc., 

832 F.2d 1226, 1227 (10th Cir. 1987). Our review of the record 

reveals that the district court did not abuse its discretion in 

denying plaintiffs' motion to disqualify. 

Finally, plaintiffs argue that the district court erred in 

granting defendant's request to unseal the affidavit of James 

Craig Dodd. In United States v. Hickey, 767 F.2d 705, 708 (10th 

Cir.), cert. denied, 474 U.S. 1022 (1985), this court acknowledged 

"the basic axiom that a common law right exists to inspect and 

copy judicial records." We also recognized that the right is not 

absolute and that a court must balance competing interests in 

deciding whether to seal a document. Id. 

The record reflects that the district court declined to 

unseal Mr. Dodd's affidavit while the merits of plaintiffs' case 

were still pending, despite the Bank's request to do so. Once the 

merits of the action were disposed of, however, the court honored 

the Bank's request to see the affidavit for purposes of 

determining the appropriate parties against whom to seek sanctions 

pursuant to Fed. R. Civ. P. 11. The court limited the use of the 

affidavit to such Rule 11 proceedings. Under the circumstances, 

the court did not abuse its discretion in unsealing Mr. Dodd's 

affidavit. 

The judgment of the United States District Court for the 

Western District of Oklahoma is AFFIRMED. 

ENTERED FOR THE COURT 

PER CURIAM 

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