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Nebraska Supreme Court Advance Sheets

300 Nebraska Reports

HILL v. AMMC, INC.

Cite as 300 Neb. 412

Michelle M. Hill, appellant, v. AMMC, Inc., 

doing business as Morrissey Motor

Company, appellee.

___ N.W.2d ___

Filed June 29, 2018. No. S-17-1075.

1. Motions to Dismiss: Summary Judgment: Pleadings. When matters 

outside the pleadings are presented to and not excluded by the court, a 

motion to dismiss is treated as one for summary judgment.

2. Summary Judgment: Appeal and Error. An appellate court will 

affirm a lower court’s grant of summary judgment if the pleadings and 

admitted evidence show that there is no genuine issue as to any material 

fact or as to the ultimate inferences that may be drawn from the facts 

and that the moving party is entitled to judgment as a matter of law.

3. Judgments: Claim Preclusion: Issue Preclusion: Appeal and Error. 

The applicability of claim and issue preclusion is a question of law. On 

a question of law, an appellate court reaches a conclusion independent 

of the court below.

4. Judgments: Jurisdiction: Claim Preclusion. Under Nebraska law, 

claim preclusion bars relitigation of any right, fact, or matter directly 

addressed or necessarily included in a former adjudication if (1) the 

former judgment was rendered by a court of competent jurisdiction, (2) 

the former judgment was a final judgment, (3) the former judgment was 

on the merits, and (4) the same parties or their privies were involved in 

both actions.

5. Judgments: Claim Preclusion: States: Courts. A Nebraska state court 

must apply federal law to determine the preclusive effect of a federal 

court judgment.

6. Judgments: Jurisdiction: Claim Preclusion: States: Courts. For judgments in federal question jurisdiction cases, federal claim preclusion law 

applies to the analysis, but for judgments in federal diversity jurisdiction 

cases, federal common law applies to the preclusion analysis. Federal 

common law, in turn, incorporates the rules of preclusion applied by 

state courts in the state in which the federal diversity court sits.

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

07/06/2018 01:10 AM CDT
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Nebraska Supreme Court Advance Sheets

300 Nebraska Reports

HILL v. AMMC, INC.

Cite as 300 Neb. 412

7. Claim Preclusion: Final Orders: States: Courts. Under federal law 

as stated by the U.S. District Court for the District of Nebraska, claim 

preclusion bars the relitigation of a claim if the prior judgment was a 

final judgment on the merits rendered by a court of competent jurisdiction and if the same cause of action and the same parties or their privies 

were involved in both cases.

Appeal from the District Court for Lancaster County: Jodi L. 

Nelson, Judge. Affirmed.

Joy Shiffermiller, of Shiffermiller Law Office, P.C., L.L.O., 

for appellant.

Robert S. Keith and Philip O. Cusic, of Engles, Ketcham, 

Olson & Keith, P.C., for appellee.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, and

Papik, JJ., and Welch, Judge.

Stacy, J.

The Lancaster County District Court dismissed an action 

filed by Michelle M. Hill, finding it was barred by the doctrine 

of claim preclusion. Hill filed this timely appeal. We affirm.

I. FACTS

1. Hill’s 2016 Complaint

On July 14, 2016, Hill filed a complaint in the district court 

for Lancaster County against her former employer, AMMC, 

Inc., doing business as Morrissey Motor Company. The complaint presented two claims: one alleging a violation of title 

VII of the Civil Rights Act of 1964,1 and the other alleging 

“wrongful discharge . . . in violation of Nebraska law and public policy.”

According to the factual allegations of Hill’s complaint, she 

was hired by AMMC in May 2014. AMMC sold motor vehicles, and Hill alleged that during the course of her employment she was (1) subjected to severe and pervasive sexual 

1 See 42 U.S.C. § 2000e et seq. (2012 & Supp. IV 2016).
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300 Nebraska Reports

HILL v. AMMC, INC.

Cite as 300 Neb. 412

comments by a coworker in violation of title VII and (2) 

asked to physically alter customers’ credit scores and indicate 

to financing companies that vehicles subject to purchase by 

AMMC customers were “fully loaded” when the vehicles actually were not. The complaint alleged Hill was constructively 

discharged in October 2014 when she resigned rather than 

falsify records.

Hill’s complaint alleged she had filed “charges” with both 

the Nebraska Equal Opportunity Commission (NEOC) and the 

federal Equal Employment Opportunity Commission (EEOC). 

The complaint alleged the EEOC issued a right to sue letter 

on July 6, 2016, but was silent as to any final action taken by 

the NEOC.

On August 17, 2016, AMMC removed Hill’s action to the 

U.S. District Court for the District of Nebraska. After the action 

was removed, AMMC filed a motion to dismiss Hill’s state law 

wrongful discharge claim, arguing it was time barred under 

the statute of limitations in the Nebraska Fair Employment 

Practice Act (NFEPA).2 Specifically, AMMC argued Hill failed 

to file her state law claim within 90 days of the NEOC’s final 

action in the case.3 At the hearing on the motion to dismiss, 

evidence was received without objection, so the federal court 

treated the motion as one for partial summary judgment.4

Hill resisted the motion, arguing her state law claim was 

not brought under the NFEPA, but instead was a common-law 

tort claim subject to a 4-year statute of limitations. In an order 

entered October 7, 2016, the federal court granted summary 

judgment in favor of AMMC on Hill’s state law wrongful 

discharge claim, specifically finding the claim was governed 

by the NFEPA and was not a general state law tort claim for 

wrongful discharge. Hill’s title VII claim remained pending in 

the federal court.

2 Neb. Rev. Stat. §§ 48-1101 to 48-1125 (Reissue 2010 & Cum. Supp. 

2016).

3 See § 48-1120.01.

4 See Fed. R. Civ. P. 12(d) and 56.
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Nebraska Supreme Court Advance Sheets

300 Nebraska Reports

HILL v. AMMC, INC.

Cite as 300 Neb. 412

2. Hill’s 2017 Complaint

Approximately 5 months later, on March 1, 2017, Hill 

filed the instant complaint against AMMC in the district 

court for Lancaster County. Her complaint alleged only one 

claim: that AMMC wrongfully discharged Hill “in violation 

of Nebraska law and public policy.” The factual allegations 

regarding wrongful discharge were substantially identical to 

those alleged in her 2016 complaint. However, the 2017 complaint contained additional detail regarding the illegality of 

the actions AMMC allegedly asked Hill to take regarding 

customers’ credit scores and vehicle financing. Specifically, 

Hill’s 2017 complaint alleged the actions AMMC asked her 

to take would have amounted to forgery under Neb. Rev. Stat. 

§ 28-603 (Reissue 2016) and would have violated Neb. Rev. 

Stat. § 28-619 (Reissue 2016), which prohibits issuing a false 

statement for the purpose of obtaining a financial transaction device.

AMMC moved to dismiss the 2017 complaint, asserting it 

failed to state a claim under Neb. Ct. R. Pldg. § 6-1112(b)(6). 

AMMC argued the state law claim was barred by the doctrine 

of claim preclusion, because the federal court had already 

decided the claim on the merits and dismissed it as time 

barred.

A hearing on AMMC’s motion was held, and evidence was 

offered by both parties and received without objection. The 

court concluded Hill’s wrongful discharge claim was barred 

by the doctrine of claim preclusion. It specifically found the 

federal court’s dismissal of Hill’s state law claim was a final 

judgment on the merits, was rendered by a court of competent 

jurisdiction, involved the same issues, and involved the same 

parties. The district court subsequently entered an order dismissing the complaint and taxing costs to Hill.

Hill filed this timely appeal, which we moved to our docket 

on our own motion.5

5 See Neb. Rev. Stat. § 24-1106(3) (Supp. 2017).
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Nebraska Supreme Court Advance Sheets

300 Nebraska Reports

HILL v. AMMC, INC.

Cite as 300 Neb. 412

II. ASSIGNMENTS OF ERROR

Hill assigns, restated, that the district court erred in (1) finding her state law claim was not governed by the general 4-year 

tort statute of limitations and (2) finding her state law claim 

was barred by the doctrine of claim preclusion.

III. STANDARD OF REVIEW

[1,2] AMMC moved to dismiss Hill’s complaint pursuant to § 6-1112(b)(6), arguing it failed to state a claim under 

Nebraska law. However, at the hearing on the motion to dismiss, the district court received exhibits from both parties with 

no objection. When matters outside the pleadings are presented 

to and not excluded by the court, a motion to dismiss is treated 

as one for summary judgment.6 An appellate court will affirm 

a lower court’s grant of summary judgment if the pleadings 

and admitted evidence show that there is no genuine issue as 

to any material fact or as to the ultimate inferences that may 

be drawn from the facts and that the moving party is entitled 

to judgment as a matter of law.7

[3] The applicability of claim and issue preclusion is a question of law.8

 On a question of law, an appellate court reaches a 

conclusion independent of the court below.9

IV. ANALYSIS

1. District Court Made No Finding on

Applicable Statute of Limitations

In her first assignment of error, Hill argues the district court 

erred in finding her wrongful discharge claim was governed 

by the limitations period under the NFEPA rather than the general 4-year tort statute of limitations. This assignment of error 

lacks merit for two reasons.

6 See, § 6-1112; Brothers v. Kimball Cty. Hosp., 289 Neb. 879, 857 N.W.2d 

789 (2015).

7 Brothers, supra note 6.

8 In re Interest of Noah B. et al., 295 Neb. 764, 891 N.W.2d 109 (2017).

9 Id.
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Nebraska Supreme Court Advance Sheets

300 Nebraska Reports

HILL v. AMMC, INC.

Cite as 300 Neb. 412

First, contrary to Hill’s assertion, the district court made no 

independent finding regarding the nature of Hill’s claim or the 

applicable statute of limitations. Instead, as discussed below, 

the court’s decision was based solely on the conclusion that 

the doctrine of claim preclusion applied to bar Hill’s 2017 

wrongful discharge claim. In other words, the district court 

determined the federal court had already conclusively decided 

the question of which statute of limitations was applicable, and 

expressed no opinion on whether the federal court’s conclusion 

was correct.

Moreover, to the extent Hill argues the district court should 

have concluded the federal court’s determination was erroneous, her complaint is of no moment.10 Hill may not overcome 

the effect of claim preclusion by collaterally attacking the correctness of the federal court’s judgment.11

2. Claim Preclusion

[4] In her second assignment of error, Hill argues the district court erred in finding her state law claim was barred by 

the doctrine of claim preclusion. Under Nebraska law, claim 

preclusion bars relitigation of any right, fact, or matter directly 

addressed or necessarily included in a former adjudication if 

(1) the former judgment was rendered by a court of competent 

jurisdiction, (2) the former judgment was a final judgment, 

(3) the former judgment was on the merits, and (4) the same 

parties or their privies were involved in both actions.12 This 

is the test the district court applied to determine whether the 

federal court’s dismissal of Hill’s state law claim had preclusive effect.

[5,6] Previously, this court has held that a Nebraska state 

court must apply federal law to determine the preclusive effect 

10 See VanDeWalle v. Albion Nat. Bank, 243 Neb. 496, 500 N.W.2d 566 

(1993).

11 Id.

12 Fetherkile v. Fetherkile, 299 Neb. 76, 907 N.W.2d 275 (2018).
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HILL v. AMMC, INC.

Cite as 300 Neb. 412

of a federal court judgment.13 The U.S. Supreme Court has also 

so held.14 However, in Semtek Int’l Inc. v. Lockheed Martin 

Corp.,

15 the U.S. Supreme Court clarified the application of 

this rule. It explained that for judgments in federal question 

jurisdiction cases, federal claim preclusion law applies to the 

analysis,16 but for judgments in federal diversity jurisdiction 

cases, federal common law applies to the preclusion analysis.17

Federal common law, in turn, incorporates the rules of preclusion applied by state courts in the state in which the federal 

diversity court sits.18

Here, the federal court was exercising federal question jurisdiction over Hill’s title VII claim19 and was exercising supplemental jurisdiction over her state law claim.20 The U.S. 

Supreme Court has not squarely addressed whether federal 

preclusion rules or the federal common law (incorporating state 

preclusion rules) apply in a case such as this.21 But this case 

does not require us to decide the question, because, as relevant 

here, the only difference between the two bodies of law is a 

slight difference in how the elements of claim preclusion are 

stated. And as explained below, whether we analyze these 

elements under the federal or state authority, we reach the 

same conclusion.

13 Millennium Laboratories v. Ward, 289 Neb. 718, 857 N.W.2d 304 (2014); 

VanDeWalle, supra note 10.

14 Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 121 S. Ct. 1021, 

149 L. Ed. 2d 32 (2001).

15 Id.

16 See, also, Taylor v. Sturgell, 553 U.S. 880, 128 S. Ct. 2161, 171 L. Ed. 2d 

155 (2008).

17 Taylor, supra note 16; Semtek, supra note 14.

18 Id.

19 See 28 U.S.C. § 1331 (2012).

20 See 28 U.S.C. § 1367 (2012).

21 See Paramount Pictures v. Allianz Risk Transfer, 31 N.Y.3d 64, 96 N.E.3d 

737, 73 N.Y.S.3d 472 (2018).
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Nebraska Supreme Court Advance Sheets

300 Nebraska Reports

HILL v. AMMC, INC.

Cite as 300 Neb. 412

[7] As noted, under Nebraska law, claim preclusion bars 

relitigation of any right, fact, or matter directly addressed or 

necessarily included in a former adjudication if (1) the former 

judgment was rendered by a court of competent jurisdiction, 

(2) the former judgment was a final judgment, (3) the former 

judgment was on the merits, and (4) the same parties or their 

privies were involved in both actions.22 Under federal law as 

stated by the U.S. District Court for the District of Nebraska, 

claim preclusion bars the relitigation of a claim if the prior 

judgment was a final judgment on the merits rendered by 

a court of competent jurisdiction and if the same cause of 

action and the same parties or their privies were involved in 

both cases.23

In this case, Hill concedes that the wrongful discharge claim 

presented in her 2017 complaint is the same state law claim 

she presented in her 2016 complaint. And the parties agree the 

federal court’s dismissal of Hill’s state law claim was rendered 

by a court of competent jurisdiction and involved the same 

parties as this action. The dispute on appeal centers on just two 

elements of the claim preclusion analysis: whether the federal 

court’s dismissal was on the merits and whether the federal 

court’s dismissal was a final judgment. These elements are 

considerations under both the state and the federal court’s articulation of the doctrine, and our analysis of these elements leads 

us to the same conclusion regardless of the applicable law.

(a) Judgment Was on Merits

Hill argues the federal court’s judgment of dismissal was 

based on the statute of limitations and therefore was not on the 

merits. We disagree.

22 Fetherkile, supra note 12.

23 Jenkins v. General Collection Co., 538 F. Supp. 2d 1165 (D. Neb. 

2008). See, also, Millennium Laboratories, supra note 13, citing Carlisle 

Power Transmission Products v. The Union, 725 F.3d 864 (8th Cir. 

2013); VanDeWalle, supra note 10, citing Armstrong v. Norwest Bank, 

Minneapolis, N.A., 964 F.2d 797 (8th Cir. 1992).
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HILL v. AMMC, INC.

Cite as 300 Neb. 412

Here, the issue decided by the federal court was not based 

solely on the application of a statute of limitations. Rather, 

the issue decided was whether Hill’s state law wrongful discharge claim was a claim under the NFEPA or, as she argues, a 

common-law claim. The federal court concluded it was a claim 

subject to NFEPA, and consequently found the claim was time 

barred under NFEPA’s 90-day limitations period. Although 

the statute of limitations period was part of the federal court’s 

analysis, its dismissal of the claim was not based solely on the 

statute of limitations.

For the sake of completeness, we note that even if the federal court judgment is characterized as one based on the statute 

of limitations, it was still on the merits. Generally, federal 

claim preclusion law holds that a judgment dismissing a claim 

based on a limitations period is on the merits and bars a second 

action on the same claim if the limitations period examined 

by the second court would be the same period examined by 

the first court.24 Federal law further holds the second action is 

barred even though the plaintiff may seek to advance new arguments for avoiding the limitations period.25

Although Nebraska has never directly addressed whether 

a judgment based on the statute of limitations is on the merits, we have held that a judgment is on the merits when it 

involves a determination of the substantive rights at issue in 

the action.26 Judgments falling within this definition include 

judgments based on the following: the outcome of a trial, the 

grant of a motion for a directed verdict, the grant of a motion 

for judgment notwithstanding the verdict, summary judgment, 

consent judgment, default judgment, and orders to dismiss an 

24 18A Charles Alan Wright et al., Federal Practice and Procedure § 4441 (3d 

ed. 2017). See Martel v. Stafford, 992 F.2d 1244 (1st Cir. 1993).

25 See 18A Wright et al., supra note 24.

26 See DeVaux v. DeVaux, 245 Neb. 611, 514 N.W.2d 640 (1994) (superseded 

by statute on other grounds as stated in Stacy M. v. Jason M., 290 Neb. 

141, 858 N.W.2d 852 (2015)).
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HILL v. AMMC, INC.

Cite as 300 Neb. 412

action for failure to state a claim upon which relief can be 

granted.27 Conversely, we have held that judgments on jurisdictional or procedural grounds are not on the merits,28 including: 

dismissal for lack of personal or subject matter jurisdiction, 

failure to effect proper or timely service, failure to join a necessary party, and failure to prosecute.29 In light of this body 

of case law, we hold, as have other jurisdictions in similar 

circumstances,30 that the federal judgment in the instant case is 

a judgment on the merits.

Here, both the federal district court and a Nebraska state 

court would apply a 90-day limitations period to a claim subject to the NFEPA. Thus, to the extent the federal judgment 

was based on the 90-day statute of limitations, it was a judgment on the merits under either federal claim preclusion law or 

federal common law (incorporating Nebraska law).

(b) Final Judgment

Hill argues the federal court’s dismissal of her state law 

claim was not final for purposes of claim preclusion because 

it was not a final judgment for purposes of appeal. At the time 

Hill filed her 2017 complaint in state court, the federal court 

had dismissed her state law claim for wrongful discharge, but 

her related title VII claim against AMMC remained pending. 

The federal court’s order dismissing the state law claim did not 

provide that it was immediately appealable,31 and Hill contends 

she was procedurally unable to appeal the ruling on her state 

27 John P. Lenich, Nebraska Civil Procedure § 8:7 (2018) (and cases cited 

therein).

28 DeVaux, supra note 26.

29 Lenich, supra note 27.

30 See, Avery v. Auto-Pro, Inc., 313 Ill. App. 3d 747, 731 N.E.2d 319, 246 

Ill. Dec. 791 (2000); Reese v. Barbee, 134 N.C. App. 728, 518 S.E.2d 571 

(1999); Nitz v. Nitz, 456 N.W.2d 450 (Minn. App. 1990); Meegan S. v. 

Donald T., 64 N.Y.2d 751, 475 N.E.2d 449, 485 N.Y.S.2d 982 (1984).

31 See 28 U.S.C. § 1292 (2012).
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HILL v. AMMC, INC.

Cite as 300 Neb. 412

law claim until the title VII claim was disposed of.32 Because 

of this, Hill argues the district court erred in treating the 

federal court’s dismissal as a final judgment for purposes of 

claim preclusion.

We decline to address the merits of this argument because, 

even if we found it had merit, it would have no effect on the 

ultimate disposition of this appeal.33 At oral argument, the 

parties advised the court that after the appeal in this case was 

filed, the federal court dismissed Hill’s title VII claim on summary judgment. No party appealed that judgment, and the time 

for appeal has now run. Consequently, regardless of whether 

the district court erred in treating the federal court’s earlier 

dismissal of the state law claim as final, there is no dispute 

it is final now for purposes of claim preclusion under both 

Nebraska law and federal law. The doctrine of claim preclusion 

bars Hill from asserting her state law claim in another court, 

and remanding the matter with directions to make a new finality determination would serve no purpose.

V. CONCLUSION

Based on the foregoing, the wrongful discharge claim 

asserted in Hill’s 2017 complaint is barred by the doctrine 

of claim preclusion. We therefore affirm the district court’s 

dismissal.

Affirmed.

32 See, 28 U.S.C. § 1291 (2012); Spring Creek Expl. & Prod. v. Hess Bakken 

Inv., 887 F.3d 1003 (10th Cir. 2018) (holding final decision is one that 

ends litigation on merits and leaves nothing for court to do but execute 

judgment).

33 See Eilts v. Bendt, 162 Neb. 538, 76 N.W.2d 623 (1956) (case will not be 

reversed for errors against party not entitled to succeed in any event).