* This order and judgment is not binding precedent, e xcept under the

doctrines of law of the case, res judicata, and col lateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3. 

## F I L E D United States Court of Appeals Tenth Circuit 

### FEB 23 1999 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

GEORGE R. SCHWARTZ, M.D.,

Plaintiff-Appellant,

v. COASTAL PHYSICIAN GROUP, INC., a North Carolina corporation,

Defendant-Appellee. No. 98-2085 (D.C. No. CIV-96-1500-RLP)

(D. N.M.)

ORDER AND JUDGMENT *

Before ANDERSON , KELLY , and LUCERO , Circuit Judges.

After examining the briefs and appellate record, th is panel has determined unanimously to grant the parties’ request for a dec ision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument.-2-

In this diversity action, plaintiff George R. Schwartz appeals the district court’s entry of summary judgment in favor of defen dant Coastal Physician Group, Inc., on the ground that plaintiff’s claims are barred by res judicata, and the denial of his motion to amend the complaint on the grounds of untimeliness and futility. We affirm. Plaintiff is a physician and author specializing inthe field of emergency medicine. Defendant is a physician management comp any that contracts with hospitals to staff their emergency rooms. In early1994, plaintiff published an article that was highly critical of the care provid ed by management companies such as defendant. On April 20, 1994, defendant fi led suit against plaintiff in North Carolina state court, asserting claims for li bel, slander, and unfair and deceptive trade practices. Plaintiff filed a count erclaim, and later sought to add a second claim. The parties agree that plaintiff’s original counterclaim and his first amended counterclaim were the same, alleging in relevant part: 4. Dr. George Schwartz is a nationally recognized pioneer in the professionalization of the emergency medicine field. . . . In order to silence him and intimidate him . . . Coastal has en gaged in the following unfair and deceptive activities . . .

. . . . b. It has filed the unjustified lawsuit in this ac tion, not for the purpose of seeking any legitimate damages to which it is lawfully entitled in fact or law, but with the ulterior purp ose of using its raw economic power to muzzle Dr. Schwartz, to intimidat e other physicians who would dare to challenge Coastal’s pr actices, to-3-

discredit Dr. Schwartz and his views in any public or private debate . . ., to impair the efficacy of his leaders hip role as a founder and officer of the American Academy of Emer gency Medicine, . . . and generally to discredit Dr. Schw artz in his profession . . . . c. Coastal has attempted to protect its business p ractices from the harsh light of truth by defaming Dr. Schwartz i n his profession and accusing him of being a teller of untruths . .

. . d. Coastal’s statements defaming Dr. Schwartz were made with malice, with knowledge of falsity, or with rec kless disregard for truth or falsity, in order to carry on its unfair and deceptive practices. 5. Coastal made a conscious tactical choice to fil e suit against Dr. Schwartz . . . . to attempt to crush Dr. Schwartz financially and to provide an example to him and other physicians of w hat would happen if they expressed their honest and conscient ious views to the media and the public. Their motive in doing so was to silence public criticism, debate and public awareness . . . . 6. As a result of Coastal’s unfair and deceptive a cts and practices, Dr. Schwartz has been damaged and will be damaged b y (a) the expenses of defending against the unjustified lawsu it filed by Coastal, (b) the loss of income to him professional ly by loss of employment opportunities, and (c) injury to his pro fessional reputation . . . . 7. The acts of Coastal were willful, intentional, and malicious, for which it is liable to Dr. Schwartz in punitive dama ges. Appellant’s App. at 54-57. On February 23, 1996, the North Carolina court entered an order dismissing defendant’s claims on the ground that the statements in the article were expressions of plaintiff’s opin ion. The state court dismissed plaintiff’s counterclaim and denied his motion to amend on the ground that “[n]either the existing nor the proposed countercla im state claims upon which-4-

relief may be granted.” Id. at 68. Both parties subsequently dismissed their appeals to the North Carolina appellate court, and the judgment became final. On October 30, 1996, plaintiff filed this action inthe United States District Court for the District of New Mexico, asserting cla ims for malicious prosecution, abuse of process, defamation, interference with contractual relations, prima facie tort and punitive damages. On November 5, 1997, de fendant filed a motion for summary judgment, alleging the grounds of res judic ata and failure to state a claim. On November 17, 1997, plaintiff sought to amend his complaint to add his wife as a plaintiff for a loss of consortium cl aim, to add certain corporate officers as defendants to all claims, to add a clai m of invasion of privacy and false light against all defendants, and to add a cl aim of aiding and abetting tortious conduct against the corporate officers. O n February 20, 1998, the district court granted summary judgment in favor of defendant and denied plaintiff’s motion to amend on the ground that the claims were barred by the statute of limitations and because the motion was untimely. On appeal, plaintiff argues that the court erred in applying res judicata to his malicious prosecution claim because (1) he neve r had the opportunity to fully and fairly litigate the underlying issues; (2) the claim was not a compulsory counterclaim; (3) he could not have brought his cla im in the first lawsuit because the claim did not accrue until after the suit termi nated in his favor; and-5-

(4) defendant’s motion did not request dismissal of the malicious prosecution claim specifically on res judicata grounds. He als o argues the district court erred in denying his motion to amend because the claims w ere not time-barred, and because the motion was not untimely as New Mexico h ad just recently recognized the “aiding and abetting” tort. We review the district court’s conclusions of law a s to the applicability of the doctrine of res judicata de novo. See State Bank of S. Utah v. Gledhill (In re Gledhill) , 76 F.3d 1070, 1082 (10th Cir. 1996). The court’s denial of plaintiff’s motion to amend is reviewed for an abuse of discretion. See Viernow v. Euripides Dev. Corp. , 157 F.3d 785, 799 (10th Cir. 1998). To determine whether plaintiff’s malicious prosecut ion claim is barred by res judicata, we look to the law of North Carolina to determine the preclusive effect to be given the state court judgment. See Allen v. McCurry , 449 U.S. 90, 96 (1980) (“Congress has specifically required all federal courts to give preclusive effect to state-court judgments wheneverthe courts of the State from which the judgments emerged would do so”); Rhodes v. Hannigan , 12 F.3d 989, 991 (10th Cir. 1993) (holding federal court must gi ve state court judgment the same preclusive effect as would the courts of the s tate from which it issued). Under North Carolina law, the doctrine of res judic ata operates to preclude a second suit involving (1) the same claim, (2) between the same parties or those-6-

in privity with them, (3) when there has been a fin al judgment on the merits in a prior action in a court of competent jurisdiction. See Northwestern Fin. Group, Inc. v. County of Gaston , 430 S.E.2d 689, 692-93 (N.C. Ct. App. 1993). Res judicata precludes not only relitigation of the claims actually raised in the first action, but all claims arising out of the sam e transaction which could and should have been raised in that action. See id. at 693. A party cannot circumvent the bar of res judicata by asserting a new legal th eory or by seeking a different remedy. See Bockweg v. Anderson , 428 S.E.2d 157, 163 (N.C. 1993). Here, a dismissal of an action for failure to state a claim is a judgment on the merits. See Dawson v. Allstate Ins. Co. , 417 S.E.2d 841, 842 (N.C. Ct. App. 1992). It is undisputed that both plaintiff and de fendant were parties in the prior action. And, upon comparing the allegations in pla intiff’s current malicious prosecution claim with his counterclaim in the prio r action, it is clear that both claims arose from the same transaction and sought r edress for the same injury. That is, they both sought damages for defendant’s i nitiation of an unjustified lawsuit, which was filed not for the recovery of le gitimate damages, but for the improper purposes of intimidating and harassing pla intiff, ruining his professional reputation, and destroying him financially. See, e.g. , Production Supply Co. v. Fry Steel Inc. , 74 F.3d 76, 79 (5th Cir. 1996) (holding, on simil ar allegations, that res judicata precluded subsequent malicious prosecution claim).-7-

While it is true that a malicious prosecution claim is not a compulsory counterclaim, cf. Hewes v. Wolfe , 330 S.E.2d 16, 22 (N.C. Ct. App. 1985) (holding related abuse of process claim not compuls ory counterclaim), and that termination of the underlying lawsuit in claimant’s favor is an element of the claim, see Best v. Duke Univ. , 448 S.E.2d 506, 510 (N.C. 1994), once plaintiff sought damages for defendant’s act of bringing an a llegedly unjustified lawsuit, he was required to raise all claims arising from th is act, including the malicious prosecution claim. See, e.g. , Bockweg , 428 S.E.2d at 161 (noting “the common law rule against claim-splitting is based on the pr inciple that all damages incurred as the result of a single wrong must be recovered in one lawsuit”); Gaither Corp. v. Skinner , 85 S.E.2d 909, 911 (N.C. 1955) (holding “a party defendant who interposes only a part of a claim by way of . . . c ounterclaim is ordinarily barred from recovering the balance in a subsequent action”); Restatement (Second) of Judgments §§ 23-25 (1980) (setting out rule against splittin g claims, and clarifying that preclusionary bar applies to counte rclaims). Under North Carolina’s procedural rules, plaintiff was permitted to raise the malicious prosecution claim even though it woul d not mature until the underlying lawsuit was terminated in his favor. See N.C. R. Civ. P. 18(b) (“Whenever a claim is one heretofore cognizable onl y after another claim has been prosecuted to a conclusion, the two claims maybe joined in a single action;1 We conclude also that there was no error in dismiss ing plaintiff’s malicious

prosecution claim on res judicata grounds, despite defendant’s reliance on other grounds in its summary judgment motion. Defendant’ s argument that res judicata applied to preclude all of plaintiff’s other claims was sufficient to place plaintiff on notice that res judicata was at issue. Even if it were error to grant summary judgment on a ground other than that relied upon bydefendant, it was harmless, as we are entitled to affirm the summary judgment o n any ground apparent from the record, including res judicata. See Lujan v. Regents of the Univ. of Cal. , 69 F.3d 1511, 1514 (10th Cir. 1995). -8- but the court shall grant relief in that action onl y in accordance with the relative substantive rights of the parties.”); Edwards v. Edwards , 456 S.E.2d 126, 130 (N.C. Ct. App. 1995) (holding party could have join ed indemnity claim which had not yet accrued under Rule 18(b)); T.H. Blake Contracting Co. v. Sorrells , 426 S.E.2d 85, 86-88 (N.C. Ct. App. 1993) (dismissi ng appeal as interlocutory when defendant’s malicious prosecution and abuse of process counterclaims had not yet been determined); Ballance v. Dunn , 385 S.E.2d 522, 525 (N.C. Ct. App. 1989) (holding party could have amended pleadings t o add related claim which accrued after lawsuit commenced and failure to do s o barred claim under res judicata); see also Northwestern Fin. Group , 430 S.E.2d at 694-95 (holding res judicata would preclude subsequent claim for damages if any portion of such damages had been incurred when first action commenc ed). The district court did not err, therefore, in holding plaintiff’s maliciou s prosecution claim was barred by res judicata. 1-9-

Further, the court did not abuse its discretion in denying plaintiff’s motion to amend the complaint to add new parties and claim s. Plaintiff apparently concedes that his claims against the corporate offi cers for abuse of process, defamation, invasion of privacy and false light, in terference with contractual relations, and prima facie tort, are barred by the statute of limitations, arguing only that he should have been permitted to add clai ms for malicious prosecution and aiding and abetting against the corporate offic ers, and to add a claim by his wife for loss of consortium. See Appellant’s Br. at 15-17. We conclude the district court was well within its bounds to find the proposed amendments, offered thirteen months after the lawsuit was initi ated and after dispositive motions had been fully briefed, to be untimely. Plaintiff was aware of his wife’s loss of consortiu m claim when he filed the initial complaint in October 1996. He also knew ab out his malicious prosecution claim against the corporate officers at that time. See Bourgeous v. Horizon Healthcare Corp. , 872 P.2d 852, 855 (N.M. 1994) (noting that corpor ate officers can be held personally liable for intentional torts ). Finally, plaintiff knew about his aiding and abetting tortious conduct claim whenhe filed the lawsuit, as New Mexico has recognized such liability for many years. See, e.g. , Stinson v. Berry , 943 P.2d 129, 133 (N.M. Ct. App. 1997) (“[I]f an officer or director directs or actively participates in the commission of the t ortious act of the corporation,-10-

he will be liable, along with the corporation.”); Rael v. Cadena , 604 P.2d 822, 822-23 (N.M. Ct. App. 1979) (holding person who ass ists or encourages another to commit a tort may be held liable). The case upo n which plaintiff relies, in fact, supports this conclusion, noting New Mexico’s long- time recognition of liability for aiding and abetting tortious conduct, and exten ding the principle to impose liability for aiding and abetting a breach of fiduciary duty. See GCM, Inc. v. Kentucky Cent. Life Ins. Co. , 947 P.2d 143, 147-48 (N.M. 1997). Thus, the district court did not abuse its discretion in deny ing plaintiff’s motion to amend. The judgment of the United States District Court fo r the District of New Mexico is AFFIRMED.

Entered for the Court

Paul J. Kelly, Jr. Circuit Judge