*Pursuant to Local Rule 47.5, the Court has determined that

this opinion should not be published and is not precedent except

under the limited circumstances set forth in Local Rule 47.5.4.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

 

No. 96-11110

Summary Calendar

 

HERMAN E. MITCHELL,

Plaintiff-Appellant,

versus

ALLSTATE LIFE INSURANCE COMPANY,

Defendant-Appellee.

 

Appeal from the United States District Court for the

Northern District of Texas, Dallas

(3:94-CV-1562-R)

 

March 14, 1997

Before GARWOOD, JOLLY and DENNIS, Circuit Judges.*

PER CURIAM:

Plaintiff-appellant Herman E. Mitchell (Mitchell) appeals the

district court’s summary judgment dismissal, on the basis of

limitations and res judicata, of his fraud suit against defendantappellee Allstate Life Insurance Company (Allstate). We affirm,

being essentially in agreement with the reasoning of the district
2

court.

Mitchell’s instant suit asserts that Allstate committed fraud

by not including in the group long term disability insurance policy

issued by Allstate in the spring of 1988 to Mitchell’s employer,

Herring Marathon Group, Inc. (Herring), a “Presumptive Disability

Benefit based on a 50% loss of earnings basis” that Allstate’s

written proposal furnished to John O’Leary (O’Leary), the

independent broker assisting Herring in purchasing its insurance,

had said would be included, and which O’Leary had accordingly

informed Herring and Mitchell, Herring’s Chief Financial Officer

and Vice President for Administration who “was in charge of

procuring” the policy for Herring, would be provided.

On May 9, 1988, Mitchell, on behalf of Herring, wrote Allstate

requesting that a change be made in the policy definition of

disability to be “own occupation.”

Allstate subsequently transferred all its disability benefits

business to Metropolitan Life Insurance Company (Metropolitan).

Thereafter, in June 1989, Mitchell filed with Metropolitan a claim

for disability benefits under the policy because of eye problems.

Metropolitan denied the claim August 11, 1990. Mitchell, by his

August 18, 1989, letter to Metropolitan, enclosed a copy of the

policy definition of disability and said he met it. Metropolitan

responded by its letter of August 23, 1989, in substance advising

that the enclosure to Mitchell’s August 18 letter was correct, but

that Mitchell did not meet the definition. Mitchell in his
1In his complaint below Mitchell alleges he “was not given a

copy of the complete insurance policy . . . until on or about

September 4, 1990.”

3

September 25, 1989, letter to Metropolitan stated that “[a]fter

review of the policy and your previous letter” he did not

understand why his claim was denied.1 Mitchell then retained

counsel, who wrote Metropolitan about the claim, but Metropolitan

again denied it on February 2, 1990.

Mitchell filed suit against Allstate and Metropolitan in June

1990 (the “first suit”) seeking to recover on the policy, and also

making a general claim of fraud against Allstate. The case was

removed to the United States District Court for the Eastern

District of Texas. In an order entered October 11, 1991, the

district court ruled that the case was governed by ERISA and

Mitchell would not be entitled to a jury trial except on his “cause

of action for fraud in the sale of the insurance policy by Allstate

Life Insurance Company. To the extent that plaintiff has

adequately pled such a cause of action and that it survives

defendants’ motions for summary judgment, plaintiff will be

entitled to a jury trial on this cause of action.” On October 10,

1991, Mitchell had filed in the first suit an opposition to

defendants’ motion for summary judgment supported by his affidavit

and by two affidavits of O’Leary. O’Leary’s first affidavit

attaches a copy of Allstate’s written proposal for Herring which

Allstate had furnished O’Leary in early March 1988 and which
2O’Leary’s affidavit in the present suit says that he

“presented” this Allstate written proposal to Herring.

4

includes the Presumptive Disability Benefit language,2 and a copy

of O’Leary’s March 14, 1988, letter to Mitchell, at Herring. The

March 14, 1988, letter states that the Allstate policy would

include:

“1) Total Disability for own occupation to age 65 . . .

2) Presumptive Disability Benefit based on 50% loss of

earnings test.

. . . .”

O’Leary’s second affidavit states that “based on the oral and

written representations of Allstate, I represented to my client

[Herring] that the Allstate policy had a Presumptive Disability

Benefit——if insured earns less than 50% of earnings because of

disability, then the insured will be presumed as totally disabled.”

Mitchell’s affidavit states: “In 1990, I earned less than one

third of the income that I earned in 1985.” It also states:

“At the time the policy was sold to the Herring

Marathon Group Inc. (in 1988) by Defendant Allstate, I

was in charge of procuring such a policy for the

employer. The policy that I was told I was purchasing

for the Herring Marathon Group Inc. was an ‘own

occupation’ policy. This was explained to me as a policy

that provided benefits if I was unable to perform any one

of the materials [sic] duties of my occupation. This was

also verified to me by letter dated march [sic] 14, 1988

from J. Brock O’Leary to me.”

The district court on January 6, 1993, rendered judgment in

the first suit that Mitchell take nothing by his suit and that it
5

be dismissed on the merits. Mitchell filed a motion for new trial

directed, inter alia, to his fraud claim. The district court

denied the motion for new trial by order dated May 27, 1993, noting

that “plaintiff claims that this Court improperly dismissed his

claim for misrepresentation in the sale of an insurance policy.”

The court focused on the claim that Mitchell was told an “own

occupation” policy meant he would be entitled to benefits if he was

unable to perform any one of his duties and that this was verified

in the O’Leary March 14, 1988, letter. The court noted that the

letter was not inconsistent with the policy as regards “own

occupation.” It also noted that Mitchell’s fraud pleadings did not

meet the requirements of Fed. R. Civ. Pro. 9(b). Mitchell

appealed, and this Court affirmed March 3, 1994.

The present suit was filed in May 1994 and was removed to the

court below, the United States District Court for the Northern

District of Texas.

Mitchell argues that the first suit is not res judicata

because his fraud claim there related only to the “own occupation”

matter, not to the Presumptive Disability issue. We are not

persuaded. In the first place, the Presumptive Disability issue

was plainly raised by O’Leary’s affidavits that Mitchell filed in

opposition to the defendants’ summary judgment motion in the first

suit, as well as by Mitchell’s affidavit there that he relied on

the March 14, 1988, letter and that his earnings were less than a
3As the district court in the present action pointed out,

there is no allegation or evidence that Allstate’s proposal was not

always readily available to Mitchell through O’Leary.

4The amended complaint alleges that in the first suit:

“Plaintiff asserted a cause of action for Allstate’s

fraud and misrepresentation of the actual benefits to be

conferred under the insurance policy to induce

Plaintiff’s employer to purchase the insurance policy

which became, when issued, the subject ERISA plan.

Specifically, the insurance policy was to provide

‘presumptive disability’ coverage to Plaintiff, in

particular a loss of fifty percent or more in earnings

6

third of what they had been. In the present suit, Mitchell has

filed one or more affidavits stating that he realized Allstate had

committed fraud respecting the Presumptive Disability matter when

on September 29, 1991, he read the Allstate proposal for Herring

which he got from O’Leary,3 that “since June 23, 1989 . . . I have

been unable to perform work providing me with 50% or more of my

pre-disability basic monthly earnings . . . in fact, I have earned

less than 33% of my basic monthly earnings,” that he relied on the

O’Leary March 14, 1988, letter in believing that the policy would

include a Presumptive Disability Benefit based on a 50% loss of

earnings test, and that Herring would not have purchased the policy

had it not been represented by the March 14 letter to include both

a Presumptive Disability Benefit and an “own occupation” provision.

Moreover, in his amended (and final) complaint in the present case,

Mitchell expressly characterizes his prior suit as having included

a claim for fraud based on the policy’s not including the provision

for Presumptive Disability based on 50% loss of earnings.4
would deem an employee automatically totally disabled.”

7

Finally, on appeal of the dismissal of the first suit to this

Court, Mitchell specifically argued that the district court erred

by dismissing his claim of fraud against Allstate on the basis that

Allstate had represented in its proposal that its policy would

contain a provision that a loss of fifty percent or more in earning

constitutes total disability but did not include any such provision

in the policy when it was issued.

However, even if Mitchell’s first suit had raised only the

fraud claim that Allstate did not include in its policy as issued

the sort of “own occupation” provision he and Herring had been

informed by Allstate, through O’Leary, that it would contain,

nevertheless this would not suffice to avoid res judicata. In

determining whether the prior federal court judgment was on the

same cause of action for res judicata purposes, this Court follows

a transactional test which focuses on whether the two suits arise

from “the same nucleus of operative facts.” Matter of Howe, 913

F.3d 1138, 1144 (5th Cir. 1996). “Res judicata ‘bars all claims

that were or could have been advanced in support of the cause of

action on the occasion of its former adjudication, . . . not merely

those that were adjudicated.” Id. See also Nilsen v. City of Moss

Point, 701 F.2d 556, 559 (5th Cir. 1983); Hogue v. Royce City, 939

F.2d 1249, 1252 (5th Cir. 1991). Accordingly, any failure by

Mitchell to specifically plead in the prior suit Allstate’s failure
8

to include in the policy the Presumptive Disability provision which

its proposal represented would be included, and any failure by the

district court in the first suit to specifically address or rule on

that particular matter, is simply irrelevant to res judicata (as

distinguished from collateral estoppel), because the district court

in the first suit rendered judgment that Mitchell take nothing by

his entire suit, and the fraud claim respecting the Presumptive

Disability provision was one which could have been advanced in that

suit. Here both the first suit and the present suit relate to the

same transaction and nucleus of operative facts, namely Allstate’s

alleged fraud in representing by its proposal for Herring delivered

to O’Leary, and O’Leary’s consequent representations to Mitchell in

respect thereto (principally the March 14, 1988, letter), as to

what would be in the 1988 policy, when the policy as issued did not

contain the provisions as represented, all to the prejudice of

Mitchell’s single disability claim.

Nor can Mitchell avoid res judicata by claiming that Allstate

and Metropolitan stonewalled or lied in response to discovery in

the first suit. In the first place, Mitchell, as his affidavit in

this suit reflects, by September 1991 at the latest, knew and was

able to prove the contents of the Allstate proposal to Herring

including its Presumptive Disability provision, that it had been

authored by Allstate and furnished to O’Leary, that O’Leary had

informed him and Herring about it before the policy issued,
5Mitchell’s amended (and final) complaint in the present suit

alleges that “Plaintiff did not discover the fraud,

misrepresentation and other actions of Defendant complained of in

the Plaintiff’s First Amended Complaint until September 29, 1991.”

6What was fatal to Mitchell’s fraud claim in the first suit

was his failure to properly plead it and his singular emphasis on

the “own occupation” matter to the near total exclusion of the

Presumptive Disability matter.

9

including by Herring’s March 14, 1988, letter to him, that the

policy did not contain such a provision, and that he met the test

of the Presumptive Disability provisions of the proposal and of the

March 14, 1988, letter; and by that time, at the latest, Mitchell

believed Allstate had been guilty of fraud in this respect.5 The

first suit was not tried until over a year later, in December 1992.

Mitchell’s fraud claim was not rendered unavailable or unprovable

in the first suit by any of the conduct or misconduct therein of

Allstate or Metropolitan of which Mitchell now complains.6 In the

second place, even if Allstate or Metropolitan were guilty of

misconduct in the first suit which clearly produced an unjust

result therein but which was not rectifiable by appeal and which

was such as to justify setting aside the final judgment therein,

Mitchell’s remedy would be to seek to set aside the judgment in the

first case by a motion therein under Fed. R. Civ. Pro. 60(b) or (an

even greater stretch) by an independent action in the Eastern

District of Texas (which rendered the judgment in the first suit)

to set aside that judgment; but Mitchell has not filed such a

motion or action, and the present suit is in the Northern District
7Even in the present action, Mitchell has not sought to set

aside the judgment in the first suit. He merely seeks to “estop”

Allstate from relying on it. That is simply an impermissible

evasion of the rules of res judicata.

10

of Texas, which is not the proper forum to set aside a judgment of

the Eastern District of Texas. See Russell v. Sunamerica

Securities, Inc., 962 F.2d 1169, 1176-77 (5th Cir. 1992).7

The judgment of the district court is correct and is therefore

AFFIRMED.