This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2014).

STATE OF MINNESOTA

IN COURT OF APPEALS

A14-1332

Timothy Edward Knoedler, 

Appellant, 

Candace Lynn Knoedler, 

Appellant, 

vs. 

Wilford, Geske & Cook, P. A., 

Respondent.

Filed April 6, 2015

Affirmed

Rodenberg, Judge

St. Louis County District Court

File Nos. 69DU-CV-14-432, 69-DU-CV-13-2359

Timothy E. Knoedler, Saginaw, Minnesota (pro se appellant)

Candace L. Knoedler, Saginaw, Minnesota (pro se appellant)

David Mortensen, Wilford, Geske & Cook, P.A., Woodbury, Minnesota (for respondent) 

Considered and decided by Chutich, Presiding Judge; Rodenberg, Judge; and 

Smith, Judge. 

U N P U B L I S H E D O P I N I O N

RODENBERG, Judge

Appellants challenge the district court’s grant of respondent’s motion to dismiss. 

We affirm.
2

FACTS

In 2013, appellants Timothy and Candace Knoedler brought suit in Minnesota 

state court against respondent Wilford Geske & Cook, P.A., and Ocwen Loan Servicing, 

LLC, U.S. Bank National Association, and Credit Based Asset Servicing and 

Securitization, LLC, alleging that the procedures used in foreclosing appellants’

mortgage were improper. The case was removed to federal court. See Knoedler v. 

Wilford, Geske & Cook, P.A. et. al., No. 13-2782, 2014 WL 28795 (D. Minn. Jan. 2, 

2014). Although respondent is a Minnesota company, the federal court held that 

respondent’s party status did not deprive the federal court of diversity jurisdiction 

because respondent had been fraudulently joined. Id. at *2. The federal court dismissed 

appellants’ claims against all defendants with prejudice. Id. at *3. Appellants appealed 

to the Eighth Circuit Court of Appeals, but have since voluntarily dismissed their appeal.

Appellants then sued respondent in Minnesota state court, again alleging that its 

foreclosure procedures were improper and specifically alleging that respondent was 

negligent in representing the mortgagees. The district court dismissed appellants’ claims 

on three bases. First, the district court held that it did not have jurisdiction to hear 

appellants’ case because there was an appeal pending in federal court.1 Second, the 

district court held that, even if the appeal in the federal court system did not deprive the 

state court of jurisdiction, appellants’ claims were barred by res judicata and collateral 

 

1 While the record before us admits of no conclusion concerning the federal appeal, the 

parties to this appeal have both represented that there is no pending federal appeal and we 

therefore proceed with that understanding. We also observe that whether the federal 

appeal has been dismissed is not dispositive.
3

estoppel. Third, the district court held that, even if it had jurisdiction and appellants’ 

claims were not barred, appellants’ complaint failed to state a claim against respondent

upon which relief may be granted. This appeal followed.

D E C I S I O N

Fundamental to the doctrines of res judicata and collateral estoppel is the notion 

that a “right, question or fact distinctly put in issue and directly determined by a court of 

competent jurisdiction cannot be disputed in a subsequent suit between the same parties.” 

Hauschildt v. Beckingham, 686 N.W.2d 829, 837 (Minn. 2004) (quotation omitted). 

While related, res judicata and collateral estoppel serve different purposes. Id. Res 

judicata is broader and applies “to a set of circumstances giving rise to entire claims or 

lawsuits” and prevents litigation of claims arising from those circumstances, even if the

later claims are brought under new legal theories. Id. Collateral estoppel applies to 

specific legal issues. Id. A reviewing court must decide whether application of either 

doctrine “would work an injustice on the party against whom the doctrines are urged.” 

Id. Whether collateral estoppel applies is “a mixed question of law and fact,” which we

review de novo. Id. Whether res judicata applies is a question of law, which we also 

review de novo. Id. at 840.

Res judicata is available when “(1) the earlier claim involved the same set of 

factual circumstances; (2) the earlier claim involved the same parties . . . ; (3) there was a 

final judgment on the merits; [and] (4) the estopped party had a full and fair opportunity 

to litigate the matter.” Id. A good indicator that the new claims arise from the same set 

of operative facts as an earlier claim is that the new claim will rely largely on the same 
4

evidence as the previous claim. Id. at 840-41. The elements of collateral estoppel are 

similar to those of res judicata except that the first element of collateral estoppel requires 

that the specific issue in the earlier case be identical to the specific issue in the current 

case. Id. at 837. When either res judicata or collateral estoppel is available, the decision 

to apply either doctrine for preclusive effect is left to the district court’s discretion, and 

we review only for abuse of that discretion. Fain v. Andersen, 816 N.W.2d 696, 699 

(Minn. App. 2012).

Appellants’ claim that respondent was negligent in the foreclosure-byadvertisement procedure arises from the same set of facts underlying appellants’ earlier 

claims, which were dismissed by the federal district court. And appellants’ state-court 

negligence claim will rely on the same evidence underlying their federal claims. 

Therefore, the first element of res judicata is met.

Appellants argue that the earlier claim did not involve the same parties because it 

was “legally impossible for [respondent] to have been party to the federal case” as

respondent’s Minnesota residency deprived the federal court of diversity jurisdiction. 

But appellants are mistaken. The federal court took jurisdiction over respondents through 

the doctrine of fraudulent joinder. See Wiles v. Capitol Indem. Corp., 280 F.3d 868, 871 

(8th Cir. 2002) (stating that federal courts may take jurisdiction over resident parties 

without destroying diversity jurisdiction when “there exists no reasonable basis in fact 

and law supporting a claim against the resident defendants”). The federal court then 
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dismissed the claims against respondent on the merits after asserting jurisdiction.

2

 

Appellants concede not pursuing the federal appeal and the federal district court action is 

final. Respondent was a party to the previous action. Therefore, this case and the earlier 

case involve the same parties. 

Finally, appellants argued to the district court that they did not have a full and fair 

opportunity to litigate the matter because the judge in the dismissed federal case did not 

hear oral arguments on every aspect of appellants’ claims. Appellants do not appear to 

make this argument on appeal. Even if they did, whether the proceedings in the federal 

court were improper or inadequate would have been an issue in the federal appeal. 

Appellants cite no authority for the notion that we or a state district court could properly 

decide the adequacy of a federal district court’s consideration of this or any matter. We 

also observe that appellants and respondent argued extensively before the federal district 

court and appellants apparently perfected and later abandoned a federal appeal.

Appellants had a full and fair opportunity to litigate the issues in the earlier case.

 

2 Whether the federal court’s application of fraudulent joinder to this case was proper is 

outside the scope of our subject matter jurisdiction. See Chesapeake & Ohio Ry. Co. v. 

McCabe, 213 U.S. 207, 217, 221, 29 S. Ct. 430, 434, 436 (1909) (holding that after a 

federal court has decided that a case is removable, taken jurisdiction of the case, and 

rendered a final judgment, the judgment is binding unless reversed by the United States 

Supreme Court and the state court lacks subject matter jurisdiction to review the 

judgment, including the decision that removal was proper). 
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All of the elements of res judicata are clearly met here. The district court did not 

err in concluding that the dismissal of appellants’ claims by the federal district court may 

operate as a ban to the present claims.3 

Further, the district court’s application of res judicata did not work an injustice on 

appellants. As the district court held, aside from claim-preclusion considerations, 

appellants failed to state a claim against respondent. See McDonald v. Stewart, 289 

Minn. 35, 40, 182 N.W.2d 437, 440 (1970) (stating that “an attorney acting within the 

scope of his employment as attorney is immune from liability to third persons for actions 

arising out of that professional relationship,” but this immunity may be defeated by a 

fraudulent or unlawful act). As the district court succinctly stated: Appellants “simply 

have no case against the law firm.” Appellants claim respondent was negligent. Even if 

true, that would not give rise to a claim by a nonparty to the attorney-client relationship. 

See id. The federal district court dismissed appellants’ complaint for failure to state a 

claim and the district court correctly determined that, even if appellants’ state-court 

action were not barred by res judicata, their complaint also fails to state a claim against 

respondent. Application of res judicata in this circumstance was within the district 

court’s discretion.

In short, the district court’s analysis was exactly correct. 

Affirmed.

 

3

The district court also concluded that collateral estoppel applies so as to bar relitigation 

of the same issues involved in the earlier federal litigation. Because we conclude that the 

district court properly applied res judicata (claim preclusion), we do not separately 

analyze whether collateral estoppel (issue preclusion) also applies. See generally 

Hauschildt, 686 N.W.2d at 837.