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Nebraska Court of Appeals Advance S

24 Nebraska Appellate Repor

JENSEN v. CHAMPION WINDOW OF OMAHA

Cite as 24 Neb. App. 929

Randle S. Jensen, an indiv

appellant, v. Champion Wi

of Omaha, LLC, appell

___ N.W.2d ___

Filed August 15, 2017. No. A-16-780.

1. Motions to Dismiss: Pleadings: Appeal and Error. An appellate court 

reviews a district court’s order granting a motion to dismiss de novo, 

accepting all allegations in the complaint as true and drawing all reasonable inferences in favor of the nonmoving party.

2. Motions to Dismiss: Appeal and Error. When reviewing a dismissal 

order, the appellate court accepts as true all the facts which are well pled 

and the proper and reasonable inferences of law and fact which may be 

drawn therefrom, but not the pleader’s conclusions.

3. Claim Preclusion. The doctrine of claim preclusion applies when there 

are two proceedings and the following four requirements are satisfied: 

(1) there was a final judgment on the merits in the prior action; (2) the 

judgment was entered by a court of competent jurisdiction; (3) both the 

prior and the subsequent actions involved the same cause of action; and 

(4) both the prior and subsequent actions were between the same parties 

or persons in privity with them.

4. Judgments: Claim Preclusion. A judgment on the merits, rendered in a 

former suit between the same parties or their privies, on the same cause 

of action, by a court of competent jurisdiction, operates as a bar not only 

as to every matter which was offered and received to sustain or defeat 

the claim, but as to every other matter which might with propriety have 

been litigated and determined in that action.

5. Actions: Claim Preclusion. A party who could have raised claims in a 

prior action but failed to do so is precluded from raising those claims in 

a subsequent action.

6. ____: ____. Where a federal court dismisses the filed federal causes 

of action with prejudice but reserves and dismisses the state law 

Nebraska Supreme Court Online Library

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

08/22/2017 09:09 AM CDT
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Nebraska Court of Appeals Advance S

24 Nebraska Appellate Repor

JENSEN v. CHAMPION WINDOW OF OMAHA

Cite as 24 Neb. App. 929

claims filed contemporaneously, the only claims reserved are those 

expressly dismissed without prejudice. Any other state law claims arising from the same factual scenario but not brought in the federal lawsuit 

are precluded.

Appeal from the District Court for Douglas County: J. 

Michael Coffey, Judge. Affirme

Terry B. White, of Carlson & Burnett, L.L.P., for appellant.

Sarah J. Millsap and Kenneth M. Wentz III, of Jackson 

Lewis, P.C., for appellee.

Inbody, Riedmann, and Arterburn, 

Arterburn, Judg

INTRODUCTION

Randle S. Jensen appeals from an order of the district court 

which granted a motion to dismiss in favor of Champion 

Window of Omaha, LLC (Champion). On appeal, Jensen 

argues the district court erred in dismissing his claims for negligent and intentional infliction of emotional distress based on 

claim preclusion. For the reasons set forth below, we affirm.

BACKGROUND

Jensen worked several years at Champion as an installation 

manager. Jensen’s employment was terminated on August 12, 

2013. Following his termination, Jensen filed a charge of discrimination with the federal Equal Employment Opportunity 

Commission (EEOC), which cross-filed his complaint with 

the Nebraska Equal Opportunity Commission (NEOC). Jensen 

alleged Champion discriminated against him based on his 

sex, retaliated against him for reporting sexual harassment, 

and retaliated against him for reporting alleged violations of 

building codes and regulations.

On September 2, 2014, the NEOC issued a notice indicating 

it found no reasonable cause to support Jensen’s allegations. 
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JENSEN v. CHAMPION WINDOW OF OMAHA

Cite as 24 Neb. App. 929

The notice stated that Jensen had 90 days after the receipt of 

the notice to file suit. On December 1, Jensen filed a federal 

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

Jensen’s federal complaint alleged violations of title VII of 

the Civil Rights Act of 1964 and violations of the Nebraska 

Fair Employment Practice Act. The federal court granted 

summary judgment in favor of Champion on December 8, 

2015. The federal court dismissed Jensen’s title VII claims 

with prejudice and declined to exercise supplemental jurisdiction over his state law claims. The federal court expressly 

reserved Jensen’s state law claims and dismissed them without prejudice.

On February 26, 2016, Jensen filed a complaint in the 

district court for Douglas County. Jensen’s complaint in the 

district court was nearly identical to the complaint filed in 

federal court. Jensen filed an amended complaint in the district court on March 29. This complaint was nearly identical to his previous complaints, except that Jensen added 

a claim titled “Negligent and/or Intentional Infliction of 

Emotional Distress by Champion — In Violation of Nebraska 

Laws.” Jensen relied on the same factual basis for all of his 

claims, as he incorporated the factual basis by reference for 

each claim.

Champion filed a motion to dismiss on April 11, 2016. 

The district court granted Champion’s motion to dismiss in 

an order dated July 20, 2016. In reaching its decision, the 

court took judicial notice of Jensen’s federal complaint. The 

court determined that Jensen’s retaliation claims were barred 

because they were not filed in a timely manner pursuant to 

the NEOC order. The court also found that Jensen’s emotional distress claims were barred because they arose out of 

the same cause of action as alleged in the federal complaint 

and were not expressly reserved in the federal court’s order. 

Jensen appeals only the district court’s granting of Champion’s 

motion to dismiss with regard to his emotional distress claims. 
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JENSEN v. CHAMPION WINDOW OF OMAHA

Cite as 24 Neb. App. 929

Jensen assigned no error to the district court’s finding that his 

retaliation claims were time barred. Therefore, we will not 

address that issue.

ASSIGNMENT OF ERROR

Jensen argues, restated, that the district court erred in 

granting Champion’s motion to dismiss his emotional distress claims.

STANDARD OF REVIEW

[1,2] An appellate court reviews a district court’s order 

granting a motion to dismiss de novo, accepting all allegations 

in the complaint as true and drawing all reasonable inferences 

in favor of the nonmoving party. Hargesheimer v. Gale, 294 

Neb. 123, 881 N.W.2d 589 (2016). When reviewing a dismissal order, the appellate court accepts as true all the facts 

which are well pled and the proper and reasonable inferences 

of law and fact which may be drawn therefrom, but not the 

pleader’s conclusions. Id.

ANALYSIS

Jensen argues that his claims for emotional distress should 

not have been dismissed, because the federal court did not 

retain jurisdiction over his state law claims, and that he was 

therefore free to amend his complaint to add an additional state 

law claim.

[3,4] The doctrine of claim preclusion applies when there 

are two proceedings and the following four requirements 

are satisfied: (1) there was a final judgment on the merits in 

the prior action; (2) the judgment was entered by a court of 

competent jurisdiction; (3) both the prior and the subsequent 

actions involved the same cause of action; and (4) both the 

prior and subsequent actions were between the same parties or persons in privity with them. See Young v. Govier & 

Milone, 286 Neb. 224, 835 N.W.2d 684 (2013). A judgment 

on the merits, rendered in a former suit between the same 
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JENSEN v. CHAMPION WINDOW OF OMAHA

Cite as 24 Neb. App. 929

parties or their privies, on the same cause of action, by a 

court of competent jurisdiction, operates as a bar not only 

as to every matter which was offered and received to sustain or defeat the claim, but as to every other matter which 

might with propriety have been litigated and determined in 

that action. See Jensen v. Jensen, 275 Neb. 921, 750 N.W.2d 

335 (2008).

There is a split of authority on the very narrow issue 

before us: When a federal court disposes of federal claims 

brought before it in pretrial motions and expressly declines 

to exercise supplemental jurisdiction over the included state 

law claims, is a party precluded, in a subsequent action filed 

in state court, from bringing an additional state law claim 

that was not expressly reserved by the federal court? Upon 

our review of the claim in this case, we find that Jensen 

should be precluded from bringing a new claim in the subsequent action.

The Restatement (Second) of Judgments § 25 comment e. 

(1982) provides:

A given claim may find support in theories or grounds 

arising from both state and federal law. When the plaintiff 

brings an action on the claim in a court, either state or 

federal, in which there is no jurisdictional obstacle to his 

advancing both theories or grounds, but he presents only 

one of them, and judgment is entered with respect to it, 

he may not maintain a second action in which he tenders 

the other theory or ground. If however, the court in the 

first action would clearly not have had jurisdiction to 

entertain the omitted theory or ground (or, having jurisdiction, would clearly have declined to exercise it as a 

matter of discretion), then a second action in a competent 

court presenting the omitted theory or ground should be 

held not precluded.

Some courts have adopted the exception that if the court 

in the first action would clearly have declined to exercise 
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JENSEN v. CHAMPION WINDOW OF OMAHA

Cite as 24 Neb. App. 929

jurisdiction as a matter of discretion, then a second action in 

a competent court presenting the omitted theory or ground 

should be held not precluded. See, Pierson Sand v Keeler 

Brass, 460 Mich. 372, 596 N.W.2d 153 (1999); Parks v. City 

of Madison, 171 Wis. 2d 730, 492 N.W.2d 365 (Wis. App. 

1992); Sattler v. Bailey, 184 W. Va. 212, 400 S.E.2d 220 

(1990); Merry v. Coast Community College Dist., 97 Cal. 

App. 3d 214, 158 Cal. Rptr. 603 (1979).

However, the Restatement (Second) of Judgments § 26(b) 

(1982) further states that a plaintiff’s claim is not precluded by 

a final judgment if the court in the first action has expressly 

reserved the plaintiff’s right to maintain the second action. 

This is contingent upon the court expressly reserving a plaintiff’s ability to bring a particular claim. Id. When a court 

splits a cause of action by dismissing one part with prejudice and one part without prejudice, the only claims reserved 

are those expressly dismissed without prejudice. Some courts 

have adopted this view and have held that any state claims 

not reserved by the federal court are precluded. See, Korn v. 

Paul Revere Life Ins. Co., 83 Mass. App. 432, 984 N.E.2d 882 

(2013); Lambert v. Iowa Dept. of Transp., 804 N.W.2d 253 

(Iowa 2011).

The jurisdictions that have adopted the exception cited 

above rely heavily on whether the federal court would have 

declined to exercise supplemental jurisdiction. See Pierson 

Sand, supra. Those jurisdictions reason that a federal court 

will typically not exercise supplemental jurisdiction over state 

law claims once it has disposed of the federal claims pretrial. 

These jurisdictions reason that since the federal court clearly 

would have dismissed the state law claims without prejudice, 

then it is of no consequence if the party adds additional state 

law claims in state court.

The jurisdictions that have declined to adopt the above 

exception clearly disfavor attempting to divine or speculate 

what the federal court would have done if it were presented 
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Cite as 24 Neb. App. 929

with the state law claim that was added after dismissal of 

the case. See Korn, supra. Additionally, these jurisdictions 

believe the exception undercuts the broader principles against 

claim splitting and judicial economy. They reason that whether 

the party intentionally or inadvertently omitted the additional 

claim in the federal lawsuit, the party should not receive a 

second opportunity to litigate its claim based on the same factual scenario.

[5,6] We were unable to find a Nebraska case that deals 

with this specific issue. However, we believe that our case 

law is clear that a party must bring all claims in its initial 

action. A party who could have raised claims in a prior action 

but failed to do so is precluded from raising those claims in 

a subsequent action. See Ichtertz v. Orthopaedic Specialists 

of Neb., 273 Neb. 466, 730 N.W.2d 798 (2007). The key 

words here are “could have raised.” If the party could not 

have raised the claims in the prior action, perhaps because 

the court in the prior action lacked jurisdiction over them 

or because the claims had not yet matured, then the judgment in the prior action would not preclude the assertion 

of those claims in a subsequent action. See id. Therefore, 

we adopt the view that where a federal court dismisses the 

filed federal causes of action with prejudice but reserves 

and dismisses the state law claims filed contemporaneously, 

the only claims reserved are those expressly dismissed without prejudice. Any other state law claims arising from the 

same factual scenario but not brought in the federal lawsuit 

are precluded.

Because the federal court did not expressly reserve Jensen’s 

claims for emotional distress, Jensen is precluded from bringing these additional claims that could have been brought 

before the federal court. It is clear from the pleadings that 

Jensen is alleging identical facts as a basis for his emotional 

distress claims as were pled in the claims brought in federal 

court. There was a final judgment on the merits of his federal 
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JENSEN v. CHAMPION WINDOW OF OMAHA

Cite as 24 Neb. App. 929

claims. The federal court was a court of competent jurisdiction. Both the federal and state actions involved the same 

facts and the same causes of action. Both the prior and subsequent actions were between the same parties. The claims 

of emotional distress arose during the same occurrences as 

his other claims. Therefore, the district court did not err in 

granting Champion’s motion to dismiss the claims based on 

claim preclusion.

CONCLUSION

We find that, based on claim preclusion, the district court 

did not err in granting Champion’s motion to dismiss the 

claims.

Affirmed