UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

SOUTH BEND DIVISION

ODELL HUGHES, )

)

Plaintiff, )

)

v. ) No. 3:14 CV 1594

)

SOUTHERNCARE INC. and )

PATRICIA PANCNER, )

)

Defendants. )

OPINION AND ORDER

This matter is before the court on defendant Southerncare Inc. and defendant

Patricia Pancner’s (“defendants”) motion to dismiss plaintiff Odell Hughes’s complaint.

(DE # 8.) Plaintiff has filed a response to this motion (DE # 9) and defendants have filed

a reply (DE # 13). For the following reasons, the court takes that motion under

advisement, and grants the parties 30 days in which to respond to the analysis set forth

below. 

I. Facts and Background 

In the analysis section below, the court analyzes whether plaintiff’s case should

be dismissed on res judicata grounds. Before getting to the facts of this case however,

the court must summarize the facts of a different suit plaintiff filed in this district

against defendant Southerncare. In July of 2012, plaintiff filed suit against Southerncare

in Indiana state court, and that action was removed to this court, where it was assigned

to Judge William C. Lee. See 3:12-cv-00388. In that suit, plaintiff alleged that he had been
employed by Southerncare for seven years, but was terminated after being accused of

committing mileage fraud. (3:12-cv-00388, DE # 25.) Specifically, plaintiff alleged that

after a change in management, he was accused of mileage fraud for using a system for

calculating mileage that he had used for several years, and which other, white

employees had also used. Id. He also alleged that those white employees were not

disciplined for using the mileage calculation system. Id.

In plaintiff’s case before Judge Lee, plaintiff argued that his termination violated

Title VII, and also brought state law claims of intentional infliction of emotional

distress, breach of contract, and defamation. Id. Although she was not a named

defendant in the case before Judge Lee, Patricia Pancner was noted in the complaint as

being the person that accused plaintiff of committing mileage fraud. Id. at 8. The last

date for amended pleadings in that case was October 31, 2012 (3:12-cv-00388, DE # 23)

and discovery closed in January 2014. (3:12-cv-00388, DE # 46). In September of 2014,

Judge Lee granted summary judgment in favor of Southerncare (3:12-cv-00388, DE #

82), and the case was closed. The court will refer to plaintiff’s suit against Southerncare

in front of Judge Lee as Hughes I.

In May of 2014, plaintiff brought suit against Southerncare and Patricia Pancner

in Indiana state court. (3:14-cv-01594; DE # 4.) After filing an amended complaint (DE

# 5), the case was removed to this court. (DE # 1.) In his complaint in the case before the

undersigned district court judge, which the court will call Hughes II, plaintiff alleges that

he worked for Southerncare for seven years. (DE # 5 at 2.) Plaintiff, who is African

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American, goes on to allege that in June of 2011, he was disciplined for an incident that

involved plaintiff and several non-African American employees. (Id. at 2-3.) After the

incident, plaintiff was required to stay at home without pay, but the other non-African

American employees were not disciplined. (Id. at 2.) 

In a subsequent conversation with defendant Pancner, plaintiff stated that he was

being treated differently because he is African American. (Id.) Plaintiff alleges that he

was fired after he complained about being treated differently. (Id.) Plaintiff was told

that he was being fired for poor performance and inappropriate behavior, including

mileage fraud. (Id.) Although his complaint is not entirely clear, it appears that the

incident described above had to do with the way he reported his mileage. (Id.) Plaintiff

alleges that other non-African American employees reported their mileage in the same

way, but were not terminated by Southerncare. (Id.) 

In Hughes II, plaintiff alleges that by firing him but not other non-African

American employees that reported their miles in the same manner that plaintiff did,

defendants violated 42 U.S.C. 1981. (Id. at 3-4.) Defendants have now moved to dismiss

plaintiff’s complaint. (DE # 8.)

In their motion to dismiss, defendants argue that plaintiff’s complaint in this case

must be dismissed because plaintiff, by filing two separate lawsuits arising out of the

same transaction, has engaged in “claim splitting.” (DE # 8 at 2.) “As a general rule, a

federal suit may be dismissed for reasons of wise judicial administration . . . whenever it

is duplicative of a parallel action already pending in another federal court.” Serlin v.

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Arthur Andersen & Co., 3 F.3d 221, 224 (7th Cir. 1993) (citations and quotations omitted).

The rule against claim splitting leaves the decision on whether to dismiss a duplicate

suit to the discretion of the district court judge. Wallis v. Fifth Third Bank, 443 F. App’x

202, 205 (7th Cir. 2011) (“No rule requires that district courts dismiss duplicative

lawsuits, and we have sometimes suggested that district courts should stay a second

lawsuit pending the outcome of an earlier-filed lawsuit addressing the same issues.”

(emphasis in original)). Plaintiff’s case against Southerncare in front of Judge Lee is no

longer pending, however, and this court believes that an analysis under res judicata is

now more appropriate than analyzing plaintiff’s two cases under the doctrine of claim

splitting.

Defendants did not make a res judicata argument in their motion to dismiss

because Hughes I was still pending when the motion to dismiss was filed. (DE # 8 at 4.)

After Judge Lee granted summary judgment in favor of Southerncare in Hughes I,

defendants filed a supplement to their motion to dismiss in this case asking that

plaintiff’s complaint be dismissed on a res judicata theory. (DE # 18.) The court agrees

that res judicata applies to bar plaintiff’s claim in Hughes II. The court will set out its

analysis explaining why it believes that res judicata applies in this case. The court

realizes, however, that it may grant summary judgment sua sponte “only if [it has] given

the affected parties advance notice of their intent to do so and a fair opportunity to

respond with argument and evidence.” Smith v. Bray, 681 F.3d 888, 903 (7th Cir. 2012).

Because neither party has briefed the res judicata issue, both parties will be granted 30

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days from the date of this order in which to file a brief including any argument and

evidence they believe is relevant to the court’s res judicata analysis set out below. 

II. Analysis

“The preclusive effect of a federal-court judgment is determined by federal

common law.” Adams v. City of Indianapolis, 742 F.3d 720, 735 (7th Cir. 2014) (citations

and quotations omitted). “The principle underlying res judicata—or claim

preclusion—is to minimize the expense and vexation attending multiple lawsuits,

conserve[ ] judicial resources, and foster[ ] reliance on judicial action by minimizing the

possibility of inconsistent decisions.” Matrix IV, Inc. v. Am. Nat’l Bank & Trust Co. of Chi.,

649 F.3d 539, 547 (7th Cir. 2011) (citations and quotations omitted). “Claim preclusion

under federal law has three ingredients: a final decision in the first suit; a dispute

arising from the same transaction (identified by its ‘operative facts’); and the same

litigants (directly or through privity of interest).” Czarniecki v. City of Chicago, 633 F.3d

545, 548 (7th Cir. 2011) (citations and quotations omitted); see also Adams, 742 F.3d at

736.

It is clear that Judge Lee rendered a final judgment on the merits in Hughes I. As

noted earlier, Judge Lee granted Southerncare’s motion for summary judgment in

September 2014. (See 3:12-cv-00388, DE # 82.) The court will therefore move on to

determine whether the disputes in both cases arose from the same transaction. 

“[W]hether an ‘identity of the cause of action’ exists—depends on whether the

claims arise out of the same set of operative facts or the same transaction.” Matrix IV,

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Inc., 649 F.3d at 547. “This ‘transactional’ inquiry focuses on whether the claims

comprise the same core of operative facts [that] give rise to a remedy.” Id. (citations and

quotations omitted). “Even if the two claims are based on different legal theories, the

two claims are one for purposes of res judicata if they are based on the same, or nearly

the same, factual allegations.” Id. (citations and quotations omitted). 

It is clear from the language of the complaints in Hughes I and Hughes II (see 3:12-

cv-00388, DE # 25; 3:14-cv-01594, DE # 5) that both of these suits arise from the “same

core of operative facts[.]” Matrix IV, Inc., 649 F.3d at 547. Both suits arise from plaintiff’s

employment and subsequent termination with Southerncare. (See 3:12-cv-00388, DE

# 25; 3:14-cv-01594, DE # 5.) Additionally, in both complaints (see 3:12-cv-00388, DE # 25

at 2-4; 3:14-cv-01594, DE # 5 at 3-4), plaintiff’s primary grievance with his termination

has to do with that fact that he was terminated for using an allegedly improper mileage

calculation system, while other non-African American employees that also used that

same mileage system were not terminated. 

In his response to defendants’ motion to dismiss, plaintiff points out that there

are differences between his suit in Hughes I and his suit in Hughes II. (DE # 9 at 4-6.)

Specifically, plaintiff notes that Hughes II has a Section 1981 claim that was not present

in Hughes I, and that Hughes II has an additional defendant - Patricia Pancner. (Id.) With

respect to plaintiff’s argument that Hughes II contains an additional claim not contained

in Hughes I, “[t]he doctrine of [r]es judicata bars not only those issues actually decided

in the prior suit, but all other issues which could have been brought.” Matrix IV, Inc.,

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649 F.3d at 547 (citations and quotations omitted). There is nothing in plaintiff’s

complaint in Hughes II that indicates that he is basing any of his claims on facts that

were unknown to him at the time he was litigating Hughes I. In fact, as defendants point

out (DE # 8 at 1), plaintiff included a Section 1981 claim in one of the earlier versions of

his complaint in Hughes I. (See 3:12-cv-00388, DE # 5.) Thus, it is clear that plaintiff’s

Section 1981 claim could have been, and should have been, brought in Hughes I. 

Finally, the court must determine whether Hughes I and Hughes II involve “the

same litigants (directly or through privity of interest).” Czarniecki, 633 F.3d at 548. There

were only two parties in Hughes I – plaintiff and defendant Southerncare. (See 3:12-cv00388.) In Hughes II, however, plaintiff sued two defendants – Southerncare and Patricia

Pancner. (See 3:14-cv-01594.) Thus, defendant Pancner is an additional party in Hughes II

that was not a party to plaintiff’s suit in Hughes I.

Plaintiff’s amended complaint in Hughes II makes clear that defendant Pancner

was employed by defendant Southerncare. (3:14-cv-01594, DE # 5 at 3-4). “Employees

acting within the scope of their employment are in privity with their employer.” Perdue

v. Carlos, No. 2:10 CV 35, 2011 WL 2446565, at *1 (N.D. Ind. June 17, 2011); see also Henry

v. Farmer City State Bank, 808 F.2d 1228, 1235 n. 6 (7th Cir. 1986); Martino v. McDonald’s

System, Inc., 598 F.2d 1079, 1083 n. 7 (7th Cir. 1979); Lambert v. Conrad, 536 F.2d 1183,

1186 (7th Cir. 1976). None of the allegations in plaintiff’s complaint in Hughes II indicate

that Pancner was acting outside the scope of her employment, and Pancner was

therefore in privity with Southerncare.

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In sum, the court concludes that all three elements required for the application of

res judicata are present in this case. 

III. Conclusion

The court believes that res judicata is a bar to plaintiff’s current suit. Because

neither party has fully addressed this issue, however, both parties are GRANTED

thirty days in which to respond to the analysis set out in this order with any argument

or evidence they feel is relevant to the court’s analysis. If neither party responds during

that thirty-day period, the court will grant summary judgment in favor of defendants. 

SO ORDERED.

Date: November 18, 2014

s/James T. Moody 

JUDGE JAMES T. MOODY

UNITED STATES DISTRICT COURT