Opinion ID: 571457
Heading Depth: 3
Heading Rank: 1

Heading: Sameness of Claims

Text: 30 We note from the outset, that in and of itself, the adversarial proceeding that accompanied the formal hearing was not of the scope that would have precluded the bringing of the lender liability action. In that proceeding, appellants alleged a very narrowly tailored claim which attacked the validity of the liens themselves, but not the amount of repayment the banks were entitled to. Because the question of whether VIDA was a licensed lender was a factually contained question, sharing no similarity and bearing no relevance to the debtor-creditor relationship as it was subsequently developed, we find no basis for deciding that the two claims involved the same cause of action. We take note, however, of appellees' position that, had the scope of the former complaint been more similar to that of the second, the adversary proceeding would have been the preferred forum for Sure-Snap to have brought its claims of wrongdoing. 31 The formal bankruptcy hearing, confirming as it did Sure-Snap's plan for reorganization and schedule of repayment, did necessitate preclusion of the lender liability action, as the claims premising Sure-Snap's petition for reorganization, and those alleging predatory banking practices, were integrally related. See, e.g., Southmark Properties v. Charles House Corp., 742 F.2d 862, 871 (5th Cir.1984) (If appellants' challenge to Southmark's right to thus take ownership of the property was extinguished by the prior reorganization action ... then appellants' remedies against Southmark 'with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose,' also were extinguished.) (quoting Restatement (Second) of Judgments § 24(1)). 32 Despite appellants' excessively narrow characterization of the bankruptcy hearing as a proceeding of limited effect determining only the banks' right to be paid, it is evident that the focus of contention and the basis for scheduling in that hearing encompassed the entire lender-debtor relationship, not just as initiated by assumption of the loans themselves, but as developed by State Street Bank through the working-capital funding and the early calling of the loan. See Matter of Howe, 913 F.2d at 1144 (where appellants bringing lender liability claims five years after a bankruptcy proceeding alleged that the only right and duty resolved in the bankruptcy proceedings was the[ir] obligation ... to make payments to the Bank, the court disagreed with the narrow characterization of the hearing's scope, and affirmed a holding of res judicata). 33 In its order the lower court properly pointed out that the bankruptcy cause of action comprised all matters ... that Sure-Snap or any creditors might have raised to advance their interest, including not just the creditors' proofs of claim, but Sure-Snap's petition for protection from its creditors. Fundamental to the bankruptcy court's finding of how much Sure-Snap owed, was a finding of how much Sure-Snap had--what vestigial worth its business had retained. The sudden termination of Sure-Snap's working line of credit by State Street was certain to have affected this factor. Therefore the post-lending conduct must have substantially influenced Sure-Snap's efforts to restructure its relationships with its creditors in the bankruptcy proceeding. 34 In their brief, appellants all but admit the inter-related nature of the two claims, by alleging that State Street's post-loan conduct forced Sure-Snap into bankruptcy. Sure-Snap negotiated a transaction to sell itself to a group of outside investors and to repay State Street in full, but was not afforded the time, Sure-Snap alleges. This same post-lending conduct, which Sure-Snap says tacitly influenced the disposition of the creditors' claims during the bankruptcy proceeding, makes up the subject of appellants' claims for intentional infliction of emotional distress, tortious interference with business relationship, etc. As the same cause of action includes, for res judicata purposes,  'all the remedial rights of the plaintiff against the defendant growing out of the relevant transaction,'  Nilsen v. City of Moss Point, 701 F.2d 556, 560, n. 4 (5th Cir.1983) (en banc) (quoting Restatement (Second) of Judgments § 24 Comment a (1982)), we hold the latter claims barred by the first of this Circuit's four-pronged test for sameness. 3 35 Appellants make a more convincing argument in trying to persuade us that the evidentiary foundation of their claims is distinct. It is technically true that in formulating a claim of tortious conduct, appellants could have supported their claim for relief by alleging only specific instances of injurious conduct (such as wrongfully dishonoring checks)--without relating the conduct back to the financial context in which it was performed. But, because the lender liability claims would be misleading if alleged in a vacuum--devoid of the financial atmosphere which prompted Sure-Snap to file for bankruptcy--the tortious conduct action should not be heard separate and apart from the original bankruptcy proceeding. See Hendrick v. Avent, 891 F.2d 583 (5th Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 64, 112 L.Ed.2d 39 (1990) (following bankruptcy court's order confirming sale of an asset, trustee's suit against purchaser alleging fraud held barred). 36 On the final issue of factual similarity, appellants also are not persuasive. Sure-Snap's very allegation that the banks' tortious conduct negatively influenced their business's health, makes it hard-pressed to explain how the two causes of action--the plan of reorganization and the lender liability claims--did not comprise the same essential matter. As was stated by the court in Matter of Howe, 913 F.2d at 1144, n. 10, [a] party may not avoid the preclusive affect of res judicata by asserting a new theory or a different remedy. Far from there being only a few operative facts which were common to these successive actions, United Technologies, 706 F.2d at 1259, it appears the entire basis of contention was the same.