Opinion ID: 507204
Heading Depth: 2
Heading Rank: 1

Heading: Preclusive Effect of Prior Suit.

Text: 16 In 1981 WPSC obtained a default judgment in an action seeking foreclosure on plaintiffs' housing development and seeking judgment against the plaintiffs for the amount of the loan plus interest. After the entry of the default judgment in the foreclosure case, plaintiffs filed two motions under Fed.R.Civ.P. 60(b) requesting relief from the judgment. In each motion plaintiffs raised essentially the same arguments as they do in this case. The district court denied both motions. Plaintiffs did not appeal. 17 WPSC argues that the present suit is barred for two reasons related to the foreclosure suit. First, WPSC claims that the promissory estoppel claim raised here should have been raised as a compulsory counterclaim in the foreclosure action and that failure to raise the claim in the earlier suit bars plaintiffs from urging the issue in this case. Fed.R.Civ.P. 13(a) provides: 18 A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. 19 Failure to make a counterclaim that falls within the ambit of Rule 13(a) ordinarily bars a party from making the same claim against the prior opponent in a subsequent proceeding. See Pipeliners Local Union No. 798, Tulsa, Okla. v. Ellerd, 503 F.2d 1193, 1198 (10th Cir.1974). Courts have generally attributed the Rule's preclusive effect to the doctrines of res judicata or waiver and estoppel. See, e.g., Cleckner v. Republic Van and Storage Co., 556 F.2d 766, 769 (5th Cir.1977) (principles of res judicata govern); Dindo v. Whitney, 451 F.2d 1, 3 (1st Cir.1971) (estoppel); see also 6 C. Wright and A. Miller, Federal Practice and Procedure Sec. 1417 (1971). We find it unnecessary in this case to rely on these specific legal concepts because the Rules themselves, under a fair construction, bring about the same result. Lawhorn v. Atlantic Ref. Co., 299 F.2d 353, 356 (5th Cir.1962). 20 We agree, however, with the district court in this case that, given the special circumstances, plaintiffs' failure to bring a counterclaim in the foreclosure action does not bar them from seeking relief against WPSC in the present suit. Plaintiffs allege that they were induced by WPSC not to answer the complaint in the prior action. They claim that WPSC's attorney, Donald Winship, was also advising them and that he told them not to contest the suit in exchange for WPSC's promise to finance a prospective buyer of plaintiffs' housing development. The district court noted the existence of several facts that support these assertions. For example, Winship admitted to the court that he had spoken to plaintiff Gratz concerning the sale of the development. Winship also said plaintiffs had access to his office for having a sales agreement typed and reviewed by him. After the foreclosure, Winship advised plaintiffs concerning the nature of the foreclosure sale and the significance of various periods of redemption. These facts support plaintiffs' contention that an agreement existed between WPSC, Winship, and plaintiffs. The district court was persuaded that, given this arrangement, plaintiffs did not have a fair opportunity to bring their counterclaim. Under the facts of this case as the court found them, we cannot say that the court erred. 21 Second, WPSC alleges that failure to appeal from the denials of the Rule 60(b) motions prevents plaintiffs from bringing an independent action on the same grounds. Resort to independent action may be had only under unusual and exceptional circumstances. Crosby v. Mills, 413 F.2d 1273, 1276 (10th Cir.1969); see also Winfield Assocs. v. Stonecipher, 429 F.2d 1087, 1090 (10th Cir.1970) (outlining specific requirements). Nevertheless, granting of relief in this unusual type of proceeding lies largely within the discretion of the trial judge. Stonecipher, 429 F.2d at 1090. We find no abuse of discretion in this case. The court found that shortly before the filing of the foreclosure suit the plaintiffs formally lost the services of attorney Winship who had represented them during the entire deal. The court also found that plaintiffs were not able to retain new counsel before the time for appeal had lapsed and therefore decided to file an independent action. Furthermore, the court found that plaintiffs based this decision in part on a possibly misleading statement the court made in a prior proceeding. On these facts we cannot say that the court abused its discretion in holding that plaintiffs' claims were not barred by their failure to appeal the denial of their Rule 60(b) motions. 22