Opinion ID: 2137478
Heading Depth: 1
Heading Rank: 4

Heading: whether pca's action for claim and delivery was barred by res judicata.

Text: Wynne and Holm initially assert that the issue of claim and delivery is barred by res judicata, collateral estoppel, and waiver by virtue of the federal action. Further, they assert that PCA's claim to the proceeds held in escrow is inferior to their liens. Finally, they argue that there are indispensable parties [5] (Peter Dupris and the estate of Hazel Dupris) not within this action which are necessary to a resolution of this action. Res judicata serves as a claim preclusion to prevent litigation of an issue actually litigated or which could have been properly raised and determined in a prior action. Bank of Toronto v. Lengkeek, 436 N.W.2d 271, 275 (S.D.1989); Black Hills Jewelry Mfg. v. Felco Jewel Ind., 336 N.W.2d 153, 157 (S.D.1983); Schell v. Walker, 305 N.W.2d 920 (S.D.1981); Golden v. Oahe Enterprises Inc., 90 S.D. 263, 240 N.W.2d 102 (1976). In the federal district court litigation, PCA made a motion for turnover of funds against Dupris. In the state court proceedings PCA also sought an order for claim and delivery issued pursuant to SDCL ch. 21-15, requiring First Bank to immediately turn over to PCA all sums in excess of the sums claimed by Wynne and Holm pursuant to their attorneys' liens. Wynne and Holm assert that PCA brought this action for claim and delivery in the United States District Court. They argue that PCA was denied that relief in federal court on the merits but have resurrected this identical claim involving the identical proceeds of the escrow account before the state court. The federal district court (in its post-trial order) did deny PCA's motion for turnover of funds. However, that court's order states as follows: [T]his Court cannot determine whether [Wynne & Holm] have an interest in the escrow account superior to that of [PCA]. Besides out of court settlement, the best way to resolve the present dispute is for [PCA] to seek to execute on the entire escrow fund. First Bank of Rapid City could then bring an interpleaded action or either party could seek to bring a state court case. Though [PCA] is a federal instrumentality who could seek removal of an action to federal court, it would be best for a South Dakota court to adjudicate this novel point of South Dakota law. Therefore, it is ORDERED that [PCA's] motion for turnover of funds is denied. It is further ORDERED that plaintiffs' motion for recognition of an attorney's lien is denied. (Emphasis added.) Here, the federal court denied PCA's claim for turn-over of funds because it wanted a state court ruling on the priority issue. PCA then brought this action in state court pursuant to the federal court's suggestion. Not only was the federal court's denial of the motion not a final decision, Wynne & Holm's suggestion that res judicata applies is ludicrous. Bank of Toronto, supra ; Black Hills Jewelry Mfg., supra ; Schell, supra; Luedtke v. Koopsma, 303 N.W.2d 112 (S.D.1981); Golden, supra; Carr v. Preslar, 73 S.D. 610, 47 N.W.2d 497 (1951).