Opinion ID: 699275
Heading Depth: 2
Heading Rank: 5

Heading: The Successors.

Text: 58 After the debtors filed bankruptcy, Bushard and a large number of people who allegedly had loaned $540,000 to the limited partnerships, as well as Lindsay and the limited partnerships themselves, filed another lawsuit in state court. By the time the Bushard plaintiffs served their complaint on Beneficial, the bankruptcy court had decided the limited partnerships' and Lindsay's case and published its opinion. The Bushard plaintiffs claimed in their state court lawsuit, subsequently removed to bankruptcy court, that their loans were secured by the limited partnerships' interests in the Greenway note and deed of trust. One plaintiff, LEI Properties, Inc. alleges that it is the successor entity to the Bankruptcy Estates of LEI, L.E.I. Properties, Inc., Investment Management Associates, Commonwealth Property Management Corporation and John R. Lindsay. Their complaint is drafted by the same lawyer as the limited partnerships' complaint, and is substantially identical, except that it adds a claim that because the foreclosure sale was improperly conducted Beneficial became a trustee for the debtors' other creditors and had breached its fiduciary duty to them, and it omits the claims of fraudulent conveyance and violation of the automatic stay. Beneficial removed the case to bankruptcy court March 18, 1988. The bankruptcy court dismissed it for failure to state a claim upon which relief could be granted, because the matter was res judicata. The limited partnerships had already been defeated on these claims, and the investors' claims derived from the limited partners. The district court affirmed. 59 The Bushard plaintiffs are variously creditors, successors-in-interest of the limited partnerships and the general partner, and the identical parties to the Lindsay complaint. Any claim based on status as a creditor must have been filed with the bankruptcy court as part of that litigation. See 11 U.S.C. Secs. 501(a), 727(b). Res judicata bars the claims of the successors in interest. See Restatement (Second) of Judgments Sec. 43 (1982). The Bushard appellants argue on appeal 3 that their claim is not identical, so cannot be barred. The claims are a subset of the limited partners' claims, except for the resulting trust theory, which depends entirely on the proposition that the foreclosure sale was improper. These differences are no barrier to res judicata. See Restatement (Second) of Judgments Sec. 24 (the claim extinguished includes all rights ... with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose.); see also id. at Sec. 25 (res judicata is bar even where second action presents new evidence or new theories). We affirm the dismissal. 60