Opinion ID: 443256
Heading Depth: 1
Heading Rank: 4

Heading: effect of the 1961 settlement of prior state suit

Text: 117 Defendants argue that this action is barred by res judicata on the basis of the wrongful death action instituted in 1960 by Dolphus Bell in Milwaukee County Circuit Court against Grady and the City of Milwaukee. The record indicates that in October 1961 Dolphus Bell stated in court he would accept the $1,800 settlement offer, and an oral stipulation for dismissal of the action upon the merits was entered into by the attorneys in the presence of the parties and Judge Landry. The oral stipulation for dismissal was reduced to writing and was presented to Dolphus Bell for his signature as a condition for payment of the settlement. Dolphus Bell refused to sign the release. Dolphus Bell's attorney Max Raskin moved for an order to show cause why the defendants should not deposit with the court clerk the $1,800 and why Raskin should not receive his attorney fees out of this sum. On November 21, 1961, Judge Landry ordered that the settlement be disbursed in part to Raskin, in part to Milwaukee County (which had attached part of the settlement for payment of Dolphus Bell's medical bills), and the remainder to Dolphus Bell. Judge Landry also approved the stipulation and order for dismissal of the action with prejudice signed by the attorneys. Dolphus Bell did not sign and refused to endorse his settlement check which was returned to the City of Milwaukee treasury. 118 In the instant action the defendants raised the prior settlement/res judicata argument on their motion for summary judgment. The district court pursuant to Fed.R.Civ.P. 56(d) viewed defendants' factual contentions as existing without substantial controversy and accepted them as true, namely, that Dolphus Bell had entered into a binding settlement agreement with Grady and the City of Milwaukee. Notwithstanding this factual finding, the court ruled that res judicata could not be applied to this action, at least on a motion for summary judgment, since the record was replete with allegations of fraud, concealment and a broad-based cover-up on the part of the defendants Milwaukee Police Department, Howard Johnson, Edwin Shaffer, Thomas Grady, and the Office of the Milwaukee County District Attorney. Bell II, 514 F.Supp. 1363, 1368-1369. 119 In ruling upon post-verdict motions, the district court reaffirmed its denial of defendants' motion for summary judgment, observing that: 120 [T]he fraud in this case is sufficient to nullify an otherwise valid settlement and dismissal. This is not a case in which the defendant simply lied and thereby made the plaintiff's proof of his case difficult. Rather, this is a case of massive conspiracy by high ranking Milwaukee officials to prevent the disclosure of the true facts of the shooting of Daniel Bell. Given the monopoly on force held by the government, this conspiracy prevented the proper functioning of the judicial system. 121 Bell III, 536 F.Supp. 462, 465-466. 122 Along with the defendants' post-verdict motions, plaintiffs moved for an evidentiary hearing to reconsider the district court's earlier finding that Dolphus Bell had entered into a valid settlement of the state court action. The court denied plaintiffs' motion. Since the jury by its special verdict had found the allegations of fraud, concealment, and a broad-based cover-up to be true, the court held that the earlier action did not bar the instant action regardless of whether the earlier settlement was an effective and binding one. 123 Defendants on appeal again contend that the 1961 settlement precludes this action. We reject this contention and affirm the rulings of the district court. 124 Federal courts are ordinarily obligated to give full faith and credit to judicial proceedings in state courts of competent jurisdiction and to apply the concepts of res judicata and collateral estoppel which would be employed by the courts of the state in which a prior judgment was rendered. See 28 U.S.C. Sec. 1738; Migra v. Warren City School District Board of Education, --- U.S. ----, 104 S.Ct. 892, 79 L.Ed.2d 56; Winters v. Lavine, 574 F.2d 46 (2d Cir.1978). This principle clearly applies in instances where a federal Section 1983 action is brought subsequent to an action in state court based on the same set of operative facts. Migra, supra; Allen v. McCurry, 449 U.S. 90, 101 S.Ct. 411, 66 L.Ed.2d 308. The present Section 1983 action is based upon the same factual happening as the 1960 wrongful death action, although many of the operative facts were concealed at the time of the earlier action. In Wisconsin, a state court judgment has no binding effect in subsequent litigation where the plaintiff proposes to rely on evidence that he or she was unable or failed to present in the first action on account of the defendant's fraud or concealment. See, e.g., Hammes v. First National Bank & Trust, 79 Wis.2d 355, 363, 255 N.W.2d 555, 559-560 (1977); see also Restatement (Second) of Judgments Sec. 70(1)(b) (1981). The district court applied Hammes and therefore held that the 1961 purported settlement which was entered upon the dismissal of the action on the merits did not bar this subsequent action. 24 125 The policy of Hammes applies in this case notwithstanding defendants' argument that the Bell family and their attorneys knew from the very beginning that the police must have been lying and covering up the true circumstances of the shooting. The depositions and testimony of Daniel Bell's siblings and the Bell family's attorneys certainly support the proposition that at the time of the state court action they believed Daniel Bell was innocent of any wrongdoing and that the police had lied. But the Bell family, with their beliefs alone, were deprived of a fair opportunity to seek redress by virtue of defendants' fraudulent concealment of facts crucial to the fair disposition of the dispute. Not only did Grady and others cover up what actually happened the night of the shooting, but, according to the testimony of Sylvia White Bell, when some members of the Bell family went to the police that night for an explanation, they were told niggers get out of here, or be jailed. At the coroner's inquest, conducted as a non-adversarial proceeding without opportunity for cross-examination, Bell family questions were largely ignored. 126 In the 1960 tort action, the City and Grady defended the action on the basis of Grady's false representations made during the investigation of the shooting. Defendants' answer there states, inter alia, that Bell announced himself as a holdup man, Bell lunged at Grady with a knife, and that the shooting was in self-defense (Exh. 508). Moreover, the record indicates that the 1961 settlement offer by the City of Milwaukee was made before any discovery was obtained by Dolphus Bell. Defendants at oral argument stated that Dolphus Bell and his attorney did not seek any discovery in the 1960 action. Even assuming this contention to be true, defendants have not established that had Dolphus Bell and his attorney sought discovery, they would have obtained sufficient documentary and testimonial evidence to overcome the inquest finding of justifiable homicide, a finding facilitated by perjured testimony and the biased examination tack of District Attorney McCauley and Deputy Medical Examiner LaMonte. It was not until Officer Krause came forward in 1978 and revealed the true circumstances that plaintiffs could fairly present their case. Thus regardless of whether the settlement was valid when allegedly entered into, it cannot be used to preclude future claims and in so doing redound to the benefit of defendants. 127 Of course, there has been a dramatic change in civil rights recovery over the last 25 years which has an ironic impact on the result in this case. At the time of the Bell shooting, just prior to Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492, a civil rights plaintiff was required to prove that the defendant acted with a specific intent to deny plaintiff his or her constitutional rights, a difficult showing indeed. Moreover, it was not until Terry v. Kolski, 78 Wis.2d 475, 254 N.W.2d 704 (1977), that the Wisconsin Supreme Court explicitly opened the door to Section 1983 plaintiffs. 25 Limited to the Wisconsin wrongful death statute and a maximum potential state court recovery of $18,125, Dolphus Bell would have had a difficult time establishing the $15,000 component of pecuniary injury, for the record does not indicate that Dolphus Bell was financially dependent upon his son Daniel. Defendants argue unpersuasively that plaintiffs should not now enjoy the evolved civil rights doctrine. Ironically, the efforts of Grady and others to conceal the facts surrounding the shooting make the expanded civil rights recovery available to plaintiffs. 128 Even if the 1961 settlement and dismissal on the merits were given preclusive effect and it were held that Dolphus Bell could or should have raised civil rights claims on behalf of himself and Daniel Bell's estate in 1960, much of the present action would not be barred. Clearly a civil rights claim would lie for damages arising from defendants' acts of concealment continuing past the prior action. Additionally, it is likely that in any event all claims of Daniel Bell's siblings would not be barred since, although the siblings were extensively involved in assisting Dolphus Bell in the first action, they were not actual plaintiffs; nor have defendants established that defensive collateral estoppel should be applied to bar the siblings' claims.