Court Opinion

ID: 2654697
Source: CourtListenerOpinion
Date Created: 2014-02-27 01:01:20.841985+00
Date Added: 2024-06-11T12:58:45.718794
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                            No. 13-1926

BARBRANDA WALLS; HAL WALLS, JR.,

                Plaintiffs – Appellants,

          v.

WELLS FARGO BANK, N.A.,

                Defendant − Appellee.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria.     Leonie M. Brinkema,
District Judge. (1:13-cv-00623-LMB-JFA)

Submitted:   December 20, 2013          Decided:   February 26, 2014

Before SHEDD, DAVIS, and DIAZ, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Harry T. Spikes, Sr., Washington, D.C., for Appellants. Alison
W. Feehan, Richmond, Virginia, Craig B. Young, KUTAK ROCK, LLP,
Washington, D.C., for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

     Plaintiff-Appellant            Barbranda         Walls   brought     this    lawsuit

against    Wells   Fargo       Bank,    N.A.,          Defendant-Appellee,        in    the

Superior Court for the District of Columbia, seeking to enjoin

the foreclosure sale of a commercial property in the District.

Walls’ husband, Hal Walls, Jr., was joined as a plaintiff in an

amended complaint, after which Wells Fargo removed the action to

federal court. Thereafter, venue was transferred to the Eastern

District    of   Virginia,      where      a       previous   action      between      Wells

Fargo and Barbranda Walls involving the same loan and the same

collateral    property        had   been    adjudicated.          The   district       court

granted    Wells   Fargo’s      motion      to       dismiss.     The   Wallses     timely

appealed. As explained within, we affirm.

                                           I.

     In June 2012, Wells Fargo filed suit in the U.S. District

Court for the Eastern District of Virginia against Barbranda

Walls, alleging she had defaulted on a $600,000 loan secured by

real estate she owned in the District of Columbia. In September

2012,   Walls    filed    a    number      of       counterclaims,      which    included

allegations of fraud, breach of contract, and bad faith. Walls

disputed the loan balance asserted by Wells Fargo, alleging that

it   was   “grossly      overstated,”              that   Wells   Fargo    had    charged

“excessive fees and charges designed to prevent [Walls] from

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paying      off    the   note”      and   that       Wells    Fargo’s      figures       were

“knowingly fraudulent.” J.A. 69.

      The     district      court    dismissed        all    of   Walls’        claims   with

prejudice, holding that Walls had failed to state a claim under

Federal Rule of Civil Procedure 12(b)(6), and in particular that

the allegations supporting the fraud claim were insufficient to

meet the heightened pleading standard of Rule 9(b). The district

court eventually granted summary judgment to Wells Fargo on its

claim,     including     an     award     of    significant       attorney’s        fees    to

Wells Fargo in accordance with the terms of the loan agreement.

We affirmed the district court’s judgment and the fee award. See

Wells Fargo Bank, N.A. v. Walls, 2013 WL 5718480 (4th Cir. Oct.

22, 2013).

      While the above-described proceedings were ongoing, Wells

Fargo began foreclosure proceedings in the District of Columbia

on   the    property     that    served        as   collateral      for    the     loan.   In

September 2012, just before the public auction of the property

was to take place, Mrs. Walls filed this suit seeking to enjoin

the sale. The court denied emergency relief, and subsequently

dismissed      Walls’    remaining        claims      as    moot.   In     January       2013,

Walls filed an amended complaint adding her husband, Mr. Walls,

as a plaintiff. The amended complaint included the same claims

as   Walls’       counterclaims      in   the       earlier   suit,       and    additional

claims     for     unjust     enrichment       and    negligence.         The    underlying

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facts as to all the claims, however, remained identical to those

underlying the earlier counterclaims: that Wells Fargo’s fees

were       fraudulent,   excessive,   assessed   in   bad    faith,    and    that

“through the charges, [Wells Fargo] effectively deprived [Walls]

of her ability to satisfy the debt obligation[.]” J.A. 10.

       Wells Fargo removed the case to the U.S. District Court for

the District of Columbia, and then moved to transfer venue to

the Eastern District of Virginia. * The court granted the motion.

In June 2013, the Virginia district court dismissed the case on

grounds of res judicata and for failure to state a claim under

Rule 12(b)(6). The Wallses now appeal.

                                      II.

       We review a district court’s application of res judicata de

novo. Pueschel v. United States, 369 F.3d 345, 354 (4th Cir.

2004). Under res judicata, “a final judgment on the merits of an

action precludes the parties or their privies from relitigating

issues that were or could have been raised in that action.” Id.

(quoting Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394,

398    (1981)     (further    citations     omitted)).      There     are    three

requirements for the application of res judicata: “(1) a final

       *
       It appears the timeliness of the removal of the case was
not challenged in the District of Columbia federal court, but in
any event the district court was satisfied that the somewhat
unusual procedural posture, e.g., a belated grant of leave to
amend the complaint, rendered the removal timely.

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judgment on the merits in a prior suit; (2) an identity of the

cause of action in both the earlier and the later suit; and (3)

an identity of parties or their privies in the two suits.” Id.

at 354-55 (citing Nash Cnty. Bd. of Educ. v. Biltmore Co., 640

F.2d 484, 486 (4th Cir. 1981)).

      Res judicata was an appropriate ground on which to dismiss

this case. First, the district court’s dismissal with prejudice

in the prior case was a final judgment on the merits. In re

Tomlin, 105 F.3d 933, 936-37 (4th Cir. 1997) (“[D]ismissal of an

action with prejudice is a complete adjudication of the issues

presented by the pleadings and is a bar to a further action

between the parties.”) (internal quotation marks omitted).

      Second, the claims are substantially identical. Though the

legal      theories   on    which     the    claims      here    are   based    are   not

exactly     the    same    (negligence       and    unjust      enrichment     were   not

included in the first lawsuit), the underlying grounds for all

of   the    claims    in   both     lawsuits       are   Wells    Fargo’s      allegedly

excessive and fraudulent charges. The Wallses acknowledge this,

as they repeatedly state in their briefs that the “instant cause

of action is interwoven inextricably with [the previous action]

because     they   derive    .    .   .     from   the    same    nucleus    of   facts,

transactions and occurrences.” App. Reply Br. 11. We have held

that finding identity in causes of action “turns on whether the

suits and the claims asserted therein arise out of the same

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transaction    or   series   of   transactions   or   the   same   core   of

operative facts.” Pueschel, 369 F.3d at 355 (internal quotation

marks omitted). That the Wallses consider these two lawsuits to

be part and parcel of the same transaction is evident from the

rehashing of arguments raised in the opposition briefs from the

first lawsuit, including the issue of attorney’s fees, which we

previously affirmed.

     Finally, the Wallses concede that Mr. Walls is not a proper

party to the case. There is no dispute, therefore, that the

parties in both actions are identical, even assuming Mr. Walls

was not in privity with his wife in the earlier action.

     As the district court properly held, “Walls’s attempts to

restyle her earlier factual allegations . . . are insufficient

to avoid the res judicata bar[.]” Walls v. Wells Fargo Bank

N.A., 2013 WL 3199675, *3 (E.D. Va. June 20, 2013). We agree

with the district court that all three elements of res judicata

are met here. Accordingly, we affirm the judgment. We dispense

with oral argument because the facts and legal contentions are

adequately    presented   in   the   materials   before     the   court   and

argument would not aid in the decisional process.

                                                                   AFFIRMED

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