Court Opinion

ID: 2729432
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:41:50.02998+00
Date Added: 2024-06-11T10:15:01.331436
License: Public Domain

Pursuant to Ind.Appellate Rule 65(D), this
Memorandum Decision shall not be
regarded as precedent or cited before any
court except for the purpose of
                                                             FILED
                                                          Sep 28 2012, 9:37 am
establishing the defense of res judicata,
collateral estoppel, or the law of the case.                      CLERK
                                                                of the supreme court,
                                                                court of appeals and
                                                                       tax court

ATTORNEY FOR APPELLANT:                         ATTORNEYS FOR APPELLEE:

KEVIN E. STEELE                                 JOHN P. REED
Burke Costanza & Carberry, LLP                  JONATHAN HALM
Valparaiso, Indiana                             Abrahamson Reed & Bilse
                                                Hammond, Indiana

                              IN THE
                    COURT OF APPEALS OF INDIANA

VICTOR J. DiMAGGIO, III,                        )
                                                )
       Appellant-Plaintiff,                     )
                                                )
              vs.                               )        No. 64A04-1204-PL-169
                                                )
ELIAS ROSARIO and MARK NEBEL,                   )
                                                )
       Appellees-Defendants.                    )

                    APPEAL FROM THE PORTER SUPERIOR COURT
                         The Honorable William E. Alexa, Judge
                            Cause No. 64D02-0803-PL-2790

                                    September 28, 2012

               MEMORANDUM DECISION – NOT FOR PUBLICATION

RILEY, Judge
                             STATEMENT OF THE CASE

       Appellant-Plaintiff, Victor DiMaggio (DiMaggio), appeals the trial court’s

dismissal of his Amended Complaint against Appellee-Defendant, Mark Nebel (Nebel).

       We affirm.

                                         ISSUE

       DiMaggio raises two issues on appeal, one of which we find dispositive and

restate as: Whether the trial court erred by dismissing his Amended Complaint based on

res judicata.

                       FACTS AND PROCEDURAL HISTORY

       We reviewed the factual background of this case in a prior appeal as follows:

              DiMaggio and [Defendant Elias] Rosario are shareholders in
       Galleria Realty Corporation [(Galleria)], which was an Indiana corporation
       with its principal place of business in Lake County, Indiana and involved in
       the business of real estate development. Galleria was formed on December
       19, 1997, and DiMaggio and Rosario have been the shareholders of the
       corporation since its inception. [Defendant Liberty Lakes Estates, LLC
       (LLE)] is an Indiana limited liability company with its principal place of
       business in Porter County, Indiana. LLE was formed on June 23, 2003 to
       pursue real estate development in Porter County. Rosario, Nebel, and
       [Defendant William] Haak are all members of LLE.

              On March 26, 2008, DiMaggio filed a complaint against Rosario and
       [Nebel, LLE, and Haak], alleging, among other things, that the Appellees
       usurped a corporate opportunity from Galleria, which caused damages to
       DiMaggio. DiMaggio specifically stated that Nebel and Haak actively
       participated with Rosario, who owed a fiduciary duty to DiMaggio, his
       fellow shareholder in Galleria, in usurping Galleria's corporate opportunity;
       he further alleged that, because Galleria’s business was real estate
       development, Rosario should have presented Galleria with the opportunity
       to develop real estate in Porter County prior to his formation of LLE with
       Nebel and Haak. On June 16, 2008, [Nebel, LLE, and Haak] filed a motion
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      to dismiss DiMaggio’s complaint on the basis that it failed to state a claim
      upon which relief can be granted. [On August 30, 2010, the] trial court
      granted the [Nebel, LLE, and Haak’s] motion and dismissed the complaint
      against [them] without prejudice.

DiMaggio v. Rosario, 950 N.E.2d 1272, 1273-74 (Ind. Ct. App. 2011).

      Following dismissal of his complaint, DiMaggio appealed, arguing that his

complaint pled facts sufficient to state a cause of action against Nebel for aiding and

abetting Rosario, who should be considered as a fiduciary, to usurp a corporate

opportunity belonging to Galleria. Id. at 1274. In his appeal, DiMaggio argued that an

Indiana case had impliedly recognized this cause of action and even if not, Indiana should

follow other jurisdictions and adopt it. Id. at 1274-75. We declined to find that Indiana

had impliedly recognized the cause of action. Id. at 1275. Further, applying the laws of

other jurisdictions, we found that DiMaggio’s complaint did not allege operative facts

that would entitle him to relief. Id. at 1276. While DiMaggio had alleged that Nebel and

Haak actively participated with Rosario in the usurpation of a corporate opportunity, this

was insufficient without an allegation that Nebel and Haak “acted knowingly or

intentionally” in so doing. Id. As a result, we held that the trial court did not err in

dismissing DiMaggio’s complaint. Id.

      On September 14, 2011, DiMaggio requested leave to file an Amended Complaint,

which the trial court granted the same day. On September 19, 2011, DiMaggio filed his

Amended Complaint, naming Rosario and Nebel as the only defendants. On November

14, 2011, Nebel filed his motion to dismiss the Amended Complaint, asserting that

DiMaggio’s claim was barred by res judicata. On February 22, 2012, the trial court held
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a hearing on the motion to dismiss, and granted it, dismissing Nebel from the cause on

March 5, 2012.

      DiMaggio now appeals. Additional facts will be provided as necessary.

                            DISCUSSION AND DECISION

      DiMaggio contends that the doctrine of res judicata does not operate to bar his

claims and the trial court erred in granting Nebel’s motion to dismiss. The trial court

dismissed the Amended Complaint by concluding:

             DiMaggio’s Amended Complaint seeks to remedy the deficiency
      noted by the [a]ppellate [c]ourt. The Amended Complaint is essentially a
      continuation of this entire cause, as such, [res judicata] may or may not
      apply to this situation. However the [a]ppellate decision could well now be
      the “law of the case” in which event the Amended Complaint should be
      dismissed as to Nebel.

             Further, the [appellate] [c]ourt in its decision stated, “Therefore,
      while we save for another day the decision as to whether Indiana should
      adopt such a cause of action ….” This [c]ourt has previously determined
      that Indiana has not, as of yet, adopted such a cause of action, and the
      Amended Complaint as to Nebel should be dismissed for failure to state a
      cause of action upon which relief can be granted.

(Appellant’s Br. p. 20). Here, Nebel argues, as he did in his motion to dismiss the

Amended Complaint, that DiMaggio’s claim is barred by res judicata. We agree.

      Res judicata prevents the repetitious litigation of that which is essentially the same

dispute. In re L.B., 889 N.E.2d 326, 333 (Ind. Ct. App. 2008). The principle of res

judicata is divided into two branches: claim preclusion and issue preclusion. Id. Claim

preclusion applies where a final judgment on the merits has been rendered which acts as a

complete bar to a subsequent action on the same issue or claim between those parties and

                                            4
their privies.   Id.   Issue preclusion, also referred to as collateral estoppel, bars the

subsequent relitigation of the same fact or issue where the fact or issue was necessarily

adjudicated in a former suit and the same fact or issue is presented in a subsequent action.

Id.

       When, as here, a party argues that the claim preclusion component of res judicata

applies, four factors must be present, namely: (1) the former judgment must have been

rendered by a court of competent jurisdiction; (2) the former judgment must have been

rendered on the merits; (3) the matter now in issue was, or could have been, determined

in the prior action; and (4) the controversy adjudicated in the former action must have

been between parties to the present suit or their privies. Id.

       There is no dispute that the two of the four requirements are met here. First, the

trial court possessed jurisdiction over the parties and the subject matter and second, the

parties here are identical. Further, although DiMaggio disputes that the matter was in fact

determined in the prior action based on the minor variation in facts pled in the Amended

Complaint, the cause of action was asserted in both the complaint and the Amended

Complaint. We therefore find that the matter at issue was therefore determined in the

prior action.

       To determine whether the August 30, 2010 Order operated as a former judgment

on the merits, we review the effect of a dismissal under Ind. Trial Rule 12(B)(6). T.R.

12(B)(6) provides that a defendant may file a motion to dismiss for a failure to state a

claim upon which relief can be granted. Platt v. State, 664 N.E.2d 357, 361 (Ind. Ct.

                                              5
App. 1996), trans. denied, cert. denied, 520 U.S. 1187 (1997). If the trial court grants the

motion to dismiss, the plaintiff is granted an automatic right to amend his complaint

pursuant to 12(B)(8) and T.R. 15(A). Id. Thus, “a T.R. 12(B)(6) dismissal is without

prejudice, since the complaining party remains able to file an amended complaint within

the parameters of the rule.” Thacker v. Bartlett, 785 N.E.2d 621, 624 (Ind. Ct. App.

2003).     In such case, “the amended pleading replaces the original pleading for all

purposes, and all rights to appeal the original dismissal are lost.” Platt, 664 N.E.2d at

361. However, rather than amend the complaint, the plaintiff may instead “elect to stand

upon his complaint and to appeal from the order of dismissal.” Browning v. Walters, 616

N.E.2d 1040, 1044 (Ind. Ct. App. 1993), reh’g granted, modified on other grounds, 620

N.E.2d 28. A T.R. 12(B)(6) dismissal then becomes an adjudication on the merits after

the complaining party opts to appeal. Id.

         The trial court’s August 30, 2010 Order of dismissal therefore represents a former

judgment on the merits. Rather than opt for his automatic right to amend under T.R.

12(B)(8) and T.R. 15(A), DiMaggio sought appeal of the trial court’s Order. That

dismissal was affirmed by this court. As a result, res judicata operates to bar further

proceedings. See England v. Dana Corp., 259 N.E.2d 433, 436 (Ind. Ct. App. 1970).

         To avoid application of res judicata, DiMaggio raises several arguments

predicated on the novelty of the cause of action asserted. First, DiMaggio argues that

because his complaint raised a cause of action heretofore unrecognized by Indiana courts,

it would have been pointless to avail himself of the automatic right to amend. We

                                             6
disagree. The rule is clear that an appeal of an order granting dismissal under T.R.

12(B)(6) renders the order a decision on the merits. Next, DiMaggio relies on Thacker to

argue that res judicata does not bar the filing of an amended complaint following

dismissal under T.R. 12(B)(6). However, Thacker did not involve an appealed dismissal

of the original complaint. See Thacker, 785 N.E.2d at 624. Finally, DiMaggio cites

Griffin v. Wallace, 66 Ind. 410, 417 (Ind. 1879) for the general rule that:

       A judgment for the defendant, upon a demurrer to the complaint on account
       of the omission of an essential allegation therein, which is supplied in the
       second suit, will not be a bar to the second suit.

Id. This passage merely reflects the rule that a T.R. 12(B)(6) dismissal is without

prejudice, allowing the plaintiff to thereafter file an amended complaint within certain

parameters. See Thacker, 785 N.E.2d at 624.

       In sum, res judicata bars DiMaggio’s claims and the trial court did not err in

dismissing DiMaggio’s Amended Complaint.

                                      CONCLUSION

       Based on the foregoing, we conclude that the trial court did not err by dismissing

DiMaggio’s Amended Complaint based on res judicata.

       Affirmed.

BAILEY, J. and CRONE, J. concur

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