Court Opinion

ID: 202601
Source: CourtListenerOpinion
Date Created: 2011-02-07 05:57:46+00
Date Added: 2024-06-11T17:27:28.593693
License: Public Domain

Not for Publication in West's Federal Reporter
              Citation Limited Pursuant to 1st Cir. Loc. R. 32.1.0

          United States Court of Appeals
                        For the First Circuit

No. 06-1364

                            BAHIG F. BISHAY,

                         Plaintiff, Appellant,

                                      v.

                 CITIZENS BANK OF MASSACHUSETTS,

                         Defendant, Appellee.

          APPEAL FROM THE UNITED STATES DISTRICT COURT

                FOR THE DISTRICT OF MASSACHUSETTS

         [Hon. Richard G. Stearns, U.S. District Judge]

                                   Before

                       Boudin, Chief Judge,
              Torruella and Howard, Circuit Judges.

     Bahig F. Bishay on brief pro se.
     Elise Busny, James W. Stoll and Brown Rudnick Berlack Israels
LLP on brief for appellee.

                            January 19, 2007
            Per    Curiam.      We   affirm   the   judgment     of    dismissal

substantially for the reasons recited in the district court’s

memorandum and order, see 2005 WL 2514929 (D. Mass. 2005), adding

only the following comments.

            To recover an unpaid loan, appellee Citizens Bank of

Massachusetts (“Citizens”) brought a state court action in 1995

against appellant Bishay and a company he owned (collectively

“Bishay”).      Bishay filed two counterclaims and later applied for

bankruptcy protection.        The ensuing reorganization plan contained

a    reservation    clause,    which   permitted     Bishay     to    pursue   his

counterclaims on condition that he procure a letter of credit

(“LOC”) to compensate Citizens for its expenses if it prevailed in

state court.       Bishay did so and then added four new counterclaims

in an amended filing.        At the summary judgment stage, the superior

court concluded that the four new claims were not covered by the

reservation clause and were subject to dismissal on preclusion

grounds.     The court rejected the original two claims on other

grounds and later awarded attorney’s fees to Citizens. When Bishay

refused to make payment, Citizens collected its fees award in 1999

by drawing on the LOC.           The state appeals court subsequently

affirmed.    See 56 Mass. App. Ct. 1104 (2002).

            Bishay filed the instant action in 2005.            In six counts,

he    charged     that   Citizens’     draw   on    the   LOC    violated      the

reorganization plan and was actionable on various grounds including

                                       -2-
breach of contract.       But his underlying allegations mirrored those

he had earlier advanced in state court.              For example, the LOC draw

was   supposedly   unlawful     (or    at    least     premature)    because     the

reservation   clause      had   been    misinterpreted      and     he   had    been

wrongfully    denied    the     opportunity       to    pursue     his   four    new

counterclaims.      The    district     court     deemed    the    complaint     “an

improper   collateral     attack”      on   the   state    court    judgment     and

concluded that “Bishay’s recasting of his dissatisfaction with the

adverse rulings of [the state] courts into a breach of contract

claim ... does not alter the fact of preclusion.”                  We agree.

           The precise nature of Bishay’s breach of contract claim--

the only claim he has pursued on appeal–-is unclear.                 At times, he

appears to be raising a procedural objection: that disposition of

his counterclaims at the summary judgment stage was improper

because the reservation clause entitled him to prosecute his claims

through trial.     At other times, he appears to be raising a more

substantive objection: that the reservation clause barred Citizens

from relying on a preclusion defense, regardless of the procedural

mechanism chosen to do so.              Yet this ambiguity need not be

resolved, since both of these arguments involve the scope of the

reservation clause.       That issue has already been decided in state

court, whose rulings are entitled to full faith and credit. Bishay

cannot now relitigate the matter in federal court.                  See generally

McDonough v. City of Quincy, 452 F.3d 8, 16 (1st Cir. 2006)

                                       -3-
(applying    Massachusetts   law   of   claim    preclusion);    Johnson   v.

Mahoney, 424 F.3d 83, 93 (1st Cir. 2005) (applying Massachusetts law

of issue preclusion).

            Bishay argues that his contract claim is not subject to

preclusion because it did not exist in 1996 when he filed his

amended counterclaims in state court.       But his attempt to lump all

such   claims   together   for   purposes   of   preclusion     analysis   is

misplaced.      The superior court found the counterclaims to be

precluded by the bankruptcy court ruling. See, e.g., In re Belmont

Realty Corp., 11 F.3d 1092, 1095 (1st Cir. 1993) (noting that

“normal rules of res judicata apply to decisions of bankruptcy

courts”). By contrast, the district court found the contract claim

to be precluded by the state court judgment.            That the contract

claim may not have existed in 1996 had no bearing on the district

court’s analysis.

            Bishay also asserts that Citizens “opened the door” to

his bringing the contract claim when it drew on the LOC in 1999.

Yet his objections to the LOC draw, rather than advancing any new

basis for relief, simply reproduce the arguments earlier resolved

by the state court regarding the scope of the reservation clause.

The district court properly rejected this attempt to get a second

bite of the apple.

            Affirmed.

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