Court Opinion

ID: 4657438
Source: CourtListenerOpinion
Date Created: 2021-02-04 18:00:35.118101+00
Date Added: 2024-06-11T08:01:18.428902
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 ___________

                                       No. 19-3893
                                       __________

                                   REINARD SMITH,
                                                Appellant

                                             v.

    ALEX KERSHENTSEF; KEY & V AUTO SALES; VLAD (JOHN DOE); MIKE
     (JOHN DOE); JANE DOE 1; JANE DOE 2; SIANI'S TOWING; STEWART
                         KISSINGER; JOHN DOE
                  ____________________________________

                     On Appeal from the United States District Court
                         for the Eastern District of Pennsylvania
                         (D.C. Civil Action No. 2-19-cv-04159)
                     District Judge: Honorable Eduardo C. Robreno
                      ____________________________________

                   Submitted Pursuant to Third Circuit LAR 34.1(a)
                                   July 10, 2020
                Before: KRAUSE, MATEY, and ROTH, Circuit Judges

                            (Opinion filed: February 4, 2021)
                                      ___________

                                       OPINION*
                                      ___________

PER CURIAM

       Reinard Smith appeals the District Court’s order dismissing his complaint on the

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
ground that his federal claims are barred by the doctrine of res judicata. For the

following reasons, we will affirm in part and vacate in part, and will remand for further

proceedings.

                                              I.

       In September 2018, Smith filed an action against a used car dealership, Key & V

Auto Sales, and several of its employees (collectively, “Appellees”). See Smith v.

Kershentsef, No. 2:18-cv-3840, 2019 WL 558225 (E.D. Pa. Feb. 12, 2019) (hereinafter,

“Smith I”). Smith’s complaint arose from his purchase of a used car from the

dealership.1 Appellees filed a motion to dismiss for failure to state a claim, which was

ultimately granted by the District Court. In its order of dismissal, the District Court

dismissed Smith’s claim under the Magnuson-Moss Warranty Act with prejudice,

dismissed Smith’s claim under the FDCPA without prejudice, and declined to exercise

supplemental jurisdiction over Smith’s state law claims. The District Court’s order did

not explicitly invite Smith to amend his FDCPA claim. Smith did not file an amended

complaint and instead filed a notice of appeal, docketed in this Court at C.A. No. 19-

1621. Smith failed to file a brief on appeal as instructed, and on September 17, 2019, the

appeal was dismissed pursuant to Fed. R. App. P. 3(a) and 3d Cir. Misc. LAR 107.2(b)

1
 He asserted claims pursuant to the Magnuson-Moss Warranty Act, the Fair Debt
Collection Practices Act (“FDCPA”), and the Pennsylvania Unfair Trade Practices and
Consumer Protection Law (“UTPCPL”). Additionally, the complaint raised a claim
under 12 Pa. Cons. Stat. Ann. § 6251, a state law authorizing repossession of a motor
vehicle, and a contract claim for anticipatory repudiation under 13 Pa. Cons. Stat. Ann.
§ 2610.
                                              2
for failure to timely prosecute.

       On September 9, 2019, prior to this Court’s dismissal of the Smith I appeal, Smith

filed the action giving rise to the current appeal (Smith II). Smith reasserted claims

against Appellees under the UTPCPL, Magnuson-Moss Federal Warranty Act, and the

FDCPA, while also reasserting state law claims for unlawful repossession. Appellees

moved to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), and further

argued that the doctrine of res judicata barred Smith’s claims. The District Court entered

an order granting Appellees’ motion to dismiss,2 holding that res judicata barred all of

Smith’s federal claims. Dkt. #9. Smith filed a motion for relief from judgment pursuant

to Rule 60(b)(3), which was denied. Smith timely appealed.

                                             II.

       We have jurisdiction to review the District Court’s dismissal order pursuant to 28

U.S.C. § 1291. Our review of dismissals pursuant to Rule 12(b)(6) and res judicata is de

novo. See Newark Cab Ass’n v. City of Newark, 901 F.3d 146, 151 (3d Cir. 2018) (Rule

12(b)(6) standard); Elkadrawy v. Vanguard Grp., Inc., 584 F.3d 169, 172 (3d Cir. 2009)

(res judicata standard).

2
  The District Court characterized Appellees’ motion to dismiss as unopposed. But, as
Smith argues on appeal, it appears that he did file a memorandum in opposition to the
motion on November 15, 2019, a day after the District Court’s dismissal. The case
number from Smith I is handwritten on the first page of the response (it is unclear who
wrote the incorrect case number), so the opposition was docketed in Smith I, not in Smith
II. See Plaintiff’s Response to FRCP 12(b)(1)–(6) Motion to Dismiss, Smith I, No. 18-
cv-3840, ECF No. 14. Thus, it was never considered by the District Court.
                                             3
       The District Court determined that res judicata—i.e., claim preclusion—barred the

federal claims alleged against Appellees.3 We agree, in part. For claim preclusion to

apply, a defendant must show there has been “(1) a final judgment on the merits in a prior

suit involving (2) the same parties or their privies and (3) a subsequent suit based on the

same cause of action.” Davis v. Wells Fargo, 824 F.3d 333, 341 (3d Cir. 2016)

(quotation marks omitted).

       Claim preclusion’s first requirement of a “judgment on the merits” is “better

understood in terms of its functional equivalent: whether a dismissal is with prejudice.”

Papera v. Pa. Quarried Bluestone Co., 948 F.3d 607, 610 (3d Cir. 2020). Thus, “[a]

dismissal with prejudice operates as an adjudication on the merits, so it ordinarily

precludes future claims.” Id. at 611 (internal quotation marks omitted). On the other

hand, a dismissal without prejudice is one that does not operate as an adjudication on the

merits, and therefore does not have a claim-preclusive effect. Id. A “party asserting

claim preclusion bears the burden of proving all the elements,” which includes proving

the “dismissal was with prejudice and so can preclude claims.” Id.

                                                III.

       Here, the District Court’s dismissal of Smith’s claim under the Magnuson-Moss

Warranty Act easily satisfies the elements for claim preclusion to apply. Smith’s current

3
 As in Smith I, the District Court declined to exercise supplemental jurisdiction over
Smith’s state law claims. Thus, our discussion on the application of claim preclusion
only centers on Smith’s claims under the Magnuson-Moss Warranty Act and the FDCPA.
                                             4
claim under that Act is derived from the same set of underlying facts as Smith I, and

involve the same parties or their privies. See Blunt v. Lower Merion Sch. Dist., 767 F.3d

247, 277 (3d Cir. 2014) (noting we take a “broad view” when considering what

constitutes the same cause of action, and whether res judicata applies turns on the

“essential similarity” of the underlying events giving rise to the legal claims). To the

extent any claims may be slightly different, it is clear that Smith could have brought those

claims in Smith I. See id. (noting res judicata bars not only claims brought in previous

litigation, but also claims that could have been brought). Moreover, the District Court’s

memorandum opinion and accompanying order of dismissal in Smith I specify that

Smith’s claim was dismissed “with prejudice,” and was thus a final judgment on the

merits for that claim. See Davis, 824 F.3d at 341; Papera, 948 F.3d at 610–11.

       Smith’s FDCPA claim presents a closer question. The District Court’s opinion in

Smith I simply concluded that “[Smith] has not pleaded sufficient facts for relief under

the [FDCPA],” and the accompanying order stated that the FDCPA claim was dismissed

“without prejudice.” Smith I, No. 2:18-cv-3840, 2019 WL 558225, at *4; id., ECF No.

10 at 1. As it stands before us, we cannot read the District Court’s dismissal as having

ripened into a dismissal with prejudice, since neither the District Court’s opinion nor the

order provided a deadline for Smith to amend his FDCPA claim and plead sufficient facts

for relief. See Weber v. McGrogan, 939 F.3d 232, 240 (3d Cir. 2019) (noting “a ‘self-

effectuating’ order is one that directs a party to take some action to cure a defective

                                              5
complaint by a defined date and provides express notice that it will then automatically

produce a final order of dismissal when the time to amend runs out”); see also Papera,

948 F.3d at 609 (“We construe ambiguities in dismissal orders against claim

preclusion.”). Accordingly, it appears that Smith II is, in part, Smith’s attempt to refile

claims that were dismissed without prejudice—something Smith may do. See S.B. v.

KinderCare Learning Ctrs., LLC, 815 F.3d 150, 152 (3d Cir. 2016) (noting “a dismissal

without prejudice is not a final decision because the plaintiff may refile the complaint”

(emphasis added)); see also Papera, 948 F.3d at 611 (noting a dismissal without prejudice

is one that does not operate as an adjudication on the merits, and therefore does not have

a claim-preclusive effect). Consequently, the first element necessary for claim preclusion

to apply to Smith’s FDCPA claim is lacking.4 See Davis, 824 F.3d at 341. Thus, the

District Court erred in dismissing Smith’s FDCPA claim solely on the doctrine of res

judicata.

4
  The appeal in Smith I was dismissed for failure to prosecute and does not have any
bearing on our analysis. While “finality” for purposes of determining appellate
jurisdiction may also indicate, in certain circumstances, that a dismissal without prejudice
has become “final” for purposes of res judicata, see Hoffman v. Nordic Nats., Inc., 837
F.3d 272, 279 (3d Cir. 2016) (noting a plaintiff can convert a dismissal “without
prejudice” into a final order by “declaring his intention to stand on his complaint”
(internal quotation marks omitted)), that situation is simply not present here. In Hoffman,
the order dismissing without prejudice was self-effectuating and automatically converted
to a dismissal with prejudice when the appellant did not file an amended complaint within
the mandated deadline. Id. at 279–80. The order in Smith I was not self-effectuating,
and the appeal was dismissed for failure to prosecute because Smith did not file a brief;
we made no determination as to “finality” for purposes of our appellate jurisdiction in
that appeal.
                                               6
                                            IV.

       For the foregoing reasons, the District Court properly dismissed Smith’s claim

under the Magnuson-Moss Warranty Act as barred by the doctrine of res judicata.

However, the District Court erred in holding that Smith’s claim under the FDCPA was

precluded.5 Accordingly, we will affirm the judgment in part and vacate it in part, and

will remand for further proceedings in accordance with this opinion. We grant

Appellees’ motion for leave to file their supplemental appendix.

5
  This opinion is limited to the claim preclusion issue, as that was the sole basis for
dismissal by the District Court. It is not an appraisal on the underlying merits of Smith’s
claims or whether he has properly pleaded his claims.
                                               7