Court Opinion

ID: 181570
Source: CourtListenerOpinion
Date Created: 2010-12-22 18:18:32+00
Date Added: 2024-06-11T17:25:56.033193
License: Public Domain

Case: 10-40209 Document: 00511329434 Page: 1 Date Filed: 12/22/2010

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                 FILED
                                                                         December 22, 2010
                                       No. 10-40209
                                                                            Lyle W. Cayce
                                                                                 Clerk

SYLVESTER J. HOFFART,
Individually and as Guardian of the Person and Estate of Louise T. Hoffart,

                                                   Plaintiff-Appellant,

versus

HAL C. WIGGINS; JOANNE WIGGINS; DWD CONTRACTORS INC.,

                                                   Defendants-Appellees.

                    Appeal from the United States District Court
                         for the Eastern District of Texas
                                  No. 1:08-CV-46

Before JOLLY, HIGGINBOTHAM, and SMITH, Circuit Judges.
PER CURIAM:*

       Sylvester Hoffart appeals a summary judgment on his claims for breach
of fiduciary duty, fraud, and promissory estoppel against Hal and Joanne Wig-

       *
         Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
    Case: 10-40209 Document: 00511329434 Page: 2 Date Filed: 12/22/2010

                                        No. 10-40209

gins and their company, DWD Contractors, Inc. (“DWD”). The district court de-
termined that the claims are barred by res judicata. We affirm in part, vacate
in part, and remand.

                                              I.
      The elderly Hoffarts previously sued Hal Wiggins, Joanne Wiggins, and
DWD in Oregon to obtain repayment of substantial sums of money they had
transferred to the defendants.          The Hoffarts brought two claims: the first,
against only Hal Wiggins, for breach of contract, and the second, against all
three defendants, for financial abuse of the elderly, an Oregon statutory claim.
The Oregon trial court granted the defendants summary judgment for financial
abuse but allowed the breach-of-contract claim to go to trial; the jury found in
favor of Hal Wiggins. At trial, Hal and Joanne also unsuccessfully asserted
cross-claims against the Hoffarts for invasion of privacy and intentional inflic-
tion of emotional distress. The Hoffarts appealed the summary judgment on the
financial abuse claim, and the Oregon Court of Appeals reversed and remanded.
The Hoffarts voluntarily dismissed the Oregon suit without prejudice and refiled
for financial abuse in federal court in Texas.
      The district court determined that the substantive law of Texas, not Ore-
gon, applied, so the Hoffarts could not bring the claim for statutory financial
abuse. Reading the Hoffarts’ pro se pleadings liberally,1 however, the court
found that they had asserted several other claims governed by Texas law: a stat-
utory cause of action under the Texas Theft Liability Act and common law caus-
es of action for breach of fiduciary duty, fraud, promissory estoppel, conversion,
and unjust enrichment. The court determined that conversion, unjust enrich-
ment, and the Theft Liability Act are subject to a two-year statute of limitations

      1
          See United States v. Robinson, 78 F.3d 172, 174 (5th Cir. 1996).

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                                  No. 10-40209

and thus are barred. The court also held that the Hoffarts’ claims for breach of
fiduciary duty, fraud, and promissory estoppel are barred by res judicata. The
Hoffarts have appealed only the applicability of res judicata to their claims for
breach of fiduciary duty, fraud, and promissory estoppel.

                                        II.
      A summary judgment is reviewed de novo. Bolton v. City of Dallas, 472
F.3d 261, 263 (5th Cir. 2006). Summary judgment is appropriate if there is no
genuine issue of material fact and the moving party is entitled to judgment as
a matter of law. F ED. R. C IV. P. 56(a) (as amended eff. Dec. 1, 2010); Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The movant has the burden of
showing that summary judgment is appropriate, Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986), and we view the evidence in the light most favorable to the
non-moving party, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986).
      The doctrine of res judicata precludes a plaintiff who has prosecuted one
action, and obtained a valid final judgment, from prosecuting another action
against the same defendant where (1) the claim in the second action is based on
the same factual transaction that was at issue in the first; (2) the plaintiff seeks
a remedy additional or alternative to the one sought earlier; and (3) the claim is
of such a nature as could have been joined in the first action. Rennie v. Freeway
Transp., 656 P.2d 919, 921 (Or. 1982). Federal courts are required to give state
court judgments the same preclusive effect they would enjoy in the courts of the
rendering state. 28 U.S.C. § 1738. The federal court applies the claim preclu-
sion rules of that state. In re Keaty, 397 F.3d 264, 270 (5th Cir. 2005). Here, we
apply Oregon law for purposes of res judicata.

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                                       No. 10-40209

                                             A.
       The Hoffarts have appealed the dismissal of only one claim sounding in
contract against Joanne Wiggins and DWD. That claim, promissory estoppel,
plainly is not barred by res judicata, because Joanne and DWD were not defen-
dants in the Oregon breach-of-contract trial. Although the district court found
that they were defendants in the contract claim, the Oregon jury form and judg-
ment show that they were not. Thus, the court erred, and the Hoffarts are not
barred under res judicata from bringing the only appealed contract claim of
promissory estoppel against Joanne and DWD in this Texas litigation. Sum-
mary judgment based on res judicata as to this asserted claim is vacated, and we
remand for further proceedings as to this claim. As we will explain, neither are
the Hoffarts’s claims for breach of fiduciary duty and fraud against Joanne and
DWD barred by res judicata.

                                             B.
       With respect to Hal Wiggins, all of the Hoffarts’ contract claims, including
promissory estoppel, are barred; Hal obtained a valid final judgment against the
Hoffarts for their breach-of-contract claim against him. Because the Hoffarts
could have presented alternative contractual theories of recovery against Hal in
the Oregon trial, they are also barred from bringing any claims sounding in con-
tract against Hal arising from the same factual transaction. See Dean v. Exotic
Veneers, Inc., 531 P.2d 266, 269-72 (Or. 1975). This includes a claim for promis-
sory estoppel, which sounds in contract under Texas law.2 Summary judgment
on res judicata grounds, in favor of Hal on the promissory estoppel claim, was
proper and is affirmed.

       2
         See Fretz Constr. Co. v. S. Nat’l Bank, 626 S.W.2d 478, 480 (Tex. 1981) (stating that
Texas has adopted the doctrine of promissory estoppel as set forth by the Restatement of Con-
tracts, which describes such agreements as informal contracts).

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                                 No. 10-40209

                                       C.
      Finally, we address the claims for breach of fiduciary duty and fraud. In
the Oregon state courts, the Hoffarts, as we have noted, brought contract and
tort claims against Hal and only a tort claim against Joanne and DWD. How-
ever, the Oregon trial court granted summary judgment against the Hoffarts on
the financial-abuse-of-the-elderly tort claim; on appeal, the Oregon Court of Ap-
peals reversed that summary judgment and remanded only that claim to the
trial court. At that point, the Hoffarts dismissed the Oregon suit and filed this
Texas suit. Although Texas has no common-law or statutory analogue denoted
as “financial abuse of the elderly,” the Hoffarts, who are proceeding pro se, may
still assert this tort claim under the general Texas common law of fraud and
breach of fiduciary duty, because there is no final Oregon judgment on this claim
sounding in tort. We therefore vacate the summary judgment that dismissed the
Hoffarts’ claims for breach of fiduciary duty and fraud against all defendantsSS
that is Hal Wiggins, Joanne Wiggins, and DWDSSand remand the claim for fur-
ther consideration.

                                      III.
      We will now summarize what we have held. First, because a final judg-
ment was entered in favor of Hal in Oregon state court on the contract claim
against him, and because that judgment was not appealed, we have held that the
trial court properly granted summary judgment on res judicata grounds as to the
promissory estoppel claim against him. Second, because no final judgment was
ever entered in the courts of Oregon against Joanne and DWD with respect to
the Hoffarts’ contract claim against them, we have held that the district court
erred in granting summary judgment, on res judicata grounds, on the promis-
sory estoppel claim against Joanne and DWD, and we have remanded that claim
for further proceedings. Third, and finally, because following the appeal and re-

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                                  No. 10-40209

mand in Oregon, there is no final judgment with respect to the financial abuse
of the elderly claim, we have vacated the dismissal of the claims for breach of fi-
duciary duty and fraud against Hal, Joanne, and DWD, and remanded those
claims for further proceedings not inconsistent with this opinion.
      The judgment is therefore AFFIRMED in part and VACATED in part, and
the case is REMANDED.

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