Barbranda Walls v. Wells Fargo Bank, N.A. ( 2014 )

UNPUBLISHED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Affirmed by unpublished per curiam opinion.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Unpublished opinions are not binding precedent in this circuit.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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