Brown, Maurice v. Chrysler Finan Servi ( 2007 )

NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted February 14, 2007*
Decided March 8, 2007
Before
Hon. MICHAEL S. KANNE, Circuit Judge
Hon. ILANA DIAMOND ROVNER, Circuit Judge
Hon. DIANE S. SYKES, Circuit Judge
No. 06-2459
MAURICE BROWN, Appeal from the United States District
Plaintiff-Appellant, Court for the Northern District of Illinois,
Eastern Division
v.
No. 05 C 1117
CHRYSLER FINANCIAL
SERVICES, Wayne R. Andersen,
Defendant-Appellee. Judge.
ORDER
Maurice Brown appeals the district court’s dismissal of a third lawsuit in
which he and Chrysler Financial Services (DaimlerChrysler) litigated the
company’s alleged mishandling of his loan account and improper repossession of his
car. The district court ruled that his claims were barred by res judicata because he
had the opportunity to litigate the same issues in the two previous suits. We
affirm.
*
After examining the briefs and the record, we have concluded that oral
argument is unnecessary. Thus, the appeal is submitted on the briefs and the
record. See Fed. R. App. P. 34(a)(2).
No. 06-2459 Page 2
In 2001 Brown bought a $30,000 car, which he financed through
DaimlerChrysler. As part of the contract for the financing, DaimlerChrysler agreed
to allow Brown to use the car as collateral, so long as he agreed to maintain it in
good condition. Several months after Brown purchased the car, however, it was
damaged in an accident and taken to a repair shop. Brown refused to pay for the
repairs because he believed that he had only requested an estimate for the cost of
the damages and had not authorized the repair shop to begin work. The repair shop
informed DaimlerChrysler that it intended to place a lien on the car, and so, to
preserve its collateral, DaimlerChrysler paid more than $8,000 for the repairs and
storage.
DaimlerChrysler subsequently sued Brown in Illinois court, requesting an
order to repossess the car and a deficiency judgment for the remaining balance of
the loan. Brown counterclaimed that DaimlerChrysler violated the Fair Credit
Reporting Act, 15 U.S.C. § 1681 et seq., and various state laws when it cashed a
payment check without crediting his account. The Illinois court granted
DaimlerChrysler’s summary judgment motion and denied Brown’s subsequent
motion for reconsideration. Brown appealed.
While Brown’s appeal was pending in state court, he sued DaimlerChrysler
in federal court under the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., and
42 U.S.C. §§ 1981 and § 1983, for emotional distress caused by cashing his check
without crediting his account, repossessing the car, and discriminating against him
because he was black. See Brown v. Chrysler Fin. Servs. LLC, No. 04 C 1339, 2004
WL 2091998 (N.D. Ill. Sept. 15, 2004). The district court granted DaimlerChrysler’s
motion to dismiss the complaint. Id. at *1. The court ruled that Brown failed to
create a reasonable inference that DaimlerChrysler intended to inflict emotional
distress or that it in any way discriminated against him based on race. Id. at *3.
The court also ruled that Brown’s claims under the Fair Credit Reporting Act were
improper because the provisions of the act cited by Brown applied only to consumer
reporting agencies, which DaimlerChrysler was not. Id. at *4. Brown did not
appeal the district court’s judgment, but he did move to voluntarily dismiss his
pending state court appeal.
Brown then filed this suit in federal court, based on the same set of facts. He
alleged under 42 U.S.C. § 1985 that DaimlerChrysler conspired to racially
discriminate against him by denying that he paid for his car loan, impairing his
credit to reflect the nonpayment, and repossessing his car. He also claimed that
DaimlerChrysler slandered and libeled him by falsely claiming that his payment
check was late and that he had to pay the repair bill. DaimlerChrysler moved to
dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), alleging that
the claims were barred by res judicata. The district court agreed that Brown’s
No. 06-2459 Page 3
claims were precluded by the prior final judgments in federal and state court
proceedings that involved the same set of facts.
We review de novo a district court’s decision to dismiss a case based on res
judicata, or claim preclusion. Tartt v. Nw. Cmty. Hosp., 453 F.3d 817, 822 (7th Cir.
2006). Under federal law, res judicata precludes claims when there is (1) a final
judgment on the merits in an earlier action, (2) identical claims in both suits, and
(3) the same parties or privies in both suits. Tartt, 453 F.3d at 822 (citing Smith v.
City of Chicago, 820 F.2d 916, 917 (7th Cir. 1987)). Res judicata bars not only the
claims actually raised in the earlier suit, but also any claims that could have been
raised in that suit. Highway J Citizens Group v. U.S. Dep’t. of Transp., 456 F.3d
734, 741 (7th Cir. 2006).
On appeal, Brown devotes most of his brief to attacking the district court’s
handling of his car loan and repossession, but only generally touches upon any
disagreement with the district court’s res judicata ruling. He asserts that he “never
had an opportunity to litigate” his claims because both the district court and the
Illinois state court erroneously credited DaimlerChrysler’s false statements and
therefore improperly ruled against him.
The district court was correct to rule that Brown’s federal suit met all three
requirements for claim preclusion. First, the district court correctly noted that the
judgment in the first case was a dismissal under Rule 12(b)(6) for failing to state a
claim, a ruling on the merits that became final when Brown failed to appeal. See
Tartt, 453 F.3d at 822. Second, this suit raised claims identical to the first suit
because, although the legal theories were slightly different, the two suits shared a
“single core of operative facts.” Highway J Citizens Group, 456 F.3d at 743.
Specifically, all of Brown’s current claims arise from the manner in which
DaimlerChrysler handled his check and repossessed his car. Finally, Brown was a
party in each suit.
In any event, as the district court noted, Brown’s claims were also precluded
by the prior state court judgment. When, as here, a plaintiff attempts to litigate
issues that were the subject of an earlier state court case, federal courts give the
state judgment the same preclusive effect that they would receive under the
rendering state’s law. 28 U.S.C. § 1738; Wilhelm v. County of Milwaukee, 325 F.3d
843, 846 (7th Cir. 2003). In Illinois, the requirements for res judicata are virtually
identical to those under federal law. See Licari v. City of Chicago, 298 F.3d 664, 666
(7th Cir. 2002); Nowak v. St. Rita High Sch., 757 N.E.2d 471, 477 (Ill. 2001). Here,
the earlier state judgment was final, the claims were identical because they arose
from a single set of operative facts, and Brown was a party in each suit.
Accordingly, we AFFIRM the district court’s judgment.