Forrest Construction Inc. v. City of Greenwood ( 2003 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 02-4160
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Forrest Construction, Inc., *
an Arkansas Corporation, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the Western
* District of Arkansas.
City of Greenwood; Jimmy Strozier; *
Drucilla Hughart; Roger D. Rainwater; * [UNPUBLISHED]
Bill McAllister; Donnie Whitson; *
Carol Whitson, *
*
Appellees. *
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Submitted: September 24, 2003
Filed: October 7, 2003
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Before RILEY, HANSEN, and SMITH, Circuit Judges.
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PER CURIAM.
Forrest Construction, Inc. (Forrest) filed this case in Arkansas state court,
which was then removed to federal court, alleging deprivation of property rights
without just compensation and without due process and also denial of equal
protection in violation of 42 U.S.C. § 1983. The district court decided (1) the claims
against the City of Greenwood (City) and members of the City Council (Council)
were barred by res judicata, granting summary judgment to the City and the Council;
and (2) the claims against Donnie and Carol Whitson (Whitsons) failed to establish
a claim under section 1983, granting judgment on the pleadings to the Whitsons.
Forrest appeals.
We affirm the grant of judgment on the pleadings to the Whitsons, because
Forrest did not establish the Whitsons acted only to injure Forrest and not to influence
the City’s and the Council’s decisions. See Gorman Towers, Inc. v. Bogoslavsky,
626 F.2d 607, 615 (8th Cir. 1980). We reverse the grant of summary judgment to the
City and Council, however. The district court concluded res judicata barred Forrest’s
action because (1) under Ark. Code Ann. § 14-56-425 (Michie 1998), Forrest could
have raised its damages claim in its previous appeal of the Council’s decision to the
state circuit court; and (2) the state court’s order granting Forrest summary judgment
did not expressly reserve Forrest’s right to pursue a damages action. Upon de novo
review, see Mercer v. City of Cedar Rapids, 308 F.3d 840, 843 (8th Cir. 2002), and
looking to Arkansas law, see Sondel v. Northwest Airlines, Inc., 56 F.3d 934, 937
(8th Cir. 1995), we conclude applying res judicata was not proper in this case.
Even if Forrest’s appeal to the state circuit court from the Council’s decision
was a “suit,” res judicata does not bar claims that could not have been litigated in that
prior suit, see Am. Standard, Inc. v. Miller Eng’g, Inc., 772 S.W.2d 344, 346 (Ark.
1989), and Arkansas law does not clearly indicate Forrest could have raised a
damages claim in the state court proceeding, compare Ark. Power & Light Co. v. City
of Little Rock, 420 S.W.2d 85, 89 (Ark. 1967) (circuit court tries same issue pending
before Board), and City of Little Rock v. Leawood Prop. Owners’ Ass’n, 413 S.W.2d
877, 879 (Ark. 1967) (same), with Carmical v. McAfee, 7 S.W.3d 350, 359 (Ark. Ct.
App. 1999) (implying party appealing under § 14-56-425 may raise new issues on
appeal). Further, the state court’s order–stating there was “no statutory authority for
the granting of an attorney’s fee in an appeal such as this,” but a fee claim might “be
an appropriate part of the landowner’s action for damages”–suggests the Arkansas
court believed its authority was limited, and further assumed Forrest could bring a
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separate damages action. Cf. Cater v. Cater, 846 S.W.2d 173, 176 (Ark. 1993) (res
judicata does not bar subsequent action if court in earlier action made express
reservation of rights as to future litigation).
Thus, we conclude this case presents exceptional circumstances where applying
res judicata would be fundamentally unfair to Forrest. See Schieffler v. Fin. Servs.
Ins. Co., 39 F.3d 181, 186 (8th Cir. 1994) (Arkansas res judicata rule is to be applied
as fairness and justice require, and not rigidly so as to work injustice).
Accordingly, we affirm the grant of judgment on the pleadings to the Whitsons,
and reverse and remand for further proceedings as to the City and the Council.
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