James Gagan v. James Monroe ( 2016 )

FILED
NOT FOR PUBLICATION
APR 20 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
JAMES GAGAN, No. 14-15724
Plaintiff - Appellant, D.C. No. 2:99-cv-01427-RCB
v.
MEMORANDUM*
JAMES A. MONROE,
Defendant - Appellee,
And
VICTOR SHARAR,
Defendant.
Appeal from the United States District Court
for the District of Arizona
Robert C. Broomfield, Senior District Judge, Presiding
Submitted April 13, 2016**
San Francisco, California
Before: O’SCANNLAIN, CLIFTON, and N.R. SMITH, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
James Gagan won a judgment against James Monroe in 1994, in the United
States District Court for the Northen District of Indiana. Gagan properly registered
his judgment in the United States District Court for the District of Arizona, giving
such court jurisdiction to enforce it under 28 U.S.C. § 1963. The district court
determined that it no longer had jurisdiction to enforce Gagan’s judgment, and
therefore granted Monroe’s motion to dismiss Gagan’s claim. Gagan timely
appealed. The facts of this long-running litigation are familiar to the parties, and
we do not repeat them except as necessary to decide the sole issue on appeal.
I
In 2011, the Arizona Court of Appeals decided that Gagan’s judgment
remained valid and enforceable against Monroe under Arizona law, despite the
Arizona Supreme Court’s earlier decision in Fidelity National Financial Inc. v.
Friedman (Fidelity III), 238 P.3d 118 (Ariz. 2010). See Monroe v. Gagan, No. 1
CA-CV 10-0589, 2011 WL 2555736, at *6 (Ariz. Ct. App. June 28, 2011).
Monroe could have sought review of that decision by the Arizona Supreme Court,
but apparently elected not to do so. Such decision is entitled to preclusive effect
under the five-factor test prescribed by Arizona law. See Hullett v. Cousin, 63 P.3d
1029, 1034–35 (Ariz. 2003) (en banc).
2
First, the parties actually litigated—and the Arizona Court of Appeals
actually decided—whether Gagan’s judgment could still be enforced in Arizona
after Fidelity III. See Chaney Bldg. Co. v. City of Tucson, 716 P.2d 28, 30 (Ariz.
1986) (en banc). Second, there is no question that Monroe had a “full and fair
opportunity to litigate” such question before the Arizona Court of Appeals. Third,
the Arizona Court of Appeals’s determination that Fidelity III does not govern the
continued enforceability of Gagan’s judgment was essential to the Court of
Appeals’s decision, for if the Court of Appeals had decided that Monroe could take
advantage of Fidelity III, the Court of Appeals would have been required to enter
judgment in favor of Monroe. Fourth, the Court of Appeals’s decision constituted
a “valid and final decision on the merits,” because Monroe does not dispute that he
never appealed it and that it had become final by the time he brought the present
action in federal district court. Cf. Federated Dep’t Stores, Inc. v. Moitie, 452 U.S.
394, 398 (1981). Fifth and finally, Monroe and Gagan were both parties before the
Court of Appeals.
Because the Court of Appeals’s 2011 decision is entitled to preclusive effect
under Arizona law, the district court’s failure to afford such decision preclusive
effect was a violation of the federal Full Faith and Credit Statute. 28 U.S.C. §
1738; Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984). The
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district court should not have allowed Monroe to re-litigate whether Fidelity III
rendered Gagan’s judgment unenforceable in Arizona.
II
Of course the district court is correct that objections to subject matter
jurisdiction can be raised at any time, and that defects in subject matter jurisdiction
cannot be waived. But here the presence or absence of subject matter jurisdiction
turned on the antecedent state-law question of whether Gagan’s judgment was still
valid following Fidelity III. And on that question, the Arizona Court of Appeals
had already spoken, in a valid and final decision on the merits between the same
two parties. Because such decision satisfied the five factors to win preclusive
effect under Arizona law, the district court’s failure to afford the decision
preclusive effect was error.
REVERSED and REMANDED.
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