Roberts v. Hollandsworth ( 1980 )

BAKES, Justice.

Plaintiff appellants Roberts appeal from a district court order dismissing their action against defendant respondents. We affirm.

Plaintiff appellant Dolores V. Roberts and her sister, defendant respondent Grace Hollandsworth, each inherited from their mother an undivided one-half interest in real property located in Idaho County, Idaho. In 1965 Roberts conveyed her interest to her sister and to her sister’s husband. Appellant Roberts, however, reserved or excepted from the conveyance an interest in merchantable timber located on the land. In 1972 the respondents Hollandsworths conveyed to Idapine Mills, now merged with Wickes Corporation, all accessible and merchantable timber on the property.¹

The Robertses initially commenced suit in federal district court for the District of Idaho in 1975 against the Hollandsworths and Idapine Mills, alleging (1) that the defendants had conspired to defraud them of their interest in timber on the property; and (2) that the Hollandsworths had defrauded them of their interest in the timber. The defendants moved for summary judgment in the federal court action. The federal court granted summary judgment in favor of each of the defendants and ordered plaintiffs’ complaint dismissed, ruling that there was no credible evidence of any acts or agreements by the defendants to support the conspiracy theory and that the plaintiffs had failed to make the requisite proof of the elements of fraud required by Idaho law. The federal district court, however, allowed the plaintiffs additional time to allege any other theory of relief which might be supported by the evidence. Plaintiffs thereupon sought relief upon a conversion theory. The federal district court subsequently granted the defendants’ motion for summary judgment on this theory as well, ruling that there was no basis for an action in Idaho law for conversion of real property and that an action for conversion was barred by a three year statute of limitations in Idaho. Judgment was entered for the defendants in July 1976. The Robertses appealed the judgment .to the Ninth Circuit Court of Appeals.

Subsequently, in August, 1976, the Robertses filed this action in state district court. The action was brought against the same defendants named in the federal complaint and was based upon the same transactions and facts which were sued upon in the federal action. The Robertses sought either to have a one-half interest in the timber on the Idaho County land declared to be theirs or, in the alternative, to have judgment for one-half the price received by the defendants Hollandsworths for sale of the timber. The Robertses based their claim upon the following theories: (1) quiet title; (2) unjust enrichment; (3) accounting; (4) money had and received; and (5) constructive trust.

The defendants moved to dismiss the state court action on the ground that another action was pending in the federal court which was based upon the same transactions and conduct and involved the same parties as the state court action. The district court issued a provisional ruling indicating its intent to dismiss the suit for the reasons raised by the defendants and granted the plaintiffs Robertses additional time in which to submit to the court any additional material they might deem pertinent to the defendants’ motion to dismiss. In August, 1977, the state court, treating the defendants’ motion to dismiss as a motion for summary judgment, entered judgment for all defendants. The court held that the federal court action pending appeal in the Ninth Circuit Court of Appeals was based upon the same transaction and conduct and involved the same parties as the state court action and that dismissal of the state court action was proper under I.R.C.P. 12(b)(8).² The court also held that the state court action was barred under the principles of res judicata, based upon the federal court judgment. The Robertses have appealed dismissal of their state court action.

Subsequent to the Robertses’ filing of this appeal, the Ninth Circuit Court of Appeals reversed the federal court’s dismissal of the Robertses’ federal court action, holding that material issues of fact existed which might form the basis for a claim for money had and received, precluding the granting of summary judgment in the case. The cause was remanded to federal district court for the District of Idaho, with leave granted to the Robertses to amend their claim if desired. Roberts v. Hollandsworth, 582 F.2d 496 (9th Cir. 1978).³ Idaho state courts may take judicial notice of the judgments and decisions of the federal courts which affect the subject matter of an action before the state court. Williams v. Sherman, 36 Idaho 494, 212 P. 971 (1922).⁴

The district court did not err in dismissing the Robertses’ state court action on the ground that there was another action pending between the same parties for the same cause, I.R.C.P. 12(b)(8).⁵ Farmer v. Boyd, 89 Idaho 269, 404 P.2d 353 (1965); Stevens v. Home Savings & Loan Ass'n, 5 Idaho 741, 51 P. 779 (1898) (relying on former I.C. § 5-607 which was superseded by I.R.C.P. 12(b)(8), and subsequently repealed in 1975). It was only after the federal district court had ruled against the plaintiffs adversely, albeit by summary judgment, that the plaintiffs then filed the same action in the state district court. There is no suggestion in the record that the federal district court did not have jurisdiction to resolve the entire conflict between the parties, and the plaintiffs have not asserted that the federal court lacked jurisdiction to resolve the issues on the merits. The filing of the second action in the state court under these circumstances, involving as it did the same parties, the same issues and the same facts, incurs needless and substantially increased costs to the defendants, is a waste of judicial resources, and conjures up the possibility of conflicting judgments by state and federal courts.⁶ While there may be some circumstances which would justify a state court in staying a state court action pending the termination of a similar controversy pending in the federal courts, under' the circumstances of this case we conclude that the trial court did not err in dismissing this action. I.R.C.P. 12(b)(8); Farmer v. Boyd, supra.

Affirmed. Costs to respondents. No attorney fees allowed.

DONALDSON, C. J., and McFADDEN, J., concur.

1 . Both corporate defendants have been dismissed from this appeal pursuant to stipulation of the parties.

2 . “RULE 12(b). HOW DEFENSES AND OBJECTIONS PRESENTED.-Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim, or third-party claim, shall be asserted in the responsive pleading thereto if one (1) is required, except that the following defenses may at the option of the pleader be made by motion: . . . (8) another action pending between the same parties for the same cause. .

3 . The Robertses had been offered several opportunities to amend their claims. After indicating an intent to grant the defendants’ motion for summary judgment, the federal district court afforded the Robertses a chance to advance any additional theories which they believed supported their claim. After the federal district court entered summary judgment in the defendants’ favor, the United States Court of Appeals reversed the judgment and remanded the cause “with leave to appellant [Roberts] to amend her claim if she so desires.” Roberts v. Hollandsworth, 582 F.2d 496, 500 (9th Cir. 1978). The state district court also offered the Robertses an opportunity to allege additional facts or claims after provisionally granting the defendants’ motion to dismiss on the ground that the pending federal court action barred their suit.

4 . Oral arguments were originally scheduled in this case in October, 1979. However, upon issuance of the Ninth Circuit Court of Appeals opinion in Roberts v. Hollandsworth, supra, the appellants Robertses moved to vacate this Court’s order setting oral argument “for the reason that the identical case is set for trial [in federal district court for the District of Idaho] . and involves exactly the same issues [as] are presented to the Supreme Court of this state.” Prior to oral arguments in this case held in May, 1980, counsel for both appellants and respondents moved to augment the record before this Court to show the federal district court’s disposition of the Roberts action on remand from the Court of Appeals and the Robertses’ subsequent appeal from that disposition. The motions were denied by this Court with leave granted to renew upon a showing of relevancy to this appeal. The motions to augment were renewed at oral argument by counsel for both appellants and respondents, and the motions were orally granted by this Court. However, we conclude that the proffered augmentation is not relevant to our decision in this appeal.

5 .The district court’s summary judgment in defendants’ favor was also based on the ground that the federal court judgment barred the subsequent state court action under the principle of res judicata. Because we have affirmed the judgment on the ground that the lower court properly dismissed the suit on the ground that another action involving the same claims was pending between the parties, it is not necessary for us to address the second ground upon which the district court made its decision. See Fischer v. Fischer, 92 Idaho 379, 443 P.2d 463 (1968). We do note, however, that the pendency of an appeal does not suspend operation of an otherwise final federal court judgment as res judicata within the federal system, Huron Holding Co. v. Lincoln Mine Operating Co., 312 U.S. 183, 61 S.Ct. 513, 85 L.Ed. 725 (1941), and that a federal court judgment must be given the same full faith and credit in the state courts as afforded by the federal courts, Hancock National Bank v. Farnum, 176 U.S. 640, 20 S.Ct. 506, 44 L.Ed. 619 (1900).

6 . See also Browning Debenture Holders’ Committee v. Dasa Corp., 454 F.Supp. 88 (D.C.N.Y.1978) (defendant entitled to federal court injunction against plaintiffs state court litigation of same claim previously litigated in federal district court and appealed to Court of Appeals); and 28 U.S.C. § 2283 (1948) (stay of state court proceedings).