Leroy Carrington v. Anthony Maye

Case: 17-10731 Document: 00514296103 Page: 1 Date Filed: 01/05/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 17-10731 January 5, 2018
Summary Calendar
Lyle W. Cayce
Clerk
LEROY R. CARRINGTON; THE CARRINGTON LIVING TRUST,
Plaintiffs–Appellants,
v.
ANTHONY MAYE; HCE OPERATING, L.L.C.,
Defendants–Appellees.
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 5:16-CV-283
Before JOLLY, OWEN, and HAYNES, Circuit Judges.
PER CURIAM:*
Appellants Leroy Carrington and the Carrington Living Trust
(collectively, Carrington) sued Anthony Maye and HCE Operating, L.L.C.
(collectively, Maye) for fraudulent transfers of property. The district court
dismissed Carrington’s claims as barred by res judicata. We affirm.
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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No. 17-10731
I
In 2008, Carrington invested approximately $720,000 in oil well
improvement and reperforation projects run by Maye. After allegedly
receiving only $3,000 in returns, Carrington sued Maye in 2012, claiming that
Maye had assigned Carrington’s interests in the oil wells to other investors,
failed to use the money invested to improve the wells, and failed to make
promised royalty payments. Two years later, the parties settled. The district
court entered a Consent Judgment, which provided that Maye would pay
Carrington $4 million in damages and assign all of the assets listed in an
attached schedule. Maye agreed to disclose all assets necessary to effectuate
the transfer of the scheduled assets to Carrington. Carrington reserved the
right to sue potential transferees of the assets.
In this case, Carrington alleges that Maye fraudulently transferred
various oil leases and other assets between 2011 and 2013 in violation of the
Texas Uniform Fraudulent Transfer Act. Carrington claims that although
Maye represented that he owned the assets mentioned in the Consent
Judgment, some of those assets had already been transferred to third parties.
The district court granted Maye’s motion to dismiss, holding that Carrington’s
claims in the instant case were based on the same nucleus of operative facts as
the first case between the parties.
II
We review the district court’s dismissal of Carrington’s claim de novo. 1
Because the pleadings and public records 2 reveal that Carrington’s fraudulent
transfer claims are barred by res judicata, we affirm.
1 Lovelace v. Software Spectrum Inc., 78 F.3d 1015, 1017 (5th Cir. 1996).
2 See id. at 1017-18 (holding that a district court may take juridical notice of the
contents of public records when deciding a motion to dismiss a securities fraud claim).
2
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Res judicata bars claims brought after a judgment in a prior lawsuit
when “(1) the prior suit involved identical parties; (2) the prior judgment was
rendered by a court of competent jurisdiction; (3) the prior judgment was a
final judgment on the merits; and (4) the same claim or cause of action was
involved in both cases.” 3 Here, Carrington argues only that the parties and
the claims in this lawsuit are different from those in the first lawsuit.
A
Carrington erroneously contends that the parties in this suit are not
identical to those in the first suit. Carrington concedes that the plaintiffs and
defendants in this case were also involved in the previous case, but argues that
the parties are not identical because the complaint in the instant case names
additional defendants. This argument fails. Res judicata would be a feeble
doctrine if plaintiffs could evade its reach by adding or subtracting defendants.
For res judicata to bar Carrington’s claims against Maye, it is sufficient that
both Carrington and Maye were involved in the previous case.
B
With respect to identity of claims, Carrington argues that the fraudulent
transfer claims in the complaint underlying this appeal are different from the
claims in the first case. Res judicata “bars the subsequent litigation of claims
that have been litigated or should have been raised in an earlier suit.” 4 Claims
“based on the ‘same nucleus of operative facts’” as the claims in a previous case
fall within this category. 5 Under this “transactional test,” we evaluate whether
the facts in the two cases “are related in time, space, origin, or motivation,”
“form a convenient trial unit,” and should be considered as a unit in light of
3 Retractable Techs., Inc. v. Becton Dickinson & Co., 842 F.3d 883, 898 (5th Cir. 2016)
(citing In re Ark–La–Tex Timber Co., Inc., 482 F.3d 319, 330 (5th Cir. 2007)).
4 In re Ark-La-Tex Timber, 482 F.3d at 330.
5 Test Masters Educ. Servs., Inc. v. Singh, 428 F.3d 559, 571 (5th Cir. 2005) (quoting
New York Life Ins. Co. v. Gillispie, 203 F.3d 384, 387 (5th Cir. 2000)).
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the parties’ “expectations or business understanding or usage.” 6 Differences
in legal theories or in “shadings of the facts” are irrelevant to the res judicata
inquiry. 7
The crux of Carrington’s argument is that the first lawsuit was about
whether Maye defrauded Carrington, while this lawsuit is about whether
Maye fraudulently transferred assets—some of which Carrington had invested
in—to third parties to avoid paying an anticipated judgment debt to
Carrington. This distinction, however, is merely a new shading of the facts
underlying the first case. Carrington’s complaint in the first suit alleges at
least four times that Maye made unauthorized transfers of Carrington’s
property to third parties. Moreover, all of the allegedly fraudulent transfers
identified in Carrington’s complaint in this case occurred before the Consent
Judgement was entered in December 2014; some of them were matters of
public record at the time or were documented in materials produced in the first
case. In the first case, Carrington also sought a preliminary injunction
prohibiting Maye from transferring property, and the Consent Judgment
expressly allows Carrington to sue third party transferees of assets from Maye.
All of this shows that Carrington was aware of possible fraudulent transfers at
the time the district court entered the Consent Judgment. The asset transfers
alleged in this case involve all of the mineral leases in the first case and
occurred during largely the same time period. Because the cases share the
same factual predicate, the district court correctly held that Carrington’s
claims are barred by res judicata.
6Oreck Direct, LLC v. Dyson, Inc., 560 F.3d 398, 402 (5th Cir. 2009) (quoting Davis v.
Dallas Area Rapid Transit, 383 F.3d 309, 313 (5th Cir. 2004)).
7 In re Paige, 610 F.3d 865, 873 (5th Cir. 2010).
4
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III
Carrington also argues that Maye should be judicially estopped from
asserting res judicata because Maye misrepresented his asset holdings in the
Consent Judgment. Carrington alleges that he was unable to confirm whether
the assets had been transferred when the Consent Judgment was entered and
should therefore be able to bring this suit to facilitate recovery. This argument
only provides further evidence that Carrington is attempting to litigate facts
that should have been addressed in the previous case.
* * *
For the foregoing reasons, we AFFIRM the judgment of the district court.
5