Adams v. Wells Fargo Bank, N.A.

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

MEDFORD DIVISION

DWAYNE B. ADAMS, Case No. 1:19-cev-00965-CL

OPINION AND ORDER

Plaintiff,

vs.

WELLS FARGO BANK, N.A.,

Defendant.

AIKEN, District Judge:

United States Magistrate Judge Mark Clarke issued his Findings and

Recommendation (“F&R”) (doc. 10) in this case on August 14, 2019. Judge Clarke

recommended that defendant Wells Fargo Bank N.A.’s Motion to Dismiss (doc. 4) be

granted. The matter is now before the Court pursuant to 28 U.S.C. § 636(b)(1) and

Federal Rule of Civil Procedure 72(b), Also before the Court is a Motion to Intervene

(doc. 16) by the Bankruptcy Estate of Dwayne B. Adams (“the Estate”).

Plaintiff filed timely objections to which defendant responded. Accordingly,

the Court must “make a de novo determination of those portions of the report or

specified proposed findings or recommendations to which objection is made.”

28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(8); Dawson v. Marshall, 561 F.3d 980, 932

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(9th Cir. 2009); United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en

banc).

Before turning to plaintiffs objections, the Court will address the Motion to

Intervene (doc. 16) by the Bankruptcy Estate of Dwayne B. Adams (“the Estate”),

which is also before the Court. Having reviewed the briefing on the matter, the Court

grant’s the Estate’s motion. Although the Estate’s objections were untimely, the

Court has considered them and concludes that they do not provide a basis to modify

or reject the F&R.

Plaintiff objects that the application of res judicata, or claim preclusion, is

improper because this suit and Adams v, Wells Fargo Bank, N.A., Civ. No, 1:18-cv-

01748-CL, (“the Prior Action”) do not involve the same claim or cause of action and

because the relevant prior ruling was not on the merits, Having reviewed these

objections and the pertinent portions of the record de novo, I conclude that they do

not provide a basis to modify or reject the F&R,

Plaintiffs objections also raise an issue not briefed before Judge Clarke—

whether the application of claim preclusion is improper because the Prior Action is

still pending in this court, See Brown v. Roe, 279 F.3d 742, 745-46 (9th Cir. 2002)

(rejecting Fourth Circuit's holding that a district court must consider new arguments

raised for the first time in an objection to a magistrate judge’s F&R); United States v.

Howell, 231 F.8d 615, 622 (9th Cir. 2000) (district courts have discretion to consider

new evidence raised for the first time in an objection to a magistrate judge’s F&R).

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But even assuming this objection has merit and that dismissing the case on claim

preclusion grounds was error, I would still conclude that dismissal was warranted

because, under the doctrine against claim splitting, if is duplicative of the Prior

Action. See Davis v. Sun Ou Co., 148 F.3d 606, 613 (6th Cir, 1998) (referring to the

doctrine against claim splitting as “the ‘other action pending’ facet of the res judicata

doctrine”) (quoted with approval by Adams v. Cal. Dep’t of Health Servs,, 487 F.3d

684, 689 (Oth Cir, 2007), overruled on other grounds by Taylor v. Sturgell, 553 U.S.

880, 904 (2008)),

The rule against claim splitting is rooted in the district court’s broad discretion

to control its own docket as well as the court’s interests in judicial economy and

efficiency. The idea is to prevent the same plaintiff from filing multiple suits alleging

the same claims against the same defendant when one suit will do. See Adams, 487

F.3d at 692-93. in the Ninth Circuit, “falfter weighing the equities of the case, the

district court may exercise its discretion to dismiss a duplicative later-filed action, to

stay that action pending resolution of the previously filed action, to enjoin the parties

from proceeding with it, or to consolidate both actions.” Jd. at 688. “To determine

whether a suit is duplicative, [the Ninth Circuit] borrow[s] from the test for claim

preclusion.” Id. The rule against claim splitting applies when the causes of action

are the same and the parties are the same or are in privity. Id. at 689.

To determine whether the causes of action in two suits are the same, courts

within the Ninth Circuit “use the transaction test, developed in the context of claim

preclusion.” Id. In applying the transaction test, courts examine four criteria:

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(1) whether rights or interests established in the prior judgment would

be destroyed or impaired by prosecution of the second action; (2) whether

substantially the same evidence is presented in the two actions; (3)

whether the two suits involve infringement of the same right; and (4)

whether the two suits arise out of the same transactional nucleus of

facts.

Id In the claim splitting context, “{t]he last of these criteria is the most important,”

Id,

The F&R applied the transaction test and concluded that all four criteria

support the conclusion that this action and the Prior Action involve the same cause

of action. F&R at 4-6. The F&R also concluded that the two actions involve the same

parties... Jd..at.5...I find. no. error.in. that.analysis, and.those. determinations .also

support the conclusion that this action is duplicative of the Prior Action.

Although the Court has discretion to stay or enjoin a duplicative suit or to

consolidate it with the earlier-filed suit, equitable considerations support dismissal

of this duplicative suit with prejudice. As the Ninth Cireuit has observed, “[d]ismissal

of the duplicative lawsuit, more so than the issuance of a stay or the enjoinment of

proceedings, promotes judicial economy and the comprehensive disposition of

litigation.” Adams, 487 F.3d at 693 (quotation marks omitted). And “the fact that

plaintiff was denied leave to amend does not give h[er] the right to file a second

lawsuit based on the same facts.” Jd. at 688 (quoting Harisel Spring Ranch of Colo.,

Ine. v. Bluegreen Corp,, 296 F.3d 982 (10th Cir. 2002) (alteration in Adams); see

Stearns v, Ticketmaster Corp., 655 F.3d 1018, 1025 (8th Cir. 2011), abrogated on other

1 The particular claims alleged or relief sought in the two actions need not be identical, nor can

a plaintiff simply add new legal theories to avoid a finding that two actions involve infringement of

the same right. Adams, 487 F.3d at 689-91,

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grounds by Comcast Corp. v. Behrend, 569 U.S. 27 (2013) (eferring to actions

dismissed for claim splitting as ones where “plaintiff was, in effect, attempting to

avoid an unfavorable prior ruling in one case by filing essentially the same claims in

a new case”),

In sum, having reviewed the objections properly before the Court and the

relevant portions of the record, I conclude that there is no basis to modify the F&R.

Even if the Court considered plaintiffs unpreserved objection and found that it had

merit, the Court would still exercise its inherent authority to control its own docket

and dismiss the case with prejudice under the doctrine against claim splitting.

CONCLUSION

The Estate's Motion to Intervene (doc. 16) is GRANTED, The Court ADOPTS

Magistrate Judge Clarke’s F&R (doc. 10) and therefore defendant’s Motion to Dismiss

(doc. 4)is GRANTED, This case is dismissed with prejudice, and a judgment shall be

entered accordingly.

IT IS SO ORDERED.

Dated this ASKS of November 2019.

Che A Chow

Ann Aiken

United States District Judge

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