This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. ß 480A.08, subd. 3 (2004).
STATE OF MINNESOTA
IN COURT OF APPEALS
Arrowhead Bluffs, Inc., et al.,
Paul S. Blackburn,
Justin E. Blackburn, et al.,
Filed June 20, 2006
Wabasha County District Court
File No. 79-C3-00-000684
James P. Ryan, Jr., DeAnna J. Schleusner, Ryan & Grinde, Ltd.,
James Doran, William C. Weeding,
††††††††††† Considered and decided by Hudson, Presiding Judge; Kalitowski, Judge; and Worke, Judge.
U N P U B L I S H E D†† O P I N I O N
††††††††† Appellant Arrowhead Bluffs, Inc. challenges the district courtís order on remand from this court, arguing that (1) respondent Paul S. Blackburnís claims are barred by Minn. R. Civ. P. 13.01 as compulsory counterclaims; (2) because the district court lacked jurisdiction over respondent, it should not have ruled on respondentís remaining claims; and (3) respondentís claims should be barred by res judicata, claim preclusion, and collateral estoppel.† We affirm the district courtís determination that because the original action brought by appellant was a tort action, respondent was not required to file a compulsory counterclaim under rule 13.01.† Further, because respondentís interest in the mortgage, guarantee, and lien was immediately enforceable upon the district courtís entry of directed verdict in favor of respondent, which was affirmed on appeal, we reverse the district courtís determinations that it did not have jurisdiction over respondentís claims and that the doctrine of res judicata does not apply here.†
D E C I S I O N
factual history of this case has been detailed in Arrowhead
Bluffs, Inc. v. Blackburn, Nos.
C8-03-301 (Minn. App. Nov. 25, 2003), review denied (
††††††††††† Appellant argues that respondentís
claims are barred as compulsory counterclaims under Minn. R. Civ. P.
13.01.† The rule states, ď[a] pleading
shall state as a counterclaim any claim which at the time of serving the
pleading the pleader has against any opposing party, if it arises out of the
transaction that is the subject matter of the opposing partyís claim[.]Ē† The Minnesota Supreme Court has held that ďthe
word Ďtransaction,í as used in [r]ule 13.01, does not embrace claims in tort.Ē† House
v. Hanson, 245
††††††††††† On remand, this court questioned whether the district court had jurisdiction over respondentís motion in the fraud action.† Appellant argues that because the district court determined that respondent ďwas dismissed as a [party] . . . . [and] is no longer a party to the original action and accordingly would have to bring a new separate action to have his case heard[,]Ē it did not have jurisdiction over respondent and the analysis should have stopped there.† The district courtís conclusion, however, is based on a finding that respondent ďwas dismissed as a defendant before the case went to trial.Ē† (Emphasis added.)† Respondent was never dismissed as a party in the original action.† It was respondentís subsequent appeal that was dismissed by this court because the district court did not address the issue of how the findings of fact or the judgment in favor of respondents on Justin Blackburnís counterclaim affects respondentís interest.
††††††††††† Respondentís interest in the mortgage, guarantee, and lien became enforceable immediately upon entry of the directed verdict.† This conclusion is further supported by the fact that the district court issued an order on May 3, 2004, which states:
IT IS HEREBY ORDERED that the matter of the enforceability and validity of defendant Paul Blackburnís contract interest in the subject premises, having been fully litigated, including appeal to the Court of Appeals and denial of a petition for hearing by the [Minnesota] Supreme Court, has been determined with finality.† Defendant Paul Blackburnís contract interest is enforceable.† (Emphasis added.)
Because respondent was a party to the original action, a directed verdict was granted in his favor, and this court affirmed the directed verdict on appeal, the district court had jurisdiction to hear respondentís motion in the fraud action.† Therefore, respondent is not required to file a new and separate action to enforce his interest in the documents, and the district courtís ruling on this issue is reversed.†
††††††††††† Finally, respondent spends a significant amount of time arguing how the directed verdict by the district court and the jury verdict in favor of appellant on Justin Blackburnís counterclaims are irreconcilable.† This appeal, however, deals solely with the interests of Paul Blackburn; the issues raised regarding the problems between the directed verdict and the jury verdict against Justin Blackburn were final upon the original appeal.
††††††††††† The doctrine of
res judicata can preclude the litigation of claims that previously have been
litigated or could have been litigated in a former action.† Mattson v. Underwriters at Lloyds of
††††††††††† On remand, the district court found that the directed verdict ďsimply held that [appellant] had not made a prima facie case for a finding of fraud or misrepresentationĒ and that the issue of whether respondent had an enforceable mortgage, guarantee, and lien was not dealt with by way of the directed verdict.† At trial, however, appellant sought to invalidate the documents based on fraud or misrepresentation.† Therefore, the core issue at trial was the validity of the documents.† Respondentís interest immediately became enforceable upon the district courtís entry of a directed verdict in favor of respondent, and it constitutes a final judgment on the merits.† Further, the subsequent proceedingórespondentís motion seeking to enforce the settlement agreement or, in the alternative, for a determination that he had an enforceable interest in the documentsóinvolved the same parties and cause of action.†
††††††††††† Because the elements of the doctrine of res judicata on the issue of whether respondentís interest in the documents was enforceable have been met, the district courtís conclusion that the doctrine is inapplicable is reversed.† Further, as stated earlier, respondent is not required to bring a separate action for a determination regarding the enforceability of the documents because his interest became enforceable immediately upon entry of the directed verdict in his favor.† Based on the directed verdict in favor of respondent and the subsequent settlement agreement, the award of $92,500 to respondent is affirmed.†
††††††††††† Affirmed in part and reversed in part.