James Gagan v. James Monroe

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NOT FOR PUBLICATION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.

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).

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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

3
district court should not have allowed Monroe to re-litigate whether Fidelity III

rendered Gagan’s judgment unenforceable in Arizona.

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.