F I L E D
United States Court of Appeals
Tenth Circuit
PU BL ISH
August 8, 2007
UNITED STATES CO URT O F APPEALS Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
V A LLEY V IEW A N G U S R AN CH,
INC., an Oklahoma corporation; OTIS
CULPEPPER, an individual,
Plaintiffs - Appellants, No. 06-6025
v.
DUKE EN ERGY FIELD SERVICES,
INC., a Colorado limited partnership,
Defendant - Appellee.
Appeal from the United States District Court
for the W estern District of Oklahoma
(D.C. No. 04-CV-191-T)
W es Johnston (Kenneth R. Johnston with him on the briefs) of Johnston &
Associates, Chickasha, Oklahoma for Plaintiffs - Appellants.
Jayne Jarnigan Robertson of Jayne Jarnigan Robertson, P.C. of Oklahoma City,
Oklahoma for Defendant - Appellee.
Before HA RTZ, EBEL and O’BRIEN, Circuit Judges.
O’BRIEN, Circuit Judge.
Valley View Angus Ranch (Valley View) appeals from the district court’s
grant of summary judgment in favor of Duke Energy Field Services (Duke). The
court concluded Valley View’s federal claims were precluded by the doctrines of
claim and issue preclusion due to a defense it raised in related state litigation
brought by Duke. Preclusion is generally a knotty issue, and particularly so in
this case. In resolving the issue the district judge issued a thorough and reasoned
opinion. Nevertheless, and most reluctantly, we must reverse.
I. Background
Duke owns and operates a gas pipeline w hich runs through Valley View’s
450-acre ranch in Oklahoma. In October 2003, Otis Culpepper 1 , President of
Valley View, observed a pipeline leak and notified Duke. According to Valley
View, the leak polluted the soils and groundwater. In January 2004, after
obtaining the appropriate permits to conduct a subsurface investigation, Duke
notified Valley View it intended to install monitoring wells on the property
pursuant to a claimed easement interest. However, Valley View would not grant
Duke permission to enter the property 2 and on January 29, 2004, it denied D uke’s
contractors access.
The next day, Duke filed an action in the District Court of Grady County,
1
Because Valley View and Culpepper filed joint briefs, we will refer to
them collectively as “Valley View.”
2
Valley View states it withheld permission because Duke did not respond
to its request regarding where the monitoring wells were to be located.
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Oklahoma (the state suit) seeking injunctive relief. Duke obtained a temporary
restraining order (TRO) against Valley View preventing Valley View from
interfering with Duke’s intended operations on the property. 3
On February 25, 2003, prior to answering the state court complaint, Valley
View filed an action in federal district court (the federal suit) against Duke
seeking damages based on the gas line leak under the theories of trespass,
nuisance and unjust enrichment. Two days later, Valley View filed answers in the
state suit but did not assert any counterclaims. The same day Valley View filed
its answers, Duke amended its complaint in the state suit to seek damages against
Valley View in the amount of $3,000 for interference with its easement.
W hile the state matter was pending trial, Duke filed a motion for partial
summary judgment. The state court granted partial summary judgment to Duke
based on its conclusion Duke held an easement interest in the property. The state
case then went to trial to determine whether Valley View violated its duties under
the easement by refusing Duke access to the property, and, if so, the amount of
damages. The jury found against Valley View and awarded $1,800 damages.
Valley View did not appeal and the verdict became final.
Thereafter, Duke filed a motion for summary judgment in the federal
district court contending Valley View’s federal claims were barred by the
3
On April 6, 2003, the TRO was vacated and the request for an injunction
denied.
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doctrines of issue and claim preclusion. The district court agreed and granted
Duke’s summary judgment motion. Valley View appeals.
II. Discussion
Valley View asserts the district court erroneously applied the doctrines of
issue and claim preclusion in granting summary judgment to Duke. Duke
disagrees, claiming both doctrines bar Valley View’s federal claims. In the
alternative, it asserts Valley View’s claims are barred by Oklahoma’s compulsory
counterclaim statute. W e address each argument.
A. Standard of Review
“W e review a grant of summary judgment de novo, applying the same legal
standard used by the district court under Fed. R. Civ. P. 56(c).” Rohrbaugh v.
Celotex Corp., 53 F.3d 1181, 1182 (10th Cir. 1995). “Summary judgment should
be granted if ‘there is no genuine issue as to any material fact and . . . the moving
party is entitled to a judgment as a matter of law.’” Id. (quoting Fed. R. Civ. P.
56(c)).
W e review de novo the district court’s conclusions of law on the
applicability of issue and claim preclusion. Salguero v. City of Clovis, 366 F.3d
1168, 1172 (10th Cir. 2004) (issue preclusion); Frandsen v. Westinghouse Corp.,
46 F.3d 975, 977 (10th Cir. 1995) (claim preclusion).
Finally, we look to state law to determine if a claim is a compulsory
counterclaim, and, if so, the effect of a failure to raise such a claim. Fox v.
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M aulding, 112 F.3d 453, 456 (10th Cir. 1997). Under 28 U.S.C. § 1738, 4 the
preclusive effect of a state judgment is governed by the rules of preclusion of that
state. See Marrese v. Am. Academy of Orthopaedic Surgeons, 470 U.S. 373, 380-
82 (1985) (citing 28 U .S.C . § 1738). W e review de novo the district court’s
application of Oklahoma law on this issue. Fox, 112 F.3d at 457.
B. Res Judicata/Claim Preclusion
“Claim preclusion, formerly known at comm on law as res judicata, teaches
that a final judgment on the merits of an action precludes the parties from
re-litigating not only the adjudicated claim, but also any theories or issues that
were actually decided, or could have been decided, in that action.” State of Okla.
ex rel. Dep’t of Transp. v. Little, 100 P.3d 707, 720 n.47 (Okla. 2004); accord
Veiser v. Armstrong, 688 P.2d 796, 800 n.9 (O kla. 1984). Generally, claim
preclusion applies “where the parties and the two causes of action are the same.”
Wabaunsee v. Harris, 610 P.2d 782, 785 (Okla. 1980); accord State of Okla. ex
rel. Okla. Bar Ass’n v. Giger, 93 P.3d 32, 38 (O kla. 2004); State of Okla. ex rel.
Wilson v. Blankenship, 447 F.2d 687, 693-94 (10th Cir. 1971).
The district court based its ruling, in part, on the determination Valley
View “could have raised” the claim for damages in the state court action but did
4
The Full Faith & Credit Statute, 28 U.S.C. § 1738, provides: “[Judgments]
shall have the same full faith and credit in every court within the United States
and its Territories and Possessions as they have by law or usage in the courts of
such State, Territory or Possession from which they are taken.”
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not do so. (App. at 307.) On appeal, Valley View and Duke frame the issue as
whether the state and federal court causes of actions are the same. W hile these
approaches are correct in typical claim preclusion situations, they do not apply
here.
The typical claim preclusion scenario unfolds as follows: A plaintiff files
suit against a defendant based on a particular transaction and the suit proceeds to
a judgment. The plaintiff then files a second action against the same defendant
based on the same transaction. The plaintiff’s second action would be barred
under claim preclusion regardless of the theories raised in the second law suit. 5
See Retherford v. Halliburton Co., 572 P.2d 966, 967, 969 (O kla. 1977) (“[T]his
jurisdiction is committed to the wrongful act or transactional definition of a
‘cause of action.’ Thus, no matter how many ‘rights’ of a potential plaintiff are
violated in the course of a single wrong or occurrence, damages flowing
therefrom must be sought in one suit or stand barred by the prior adjudication.”).
These rules do not apply to the situation where, as here, a plaintiff (Duke)
files suit against a defendant (Valley View) based on a particular transaction (the
refusal to allow Duke entry to its easement). The defendant (Valley View) raises
5
The same preclusive result would occur where the defendant asserts a
counterclaim against the plaintiff in the first action and then attempts to bring a
subsequent action against the plaintiff based on the same transaction forming the
basis of its counterclaim. W right & M iller, 18 Federal Practice and Procedure §
4414.
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a defense 6 (D uke breached the easement first) and the suit proceeds to judgment.
The defendant (Valley View) then files an action against the plaintiff (Duke)
based on the same facts forming the basis of its defense in the prior suit. In such
a situation, the defendant’s claims in the subsequent action are not precluded
unless (1) the defendant’s success in the latter action would nullify the original
judgment or impair the rights established in the original action or (2) a statute
required the defendant to bring his claims in the original action. See Meyer v.
Vance, 406 P.2d 996, 999 (Okla. 1965) (applying the common law rule that a
defendant is not precluded from bringing a separate action by failing to bring a
claim in the first action); M itchell v. Williamson, 304 P.2d 314, 319 (Okla. 1956)
(barring claim in a latter action which could have asserted in the former action as
a counterclaim where the plaintiff’s success in the latter action would, in effect,
6
W e note here the failure to raise a defense does not have the same
preclusive effect as a plaintiff’s failure to raise all transactionally related claims.
As Comment (b) to section 22 of the Restatement notes:
b. W here facts constituting defense are ground for counterclaims.
In the absence of a statute or rule of court otherwise providing, the
defendant's failure to allege certain facts either as a defense or as a
counterclaim does not normally preclude him from relying on those
facts in an action subsequently brought by him against the plaintiff. . . .
The failure to interpose a defense to the plaintiff's claim precludes the
defendant from thereafter asserting the defense as a basis for attacking
the judgment (see § 18). But the defendant’s claim against the plaintiff
is not normally merged in the judgment given in that action, . . . The
defendant, in short, is entitled to his day in court on his own claim.
Restatement § 22 cmt. b.
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nullify the initial judgment or would impair rights established in the initial
action); 7 see also M artino v. M cDonald’s Sys. Inc., 598 F.2d 1079, 1084-85 (7th
Cir. 1979) (a defendant need not raise an affirmative claim arising from the same
facts as an asserted defense, unless a counterclaim statute bars the claim or res
judicata itself bars the claim because its prosecution would nullify rights
established by the prior action); Restatement (Second) of Judgments § 22 (1982)
(Restatement); 8 W right & M iller, 18 Federal Practice and Procedure § 4414
(“Apart from compulsory counterclaim rules, . . . the traditional conclusion has
7
In M itchell, the court concluded a party was precluded from challenging
in a second suit the constitutionality of a statute upon which a prior judgment was
based – even if the statute had been later declared unconstitutional – since that
party’s success in the second case would have entirely avoided the prior
judgment. M itchell, 304 P.2d at 319.
8
Section 22 states:
(1) W here the defendant may interpose a claim as a counterclaim but
he fails to do so, he is not thereby precluded from subsequently
maintaining an action on that claim, except as stated in Subsection
(2).
(2) A defendant who may interpose a claim as a counterclaim in an
action but fails to do so is precluded, after the rendition of judgment
in that action, from maintaining an action on the claim if:
(a) The counterclaim is required to be interposed by a
compulsory counterclaim statute or rule of court, or
(b) The relationship between the counterclaim and the
plaintiff’s claim is such that successful prosecution of the
second action would nullify the initial judgment or w ould
impair rights established in the initial action.
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been that purely defensive use of a theory does not preclude a later action for
affirmative recovery on the same theory.”). The rationale for the general rule
applying to defendants who elected not to assert a counterclaim in the prior action
is that “the defendant should not be required to assert his claim in the forum or
the proceeding chosen by the plaintiff but should be allowed to bring suit at a
time and place of his own selection.” Restatement § 22 cmt. a.
Thus, the proper analysis is 1) whether Valley View’s success in its federal
action would nullify the state judgment or impair the rights established in the
state action or 2) a statute required Valley View to bring its federal claims in the
state action as counterclaims.
1) Nullification of Prior Judgment
Although the corpus juris is not entirely clear about the exact scope of
claim preclusion as applied to former defendants, “all that can be said with
confidence is that a judgment will be protected against the most obvious assaults
of former defendants.” W right & M iller, 18 Federal Practice and Procedure §
4414 (citing Restatement (Second) of Judgments §22(2)(b)). Such “obvious
assault[s]” include subsequent actions to enjoin the prior judgment and requests
for declaratory relief on the validity of the prior judgment. See Albano v.
Norwest Fin. Hawaii, Inc., 244 F.3d 1061, 1063-64 (9th Cir. 2001) (applying
Hawaii law, concluding prior state court judgment declaring mortgage valid
precluded subsequent claim to rescind under a federal statute); Rein v. Providian
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Fin. Corp., 270 F.3d 895, 903 (9th Cir. 2001) (former defendants precluded from
claiming former judgment was void and unenforceable due to violations of the
federal bankruptcy code); W right & M iller, 18 Federal Practice and Procedure §
4414 & n.25 (collecting cases).
Valley View’s federal action does not present an “obvious assault” on the
state court judgment in favor of Duke. 9 Valley View’s success in the federal
action, i.e., recovery for Duke’s alleged tortious maintenance of the pipeline,
would not void, render unenforceable or otherwise impair Duke’s rights
established by the state court judgment, i.e., the determination Duke holds a valid
easement interest and an award of damages for Valley View’s wrongful exclusion
of Duke’s contractors. Thus, Valley View’s claims are not barred by the
nullification exception.
9
The parties spend considerable energy debating whether the underlying
causes of actions are the same. These arguments do not directly address the test
applicable here – whether Valley View’s federal suit has the potential to nullify
the effect of D uke’s prior state court judgment. The arguments are nevertheless
somewhat helpful to our determination. W hile success on a second action based
on the same cause in a previous suit need not necessarily nullify the judgment in
the first, there is a greater risk of such a result.
“Defining the term ‘claim’ is the most difficult aspect of applying claim
preclusion.” M iller v. M iller, 956 P.2d 887, 896 (Okla. 1998). In M iller, the
Oklahoma Supreme Court looked to the purpose of the compared claims to
determine if the claims were the same. Id. at 897. W hen we look to the purpose
of Duke’s state claim, i.e. to establish its right to install monitoring wells and
recover damages for the denial of that right, with the purpose of V alley View’s
federal claims, i.e., to recover damages for D uke’s alleged negligence resulting in
pollution on its property, we conclude the claims are in fact different. Because
the causes of actions are different, we think the risk is low that successful
prosecution of the federal claim would nullify the state court judgment.
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2) Effect of Compulsory Counterclaim Statute
Duke also argues Valley View is barred from raising its federal claims
because, under Oklahoma’s compulsory counterclaim statute, they should have
been raised as counterclaims in the state court action. Under Oklahoma’s statute,
a pleading must “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 or occurrence that is the subject matter of the opposing party’s claim
and does not require for its adjudication the presence of third parties of whom the
court cannot acquire jurisdiction.” Okla. Stat. Ann. tit. 12, § 2013(A). 10 “Failure
to plead a compulsory counterclaim prevents a party from bringing a later
independent action on that claim.” Okla. Gas & Elec. Co. v. Dist. Court,
Fifteenth Judicial Dist., Cherokee County, 784 P.2d 61, 64 (O kla. 1989).
In Wabaunsee v. Harris, the Oklahoma Supreme Court stated the general
rule: “[w]here the two causes of action are different, the litigants are estopped by
judgment to deny only those matters which are common to both suits.” 610 P.2d
at 785. Duke argues Valley View’s reliance on Wabaunsee is misplaced because
it was decided before the passage of the compulsive counterclaim statute. Duke
10
Recognizing the text of the Oklahoma compulsory counterclaim rule is
identical to the text of Federal Rule of Civil Procedure 13(a), Oklahoma courts
have looked to federal law for guidance in applying the Oklahoma statute.
Robinson v. Texhoma Limestone, Inc., 100 P.3d 673, 676 n.6 (O kla. 2004); Okla.
Gas, 784 P.2d at 64 n.8; Turner v. Fed. Deposit Ins. Corp., 805 P.2d 130, 131
(Okla. App. 1991).
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quotes a later Oklahoma Supreme Court case which stated:
[The compulsory counterclaim statute] changes previous Oklahoma
law by requiring a defendant to assert any claim he has against any
opposing party that arises out of the transaction or occurrence which
is the subject matter of the opposing party's claim. Committee
Comment to § 2013. See, e.g., Johnson v. Southwestern Battery Co.,
Okl., 411 P.2d 526, 529 [1966]; and M eyer v. Vance, Okl., 406 P.2d
996, 999 [1965] (in the absence of a compulsory counterclaim
statute, the defendant’s failure to assert the counterclaim did not
preclude a separate action against plaintiff on a claim which could
have been asserted as a counterclaim.).
Okla. Gas, 784 P.2d at 64 n.11.
The counterclaim statute does not, as Duke claims, undermine Wabaunsee
on claim preclusion; rather, it merely adds a step to the analysis. After the
passage of Oklahoma’s counterclaim statute, even if claim preclusion does not
operate to bar a defendant’s subsequent claim, the statute might nevertheless bar
it. See Restatement § 22 (generally, a defendant is not precluded from asserting
his claim, unless the successful prosecution of that action would nullify the
original judgment or the interposition of the claim is required by statute).
For a counterclaim to be compulsory under § 2013(A), it must arise out of
the “same transaction and occurrence” as the subject matter of the opposing
party’s claim. Okla. Gas, 784 P.2d at 64-5. Thus, in order for Valley View’s
claim to be considered compulsory, Valley View’s nuisance and trespass claims
must arise out of the “same transaction and occurrence” as Duke’s breach of
easement claim. “Rather than attempt to define the terms ‘transaction’ and
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‘occurrence’ precisely, most courts . . . have preferred to suggest standards by
which the compulsory or permissive nature of specific counterclaims may be
determined . . . .” Fox, 112 F.3d at 457 (interpreting Oklahoma law). Such
factors include: “(1) Are the issues of fact and law raised by the claim and
counterclaim largely the same? (2) W ould res judicata bar a subsequent suit on
defendants’ claim absent the compulsory counterclaim rule? (3) W ill substantially
the same evidence support or refute plaintiffs’ claims as well as defendants’
counterclaim? and (4) Is there a logical relation between the claim and the
counterclaim?” Id.; accord Driver M usic Co., Inc. v. Com mercial Union Ins.
Cos., 94 F.3d 1428, 1435 (10th Cir. 1996) (applying these factors under Fed. R.
Civ. P. 13(a)); see also W right & M iller, 6 Federal Practice and Procedure § 1410
(listing same factors).
Prior to entering its summary judgment order, the district court previously
decided whether Valley View’s claims were compulsory, albeit it in a different
context. 11 Applying the Fox factors, the district court decided the claims did
not arise out of the same transaction or occurrence. The court opined as follow s:
The transaction or occurrence out of which the state court claim of
defendant Duke Energy Field Services, LP, for breach of a
right-of-way agreement arose is D uke’s alleged attempted entry onto
Valley View’s property and Valley View’s obstruction or prohibition
on that attempted entry. . . . [whereas plaintiff’s] claims arise out of
11
The court’s first compulsory counterclaim analysis was performed in the
context of an abstention analysis and prior to Valley View raising Duke’s alleged
breach of the easement (leaking condensates) as a defense.
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the alleged occurrence of the leakage of hydrocarbons from Duke’s
pipeline across plaintiffs’ property. In any event, however, if the
court applies the four-factor test adopted by the Tenth Circuit for
determining whether the purported counterclaims in question (the
claims of plaintiffs in this case) are compulsory counterclaims in the
pending state court action brought by defendant herein, it is clear that
the counterclaims are not compulsory. The issues of fact and law
raised by the principal claim (the state court claim of defendant) and
the purported counterclaims (the plaintiffs’ claims herein) are not
largely the same. Indeed, they are very different. Res judicata
would not bar a subsequent suit on the purported counterclaims
(plaintiffs’ claims herein), with or without a compulsory
counterclaim rule, because they do not involve the same evidence,
factual issues and legal issues. The same evidence does not support
or refute the principal claim and the purported counterclaims. There
is som e logical relation between the claim and the purported
counterclaims simply because Duke alleges in the state court action
that it entered plaintiffs’ property for the purpose of determining
whether there was a hydrocarbon leak and plaintiffs’ claims herein
are based on an alleged hydrocarbon leak, but this logical connection
is attenuated. Thus, defendant’s premise for its conclusion that the
state court proceedings are parallel to these federal proceedings –
because plaintiffs’ claims herein are compulsory counterclaims in the
state court action – is wrong.
(R . App. at 123-24.) 12
The district court reached the correct conclusion on its first pass of the
12
The district court later reversed course on this issue; in granting
summary judgment on the ground of claim preclusion, the court declared first, the
abstention and counterclaim analyses were different, and second, the court was
unaware at the time it issued its first order of the fact Valley View had raised a
breach of easement defense in the state suit. Neither of these reasons change the
conclusion. The analyses are not different; the court thoroughly applied the Fox
factors, which is the analysis required to determine if the claims arise out of the
same transaction or occurrence. In addition, as discussed previously, claims
cannot be equated with defenses w hen performing a claim preclusion analysis
focusing on the defendant’s failure to assert a claim. Thus, whether Valley View
asserted a breach of easement defense in the state action is irrelevant.
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issue. W hat matters is whether Valley View’s federal claims, that is, the trespass
and nuisance claims, arise out of the same transaction or occurrence as D uke’s
claim in the state suit, that is, the breach of easement claim. The Fox factors
weigh heavily against the conclusion Valley View’s federal claims were
compulsory counterclaims in the state court action. First, as discussed above,
Valley View’s claims are not barred by claim preclusion. Second, the issues of
fact and law are likely to be very different; the development of fact and law on
Valley View’s claims would focus on the cause and extent of the leak and
whether the alleged pollution resulting therefrom exceeded the norms established
by nuisance and trespass law , whereas the development of fact and law on Duke’s
claim would focus on the existence of an easement and how Duke was denied
access. Duke’s argument on this point – the operative event underlying both
actions was Duke causing the pipeline leak – exaggerates the significance of a
single factual similarity. Finally, the only logical connection between the parties’
claims is: they concern events (namely, the alleged damages caused by the
pipeline leak and the subsequent denial of access to the pipeline to fix that leak)
occurring at the same place, albeit at different times. This nexus, however, is too
attenuated. For substantially the same reasons as those initially advanced by the
district court, 13 Valley View ’s trespass and nuisance claims are not properly
13
Duke relies on Yates v. Gulf Oil Corp., 182 F.2d 286 (5th Cir. 1950). It
claims Yates held the landowners’ damage claims arising out of seismic
operations were compulsory counterclaims. However, rather than make such a
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categorized as compulsory counterclaims. 14
The district court improperly granted summary judgment to Duke on the
basis of claim preclusion and the compulsory counterclaim statute.
C. Issue Preclusion
“Under [the doctrine of issue preclusion], once a court has decided an issue
of fact or law necessary to its judgment, the same parties or their privies may not
relitigate that issue in a suit brought upon a different claim.” Little, 100 P.3d at
720 n.47. “Issue preclusion prevents relitigation of facts and issues actually
litigated and necessarily determined in an earlier proceeding between the same
parties or their privies. An issue is actually litigated if it is properly raised in the
pleadings or otherw ise, submitted for determination, and in fact determined[.] A n
issue is necessarily determined if the judgment would not have been rendered but
for the determination of that issue.” Nealis v. Baird, 996 P.2d 438, 458 (Okla.
1999). “Issue preclusion is an affirmative defense and must be pleaded and
holding, the Yates court seemed to assume the counterclaims were compulsory. It
is not clear from the opinion whether a compulsory counterclaim question was
raised by the parties. In any case, Yates did not apply the Fox factors or, indeed,
any analysis at all. Given the uncertainty of whether a compulsory counterclaim
issue was argued in the case, and especially given the lack of analysis, Yates is of
no persuasive weight.
14
Because we have determined Valley View’s claims would not be barred
by the doctrine of claim preclusion or by the counterclaim statue, we find it
unnecessary to address Valley View’s argument regarding the applicability of the
counterclaim rule in cases where the primary claim seeks injunctive relief and the
hearing on the preliminary injunction is considered w ith the trial on the merits.
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proved.” Id.
Duke contends the occurrence and the cause of the leak were litigated and
determined in the state suit against Valley View. Specifically, Duke argues,
because Valley View’s trespass and nuisance claims 15 require a showing Duke
caused the pipeline leak, the prior findings on causation adverse to Valley View
in the state suit preclude these claims. Valley View argues the parties stipulated
in the state action a leak occurred, and therefore that issue was not decided.
Valley View also contends (1) no evidence was offered in the state action
concerning the cause of the leak, (2) the state court jury instructions did not
require the jury to decide any issue regarding the pipeline leak, and (3) the state
court’s partial summary judgment did not reach the issue of V alley View’s
breach of easement defense. According to V alley View, these facts in the record
demonstrate the pipeline issues w ere not “actually litigated” and “necessarily
determined.”
Duke’s arguments lack merit. First, the state court jury instructions did not
mention or require consideration of the cause of the pipeline leak or any defenses
15
Valley View also asserted a claim of unjust enrichment in its federal
complaint. W e do not consider this claim for issue preclusion purposes because,
in its opening brief, Valley View challenges only the district court’s
determination the nuisance and trespass claims would be barred by issue
preclusion doctrines. Valley View thereby waived any challenge to the district
court’s determination issue preclusion bars Valley View’s unjust enrichment
claim. Harsco Corp. v. Renner, 475 F.3d 1179, 1190 (10th Cir. 2007) (“[A] party
waives those arguments that its opening brief inadequately addresses.”).
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to Duke’s claims. Thus, it is difficult to see how the issues were “submitted for
determination, and in fact determined” by the jury. See Nealis, 996 P.2d at 458.
Duke argues, even if the jury did not decide the issue, the state district
court did so as a matter of law in its order granting partial summary judgment to
Duke. An issue decided by a court as a matter of law is also preclusive under
Oklahoma law. Isokariari v. Hillcrest M ed. Ctr., 33 P.3d 691, 693-94 (Okla. Civ.
App. 2001). According to Duke, Valley View’s breach of easement defense was
necessarily rejected by the state court when it concluded Duke held an easement
interest in the property. But Duke has not provided us with anything from which
we could determine the state court did, in fact, determine these issues as a matter
of law in its partial summary judgment order. In its briefing, Duke seemed
content to rely upon the federal district court’s ruling on this matter. On appeal
from the district court’s grant of summary judgment, however, we must undertake
a de novo review of both the facts and law. Rohrbaugh, 53 F.3d at 1182. At oral
argument, Duke assured us a review of the state jury instructions w ould illustrate
the state trial judge passed upon the critical issues of occurrence and causation of
the leak, but our review of the record provides no such clarity. W hile the
instructions indicate the state court ruled Duke possessed an easement interest in
the property, there is nothing therein revealing why. 16 Because we cannot
16
At oral argument Duke explained a breach of easement defense is a
complete defense. However, a review of Oklahoma’s breach of easement law
does not indicate 1) whether breach of easement constitutes a partial or complete
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determine the rationale of the state court’s disposition of the breach of easement
defense from the record, we are constrained to conclude Duke has failed to
demonstrate the issues regarding the occurrence and cause of the leak were
“actually litigated” and “necessarily determined” by either the judge or the jury. 17
In short, Duke has failed to bear its burden to affirmatively prove the defense of
issue preclusion.
Finally, we find Duke’s arguments disingenuous because it has conceded
both the occurrence of the leak and liability therefor. In its statement of facts in
this case Duke concedes a leak occurred. (Appellee’s Br. at 3 (“In late O ctober,
2003, [V alley View] discovered a leak on the property and notified Duke”).)
defense or 2) the specific elements thereof. See Shell Pipe Line Corp. v. Curtis,
287 P.2d 681, 685-86 (O kla. 1955). Curtis suggests an easement holder may in
some instances be liable to the holder of the servient estate, but it is not clear
whether a breach of an easement might forfeit the easement holder’s rights. See
Crim mins v. Gould, 308 P.2d 786, 791 (Cal. App. 1957) (“The general rule is that
misuse or excessive use is not sufficient for abandonment or forfeiture, but an
injunction is the proper remedy. But where the burden of the servient estate is
increased through changes in the dominant estate which increase the use and
subject it to use of non-dominant property, a forfeiture will be justified if the
unauthorized use may not be severed and prohibited.”) (citations omitted).
Given this rather turbid area of law, the state court could have determined
the breach of easement defense was unavailable under Oklahoma law , or, if
available, perhaps some other element of that defense – other than causation –
was not sufficiently shown.
17
On the other hand, if Valley View had prevailed on the breach of
easement defense, and that defense required a showing of causation, the causation
issue would necessarily be relitigated in a nuisance and/or trespass claim. See
Twyman v. GHK Corp., 93 P.3d 51, 54 n.4 (Okla. Civ. App. 2004) (causation is a
necessary element of a nuisance claim); Restatement (Second) of Torts § 162
(1965) (causation is an element of a trespass claim).
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Duke also admitted the leak occurred in its federal court answ er, in which it
admitted a leak of “condensate” from the pipeline. (See R. App. at 103.)
Furthermore, in Duke’s Response to Valley View’s M otion for Partial Summary
Judgment on the issue of liability in the federal case, Duke stated:
In its answ er to Plaintiffs’ A mended Complaint, [D uke] specifically
stated: “[Duke] admits that there was a discharge of condensate from
its pipeline.” Further, in the Joint Status Report submitted to the
Court on November 1, 2004, the Brief Preliminary Statement
included the following: [Duke] admits that there was a release of
condensate from the pipeline; however, [Duke] denies that Plaintiffs
have suffered either the type or extent of damages which they seek.”
[Duke’s] counsel also advised the Court, and opposing counsel, at the
Status Conference held on November 4, 2004, that [Duke] was not
contesting liability, only damages, subject to its affirmative defenses.
It is, therefore, unfortunate, [sic] that Plaintiffs have wasted their
time in preparing and the Court’s time in reviewing a motion for
summary judgment on the issue of liability for damage to land, when
such liability is not, and never has been, contested.
(D ef.’s Resp. to M ot. for Partial Summ. J. at 3-4 (D oc. 59) (emphasis added).) 18
Because Duke has admitted in the federal case there was a leak – indeed, it is
liable for such a leak – its argument that the causation and occurrence issues were
decided against Valley View in the state action is not plausible. See Rooms v.
S.E.C., 444 F.3d 1208, 1213 (10th Cir. 2006) (“A pleading prepared by an
attorney is an admission . . . because the attorney presumably speaks for the
18
Although this document does not appear in the record, we have elected to
take judicial notice of this pleading. Fed. R. Evid. 201; St. Louis Baptist Temple,
Inc. v. Fed. Deposit Ins. Corp., 605 F.2d 1169, 1172 (10th Cir. 1979) (“[A ] court
may . . . take judicial notice, whether requested or not . . . of its own records and
files, and facts which are part of its public records.”).
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litigant.”).
The judgment of the district court is REVERSED and the case is
R EM A N DED for further proceedings consistent with this opinion.
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