Hancock v. First Stuttgart Bank & Trust Co.

Judith Rogers, Judge. The appellant, Reola Hancock, has appealed from a summary judgment in favor of appellee, First Stuttgart Bank and Trust Co., in which it was held that appellant’s complaint for the tort of outrage was barred under the doctrine of res judicata. For reversal, appellant contends that the application of that doctrine was improper under the circumstances of this case. Because the specific argument raised by appellant is without merit, we affirm. In February of 1994, appellant filed suit against appellee in federal court pursuant to 15 U.S.C.A. § 1691, the Equal Credit Opportunity Act (ECOA). She alleged that appellee had violated her right to be accorded equal credit opportunity in that appellee had rejected her request for a home mortgage loan because she was employed by the owner of Orbit Fluid Power Company. Appellant also complained that appellee’s conduct was outrageous, malicious, and willful, and had caused her humiliation, degradation and emotional distress. She requested compensatory and punitive damages. Appellee responded to this complaint by filing a motion to dismiss the federal cause of action pursuant to Fed. R. Civ. P. 12(b)(6), contending that the ECOA does not bar discrimination on the basis of an applicant’s place of employment. By order of March 31, 1994, the district court dismissed appellant’s complaint under the ECOA. The court agreed with appellee’s assertion that an applicant’s place of employment was not a protected category within the meaning of the Act. On May 23, 1994, appellant initiated the present action, alleging essentially identical facts to those alleged in the federal court complaint. Appellant again alleged outrageous conduct on the part of appellee and demanded compensatory and punitive damages. Appellee raised the affirmative defense of res judicata in its answer and in a motion for summary judgment. In support of its motion for summary judgment, appellee submitted copies of appellant’s complaint in federal court, the federal district judge’s order setting out his findings, and the judgment dismissing appellant’s complaint. In opposition to the motion for summary judgment, appellant argued that the federal court dismissal was not res judicata to this action because her state law tort claim had not proceeded to trial. Appellant argued that the only issue decided by the federal court was whether she was entitled to relief under the ECOA and that she had not had a full and fair opportunity to litigate her claim of outrageous conduct. The trial court entered summary judgment for appellee on June 21, 1994. This appeal followed. On appeal, appellant directs our attention to the decision in Swofford v. Stafford, 295 Ark. 433, 748 S.W.2d 660 (1988), where the supreme court stated: The claim preclusion part of the doctrine of res judicata bars relitigation of a subsequent suit when (1) the first suit resulted in a judgment on the merits; (2) the first suit was based upon proper jurisdiction; (3) the first suit was fully contested in good faith; (4) both suits involve the same claim or cause of action which was litigated or could have been litigated but was not; and (5) both suits involve the same parties or their privies. Id. at 434, 748 S.W.2d at 661. In her brief, appellant concedes that the first suit resulted in a judgment on the merits; that the first suit was based upon proper jurisdiction; and, that both suits involved the same parties. Appellant’s argument on appeal is directed only toward the third and fourth prongs of the test. Appellant maintains that the federal order of dismissal did not address her tort claim and that, as a consequence, that claim was not litigated in federal court. She then argues that the tort claim was not “fully contested in good faith” in federal court because appellee did not file an answer responding to the tort claim. She argues that appellee’s failure to answer resulted in that issue not being joined, thereby depriving her of the opportunity to litigate that claim in the federal court. The argument raised by appellant is a narrow one. It is premised on the assertion that appellee’s failure to file an answer prevented litigation of the tort claim in federal court. We cannot agree that appellant was left without the opportunity to litigate the tort claim in federal court for the reason advanced by appellant. In the first place, appellant has cited no authority and has provided no meaningful argument for the proposition that a party’s failure to answer works as an impediment to obtaining relief on a claim. We will not address arguments unsupported by convincing argument or authority. Hicks v. Madden, 322 Ark. 223, 908 S.W.2d 90 (1995). Secondly, and more significandy, a federal court has the authority to entertain supplemental jurisdiction over pendent state claims even though it dismisses the claims over which it has original jurisdiction. 28 U.S.C.A. § 1367. It is recognized that pendent jurisdiction may continue even after the federal claims upon which jurisdiction is based have been dismissed or rendered moot. Baker v. Farmers Elec. Co-Op., Inc., 34 F.3d 274 (5th Cir. 1994). While pendent jurisdiction is a matter of discretion, Wright v. Associated Ins. Companies, Inc., 29 F.3d 1244 (7th Cir. 1994), district courts enjoy wide discretion in determining whether to retain supplemental jurisdiction over a state claim once all federal claims are dismissed. Noble v. White, 996 F.2d 797 (5th Cir. 1993). It thus cannot be said that appellant could not have proceeded with her claim in federal court. The federal court’s order of dismissal was silent with regard to the state court claim. The dissent seizes upon this fact and maintains that the “could have been litigated” requirement was not met in this case because the federal court failed to take any action on the state tort claim. The dissent reasons that, when the basis of the first court’s exercise of jurisdiction is discretionary, then the “could have been litigated” requirement is met only if the first court does take some action on the claim. That, however, is not an argument that was raised below, nor is it one that is advanced in this appeal. As so amply demonstrated by the dissenting opinion’s quotation of appellant’s argument, it is her sole contention that it was the appellee’s failure to answer the claim that precluded litigation of the claim, not the inaction of the federal court. As we have said, and as indicated by the dissenting opinion itself, appellant states her argument for reversal in very narrow terms. Under long-standing procedure, this court is to consider only the arguments raised by the parties, and we are not to consider reversing a trial court for unargued reasons. Schmidt v. McIlroy Bank & Trust, 306 Ark. 28, 811 S.W.2d 281 (1991). We choose the better practice to confine our review to the issues raised and to not delve into matters which could have been argued, but were not. Contrary then to the dissent’s suggestion, our unwillingness to broaden the scope of the argument presented is not a matter of refusing to conduct further, in-depth research, but rather it is a question of reviewing the case in the manner in which it has been argued. Moreover, the dissent has failed to demonstrate how a court’s failure to act on a claim, particularly when it does not appear that the court was ever asked to address it, necessarily leads to a conclusion that the claim could not have been litigated in that forum. The cases cited by the dissent as being supportive of its view are factually distinguishable from the case at bar and, therefore, provide no compelling authority for deciding such an issue, even if the argument were before us. In Johnson v. State, 631 N.Y.S.2d 795 (Ct. Cl. 1995), the issue before the court was whether the claimant’s cause of action in negligence was precluded by a summary judgment obtained by the defendants in federal court, when the negligence claim was not stated as a basis for relief in the federal case. In Andujar v. National Property and Casualty Underwriters, 659 So. 2d 1214 (Fla. App. 1995), the issue to be decided was whether the plaintiff’s statutory claim of discrimination under state law was barred by principles of res judicata when the defendant had prevailed in federal court in an action brought under Title VII of the Civil Rights Act of 1964. As in Johnson v. State, supra, the state law claim in Andujar was never joined in the federal lawsuit. Of course, here, the state tort claim was brought in the federal court suit. Neither Johnson nor Andujar then stand for the proposition that the “could have been litigated” prong is not satisfied when the first court fails to act. Neither court was presented with that issue, and for that matter neither are we, because it is not an argument that has been raised. Also, implicit in the dissent’s citation to Seaboard Finance Co. v. Wright, 223 Ark. 351, 266 S.W.2d 70 (1994), is the alternative idea that the federal court dismissed all claims without prejudice. We quickly point out that whether a dismissal pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure is with or without prejudice is a question governed by federal law, not Arkansas law. And again, the dissent touches upon an argument that is not made by the parties to this appeal. In simple truth, the effect of the federal court’s dismissal on the state court claim is not an issue that is before us, and we are unwilling to assume, particularly without benefit of argument from either party, that the federal court, by its silence, dismissed appellant’s state court claim without prejudice. Affirmed. Jennings, C.J., Bullion, Sp. J., Pittman, and Robbins, JJ., agree. Mayfield, J., dissents. COOPER, J., not participating.