This is the latest chapter in a seemingly endless bankruptcy litigation. We previously adjudicated the underlying dispute, involving rights to a substantial bank account standing in the name of the debtor, in favor of the trustee in bankruptcy.
See Crefisa Inc. v. Washington Mut. Bank,
I.
Background
Our earlier decision limns the full historical relationship, both procedural and factual, that is needed to put this proceeding into perspective. See id. at 47-49. Rather than retrace our steps, we include here only the bare minimum that is necessary to frame the issues on appeal. We draw our account from the brute facts that appear on the face of the complaint, the supporting documentation referenced therein, and matters susceptible to judicial notice.
On April 4, 2000, Banco Santander de Puerto Rico (Santander) filed a complaint in the federal district court requesting the court to order Washington Mutual Bank to turn over funds deposited in a certain “Golden Passbook” account. The complaint alleged that, on November 26, 1986, Caguas Federal Savings Bank loaned Milton Rua, president of Colonial Mortgage Bankers Corp., $500,000; that Rua signed a promissory note (the Note) in that amount and simultaneously pledged the Golden Passbook account to secure payment of the Note; and that Rua used the loan proceeds to fund the Golden Passbook account. The complaint then cited, and incorporated by reference, earlier litigation involving these funds, namely, Civil Action No. 87 1874, in the United States District Court for the District of Puerto Rico.
In that regard, the complaint alleged that Bowery Savings Bank (predecessor in interest to Washington Mutual) sued Rua, Colonial, and Caguas Federal in the same month that Colonial sought the protection of the bankruptcy court, alleging various defalcations in connection with a mortgage loan servicing agreement. The complaint proceeded to cite, and incorporated by reference, a bankruptcy case (Bankr.No. 87-03026) in which the bankruptcy court had ordered Caguas Federal to turn over the funds held in the Golden Passbook account to the trustee in bankruptcy (Hans López-Stubbe). Caguas Federal had complied with the turnover order, delivering a check for $557,720.86 (principal plus accrued interest) to the trustee on or about November 1,1989.
The Resolution Trust Corporation (RTC) was appointed as the receiver of Caguas Federal in August of 1999. According to the complaint in the instant case, the RTC thereafter “sold and as *15 signed to [Santander] the assets that it acquired from Caguas ..., which included Rua’s loan with its collateral,” and Santan-der then sold to Crefisa “all the assets that it acquired from RTC, including the loan granted to ... Rua with its collateral.” Crefisa proceeded to bring an action to recover the monies on deposit in the Golden Passbook account, but lost because, in the words of the complaint, “[i]t was determined that the collateral was not transferred with the loan, and that Crefisa did not have standing to claim the monies.” The complaint alleges that Crefisa thereupon transferred the loan back to Santan-der, “which has the collateral, so that San-tander may claim the monies.”
The defendants, López-Stubbe and Washington Mutual, asked the bankruptcy court to take judicial notice of the prior proceedings involving the Golden Passbook account, see Fed.R.Evid. 201, and simultaneously moved for dismissal of the complaint on res judicata grounds. They argued that the earlier proceeding brought by Crefisa precluded Santander’s current claim. The bankruptcy court agreed and granted the motion. Banco Santander de P.R. v. López-Stubbe (In re Colonial Mtge. Bankers Corp.), Ch. 7 Case No. B87-03026(ESL), Adv. No. 00-0026, slip op. at 6 (Bankr.D.P.R. July 10, 2001). Santander appealed. The Bankruptcy Appellate Panel rejected the appeal. Banco Santander de P.R. v. López-Stubbe (In re Colonial Mtge. Bankers Corp.), No. 01-073, slip op. at 26-27 (B.A.P. 1st Cir. Aug. 16, 2002). Santander now appeals to this court.
II.
Analysis
A.
Legal Principles Governing Appellate Review
The jurisprudence of Rule 12(b)(6) is applicable to motions to dismiss in bankruptcy cases.
See
Fed. R. Bankr.P. 7012(b) (incorporating by reference Fed.R.Civ.P. 12(b)(6));
see also Lawrence Nat’l Bank v. Edmonds,
These principles require us to consider not only the complaint but also matters fairly incorporated within it and matters susceptible to judicial notice.
Cruz v. Melecio,
Despite these familiar principles, the appellant challenges the bankruptcy court’s decision to go outside the margins of the complaint proper in weighing the res judicata defense. That is an affirmative defense, the appellant says, and should be left to proof at summary judgment or at trial. As a theoretical matter, this challenge is baseless. In an appropriate case, an affirmative defense may be adjudicated on a motion to dismiss for failure to state a claim.
See, e.g., Blackstone Realty LLC v. FDIC,
The conclusion that an action can be dismissed on the basis of an affirmative defense, such as res judicata, does not end our inquiry. Such a dismissal only can occur in an appropriate case. Two conditions must be met. The first condition is that the facts that establish the defense must be definitively ascertainable from the allegations of the complaint, the documents (if any) incorporated therein, matters of public record, and other matters of which the court may take judicial notice. The second condition is that the facts so gleaned must conclusively establish the affirmative defense.
See Blackstone Realty,
B.
Applying the Principles
Against this backdrop, we turn to the validity of the affirmative defense in this case. The question we must answer is whether, applying the rules enumerated above, Santander’s claim is barred by the doctrine of res judicata.
Federal law determines whether an earlier judgment, rendered in a federal court, bars the maintenance of a subsequent federal court action.
Mass. Sch. of Law at Andover, Inc. v. Am. Bar Ass’n,
In this instance, the face of the complaint acknowledges the existence of an earlier adversary proceeding. That proceeding resulted in a judgment on the merits in favor of the defendants (appellees here).
See Crefisa,
The identicality of the claims asserted in the two actions cannot seriously be questioned. We described the cause of action proffered in Crefisa in the following terms:
On October 6, 1991, Crefisa brought an adversary proceeding in the Colonial bankruptcy case asserting a security interest in the Golden Passbook account; the claim was based on the pledge of the Golden Passbook account that Rua had made to Caguas on November 28, 1986, to secure his promissory note. Since the funds in the Golden Passbook account had been turned over to the trustee pursuant to the bankruptcy court’s earlier order, the relief sought by Crefi-sa was an order from the bankruptcy court requiring the trustee to transfer the proceeds to Crefisa.
We now turn to the third element of the defense. The defendants are the same in both cases. The plaintiffs, however, are nominally different. The question thus reduces to whether the plaintiffs, though not identical, are sufficiently in privity to satisfy this element.
Gonzalez,
The historical record strongly suggests that this query should be answered in the affirmative. Crefisa and Santander were treated as a single entity throughout the earlier litigation, and neither of them disputed that characterization.
See Crefisa,
From what we already have written, it appears as if all three elements of the res judicata defense are extant here (and therefore, that the bankruptcy court appropriately dismissed the complaint under Rule 12(b)(6)). In an effort to convince us otherwise, Santander makes five counterarguments. None of them need occupy us for long.
First, Santander maintains that the
Cre-fisa
decision did not reach the merits, but, rather, turned on an issue of standing. Although Santander makes this assertion in its complaint, we are not bound by it. After all, this characterization is not a factual allegation deserving of indulgence under Rule 12(b)(6).
See Chongris,
In
Crefisa,
we summarized the bankruptcy court’s rationale, noting that the court applied the substantive law of Puerto Rico in its disposition of the case.
Santander’s next challenge also is built upon a porous foundation. It interprets our opinion in Crefisa as turning on which party held the rights to the collateral that had been tendered to secure the Note. On that reading, it posits that its reacquisition of the Note alters the nature of the claim asserted here (and, therefore, renders the claims asserted in the two actions different).
This is little more than wishful thinking. Our earlier decision did not turn on the passing of the rights to the collateral from party to party but on the effect of an attempted assertion of those rights as against third parties.
Crefisa,
Santander also maintains that the “iden-ticality of parties” element is not satisfied here. In this regard, it asseverates that the bankruptcy court’s determination that Santander and Crefisa were in privity was no more than an unsubstantiated ipse dix-it. It says now — although it did not allege in its complaint — that Crefisa is not a subsidiary of Banco Santander de Puerto Rico, but, rather, a subsidiary of that company’s parent corporation, Banco Santan-der de España. This asseveration lacks force.
As a procedural matter, Santander and Crefisa were treated as peas in a pod throughout the earlier litigation.
See, e.g., In re Colonial Mtge. Bankers Corp., supra,
*19
If more were needed — and we doubt that it is — the distinction that Santander tries to draw makes no substantive difference for purposes of this appeal. The district court adjudicating the earlier claims specifically observed that the Note “was endorsed to the order of Banco
Santander P.R.
by RTC as Caguas’ receiver and delivered to said bank as a result of the ... Agreement between RTC and San-tander/Crefisa.”
In re Colonial Mtge. Bankers Corp., supra,
In all events, Santander and Crefisa, even on Santander’s current version of the corporate interrelationship, are sister corporations under the control of a common parent. On any view of the record, these sister corporations share a common economic interest in attempting to satisfy a single debt, represented by the Note, by establishing a security interest in the Golden Passbook account and wresting the funds from the steely grip of the trustee in bankruptcy. Within this context, the corporate interrelationship among the parties gave Crefisa adequate incentive to litigate this common interest. No more is exigible to establish privity for purposes of the res judicata defense.
See Aunyx Corp.,
Fourth, Santander charges that the bankruptcy court erred in failing to convert the appellees’ motion to dismiss into a motion for summary judgment. Had the court done so, Santander suggests, it could have introduced the RTC Santander asset purchase agreement to support its claim.
This argument is flawed in at least two respects. For one thing, matters of public record are fair game in adjudicating Rule 12(b)(6) motions, and a court’s reference to such matters does not convert a motion to dismiss into a motion for summary judgment.
Boateng,
Finally, Santander — -grasping at straws — cites dictum in
Crefisa
outlining a theory under which that case’s holding might not apply to a bankruptcy trustee.
See Crefisa,
*20
We specifically noted in the earlier case that Crefisa failed to make the argument that we called a possible “escape hatch.”
Id.
Crefisa thus forfeited the right to press that argument.
See Teamsters, Chauffeurs, Warehousemen, and Helpers Union v. Superline Transp. Co.,
III.
Conclusion
We need go no further. Motions to dismiss are in order when a plaintiff has failed to state a claim upon which relief can be granted. This vehicle may be employed when the complaint, the documents incorporated by reference in it, matters of public record, and other matters susceptible to judicial notice coalesce to show beyond doubt that an action is barred, under the doctrine of res judicata, by a prior adjudication.
This is such a case. The complaint makes it abundantly clear that Santander, acting through its privy and corporate relative, had a full and fair opportunity to litigate its claim. It did so and lost. Having had one bite of the cherry, Santander is not entitled to another. As the lower courts properly held, its action is easy prey for the res judicata defense.
Affirmed.
Notes
. In an effort to turn the tables, Santander invokes the judicial estoppel doctrine offensively (rather than defensively). In this regard, it argues that the appellees should be estopped from disputing that standing was the pivotal issue in
Crefisa
because, in that case,
*19
the same parties filed a "Motion to Dismiss and/or for Summary Judgment based on lack of standing."
In re Colonial Mtge. Bankers Corp., supra,