Chаrleen CORRADO, Individually and as the Executrix of the Estate of John M. Corrado; Federal City Region, Inc., Plaintiffs-Appellants v. LIFE INVESTORS INSURANCE COMPANY OF AMERICA; John Does, 1-7, Defendants-Appellees.
No. 14-3359
United States Court of Appeals, Eighth Circuit
Submitted: April 16, 2015. Filed: Oct. 22, 2015.
804 F.3d 915
Before RILEY, Chief Judge, LOKEN and SHEPHERD, Circuit Judges.
SHEPHERD, Circuit Judge.
Charleen Corrado, the executrix of her husband John Corrado‘s estate, along with her husband‘s former business Federal City Region, Inc.,1 appeal the district court‘s dismissal of their complaint against Life Investors Insurance Company (Life Invеstors) for conversion and tortious interference with a contract. In a brief order without elaboration, the district court dismissed the complaint, concluding that the claims were barred on preclusion grounds. We reverse this dismissal and rеmand the matter to the district court for further proceedings.
I.
The factual background of this case is discussed in our previous decision Life Investors Ins. Co. of America v. Federal City Region, Inc., 687 F.3d 1117 (8th Cir.2012), and in a Maryland district court action, Corrado v. Live Investors Owners Participation Trust & Plan, No. 08-0015, 2011 WL 886635 (D.Md., Mar. 11, 2011).
Corrado brought suit in Maryland alleging Life Investors and plan trustees breached fiduciary duties and violated ERISA law with respect to two accounts he and Federal City Region maintained as part of the Life Investors Ownership Participation Trust and Plan (OPT plan).
Counts I, II, and III allege[d] that Defendаnt Trustees breached fiduciary duties in violation of
29 U.S.C. §§ 1104 ,1106(a)(1)(D) ,1106(b)(2) . Count IV allege[d] that Defendant Life Investors knowingly participated in the Trustees’ breach of their fiduciary duties and is also liable. Count V allege[d] that the Plan and Trustees failed to provide documentation regarding the ERISA plan in violation of29 U.S.C. § 1132(c) . And count VI allege[d] that Defendants unjustifiably refused to provide Plaintiffs’ benefits as requested and are liable for the amount denied.
Id. at *4.
As to Counts I-IV, the Maryland district court held that Corrado had not produced any evidence to support a claim of a breach of fiduciary duties as set forth under
Following the grant of summary judgment, Corrado filed a
Plaintiffs previously argued that Defendants were not entitled to withhold any amount of their OPT accounts to cover Plaintiffs’ debts because of ERISA‘S anti-alienation provisions. Plaintiffs’ new argument, that they simply objectеd to Defendants withholding an amount in excess of the claimed debt, is disin-
genuous. It also does not impact the court‘s prior decision. Defendants repeatedly asserted their entitlement to assets in Plaintiffs’ OPT accounts, before and after the Plan division, to cover Plaintiffs’ debts. The summary judgment ruling did not hinge on whether Plaintiffs’ account balance exceeded its claimed debts in July 2007.
Corrado v. Life Investors Owners Participation Trust & Plan, No. 08-0015, 2011 WL 1885713, *2 (D.Md., May 18, 2011).
Following the decisions in the Maryland action, Corrado alleges he paid the debt owed to Life Investors through an assignment of the Federal City Region OPT account. Although the parties continued to dispute whether Corrado has fully satisfied the debt, in 2013, Corrado learned that additional funds had been removed from the OPT accounts. Life Investоrs claimed that some of the funds were removed in accordance with the assignment but that an additional amount—over $400,000—had been taken to pay its legal fees for the Maryland action.
Corrado then initiated this action, asserting causes of action for conversion and tortious interference with contract against Life Investors. He argued Life Investors removed additional funds from the OPT accounts above the amount of his debt to Life Investors. Life Investors resрonded with a motion to dismiss, arguing for dismissal under the doctrines of claim preclusion and issue preclusion. Life Investors claimed the Maryland district court determined Corrado has no entitlement to any of the assets in the OPT accounts. The distriсt court granted the motion to dismiss, concluding, “In federal district court in Maryland, plaintiffs previously litigated and lost their claim to any entitlement to Trust assets. . . . The doctrines of res judicata and collateral estoppel, both claim рreclusion and issues preclusion, bar all the claims in the complaint.”
II.
Corrado argues in this appeal that the district court erred in dismissing the complaint as barred by either issue preclusion or claim preclusion while Life Investors mаintains the Maryland federal court “ruled as a matter of law that Corrado and FCR were barred from claiming entitlement to any assets in the ERISA Plan or the non-ERISA trust.” We review the district court‘s grant of a dismissal pursuant to
The Maryland case was brought by Corrado in federal court with jurisdiction based on
In the Fourth Circuit, claim preclusion generally has three requirements: (1) the prior judgment was final, on the merits, and made by a court retaining proper jurisdiction over the case; (2) the parties are identical, or in privity, in the two actions; and (3) the claims in the
Life Investors argues the Maryland сourt conclusively determined that Corrado was not entitled to any assets in the OPT accounts when the court granted summary judgment to Life Investors and then denied Corrado‘s Rule 59(e) motion. Life Investors relies upon the Maryland court‘s languagе in the Rule 59(e) order that “Plaintiffs previously argued that Defendants were not entitled to withhold any amount of their OPT accounts to cover Plaintiffs’ debts because of ERISA‘s anti-alienation provisions,” Corrado, No. 08-0015, 2011 WL 1885713 at *2, to support its argument. Focusing only on the part of the sentence that “Plaintiffs previously argued that Defendants were not entitled to withhold any amount of their OPT accounts,” Life Investors claims that the decision bars Corrado from seeking any money from the OPT funds. This characterizatiоn is too broad because it does not correctly describe Corrado‘s claims to the Maryland court or the Maryland court‘s ruling.
In his Maryland complaint, Corrado alleged multiple ERISA violations and asserted a claim that he was denied a certain amount of the assets as provided under the terms of the plan. As to the ERISA claims, the Maryland district court granted summary judgment, concluding Corrado had failed to establish any breach of the fiduciary duties provided for under ERISA. Corrado also asserted a claim for a violation of ERISA‘s documentation requirements, which the Maryland district court found time-barred as the claim pertained to Corrado‘s 2001 request for documents and not his 2007 request because the рlan was not covered by ERISA in 2007. Corrado‘s complaint alleged in Count VI that he was entitled to a partial distribution under the terms of the OPT plan and that defendants refused to provide that benefit when he requested it in 2000. The Maryland district court determined this claim was also time-barred because Corrado had made the request to withdraw and when defendants refused, Corrado did not bring suit based on this request within the three-year statute of limitations.
As the Maryland district court explained in its order dеnying the Rule 59(e) motion, it also understood Corrado‘s argument to be that Life Investors was not entitled to any amount from the OPT accounts “because of ERISA‘s anti-alienation provision.” Id. The court then went on to criticize as “disingenuous” Corrado‘s later attempt to recast the argument as that he “simply objected to Defendants withholding an amount in excess of claimed debt.” Id. In other words, the Maryland district court never understood Corrado‘s argument as conceding the debt he owed, rath-
The claims brought in this action are not “based upon the same cause of action as the prior suit.” See Varat Enter., 81 F.3d at 1315. Here, Corrado alleges claims for conversion and tortious interference with contract against Life Investors because Life Investors removed over $400,000 from the accounts to cover expenses above the alleged debt Corrado owed Life Investors. Life Investors removed thеse funds after the decision in the Maryland district court. The Maryland court never determined that Corrado lacked any interest in the assets in the accounts. Instead, it decided Corrado was time-barred from bringing claims from the 2000 request for withdrawal of the assets and that the ERISA claims were either time-barred or failed to allege a violation of ERISA law. Thus, this action is not barred by claim preclusion.
Similarly, the claim is not barred by issue preclusion. As explained by the Maryland district cоurt, only in the Rule 59(e) motion did Corrado argue that he objected to Life Investors holding an amount in excess of the claimed debt. The Maryland district court found this argument to be disingenuous and declined to amend the judgment because “[t]he summary judgmеnt ruling did not hinge on whether [Corrado‘s] account balanced exceeded its claimed debts.” Corrado, No. 080015, 2011 WL 1885713 at *2. Accordingly, consideration of Corrado‘s claim to assets above the amount of the debt was not necessary for the decision of the Maryland district court. See Ramsay, 14 F.3d at 210.
III.
Accordingly, we reverse the district court‘s grant of Life Investors‘s motion to dismiss on res judicata grounds and remand this matter for further proceedings not inconsistent with this opinion. We deny the motion to consolidate.