Keith Goodwin, et al v. Summit County, Ohio, et al

Filing

OPINION filed : AFFIRMED, decision not for publication. Karen Nelson Moore, CONCURRING Circuit Judge; Ronald Lee Gilman, Circuit Judge and Deborah L. Cook, AUTHORING Circuit Judge.

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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 17a0401n.06
Case No. 16-4193
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

FILED
KEITH GOODWIN; KEITH HEATING AND
COOLING, INCORPORATED,
Plaintiffs-Appellants,
v.
SUMMIT COUNTY, OHIO; RUSSELL M.
PRY, Executive, County of Summit, Ohio;
CHIEF BUILDING OFFICIAL JOHN M.
LABRIOLA; SUMMIT COUNTY, OH
BUILDING STANDARDS DEPARTMENT;
CYNTHIA M. SICH, Former Director of
Office of Consumer Affairs; WILLIAM
MILLER, Investigator for the Office of
Consumer Affairs; SUMMIT COUNTY, OH
OFFICE OF CONSUMER AFFAIRS;
COUNTY PROSECUTOR SHERRI BEVAN
WALSH;
SUMMIT
COUNTY,
OH
PROSECUTOR OFFICE,
Defendants-Appellees.

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Jul 12, 2017
DEBORAH S. HUNT, Clerk

ON APPEAL FROM THE UNITED
STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF
OHIO

BEFORE: MOORE, GILMAN, and COOK, Circuit Judges.
COOK, Circuit Judge. Summit County, Ohio, brought a civil enforcement action in
state court against an HVAC company and its owner, prompting them to sue the County and
several of its officials in federal district court. After the state court proceedings concluded, the

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County moved to dismiss the federal case, and the company and its owner sought leave to amend
their original complaint. The district court granted the County’s motion to dismiss and denied
leave to amend. The company and its owner appeal. We AFFIRM.
I. Background
Keith Goodwin is the president of Keith Heating and Cooling, Inc., a heating, ventilation,
and air-conditioning company headquartered in Summit County, Ohio. In October 2012, the
County filed a civil enforcement action against Mr. Goodwin and his company (together,
“Goodwin”) in state court, alleging violations of municipal ordinances concerning building
permits and sales practices. They answered separately in December 2012, and filed a joint
amended answer in March 2013.

All three of the answers included numerous affirmative

defenses, but no counterclaims.
In January 2014, with the state proceedings pending, Goodwin filed a 42 U.S.C. § 1983
action against the County, three County departments, and five County officials in federal court,
alleging violations of the Due Process Clause, Equal Protection Clause, and Takings Clause, as
well as state law claims for “civil abuse of process” and “vindictive enforcement and vindictive
prosecution.” Goodwin sought an injunction halting the state court proceedings; a declaration
that the County’s pertinent ordinances are unconstitutional; and compensatory and punitive
damages, costs, and fees.
The County and other defendants moved to dismiss the federal action or, in the
alternative, to stay the case pending resolution of the state court proceedings. They argued that
the County was the only proper defendant—that the departments may not be sued as separate
legal entities because administrative units of local government lack the capacity to be sued, and
that the claims against the County officials similarly amounted to suits against the County

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because Goodwin sued them in their official capacity only. The district court agreed. In
September 2014, it dismissed the County departments and officials, and it stayed the case
pending the conclusion of the state court proceedings.
Back in state court, Goodwin moved for summary judgment against the County, arguing
that it disregarded its own administrative procedures and selectively enforced its ordinances.
The state court denied the motion, finding that the County complied with its ordinances and that
Goodwin failed to establish selective enforcement. Following the ensuing bench trial, the state
court determined that the County failed to prove its claimed violations by a preponderance of the
evidence and entered judgment for Goodwin.
Goodwin moved to reopen the federal case in April 2015, which the district court granted
after the state court resolved its pending post-trial motions. The County renewed its motion to
dismiss, arguing that the state court’s final judgment barred all of Goodwin’s claims under the
res judicata doctrine.
In April 2016, Goodwin moved to amend the complaint. The key feature of the proposed
amended complaint (“PAC”) was a restyled caption that renamed as defendants the same County
officials previously dismissed by the district court—this time, in their individual and official
capacity. The PAC raised the same constitutional and state law claims raised in the original
complaint, plus a new state law claim for “malicious prosecution.” The County objected to the
consideration of the PAC, reasserting its res judicata argument and noting that the new
individual-capacity claims were time-barred and did not relate back to the original complaint.
Following a hearing, the district court denied Goodwin’s motion to amend and granted the
County’s motion to dismiss all of Goodwin’s claims. Goodwin timely appeals.

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II. Goodwin’s Claims Against the County Officials
Goodwin contends that the district court erred twice in considering Goodwin’s claims
against the County officials. First, Goodwin criticizes the district court’s finding that Goodwin
originally sued the County officials in their official capacity only and, therefore, simply restated
its claims against the County. See, e.g., Doe v. Claiborne Cty., 103 F.3d 495, 509 (6th Cir.
1996). Second, Goodwin argues that the district court should have granted it leave to amend its
complaint to name the County officials in their individual capacity.

We find Goodwin’s

arguments unavailing.
(i) Original Dismissal of the County Officials
We review de novo the district court’s dismissal of Goodwin’s claims against the County
officials. Moore v. City of Harriman, 272 F.3d 769, 771 (6th Cir. 2001) (en banc). As this court
explained in Moore, Ҥ 1983 plaintiffs must clearly notify defendants of the potential for
individual liability.” Id. at 773. If “a § 1983 plaintiff fails to affirmatively plead capacity in the
complaint, we then look to the course of proceedings to determine whether” the defendants
received sufficient notice that they might be held individually liable. Id. (emphasis added).
Goodwin argues that the district court dismissed the County officials without properly
considering Moore. In that case, the complaint’s caption listed the defendants’ names but “did
not specify whether the officers were named in their official or individual capacities.” Id. at 771
(emphasis added). Because the Moore plaintiff failed to plead capacity affirmatively, the court
looked to the “course of proceedings” to determine the defendants’ notice of their potential
individual liability, analyzing “factors [such] as the nature of the plaintiff’s claims, requests for
compensatory or punitive damages, and the nature of any defenses raised in response to the
complaint.” Id. at 772 n.1.

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Because Goodwin affirmatively pleaded capacity in the original complaint, we need not
look to the course of proceedings to determine whether the County officials had sufficient notice
of their potential for individual liability. The original complaint’s caption could not be clearer—
it specifically included in italics that each County official was sued “In His Official Capacity” or
“In Her Official Capacity.”
Even if there were any ambiguity notwithstanding the explicit “official capacity”
statements on the original complaint’s caption, Goodwin failed to press it when given the chance.
In Moore, the plaintiff’s “response to the officers’ motion to dismiss clarified any remaining
ambiguity” about capacity by specifying explicitly that the “individuals named are police officers
who are being sued in their individual capacities.” Id. at 774. Here, in their motion to dismiss
the original complaint, the County officials argued for dismissal because they were sued solely
in their official capacity. Goodwin’s opposition to the motion to dismiss, however, voiced no
objection to the County officials’ capacity argument. “Subsequent filings in a case may rectify
deficiencies in the initial pleadings,” id., but that did not happen here. The district court,
therefore, properly dismissed the County officials.
(ii) Relation Back of the PAC’s Individual-Capacity Claims
Goodwin next argues that the PAC’s individual-capacity claims survive an untimeliness
challenge because they relate back to the original complaint. We disagree.
We review de novo a district court’s conclusion that an amended complaint cannot relate
back to the original complaint. United States ex rel. Bledsoe v. Cmty. Health Sys., Inc., 501 F.3d
493, 516 (6th Cir. 2007) (citing Miller v. Am. Heavy Lift Shipping, 231 F.3d 242, 247 (6th Cir.
2000)). Because the two-year statute of limitations on Goodwin’s § 1983 claims had already
expired when Goodwin sought leave to amend, the PAC is untimely unless it relates back to the

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date of the original complaint. See Shaw v. Pfeiffer, 295 F. App’x 735, 735 (6th Cir. 2008).
Under Federal Rule of Civil Procedure 15(c)(1)(C), a change of “party or the naming of [a] party
against whom a claim is asserted” relates back to the original complaint if the claim arose out of
the same conduct, transaction, or occurrence set out in the original complaint, and if, within the
Rule 4(m) period for serving the summons and complaint, “the party to be brought in by
amendment: (i) received such notice of the action that it will not be prejudiced in defending on
the merits; and (ii) knew or should have known that the action would have been brought against
it, but for a mistake concerning the proper party’s identity.” See also, e.g., Moore, 272 F.3d at
774 (explaining that we look to Rule 15(c)(3)—now, as amended, Rule 15(c)(1)(C)—when a
§ 1983 plaintiff seeks to alter capacity). There is no dispute that the claims in the PAC arise out
of the same conduct, transaction, or occurrence set out in the original complaint. What we must
decide is whether the original complaint presented the individual defendants with information
notifying them that Goodwin might pursue claims that could result in their personal liability.
Put simply, the County officials received no notice from Goodwin’s original complaint of
their potential individual liability. Its caption specified five times that Goodwin sought recovery
from the County officials in their official capacity. See Shaw, 295 F. App’x at 735 (“The
amendment did not relate back because the original complaint expressly named the defendants in
their official capacities only, and therefore did not place them on notice of possible individual
liability.”). And although Goodwin highlights one use of the term “individual capacities” in that
original complaint, that single reference buried in a page-long paragraph was, in our view,
insufficient to provide notice. The only other action Goodwin took to place the individual
defendants on notice was inaction: it left unanswered the official-capacity arguments raised in
the County officials’ motion to dismiss.

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Nor did other factual circumstances offer the County officials reason to suspect potential
individual liability. Rule 15(c)(1)(C)(ii) “asks what the prospective defendant knew or should
have known during the Rule 4(m) period, not what the plaintiff knew or should have known at
the time of filing her original complaint.” Krupski v. Costa Crociere S. p. A., 560 U.S. 538, 548
(2010). Given the original complaint’s caption and Goodwin’s failure to contest the County
officials’ argument that the claims were strictly official-capacity claims, it is unreasonable to
expect that the County officials knew, or should have known, that Goodwin intended to hold
them individually liable. See id. at 554 (“To the extent the plaintiff’s postfiling conduct informs
the prospective defendant’s understanding of whether the plaintiff initially made a mistake
concerning the proper party’s identity, a court may consider the conduct.” (internal quotation
marks omitted)); Lovelace v. O’Hara, 985 F.2d 847, 850–51 (6th Cir. 1993) (holding that the
amended complaint did not relate back to the original complaint because the latter “contain[ed]
an unequivocal statement that” the defendant acted within his official capacity, thereby giving
the defendant “no reason to believe that he was being sued in his personal capacity or that, but
for a mistake concerning identity, the suit would have been against him personally”). The
circumstances here foreclosed application of the relation-back doctrine.
III. Goodwin’s Claims Against Summit County
In granting the County’s motion to dismiss (and denying Goodwin leave to amend), the
district court explained the “multiple reasons” for dismissing each cause of action, focusing on
res judicata as the primary basis for dismissing the constitutional, malicious-prosecution, and
vindictive-prosecution claims.

In its appeal, Goodwin addresses only the dismissal of its

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constitutional claims, arguing that the district court incorrectly applied res judicata.1 The County
disagrees, explaining that Goodwin should have litigated those claims as part of the state court
proceedings. We agree with the County and uphold the district court’s well-reasoned analysis.
“We review de novo a district court’s application of the doctrine of res judicata.” Bragg
v. Flint Bd. of Educ., 570 F.3d 775, 776 (6th Cir. 2009) (citing Black v. Ryder/P.I.E. Nationwide,
Inc., 15 F.3d 573, 582 (6th Cir. 1994)). We also review de novo a district court’s denial of a
motion for leave to amend a complaint if, as occurred here, “the district court bases its decision
to deny leave to amend on a legal conclusion that amendment would be futile” because it could
not survive a motion to dismiss. Yuhasz v. Brush Wellman, Inc., 341 F.3d 559, 569 (6th Cir.
2003) (citing Inge v. Rock Fin. Corp., 281 F.3d 613, 625 (6th Cir. 2002)). We therefore look to
the allegations in the PAC, rather than the original complaint, to determine whether the district
court properly applied res judicata.
Because the state court proceedings occurred in Ohio, Ohio law governs the preclusive
effect of the state court judgment. Hapgood v. City of Warren, 127 F.3d 490, 493 (6th Cir. 1997)
(citing Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984)). “Under Ohio law,
the doctrine of res judicata consists of the two related concepts of claim preclusion, also known
as res judicata or estoppel by judgment, and issue preclusion, also known as collateral estoppel.”
Ohio ex rel. Boggs v. City of Cleveland, 655 F.3d 516, 519 (6th Cir. 2011) (internal quotation
marks and citations omitted).

These parties use the term “res judicata” to refer to claim

preclusion only.
1

The PAC alleges state law claims for civil abuse of process, vindictive enforcement and
prosecution, and malicious prosecution. Because Goodwin does not address their dismissal by
the district court, we consider those issues abandoned on appeal. Hih v. Lynch, 812 F.3d 551,
556 (6th Cir. 2016) (“An appellant abandons issues not raised and argued in his initial brief on
appeal.”).
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Before addressing the proper application of that doctrine, we consider Goodwin’s
argument that the district court failed to follow the Restatement (Second) of Judgments in
applying res judicata. Goodwin cites language from Grava v. Parkman Township, 653 N.E.2d
226 (Ohio 1995), suggesting that the Ohio Supreme Court “expressly adopted” the entirety of the
Restatement (Second) of Judgments in defining Ohio’s res judicata principles. Goodwin then
identifies § 22 in arguing that the failure to bring counterclaims in a first action (here, the state
action) presents no bar to bringing its constitutional claims in federal court. But Goodwin
misreads Grava. There, the court adopted only Restatement (Second) of Judgments §§ 24 and
25—not § 22—and neither § 24 nor § 25 help Goodwin here. Grava, 653 N.E.2d at 229. And,
in any event, because Goodwin’s claims are compulsory counterclaims, see infra, § 22 does not
save them. Restatement (Second) of Judgments § 22 (explaining that a defendant who fails to
bring a counterclaim is precluded from maintaining an action on the claim if the counterclaim
was compulsory).
As the district court correctly noted, a claim is precluded under Ohio law if each of the
following four elements are present:
(1) a prior final, valid decision on the merits by a court of competent jurisdiction;
(2) a second action involving the same parties, or their privies, as the first; (3) a
second action raising claims that were or could have been litigated in the first
action; and (4) a second action arising out of the transaction or occurrence that
was the subject matter of the previous action.
United States ex rel. Sheldon v. Kettering Health Network, 816 F.3d 399, 415 (6th Cir. 2016)
(quoting Hapgood, 127 F.3d at 493); see also Grava, 653 N.E.2d at 229 (“[A] valid, final
judgment rendered upon the merits bars all subsequent actions based upon any claim arising out
of the transaction or occurrence that was the subject matter of the previous action.”).

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This suit easily satisfies the first two elements. The County’s state court action against
Goodwin concluded after a bench trial on the merits, and both the federal and state court actions
involve the same parties. Although Goodwin argues what it views as a material distinction—that
it was a defendant in the state proceedings but a plaintiff in the federal case—this offers no
refuge. See Lisboa v. City of Cleveland Heights, 576 F. App’x 474, 474–75 (6th Cir. 2014);
Rettig Enters., Inc. v. Koehler, 626 N.E.2d 99, 102 (Ohio 1994) (“[Ohio Rule of Civil Procedure]
13(A) requires all existing claims between opposing parties that arise out of the same transaction
or occurrence to be litigated in a single lawsuit, regardless of which party initiates the lawsuit.”).
The bulk of the dispute lies in the third and fourth elements.
(i) Claims That Could Have Been Litigated in the First Action
Turning to the third element of Ohio’s claim preclusion test, Goodwin argues that,
because it allegedly discovered new evidence after its answer was due in the state court action, it
could not have raised the constitutional claims there. The newly discovered evidence, Goodwin
admits, came to its attention by October 2014—nearly six months before the state court’s entry
of final judgment. Goodwin therefore could have sought leave to amend its pleadings in state
court, but it failed to do so. See Ohio R. Civ. P. 15(A) (“The court shall freely give leave [to
amend] when justice so requires.”).
The fact is, Goodwin’s constitutional claims stem from acts and omissions that primarily
occurred before the state court proceedings began in October 2012. For example, the PAC
alleges due process and equal protection violations because the County did not provide a
“prompt, effective name-clearing hearing” before it initiated the state court case. In support of
those claims, the PAC identifies three Akron Beacon Journal news articles published at least
seven months before the state proceedings commenced that reported that Goodwin “engaged in

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unconscionable consumer sales practices and unfair and deceptive consumer sales practices,” as
supposedly relayed by County employees. Likewise, the PAC alleges a takings claim based, in
part, on these pre-October 2012 articles, and it also alleges a due process violation stemming
from facially unconstitutional County ordinances—a claim that is not tied to any particular date.
At bottom, the PAC’s allegations show that Goodwin became aware of its constitutional
claims before filing the amended answer in March 2013. See Dubuc v. Green Oak Twp.,
312 F.3d 736, 749–50 (6th Cir. 2002) (explaining that additional supporting facts coming to light
does not obviate application of res judicata). Plus, in that amended answer (and even in the
separate answers Mr. Goodwin and his company filed initially), Goodwin raised as affirmative
defenses many of the same allegations raised in the PAC (i.e., “selective enforcement” and
“statutes [that] are, in whole or in part, unconstitutional”). Goodwin could have raised these
affirmative defenses as counterclaims during the state court proceedings—but, once again, it did
not. See, e.g., Rondigo, L.L.C. v. Twp. of Richmond, Mich., 522 F. App’x 283, 286 (6th Cir.
2013).
(ii) The Same Transaction or Occurrence as the First Action
Finally, the fourth prong of Ohio’s claim preclusion test is satisfied because Goodwin’s
constitutional claims arise out of the same transaction or occurrence as the subject matter of the
state proceedings. “[S]atisfaction of this element under Ohio law does not require that both cases
involve identical causes of action, proof of identical elements, or even the presentation of exactly
the same evidence.” Sheldon, 816 F.3d at 418. Rather, two sets of claims arise out of the same
transaction or occurrence if they share “a common nucleus of operative facts, or if, in the
language of everyday people, they are logically related.” Lisboa, 576 F. App’x at 476 (internal
quotation marks and citations omitted).

Under the logical-relation test, a “compulsory

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counterclaim is one which is logically related to the opposing party’s claim where separate trials
on each of their respective claims would involve a substantial duplication of effort and time by
the parties and the courts.” Rettig Enters., Inc., 626 N.E.2d at 103 (quotation marks and citation
omitted); see also Ohio R. Civ. P. 13(A) (“A pleading shall 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
. . . .”). Counterclaims are compulsory if they “involve many of the same factual issues, or the
same factual and legal issues, or where they are offshoots of the same basic controversy between
the parties.” Rettig Enters., Inc., 626 N.E.2d at 103 (quotation marks and citation omitted); see
also, e.g., Lisboa, 576 F. App’x at 475–76 (holding that nightclub owners’ constitutional claims
against the city were precluded because they could have pursued them as counterclaims in the
prior state court action brought by the city to enforce its noise ordinances).
Goodwin’s federal court claims are logically related to the County’s state court claims;
all are offshoots of the controversy prompted by the state court proceedings. Before seeking
relief in state court, the County gathered and investigated permit records and consumer
complaints related to Mr. Goodwin and his company. Believing then that Goodwin violated
County consumer protection and building ordinances, the County initiated the state court
proceedings.

Goodwin’s constitutional claims arise out of the County’s investigation and

enforcement of its ordinances. The PAC alleges that the County violated the Due Process and
Equal Protection Clauses when it investigated the consumer complaints and referred the matter
to the county prosecutor without providing Goodwin notice of the complaints or any opportunity
to respond. The PAC further alleges that the County violated the Due Process and Equal
Protection Clauses because it did not provide Goodwin with a “prompt, effective name-clearing

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hearing” during the time the Akron Beacon Journal was publishing its articles about the
County’s investigation. The takings claim too emanates from the same allegations supporting
the due process and equal protection claims.
Relying on Bauman v. Bank of America, N.A., 808 F.3d 1097 (6th Cir. 2015), Goodwin
argues it need not assert the constitutional claims in the state court action because they were not
compulsory counterclaims. Bauman addressed whether the servicer of a loan must bring a debtcollection action as a counterclaim to a Fair Debt Collection Practices Act lawsuit, id. at 1099,
and labeled the counterclaim not compulsory, in part for policy reasons and in part due to
significant differences in the two actions’ facts, id. at 1102. By contrast, the PAC’s factual
allegations are thoroughly intertwined with the core facts that were at issue in the state
proceedings, and we discern no policy reasons compelling a different result.
Goodwin also seeks support from Leatherworks Partnership v. Berk Realty, 247 F. App’x
676, 680–81 (6th Cir. 2007), where the court declined to apply res judicata principles to the bulk
of the plaintiff’s claims because they were based on events that occurred after entry of judgment
in the first action. Goodwin’s constitutional claims arose well before entry of final judgment in
the state court action, and Goodwin’s allegedly-discovered new evidence to support its claims
does not change the fact that the federal court and state court actions “involve many of the same
factual issues.” Rettig Enters., Inc., 626 N.E.2d at 103. Goodwin’s constitutional claims are
barred by res judicata, warranting dismissal.
IV. Conclusion
For these reasons, we AFFIRM.

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KAREN NELSON MOORE, Circuit Judge, concurring in the judgment. I would
affirm simply on the grounds of Ohio principles of res judicata, and therefore I concur in the
judgment.

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