Zell v. Suttle et al
MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Defendants Michael Mindlin and Elizabeth Kurila's motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) is GRANTED, and their alternative motion to transfer pursuant to 28 U.S.C. § ; 1404 (a) is DENIED as moot. (Doc. No. 4 .) IT IS FURTHER ORDERED that Plaintiff's complaint against Defendant David Dale Suttle is DISMISSED without prejudice, for lack of timely service. A separate Order of Dismissal will accompany this Memorandum and Order. Signed by District Judge Audrey G. Fleissig on November 15, 2016. (BRP)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EILEEN L. ZELL,
DAVID DALE SUTTLE, et al.,
Case No. 4:16-cv-01293-AGF
MEMORANDUM AND ORDER
This matter is before the Court on the motion (Doc. No. 4) of Defendants Michael
Mindlin and Elizabeth Kurila to dismiss Plaintiff’s complaint on res judicata grounds or,
alternatively, to transfer this case to the Southern District of Ohio. For the following
reasons, the Court will grant the motion to dismiss and will deny the motion to transfer as
Upon review of the record, the Court also notes that the file contains no proof of
service upon the remaining Defendant in this case, David Dale Suttle, by Plaintiff, nor
entry of appearance on behalf of Suttle. Because it does not appear that service of
Plaintiff’s complaint has been timely made upon Suttle, as required by Federal Rule of
Civil Procedure 4(m), the Court will also dismiss Plaintiff’s complaint against Suttle
The action arises out of Plaintiff Eileen Zell’s attempts to collect a debt owed by
Plaintiff’s nephew, Mindlin, to whom Plaintiff loaned $90,000. As alleged in the
complaint, on January 30, 2001, Mindlin signed a $90,000 promissory note payable to
Plaintiff. Mindlin’s wife, Kurila, and Mindlin’s business partner, Suttle (Mindlin, Kurila,
and Suttle, collectively, “Defendants”), co-signed the note. Defendants made some
payments on the loan, but, eventually, the parties disagreed over the amount that
On October 12, 2010, Mindlin and Kurila filed a complaint for declaratory relief
in Ohio state court (the “Ohio state court action”), seeking a declaration as to the
enforceability of the promissory note discussed above and as to any remaining amount
due on the note. Plaintiff filed an answer and counterclaim against Mindlin and Kurila,
together with a third-party complaint against Suttle and the architectural firm that
Mindlin and Suttle owned, alleging that Defendants were in default under the terms of the
note. On July 5, 2011, Mindlin and Kurila filed a motion for summary judgment, which
the state court granted on statute-of-limitations grounds, applying Ohio’s six-year statute
Plaintiff filed an appeal, and on August 7, 2012, the Ohio appellate court affirmed
the trial court’s judgment.1 The appellate court applied Ohio choice-of-law rules and
agreed with the trial court that Ohio’s statute-of-limitations governed the promissory
Plaintiff attached a copy of the Ohio appellate court’s August 7, 2012 decision as
an exhibit to her complaint.
note, rather than Missouri’s longer statute of limitations. The appellate court also
rejected Plaintiff’s arguments for tolling and waiver. Plaintiff filed three motions for
reconsideration (again arguing that the statute of limitations should be tolled), each of
which was denied by the state appellate court, in decisions dated October 25, 2012,
December 31, 2012, and February 12, 2013.2
Plaintiff alleges that on August 14, 2012, one week after the Ohio appellate court
issued its initial decision, Mindlin sent Plaintiff an email from which Plaintiff asserts that
she “discovered for the first time that the Defendants secretly never had any intention to
fully repay the $90,000 that they had borrowed from her.” (Doc. No. 1 at 28) (emphasis
in original.) Plaintiff quotes Mindlin’s email as stating “[W]e always intended to screw
you out of the money.’” Id. at 27 (alteration in original). However, Plaintiff attached
Mindlin’s August 14, 2012 email to her complaint, and the portion of the email from
which Plaintiff quotes reads in full:
Congratulations Eileen. You win.
You can now go to your grave confident in the knowledge that you were
right all along: we always intended to screw you out of the money. After
all, it is so much easier to believe that lie than face your own demons. But,
remember that we offered you over $104,000 plus interest…twice. You
accepted…twice. I put in writing that we would protect you if Suttle failed
to perform. I was writing the contracts. We were willing to do just about
In their motion to dismiss or transfer, Mindlin and Kurila assert that on May 10,
2013, Plaintiff filed a separate suit in the United States District Court for the Southern
District of Ohio, against the attorneys who represented her in the Ohio state court action,
asserting claims for legal malpractice, breach of fiduciary duty, and breach of contract.
Plaintiff is represented by a different attorney (her son) in her suit before this Court.
anything to pay you back for helping us… short of putting my family at
(Doc. No. 1-23 at 2) (ellipses in original.)
Plaintiff filed the current complaint in this Court on August 6, 2016. She alleges
that Defendants obtained the loan described above (and extensions for repayment) from
Plaintiff under false pretenses, while secretly knowing that they never intended to repay
the loan in full; falsely promised to repay the loan in full; and made false allegations
before the trial court in the Ohio state court action. She asserts that these actions give rise
to claims against Defendants for violation of the Racketeer Influenced and Corrupt
Organization (“RICO”) Act, 18 U.S.C. §§ 1961-1968, fraud, fraudulent representation,
breach of contract, breach of promissory note, and promissory estoppel.
Mindlin and Kurila have moved to dismiss the complaint on res judicata grounds
or, alternatively, to transfer this case to the Southern District of Ohio, pursuant to 28
U.S.C. § 1404(a). In support of their motion to dismiss, they argue that the Ohio state
court action resulted in a valid, final judgment on the merits, arising out of the same
transaction or occurrence that is the subject matter of Plaintiff’s complaint in this case,
and that Plaintiff’s complaint in this case is therefore barred by res judicata.
Alternatively, Mindlin and Kurila argue that the case should be transferred to the
Southern District of Ohio, where Plaintiff’s legal malpractice action is pending, for the
convenience of the parties and witnesses, and in the interest of justice.
In response to the motion to dismiss, Plaintiff argues that, with respect to her
breach of contract, breach of promissory note, and promissory estoppel claims in this
case—which she admits are “directly related to the subject matter of the Ohio [state court
action]”—the Ohio state court’s dismissal on statute-of-limitations grounds does not bar
claims brought in a federal court sitting in a different state, such as this Court. (Doc. No.
7 at 11.) With respect to her fraud and RICO claims, Plaintiff argues that these claims
are not barred because they “were based on Defendant Mindlin’s admission [in his
August 14, 2012 email] that the Defendants secretly never intended to fully repay the
$90,000 that they had borrowed.” Id. at 17. Plaintiff argues that because this email was
sent after the state appellate court issued its initial decision in the Ohio state court action,
Plaintiff could not have brought her fraud and RICO claims in that action. Plaintiff also
opposes Defendants’ alternative motion to transfer, arguing that a transfer to the Southern
District of Ohio would be inconvenient and unjust.
In reply, Mindlin and Kurila argue that Plaintiff misunderstands the doctrine of res
judicata and its application to all of Plaintiff’s claims and that, in any event, the
statements made by Mindlin in his August 14, 2012 email cannot credibly support a new
fraud or RICO claim. They also reassert that if the Court does not dismiss Plaintiff’s
complaint, it should transfer the case to the Southern District of Ohio.
The defense of res judicata “may be raised in a motion to dismiss when the
identity of the two actions can be determined from the face of the petition itself,”
including “public records and materials embraced by the complaint and materials
attached to the complaint.” C.H. Robinson Worldwide, Inc. v. Lobrano, 695 F.3d 758,
763-64 (8th Cir. 2012) (internal citations omitted). In considering a motion to dismiss
based on res judicata, the Court must “accept the non-moving party’s factual allegations
as true and construe all reasonable inferences in favor of the nonmovant.” Schaefer v.
Putnam, 827 F.3d 766, 769 (8th Cir. 2016) (citation omitted).
“The law of the forum that rendered the first judgment controls the res judicata
analysis.” Id. (citation omitted). “It is now settled . . . that a federal court must give to a
state-court judgment the same preclusive effect as would be given that judgment under
the law of the State in which the judgment was rendered.” Rick v. Wyeth, Inc., 662 F.3d
1067, 1069 (8th Cir. 2011) (citation omitted).
Under Ohio law, “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.” Grava v. Parkman Twp., 653 N.E.2d 226,
229 (Ohio 1995). Thus, there are four elements for establishing res judicata under Ohio
(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.
U.S. ex rel. Sheldon v. Kettering Health Network, 816 F.3d 399, 415 (6th Cir. 2016)
(interpreting Ohio law). “[R]es judicata bars any claim that was or could have been
raised at trial or on direct appeal.” State v. Steffen, 639 N.E.2d 67, 76 (Ohio 1994).
A dismissal on the basis of the statute of limitations is a final decision “on the
merits” for res judicata purposes under Ohio law. See, e.g., Loudermill v. Cleveland Bd.
of Educ., 721 F.2d 550, 558 (6th Cir. 1983) (holding that “it is clear that Ohio treats such
dismissals [on statute-of-limitations grounds] as ‘on the merits’” for res judicata
purposes) (citation omitted); LaBarbera v. Batsch, 227 N.E.2d 55, 63 (Ohio 1967)
(holding that “[t]he dismissal of plaintiff’s original action on the ground that the statute of
limitations had expired prior to its commencement was on the merits” and that such
judgment “was res judicata and the question of its erroneousness should not have been
inquired into” by a second court). Thus, here, the first element of res judicata is satisfied,
regardless of whether the Ohio state court’s statute-of-limitations analysis was correct.
See LaBarbera, 227 N.E.2d at 60 (“[T]he doctrine of res judicata would be abrogated if
every decision could be relitigated on the ground that it is erroneous, and there would be
no stability of decision, or no end to litigation.”).
There is also no question that this case involves the same parties as the Ohio state
court action. And at least with respect to Plaintiff’s breach of contract, breach of
promissory note, and promissory estoppel claims, Plaintiff admits that the claims could
have been (and largely were) litigated in the Ohio state court action and arose out of the
same transaction as the Ohio state court action. Therefore, these claims are clearly
With respect to Plaintiff’s fraud and RICO claims, these claims, too, are based on
Defendants’ alleged actions in obtaining a loan from Plaintiff, failing to repay the loan,
and prevailing on their legal claim to avoid repaying the loan. Thus, they are based on
the same “transaction, or series of connected transactions,” defined under Ohio law as the
“common nucleus of operative facts,” Grava, 653 N.E.2d at 229, that was the subject
matter of the Ohio state court action and could have been litigated in that action. It does
not matter that Plaintiff has repackaged the facts into the new legal theories of fraud and
RICO. See id. (“That a number of different legal theories casting liability on an actor
may apply to a given episode does not create multiple transactions,” even if “the several
legal theories depend on different shadings of the facts, or would emphasize different
elements of the facts, or would call for different measures of liability or different kinds of
Nor does Plaintiff’s reliance on the purported new evidence of Defendants’
fraud—Mindlin’s August 14, 2012 email—change the result. The Court is far from
convinced that Plaintiff could not have brought her fraud and RICO claims until she
received Mindlin’s August 14, 2012 email. Plaintiff’s assertion that she “discovered for
the first time” Defendants’ fraudulent intent when she received the email is, at best,
disingenuous.3 A review of the email, which is attached to Plaintiff’s complaint, contains
no indication of fraudulent intent, and in fact, suggests the opposite—that any allegation
of fraudulent intent is a “lie.” Thus, the email does not support Plaintiff’s assertion that
she could not have raised her fraud and RICO claims in the Ohio state court action.
In any event, under Ohio law, res judicata applies “even to instances in which a
party is prepared to present new evidence or new causes of action not presented in the
first action, or to seek remedies or forms of relief not sought in the first action.” Am.
Home Prod. Corp. v. Tracy, 787 N.E.2d 658, 661 (Ohio 2003); see also Grava, 653
At worst, the Court questions whether Plaintiff’s counsel, in quoting an excerpt of
the email out of context, complied with his obligations under Federal Rule of Civil
N.E.2d at 229 (holding that res judicata “applies to extinguish a claim by the plaintiff
against the defendant even though the plaintiff is prepared in the second action [to]
present evidence or grounds or theories of the case not presented in the first action”).
Finally, even if Plaintiff’s fraud and RICO claims were not barred by res judicata,
the Court would find that these claims, which by Plaintiff’s own assertion rely entirely on
Mindlin’s August 14, 2012 email to allege fraudulent intent, fail to state a claim as a
matter of law under Federal Rule of Civil Procedure 12(b)(6).
In sum, the Court will grant Mindlin and Kurila’s motion to dismiss, and the Court
will deny the alternative motion to transfer, as moot.
IT IS HEREBY ORDERED that Defendants Michael Mindlin and Elizabeth
Kurila’s motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) is
GRANTED, and their alternative motion to transfer pursuant to 28 U.S.C. § 1404(a) is
DENIED as moot. (Doc. No. 4.)
IT IS FURTHER ORDERED that Plaintiff’s complaint against Defendant David
Dale Suttle is DISMISSED without prejudice, for lack of timely service.
A separate Order of Dismissal will accompany this Memorandum and Order.
AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 15th day of November, 2016.
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