HANCOCK 1993 v. KULANA PARTNERS LLC (2021)

United States Court of Appeals, Ninth Circuit.2021-07-09No. No. 20-16873

Summary · law.co

Holding. Affirmed. The district court properly dismissed Hancock's claims on res judicata grounds as to Kulana Partners and on the merits as to Fidelity National Title, and properly denied leave to amend.

William Hancock sued in federal court claiming that defendants fraudulently altered a deed transferring his property to Kulana Partners in 2002, and he sought to reclaim ownership through trespass, ejectment, and other relief. The core problem with Hancock's case is that he had already litigated this exact transaction extensively in Hawaii state court for thirteen years, ending in a judgment that the deed was valid and properly conveyed the property to the defendant. By raising fraud allegations in federal court rather than presenting them in the earlier state proceedings, Hancock was attempting to circumvent the finality of the prior judgment.

The court rejected Hancock's claims against Kulana Partners because the doctrine of res judicata—which prevents parties from relitigating matters already decided—barred them. The court also found that Hancock's claims against Fidelity National Title, which had not been part of the state court case, lacked merit on their individual grounds: trespass and ejectment could not apply to a title and escrow company that never possessed the property, a declaration of ownership against Fidelity was pointless since she never claimed to own it, and injunctive relief was unavailable because Fidelity's involvement ended in 2002 and Hancock faced no concrete threat of future harm. The court further determined that the trial court properly refused to allow Hancock to amend his complaint to add new claims, given his eight-year delay and the fact that he could have raised such claims from the start.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether res judicata bars fraud claims raised in federal court after state court judgment on the same transaction
Whether claims for trespass, ejectment, and declaratory relief can proceed against a title and escrow company
Whether plaintiff has standing to seek injunctive relief against a defendant whose involvement ended nearly twenty years prior
Whether denial of leave to amend was an abuse of discretion given the plaintiff's eight-year delay

Procedural posture

Hancock appealed the district court's dismissal of his federal action without leave to amend, which followed thirteen years of prior state court litigation on the same property dispute.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

MEMORANDUM **

Plaintiff William Hancock alleges that Defendants Kulana Partners, LLC (“KPL”) and Fidelity National Title and Escrow of Hawaii (“Fidelity”) fraudulently modified a trustee deed that purported to convey a parcel of land from Hancock to KPL in 2002. Hancock contends that the fraud rendered the deed void ab initio and makes him the rightful owner of the property. He brings a claim for trespass and ejectment, and he also seeks declaratory and injunctive relief, along with punitive damages. The district court dismissed the case without leave to amend, and Hancock appealed. We affirm.

This land sale was the subject of nearly thirteen years of litigation in Hawaii state court, which resulted in a judgment that the trustee deed was accurate and conveyed the property to KPL. See Grinpas v. Kapaa 382, LLC, 472 P.3d 575, 2020 WL 5793752, at *1, *6 (Haw. June 29, 2020) (unpublished). By bringing his current fraudulent modification allegations in federal court, rather than as an affirmative defense or counterclaim in state court, Hancock seeks to undermine the judgment against him from state court. The doctrine of res judicata prohibits this effort. See E. Sav. Bank, FSB v. Esteban, 296 P.3d 1062, 1067-68 (Haw. 2013).

We reject Hancocks argument that an exception to res judicata for fraudulent concealment applies. Even assuming such an exception exists under Hawaii law, Hancock has not raised any non-conclusory allegations that KPL concealed any evidence in connection with this deed, which has been publicly recorded for nearly 20 years. Accordingly, the district court was correct in holding that res judicata barred Hancocks claims against KPL.

Hancocks claims against Fidelity, which was not a party to the state court litigation, fare no better. The claim for trespass and ejectment cannot be asserted against Fidelity, a title and escrow company, particularly where there are no allegations that Fidelity was ever in possession of the property at issue. Similarly, Hancocks request for a declaratory judgment that he, not KPL, remains the rightful owner of the parcel, does not implicate Fidelity, which has never purported to hold any ownership interest in the property. Lastly, to the extent Hancocks request for injunctive relief extends to Fidelity, the claim fails because Fidelitys involvement with the property began and ended in 2002. “To seek injunctive relief, a plaintiff must show that he is under threat of suffering ‘injury in fact’ that is concrete and particularized,” and that threat “must be actual and imminent, not conjectural or hypothetical.” Summers v. Earth Island Inst., 555 U.S. 488, 493, 129 S.Ct. 1142, 173 L.Ed.2d 1 (2009). There is no reasonable probability that Fidelity will interact with the challenged deed in the future, so Hancock lacks standing to seek injunctive relief against Fidelity in connection with the deed.

We also hold that the district court did not abuse its discretion in denying Hancock leave to amend. Hancock does not have a compelling excuse for his eight-year delay in bringing any other claims he may have had against Fidelity. See Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962) (recognizing “undue delay” as a reason to deny leave to amend). Hancock now argues that he could plead a breach of fiduciary duty claim against Fidelity, but he offers no justification for omitting such a claim, which is premised on the same underlying facts as were contained in the existing Complaint and thus could have been pleaded originally. Cf. Acri v. Intl Assn of Machinists & Aerospace Workers, 781 F.2d 1393, 1398 (9th Cir. 1986) (“[L]ate amendments to assert new theories are not reviewed favorably when the facts and the theory have been known to the party seeking amendment since the inception of the cause of action.”). Moreover, permitting Hancock to amend at this juncture would be unfair to Fidelity. Although Fidelity was not a party in the state court proceedings, Fidelity has been enmeshed in this federal action since 2013 and has had to defend itself from near-frivolous claims like trespass for eight years. The district court was within its discretion to deny Hancock the opportunity to attack this decades-old transaction again by adding new claims against Fidelity.

AFFIRMED.

FOOTNOTES

. We need not decide whether Fidelitys Rule 12(c) motion for judgment on the pleadings was premature because Hancock waived this argument by not raising it in his initial opposition brief in district court. See In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988, 992 (9th Cir. 2010) (“[A]n issue will generally be deemed waived on appeal if the argument was not raised sufficiently for the trial court to rule on it.” (quotation marks and citation omitted)).

. Hancock and KPL both filed unopposed motions for judicial notice. Both motions request judicial notice of court filings directly related to the transaction at issue. Accordingly, both motions are granted. See Unites States ex rel. Robinson Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992) (courts “may take notice of proceedings in other courts, both within and without the federal judicial system, if those proceedings have a direct relation to matters at issue” (citation omitted)); see also Fed. R. Evid. 201.