Everett v. Continental Bank, N.A.

845 F. Supp. 335, 1994 U.S. Dist. LEXIS 10965, 1994 WL 74367
CourtDistrict Court, M.D. North Carolina
DecidedJanuary 12, 1994
DocketNo. 1:92CV00629
StatusPublished
Cited by1 cases

This text of 845 F. Supp. 335 (Everett v. Continental Bank, N.A.) is published on Counsel Stack Legal Research, covering District Court, M.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Everett v. Continental Bank, N.A., 845 F. Supp. 335, 1994 U.S. Dist. LEXIS 10965, 1994 WL 74367 (M.D.N.C. 1994).

Opinion

MEMORANDUM OPINION AND ORDER

HIRMAN H. WARD, Senior District Judge.

This matter comes before the Court on defendant’s Motion to Dismiss, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, for failure to state a claim upon which relief can be granted or in the alternative to Transfer and defendant’s Motion to Stay. For the reasons stated herein, the Court will grant defendant’s motion to dismiss, deny defendant’s motion to transfer and deny defendant’s motion to stay.

I. FACTS

Plaintiffs are the principals of Guilford Telecasters (“Guilford”), a North Carolina corporation that in 1984 borrowed $4.2 million from defendant, Continental Bank, N.A. (“Continental”). Each of the plaintiffs executed an individual written guaranty of Guilford’s debt. All plaintiffs were responsible for the Continental debt in an amount equal to his or her pro rata ownership interest in the corporation.

In 1986, Guilford defaulted on its obligations to Continental and filed for bankruptcy in the United States Bankruptcy Court for the Middle District of North Carolina. Consequently, Continental turned to the guarantors for payment of the loan. In 1987, the guarantors began to make timely payments on the debt pursuant to their written guarantees. However, the guarantors later suspended their payments and declined to pay the entire amount due under the terms of the Guilford note. On March 14,1990, Continental brought an action against the guarantors in the United States District Court for the Northern District of Illinois to recover on the note.

The guarantors challenged personal jurisdiction but the Court held that it had personal jurisdiction. Continental Bank N.A v. Everett, 742 F.Supp. 508 (N.D.Ill.1990). On a motion for summary judgment, the Illinois court entered a final judgment against guarantors Robinson and Kathrine Everett. [337]*337Continental Bank N.A v. Everett, 760 F.Supp 713 (N.D.Ill.1991). The United States Court of Appeals for the Seventh Circuit affirmed the judgment on the merits and remanded the case solely for the computation of the amount of default interest and enforcement expenses. Continental Bank N.A. v. Everett, 964 F.2d 701 (7th Cir.1992), cert. denied, — U.S. -, 113 S.Ct. 816, 121 L.Ed.2d 688 (1992).

Continental registered the judgment in this district since this is where plaintiffs’ assets are located. Plaintiffs responded by (1) filing objections in both Illinois and North Carolina Federal Courts to the registration of the judgments, (2) filing two motions in the Illinois Federal Court to obtain relief from the judgment under Federal Rule of Civil Procedure 60(b), and (3) filing a lawsuit by Guilford, with guarantor Robinson Everett as its counsel, attempting to recalculate the amount of guaranteed debt to Continental. Plaintiffs lost on all of these actions.

After being unsuccessful on the above actions, plaintiffs filed the current complaint consisting of claims of abuse of process, defamation, along with derivative claims of unfair trade practice, and emotional distress. Continental contends and the court agrees that plaintiffs’ claims rest on two central allegations and two associated derivative claims. The first allegation is that Continental’s registration in North Carolina of the judgments obtained in Illinois was improper and the second allegation is that Continental defamed plaintiffs’ credit by improperly failing to credit the judgments which had been recorded against the plaintiffs with subsequent payments made by Guilford. Continental contends that both allegations have been previously addressed by a court of competent jurisdiction and thus the claims are barred by collateral estoppel and res judicata. In its response, plaintiffs maintain that the allegations in this action were not- previously addressed or if they were previously addressed then the prior ruling is not entitled to preclusive effect.

With regard to the derivative claims, Continental argues in the alternative that the unfair trade practice and intentional infliction of emotional distress should be barred by collateral estoppel and res judicata or be dismissed for failure to allege essential elements. Plaintiffs contend that the claims are not barred and the complaint satisfactorily alleges all of the necessary elements.

II. DISCUSSION

The court agrees with Continental’s assertion that the central issues in this matter are (1) whether Continental’s registration of the Illinois judgment in North Carolina was proper and (2) whether Continental improperly refused to mark the judgments partially satisfied and thus defamed plaintiffs’ credit. Each of these issues will be discussed separately.

A. Registration of the Illinois Judgment

Continental obtained a judgment against plaintiffs rendered by the United States District Court for the Northern District of Illinois on July 30,1991. Continental Bank v. Everett, 760 F.Supp 713 (N.D.Ill. 1991). The United States Court of Appeals for the Seventh Circuit affirmed the judgment on the merits and remanded the case solely for the computation of the amount of default interest and enforcement expenses. Continental Bank N.A v. Everett, 964 F.2d 701 (7th Cir.1992), cert. denied, — U.S. -, 113 S.Ct. 816, 121 L.Ed.2d 688 (1992).

This judgment was registered in North Carolina in October, 1991. Plaintiffs challenged the registration of the judgment in North Carolina on the grounds that North Carolina statutory law was violated. In an opinion issued on April 28, 1992, Magistrate Judge Eliason held that the registration was proper and he stated that “the Court rejects defendants’ claim .that Continental is not entitled to execution on the judgment because the judgment is not final or because it is otherwise not properly registered”. Judge Bullock affirmed Magistrate Judge Eliason’s opinion on June 5, 1992. ,

Continental claims that collateral estoppel and res judicata bar the relitigation of whether the Illinois judgment was properly registered in North Carolina. “Collateral estoppel. bars relitigation of an issue previously [338]*338decided if the party against whom the prior decision is asserted had ‘a full and fair opportunity’ to litigate that issue in the earlier case.” Combs v. Richardson, 838 F.2d 112, 114 (4th Cir.1988). Collateral estoppel, “by avoiding duplicative relitigation of identical issues ensures that parties will eschew the piecemeal presentation of their case” thereby conserving judicial resources. Id. at 115.

Plaintiffs have submitted no evidence to indicate that they did not have a full and fair opportunity before Magistrate Judge Eliason to litigate whether the Illinois judgment was properly registered in North Carolina. Plaintiffs lost on the precise issue that they are now attempting to relitigate. Clearly, the issue plaintiffs raise has been determined in a proceeding where they had an opportunity for a full and fair hearing.

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Cite This Page — Counsel Stack

Bluebook (online)
845 F. Supp. 335, 1994 U.S. Dist. LEXIS 10965, 1994 WL 74367, Counsel Stack Legal Research, https://law.counselstack.com/opinion/everett-v-continental-bank-na-ncmd-1994.