                         −This opinion will be unpublished and
                         may not be cited except as provided by
                         Minn. Stat. § 480A.08, subd. 3 (2012).

                              STATE OF MINNESOTA
                              IN COURT OF APPEALS
                                    A14-0530

                                   James Klapmeier,
                                      Appellant,

                                           vs.

                              Joseph Michael Ebel, et al.,
                                    Respondents.

                                Filed December 1, 2014
                                       Affirmed
                                    Schellhas, Judge

                            St. Louis County District Court
                              File No. 69VI-CV-12-1043

James Klapmeier, Spring Park, Minnesota (pro se appellant)

Bryan M. Lindsay, The Trenti Law Firm, Virginia, Minnesota (for respondents)

      Considered and decided by Larkin, Presiding Judge; Schellhas, Judge; and

Bjorkman, Judge.

                        UNPUBLISHED OPINION

SCHELLHAS, Judge

      Appellant asks us to reverse the district court’s order dismissing his claims against

respondents on res judicata grounds. We affirm.
                                          FACTS1

       Appellant James Klapmeier owned a 60-foot Boatel houseboat with attached

outboard motors. In July 2002, Klapmeier leased the houseboat to respondent Ebel’s

Minnesota Voyageur Houseboats Inc. (Voyageur) in an attempt to satisfy a $44,000 debt

(Klapmeier’s debt) that he owed to Voyageur’s owners, respondents Joseph Ebel and

Katy Ebel. The lease was to remain in effect until the houseboat was sold to a third party

or until Voyageur collected “Net Rental from its rental of the Houseboat to the public” in

an amount equaling Klapmeier’s debt.

       The lease agreement defines “Net Rental” as

              the gross rentals received by [Voyageur] from the renting of
              said Houseboat to the public less [Voyageur]’s actual costs in
              respect to the possession, maintenance, repair and operation
              of said Houseboat in accordance with this Lease. Such actual
              cost shall include the monies spent and paid by [Voyageur] to
              any third party for insurance, licensure, gas, maintenance,
              repair and including wages and related payroll costs paid to
              [Voyageur]’s employees for labor provided in respect to said
              Houseboat.

The agreement also provides:

                     3. CARE OF HOUSEBOAT. [Voyageur] shall treat
              the Houseboat as part of its Houseboat fleet for rental to the
              public and shall use, maintain and repair said Houseboat in
              substantially the same manner as it does with its owned
              houseboats.

                    4. MAINTENANCE AND REPAIR. [Voyageur], at
              [Voyageur]’s own cost and expense, shall keep the Houseboat
              in good repair, condition and working order. [Voyageur] shall
              be responsible for all janitorial service in respect to the

1
 The facts are taken from the appellate record and from the court file in a prior action,
described herein, of which file the district court took judicial notice in the present action.

                                              2
             Houseboat. [Voyageur] shall further provide all gas and oil
             necessary to operate said Houseboat.

                   5. RETURN OF HOUSEBOAT. At the expiration of
             this Lease, [Voyageur] shall return to [Klapmeier] the
             Houseboat in good repair, ordinary wear and tear resulting
             from use excepted. At the end of the Lease it shall be
             [Klapmeier]’s responsibility to transport the Houseboat from
             [Voyageur]’s place of business at the Ash River Trail, Orr,
             Minnesota to such location as [Klapmeier] desires . . . .

Additionally, the lease required Voyageur to provide Klapmeier with an annual “written

report of the Net Rental from the Houseboat for the calendar year in question showing

gross rentals and all costs by date and amount.”

      In June 2008, Klapmeier commenced an action (prior action) against the Ebels.2

Klapmeier alleged breach of contract against the Ebels and Voyageur based on their

“fail[ure] to provide annual accountings” as required by the lease and alleged that “as a

result of said breach, [the Ebels and Voyageur] are believed to have profited from the use

of the Houseboat contrary to the Lease.” Klapmeier also asserted a claim for

misrepresentation, alleging that the Ebels and Voyageur falsely represented that they

would attempt to sell the houseboat and misrepresented the amount of income generated

by rental of the houseboat. Klapmeier also alleged that, “[b]ut for [the Ebels and

Voyageur’s] misrepresentations, [Klapmeier] would have either been able to sell [the




2
  Before trial in the prior action, the parties agreed to amend the title of the case for
purposes of trial to include Voyageur as a party defendant. Following this agreement,
Voyageur was listed as a party defendant in every relevant document in the court file,
including the special verdict form in the prior action.


                                            3
house]boat or lease it to earn income.” Klapmeier sought lost rental income and the

return of the houseboat.

       Klapmeier tried his breach-of-contract claim to a jury in January 2009.3 The jury

returned a special verdict, finding that the Ebels and Voyageur breached the lease, that

the breach did not “directly damage” Klapmeier, and that Klapmeier still owed $22,969

on his debt. The district court granted judgment to the Ebels and Voyageur in the amount

of $22,969 plus costs and disbursements and declared that the Ebels and Voyageur were

entitled to possession of the houseboat.

       In March 2009, Klapmeier moved for judgment as a matter of law, a new trial, and

an order granting him possession of the houseboat. In their motion in opposition, the

Ebels and Voyageur informed the district court that “[t]he parties agreed and stipulated

that the [houseboat] should be transferred to [Klapmeier].” The court denied Klapmeier’s

motion for judgment as a matter of law or for a new trial but concluded that “[Klapmeier]

is entitled to possession of the [houseboat]” and ordered that “[the Ebels and Voyageur]

shall release the [houseboat] to [Klapmeier],” noting in its attached memorandum that the

houseboat “shall be returned . . . within a reasonable time and in a condition acceptable

under the terms of the lease.” The court amended the order for judgment to declare that

Klapmeier was entitled to possession of the houseboat. Klapmeier appealed from the

district court’s order.

3
  Before trial in the prior action, Klapmeier’s counsel stated that “[t]he complaint
provides for a fraud [sic] claim, and I will not argue it or present it in opening statements
but just want to preserve that claim in case something comes out at trial.” The special
verdict form in the prior action did not include a question about misrepresentation or
fraud.

                                             4
       In June 2009, Klapmeier moved the district court for an order compelling the

Ebels and Voyageur to place the houseboat into the water. The district court concluded

that “[the Ebels and Voyageur are] under no duty to place the [houseboat] into the water”

and denied Klapmeier’s motion. We subsequently affirmed the district court’s posttrial

orders in an unpublished opinion, noting in dicta that “[t]he lease required [Voyageur] to

return the houseboat to [Klapmeier] in good repair upon expiration of the lease.”

Klapmeier v. Ebel, No. A09-1005, 2010 WL 2732049, at *5 (Minn. App. July 13, 2010).

Klapmeier did not retake possession of the houseboat until October 2010.

       In July 2012, Klapmeier pro se commenced the present action against the Ebels

and Voyageur, alleging that the Ebels and Voyageur “stripped the [house]boat of almost

every piece of equipment, part and supply,” including a hot tub, a microwave, fire

extinguishers, bed linens, curtains, kitchen and cooking supplies, garbage cans, coolers,

tie-down ropes, life jackets, and life preservers; that “[e]xternal rust and extensive mold[]

[exist] both inside and outside the [house]boat,” along with other damage to items on the

houseboat; that the houseboat’s “engines were never updated” and its “[o]ld batteries

were not replaced”; and that he incurred “unnecessary and extra costs” related to the

Ebels and Voyageur’s delay in allowing Klapmeier to access the houseboat. Klapmeier

states that “the basis for . . . the Complaint . . . is a formal Houseboat Lease” that

“required [the Ebels and Voyageur] to ‘treat the Houseboat as part of [Voyageur’s]

Houseboat fleet for rental to the public and . . . use, maintain and repair said Houseboat in

substantially the same manner as [Voyageur] does with its owned houseboats,’” “to ‘keep

the Houseboat in good repair, condition and working order,’” and “to return the


                                             5
Houseboat ‘in good repair.’” Klapmeier references trial testimony of the Ebels in the

prior action, the district court’s posttrial orders in the prior action, and this court’s

opinion affirming the posttrial orders. He seeks damages in the amount of $45,866.10,

representing the “[u]nnecessary and extra costs” to access the houseboat; to clean the

houseboat, replace items on the houseboat that were removed or destroyed, and repair

items on the houseboat that were damaged; and to trade in the houseboat’s old engines

for new engines, controls, and cables.

       The Ebels and Voyageur answered Klapmeier’s complaint, asserting affirmative

defenses that include res judicata, and moved for declaratory judgment or dismissal of the

claims asserted in the present action, arguing that the present claims are barred by res

judicata. Klapmeier opposed the motion on the basis that the present action asserts “new

claims . . . that did not exist at the time of the [prior action]” and that res judicata does not

bar his claims. The district court dismissed the present action based on the doctrine of res

judicata, concluding that the present claims are barred because the prior action involved

the same claims for relief and the same parties as the present action and resulted in a final

judgment on the merits, and Klapmeier had a full and fair opportunity to litigate the

matter. The court entered a judgment of dismissal on February 4, 2014.

       This appeal follows.

                                       DECISION

       “The application of res judicata presents a question of law subject to de novo

review.” Schober v. Comm’r of Revenue, 853 N.W.2d 102, 111 (Minn. 2013). “Res

judicata is a finality doctrine that mandates that there be an end to litigation.” Hauschildt


                                               6
v. Beckingham, 686 N.W.2d 829, 840 (Minn. 2004). “Res judicata is an affirmative

defense that must be pleaded and proven by the party asserting it.” Rucker v. Schmidt,

794 N.W.2d 114, 121 (Minn. 2011); see also Minn. R. Civ. P. 8.03 (including res judicata

in a list of avoidance and affirmative defenses).

       “Under res judicata, a party is required to assert all alternative theories of recovery

in the initial action.” Id. (quotation omitted).

              Res judicata precludes “a subsequent claim when: (1) the
              earlier claim involved the same claim for relief; (2) the earlier
              claim involved the same parties or their privies; (3) there was
              a final judgment on the merits; and (4) the estopped party had
              a full and fair opportunity to litigate the matter.”

Beaulieu v. Minn. Dep’t of Human Servs., 825 N.W.2d 716, 724 (Minn. 2013) (quoting

State v. Joseph, 636 N.W.2d 322, 327 (Minn. 2001)). “When these four requirements

have been satisfied, res judicata bars claims regarding matters actually litigated and every

matter that might have been litigated in the prior proceeding.” Schober, 853 N.W.2d at

111; see also Brown-Wilbert, Inc. v. Copeland Buhl & Co., 732 N.W.2d 209, 220 (Minn.

2007) (“Res judicata applies equally to claims actually litigated and to claims that could

have been litigated in the earlier action.”). “Although the doctrine of res judicata should

not be applied rigidly in contravention of public policy, the doctrine reflects courts’

disfavor with multiple lawsuits for the same cause of action and wasteful litigation.”

Schober, 853 N.W.2d at 111 (quotation and citations omitted).

       The first requirement of res judicata is that “the earlier claim involved the same

claim for relief” as the subsequent claim. Beaulieu, 825 N.W.2d at 724 (quotation

omitted). “Central to considering this [requirement] is what is meant by ‘claim’ or ‘cause


                                               7
of action.’” Hauschildt, 686 N.W.2d at 840. “A claim or cause of action is a group of

operative facts giving rise to one or more bases for suing.” Id. (quotation omitted).

“Therefore, the focus of [the first requirement of] res judicata is whether the second claim

arises out of the same set of factual circumstances” as did the first claim. Id. (quotation

omitted). “The commonly used test for determining whether a former judgment bars

subsequent action is to inquire whether the same evidence will sustain both actions.”

Schober, 853 N.W.2d at 111.

       In this case, Klapmeier leased the houseboat to Voyageur. The lease required

Voyageur to engage in care, maintenance, and repair of the houseboat. The lease also

required Voyageur to report the houseboat’s “gross rentals and all costs by date and

amount,” including costs associated with the houseboat’s care, maintenance, and repair.

Klapmeier’s prior claims arose out of the Ebels and Voyageur’s breach of the lease’s

reporting requirements, and Klapmeier’s present claims arise out of the Ebels and

Voyageur’s alleged breach of the lease’s requirements regarding care, maintenance, and

repair of the houseboat. Klapmeier argues that the present claims are unlike the prior

claims because they are “based on discovery in 2010,” when Klapmeier retook

possession of the houseboat following this court’s affirmance of the district court’s

posttrial orders. The supreme court has stated that two “claims cannot be considered the

same cause of action if ‘the right to assert the second claim did not arise at the same time

as the right to assert the first claim.’” Hauschildt, 686 N.W.2d at 841 (quoting Care Inst.,

Inc.-Roseville v. County of Ramsey, 612 N.W.2d 443, 447 (Minn. 2000)).




                                             8
       But nothing in the appellate record shows that the Ebels and Voyageur breached

the lease’s requirements regarding care, maintenance, and repair after their breach of the

lease’s reporting requirements—the subject of the prior action. Before the district court,

the Ebels and Voyageur argued that the “genesis” of Klapmeier’s present claims is

“identical” to that of his prior claims, relying on the “basis of recovery” that Klapmeier

asserted in his complaints and supporting documentation in the present and prior actions.

Klapmeier submitted no responsive affidavit or evidence to rebut the Ebels and

Voyageur’s argument and evidence. We conclude that the Ebels and Voyageur met their

burden to prove that Klapmeier’s present claims arise out of the same set of factual

circumstances as his prior claims and involve the same request for relief. The first

requirement of res judicata therefore is satisfied.

       The second requirement of res judicata is that “the earlier claim involved the same

parties or their privies” as the subsequent claim. Beaulieu, 825 N.W.2d at 724 (quotation

omitted). Klapmeier does not contest that the second requirement is satisfied here. His

implicit concession is logical because he brought both the present claims and prior claims

against the same parties—the Ebels and Voyageur.4 The second requirement of res

judicata is satisfied.



4
  As discussed above, although the complaint in the prior action names only the Ebels as
party defendants, Voyageur also was treated as a party defendant in the prior action. But
even if Voyageur were not a party defendant in the prior action, Voyageur is a privy of its
owners, the Ebels, for purposes of res judicata. See Rucker, 794 N.W.2d at 118
(“‘Privies’ to a judgment are those who are so connected with the parties in estate or in
blood or in law as to be identified with them in interest, and consequently to be affected
with them by the litigation.” (quotation omitted)).

                                              9
       The third requirement of res judicata is that “there was a final judgment on the

merits.” Beaulieu, 825 N.W.2d at 724 (quotation omitted). Klapmeier argues that “the

present claims were not in existence at the time of the [prior action] thereby making a

final judgment on the merits impossible.” But the third requirement demands only that

the prior action—not the present claim—resulted in a final judgment on the merits. See

Kern v. Janson, 800 N.W.2d 126, 129 n.1 (Minn. 2011) (noting that “a final judgment on

the merits in one action bars further relief on a later claim if” the other three requirements

of res judicata are satisfied (emphasis added)); Rucker, 794 N.W.2d at 122 (Dietzen, J.,

concurring) (stating that the third requirement examines “whether there was a final

judgment on the merits . . . in the prior lawsuit” (emphasis added)). Here, the prior action

culminated in a trial by jury, the jury reached a special verdict, and the district court

entered judgment based on the verdict. The district court rejected Klapmeier’s subsequent

attack on the judgment in the prior action, and this court affirmed that rejection on

appeal. The third requirement of res judicata is satisfied.

       The fourth requirement of res judicata is that “the estopped party had a full and

fair opportunity to litigate the matter.” Beaulieu, 825 N.W.2d at 724 (quotation omitted).

The supreme court has stated:

              “The question of whether a party had a full and fair
              opportunity to litigate a matter generally focuses on whether
              there were significant procedural limitations in the prior
              proceeding, whether the party had the incentive to litigate
              fully the issue, or whether effective litigation was limited by
              the nature or relationship of the parties.”

Joseph, 636 N.W.2d at 328 (quotation omitted).



                                             10
       Klapmeier argues that because “the present claims were not in existence at the

time of the [prior action,] . . . there could not have been any type of opportunity to litigate

the matter.” But Klapmeier conflates the fourth requirement’s focus on the procedural

possibilities presented by the prior action with the logical possibility of asserting the

present claims in the prior action.

       As noted by the district court, Klapmeier was represented by counsel in the prior

action, he was afforded a trial by jury, the district court heard and ruled on his posttrial

motions, and he obtained review of those rulings by this court. The appellate record

contains no hint of any significant procedural limitation at any stage of the prior action.

Moreover, Klapmeier’s ownership interest in the houseboat and lessor-lessee relationship

with the Ebels and Voyageur support a conclusion that Klapmeier had the incentive to

litigate the prior action fully and effectively. The fourth requirement of res judicata is

satisfied.

       Because all four requirements are satisfied, we must determine whether the present

claims could have been litigated in the prior action; if so, they are barred by the doctrine

of res judicata. See Schober, 853 N.W.2d at 111. Klapmeier argues that the present

claims could not have been brought in the prior action because he was prevented from

having any access to the houseboat during the prior action. Although Klapmeier did not

retake possession of the houseboat until after the prior action had concluded, he could

have sought relief from the district court, if necessary, to inspect the houseboat. See

Minn. R. Civ. P. 26.02(a), (b). Had Klapmeier done so, any claims of breached duties of

care, maintenance, and repair would have been discovered and could have been litigated


                                              11
in the prior action. Furthermore, Klapmeier’s present claims relating to the Ebels and

Voyageur’s purported delay in Klapmeier’s repossession of the houseboat and the

houseboat’s condition at the time of repossession could have been raised in the prior

action, in which the district court ordered the Ebels and Voyageur to release the

houseboat to Klapmeier “within a reasonable time and in a condition acceptable under the

terms of the lease.”

       Res judicata bars Klapmeier’s present claims. The district court therefore did not

err by dismissing Klapmeier’s present action.

       Affirmed.




                                           12
