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08/15/2017 09:06 AM CDT




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                                Nebraska Court of A ppeals A dvance Sheets
                                     24 Nebraska A ppellate R eports
                                        JENSEN v. CHAMPION WINDOW OF OMAHA
                                                  Cite as 24 Neb. App. 929




                                         R andle S. Jensen, an individual,
                                         appellant, v. Champion Window
                                            of Omaha, LLC, appellee.
                                                      ___ N.W.2d ___

                                           Filed August 15, 2017.   No. A-16-780.

                 1.	 Motions to Dismiss: Pleadings: Appeal and Error. An appellate court
                     reviews a district court’s order granting a motion to dismiss de novo,
                     accepting all allegations in the complaint as true and drawing all reason-
                     able inferences in favor of the nonmoving party.
                2.	 Motions to Dismiss: Appeal and Error. When reviewing a dismissal
                     order, the appellate court accepts as true all the facts which are well pled
                     and the proper and reasonable inferences of law and fact which may be
                     drawn therefrom, but not the pleader’s conclusions.
                3.	 Claim Preclusion. The doctrine of claim preclusion applies when there
                     are two proceedings and the following four requirements are satisfied:
                     (1) there was a final judgment on the merits in the prior action; (2) the
                     judgment was entered by a court of competent jurisdiction; (3) both the
                     prior and the subsequent actions involved the same cause of action; and
                     (4) both the prior and subsequent actions were between the same parties
                     or persons in privity with them.
                4.	 Judgments: Claim Preclusion. A judgment on the merits, rendered in a
                     former suit between the same parties or their privies, on the same cause
                     of action, by a court of competent jurisdiction, operates as a bar not only
                     as to every matter which was offered and received to sustain or defeat
                     the claim, but as to every other matter which might with propriety have
                     been litigated and determined in that action.
                5.	 Actions: Claim Preclusion. A party who could have raised claims in a
                     prior action but failed to do so is precluded from raising those claims in
                     a subsequent action.
                6.	 ____: ____. Where a federal court dismisses the filed federal causes
                     of action with prejudice but reserves and dismisses the state law
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                24 Nebraska A ppellate R eports
               JENSEN v. CHAMPION WINDOW OF OMAHA
                         Cite as 24 Neb. App. 929

    claims filed contemporaneously, the only claims reserved are those
    expressly dismissed without prejudice. Any other state law claims aris-
    ing from the same factual scenario but not brought in the federal lawsuit
    are precluded.

  Appeal from the District Court for Douglas County: J.
Michael Coffey, Judge. Affirmed.

  Terry B. White, of Carlson & Burnett, L.L.P., for appellant.

  Sarah J. Millsap and Kenneth M. Wentz III, of Jackson
Lewis, P.C., for appellee.

  Inbody, R iedmann, and A rterburn, Judges.

  A rterburn, Judge.
                       INTRODUCTION
   Randle S. Jensen appeals from an order of the district court
which granted a motion to dismiss in favor of Champion
Window of Omaha, LLC (Champion). On appeal, Jensen
argues the district court erred in dismissing his claims for neg-
ligent and intentional infliction of emotional distress based on
claim preclusion. For the reasons set forth below, we affirm.

                       BACKGROUND
   Jensen worked several years at Champion as an installation
manager. Jensen’s employment was terminated on August 12,
2013. Following his termination, Jensen filed a charge of dis-
crimination with the federal Equal Employment Opportunity
Commission (EEOC), which cross-filed his complaint with
the Nebraska Equal Opportunity Commission (NEOC). Jensen
alleged Champion discriminated against him based on his
sex, retaliated against him for reporting sexual harassment,
and retaliated against him for reporting alleged violations of
building codes and regulations.
   On September 2, 2014, the NEOC issued a notice indicating
it found no reasonable cause to support Jensen’s allegations.
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             JENSEN v. CHAMPION WINDOW OF OMAHA
                       Cite as 24 Neb. App. 929

The notice stated that Jensen had 90 days after the receipt of
the notice to file suit. On December 1, Jensen filed a federal
action in the U.S. District Court for the District of Nebraska.
Jensen’s federal complaint alleged violations of title VII of
the Civil Rights Act of 1964 and violations of the Nebraska
Fair Employment Practice Act. The federal court granted
summary judgment in favor of Champion on December 8,
2015. The federal court dismissed Jensen’s title VII claims
with prejudice and declined to exercise supplemental juris-
diction over his state law claims. The federal court expressly
reserved Jensen’s state law claims and dismissed them with-
out prejudice.
   On February 26, 2016, Jensen filed a complaint in the
district court for Douglas County. Jensen’s complaint in the
district court was nearly identical to the complaint filed in
federal court. Jensen filed an amended complaint in the dis-
trict court on March 29. This complaint was nearly identi-
cal to his previous complaints, except that Jensen added
a claim titled “Negligent and/or Intentional Infliction of
Emotional Distress by Champion — In Violation of Nebraska
Laws.” Jensen relied on the same factual basis for all of his
claims, as he incorporated the factual basis by reference for
each claim.
   Champion filed a motion to dismiss on April 11, 2016.
The district court granted Champion’s motion to dismiss in
an order dated July 20, 2016. In reaching its decision, the
court took judicial notice of Jensen’s federal complaint. The
court determined that Jensen’s retaliation claims were barred
because they were not filed in a timely manner pursuant to
the NEOC order. The court also found that Jensen’s emo-
tional distress claims were barred because they arose out of
the same cause of action as alleged in the federal complaint
and were not expressly reserved in the federal court’s order.
Jensen appeals only the district court’s granting of Champion’s
motion to dismiss with regard to his emotional distress claims.
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              24 Nebraska A ppellate R eports
             JENSEN v. CHAMPION WINDOW OF OMAHA
                       Cite as 24 Neb. App. 929

Jensen assigned no error to the district court’s finding that his
retaliation claims were time barred. Therefore, we will not
address that issue.

                ASSIGNMENT OF ERROR
   Jensen argues, restated, that the district court erred in
granting Champion’s motion to dismiss his emotional dis-
tress claims.

                  STANDARD OF REVIEW
   [1,2] An appellate court reviews a district court’s order
granting a motion to dismiss de novo, accepting all allegations
in the complaint as true and drawing all reasonable inferences
in favor of the nonmoving party. Hargesheimer v. Gale, 294
Neb. 123, 881 N.W.2d 589 (2016). When reviewing a dis-
missal order, the appellate court accepts as true all the facts
which are well pled and the proper and reasonable inferences
of law and fact which may be drawn therefrom, but not the
pleader’s conclusions. Id.

                          ANALYSIS
   Jensen argues that his claims for emotional distress should
not have been dismissed, because the federal court did not
retain jurisdiction over his state law claims, and that he was
therefore free to amend his complaint to add an additional state
law claim.
   [3,4] The doctrine of claim preclusion applies when there
are two proceedings and the following four requirements
are satisfied: (1) there was a final judgment on the merits in
the prior action; (2) the judgment was entered by a court of
competent jurisdiction; (3) both the prior and the subsequent
actions involved the same cause of action; and (4) both the
prior and subsequent actions were between the same par-
ties or persons in privity with them. See Young v. Govier &
Milone, 286 Neb. 224, 835 N.W.2d 684 (2013). A judgment
on the merits, rendered in a former suit between the same
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             JENSEN v. CHAMPION WINDOW OF OMAHA
                       Cite as 24 Neb. App. 929

parties or their privies, on the same cause of action, by a
court of competent jurisdiction, operates as a bar not only
as to every matter which was offered and received to sus-
tain or defeat the claim, but as to every other matter which
might with propriety have been litigated and determined in
that action. See Jensen v. Jensen, 275 Neb. 921, 750 N.W.2d
335 (2008).
   There is a split of authority on the very narrow issue
before us: When a federal court disposes of federal claims
brought before it in pretrial motions and expressly declines
to exercise supplemental jurisdiction over the included state
law claims, is a party precluded, in a subsequent action filed
in state court, from bringing an additional state law claim
that was not expressly reserved by the federal court? Upon
our review of the claim in this case, we find that Jensen
should be precluded from bringing a new claim in the subse-
quent action.
   The Restatement (Second) of Judgments § 25 comment e.
(1982) provides:
      A given claim may find support in theories or grounds
      arising from both state and federal law. When the plaintiff
      brings an action on the claim in a court, either state or
      federal, in which there is no jurisdictional obstacle to his
      advancing both theories or grounds, but he presents only
      one of them, and judgment is entered with respect to it,
      he may not maintain a second action in which he tenders
      the other theory or ground. If however, the court in the
      first action would clearly not have had jurisdiction to
      entertain the omitted theory or ground (or, having juris-
      diction, would clearly have declined to exercise it as a
      matter of discretion), then a second action in a competent
      court presenting the omitted theory or ground should be
      held not precluded.
Some courts have adopted the exception that if the court
in the first action would clearly have declined to exercise
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             JENSEN v. CHAMPION WINDOW OF OMAHA
                       Cite as 24 Neb. App. 929

jurisdiction as a matter of discretion, then a second action in
a competent court presenting the omitted theory or ground
should be held not precluded. See, Pierson Sand v Keeler
Brass, 460 Mich. 372, 596 N.W.2d 153 (1999); Parks v. City
of Madison, 171 Wis. 2d 730, 492 N.W.2d 365 (Wis. App.
1992); Sattler v. Bailey, 184 W. Va. 212, 400 S.E.2d 220
(1990); Merry v. Coast Community College Dist., 97 Cal.
App. 3d 214, 158 Cal. Rptr. 603 (1979).
   However, the Restatement (Second) of Judgments § 26(b)
(1982) further states that a plaintiff’s claim is not precluded by
a final judgment if the court in the first action has expressly
reserved the plaintiff’s right to maintain the second action.
This is contingent upon the court expressly reserving a plain-
tiff’s ability to bring a particular claim. Id. When a court
splits a cause of action by dismissing one part with preju-
dice and one part without prejudice, the only claims reserved
are those expressly dismissed without prejudice. Some courts
have adopted this view and have held that any state claims
not reserved by the federal court are precluded. See, Korn v.
Paul Revere Life Ins. Co., 83 Mass. App. 432, 984 N.E.2d 882
(2013); Lambert v. Iowa Dept. of Transp., 804 N.W.2d 253
(Iowa 2011).
   The jurisdictions that have adopted the exception cited
above rely heavily on whether the federal court would have
declined to exercise supplemental jurisdiction. See Pierson
Sand, supra. Those jurisdictions reason that a federal court
will typically not exercise supplemental jurisdiction over state
law claims once it has disposed of the federal claims pretrial.
These jurisdictions reason that since the federal court clearly
would have dismissed the state law claims without prejudice,
then it is of no consequence if the party adds additional state
law claims in state court.
   The jurisdictions that have declined to adopt the above
exception clearly disfavor attempting to divine or speculate
what the federal court would have done if it were presented
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         Nebraska Court of A ppeals A dvance Sheets
              24 Nebraska A ppellate R eports
             JENSEN v. CHAMPION WINDOW OF OMAHA
                       Cite as 24 Neb. App. 929

with the state law claim that was added after dismissal of
the case. See Korn, supra. Additionally, these jurisdictions
believe the exception undercuts the broader principles against
claim splitting and judicial economy. They reason that whether
the party intentionally or inadvertently omitted the additional
claim in the federal lawsuit, the party should not receive a
second opportunity to litigate its claim based on the same fac-
tual scenario.
   [5,6] We were unable to find a Nebraska case that deals
with this specific issue. However, we believe that our case
law is clear that a party must bring all claims in its initial
action. A party who could have raised claims in a prior action
but failed to do so is precluded from raising those claims in
a subsequent action. See Ichtertz v. Orthopaedic Specialists
of Neb., 273 Neb. 466, 730 N.W.2d 798 (2007). The key
words here are “could have raised.” If the party could not
have raised the claims in the prior action, perhaps because
the court in the prior action lacked jurisdiction over them
or because the claims had not yet matured, then the judg-
ment in the prior action would not preclude the assertion
of those claims in a subsequent action. See id. Therefore,
we adopt the view that where a federal court dismisses the
filed federal causes of action with prejudice but reserves
and dismisses the state law claims filed contemporaneously,
the only claims reserved are those expressly dismissed with-
out prejudice. Any other state law claims arising from the
same factual scenario but not brought in the federal lawsuit
are precluded.
   Because the federal court did not expressly reserve Jensen’s
claims for emotional distress, Jensen is precluded from bring-
ing these additional claims that could have been brought
before the federal court. It is clear from the pleadings that
Jensen is alleging identical facts as a basis for his emotional
distress claims as were pled in the claims brought in federal
court. There was a final judgment on the merits of his federal
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              24 Nebraska A ppellate R eports
            JENSEN v. CHAMPION WINDOW OF OMAHA
                      Cite as 24 Neb. App. 929

claims. The federal court was a court of competent jurisdic-
tion. Both the federal and state actions involved the same
facts and the same causes of action. Both the prior and sub-
sequent actions were between the same parties. The claims
of emotional distress arose during the same occurrences as
his other claims. Therefore, the district court did not err in
granting Champion’s motion to dismiss the claims based on
claim preclusion.

                       CONCLUSION
   We find that, based on claim preclusion, the district court
did not err in granting Champion’s motion to dismiss the
claims.
                                                  A ffirmed.
