USCA1 Opinion

November 3, 1993
[NOT FOR PUBLICATION]
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
___________________
No. 93-1592

LEON P. CHEMLEN,
Plaintiff, Appellant,
v.
BANK OF IRELAND FIRST HOLDINGS, INC., ET AL.,
Defendants, Appellees.
__________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Edward F. Harrington, U.S. District Judge]
___________________
___________________
Before
Breyer, Chief Judge,
___________
Torruella and Selya, Circuit Judges.
______________

___________________

Leon P. Chemlen on brief pro se.

_______________
Alan R. Hoffman and Lynch, Brewer, Hoffman & Sands, on brief
_______________
______________________________
for appellee.

__________________
__________________

Per Curiam. Appellant Leon Chemlen appeals the dismissal

__________
of

his civil

action alleging

Influenced and Corrupt

1961

et seq.,
__ ___

M.G.L.
by

the

Massachusetts Consumer

ch. 93A, and state and

appellees

Bank

of its

Racketeer
U.S.C.

Protection

Act,

federal civil rights statutes

of Ireland,

employees,

of the

Organization Act [RICO], 18

Brickman, the law firm of

two

violations

its

general

counsel, Joel

Sheehan, Phinney, Bass & Green and

and

appellee's bankruptcy estate.

Joseph

Schindler,

trustee

We affirm the dismissal.

Background
Background

of

In October
petition in

1990, Chemlen

the United

Joseph Schindler
October 1991,
settle
National

misconduct in
U.S.C.

Court.

trustee of

Schindler sought

and

voluntary Chapter

States Bankruptcy

was appointed

two lawsuits
Bank

filed a

Chemlen had

the court

brought against

other defendants.1

Appellee

the estate.

approval from

Each

In
to

Merchants

suit alleged

violation of the Fair Credit Reporting Act, 15

1681 et seq.
__ ___

bank and

collusion

trustee,

Chemlen

Alleging misconduct by counsel for the

between counsel

opposed

the

for

the bank

settlement

motion.

and

the
The

bankruptcy court granted the trustee's motion and denied that

of Chemlen.

____________________
1. Appellee Bank of Ireland is the parent of First New
Hampshire Bank, the successor to Merchants National Bank.
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In

January 1992, Chemlen

trustee of the estate.

moved to remove

Schindler as

He alleged that Schindler had engaged

in various

improprieties in regard to the

settlement of the

suits against the bank, including threatening appellant

with

criminal prosecutions if he continued to oppose settlement of

the suits, deceiving appellant, the court and creditors as to
the

settlements, and giving the appearance of collusion with

the bank in settlement negotiations.

Chemlen

This motion was denied.

later moved to enjoin the trustee from "interfering"

with his suits

against the bank and,

remove the trustee.

Finally,

for a second

time, to

These motions too were denied.

Chemlen

appealed

the

the

trustee

to settle

denying

his request to enjoin the

denying

his request

order authorizing

suits against

to remove

the

bank, the

the
order

settlement, and the order

the trustee.

The district

court dismissed his appeal on these issues on the ground that

Chemlen lacked standing.

The court found that the settlement

proceeds were

part of

shown

successful appeal

that a

assets

over liabilities for

lacked any direct

not a

the estate and

would

the estate.

pecuniary interest in

"person aggrieved" by

that Chemlen
create a

had not

surplus of

Chemlen therefore
the estate and

the contested orders.

was

Chemlen

did not appeal the decision of the district court.

Meanwhile,
suit.

in January 1993,

Chemlen filed

the instant

It repeats various factual allegations previously made

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before

the bankruptcy

relief

under

RICO,

court.
federal

consumer protection and

Chemlen's

However,
civil

Chemlen now

rights

civil rights law.

law

seeks

and

state

The gravamen

of

complaint is that he suffered harm from appellees'

illegal actions depriving him of his property in the proceeds

of the

two lawsuits

court dismissed

settled by the

the complaint on

trustee.

The district

the ground that it

was an

improper attempt to relitigate issues already ruled on in the

bankruptcy court.
the focus of
connection
were

In

the alternative, the court

the complaint concerned communications

with judicial

proceedings, which

absolutely privileged.

properly

dismissed

therefore,

found that

do

not

on

We

the

reach

ground
the

find
of

communications

that the
res
___

district

made in

case

judicata
________

court's

was
and,

alternate

ground.

Discussion
Discussion
We have

recently placed

the doctrine

of res
___

judicata
________

into workable perspective:

The doctrine of

res judicata bars all

___ ________

parties and

their privies from

raised

or could
_____

action, once a
on

the

have been
____ ____

raised
______

court has entered a

merits

States v.
______

relitigating issues which

in the

previous

Alky Enterprises, Inc.,

_____________________

in a

were

previous

final judgment
action.

United
______

969 F.2d

1309,

-4-

1314
res
___

(1st Cir. 1992).

The essential

elements of

judicata, or claim preclusion, are (1) a final

________

judgment on the merits in an earlier action; (2) an

identity
suits;
in

both

of

the

parties or

and (3) an identity of

the earlier

and

privies

in

the two

the cause of action

later suits.

Combined Insurance Co. of America, 924

__________________________________

Kale v.
____
F.2d 1161,

1165 (1st Cir.), cert. denied, 112 S.Ct. 69 (1991).

____ ______

F.D.I.C.

v. Shearson-American Express,

Inc., 996

F.2d 493,

_______
497 (1st

_______________________________
Cir. 1993)

(quoting Aunyx Corp. v.

___________

Canon U.S.A.,
_____________

Inc., 978 F.2d 3, 6 (1st Cir. 1992), cert. denied, 113

___
____ ______
1416 (1993))

(emphasis in original).

res judicata and

___ ________

collateral estoppel apply to

of the bankruptcy
382

U.S. 323,

settlement

"The normal

courts."

Id.
__

334 (1966)).

receives

litigated judgment."

the

same

rules of

the decisions

(quoting Katchen v.
_______
"Generally, a
res
___

judicata
________

S.Ct.

Landy,
_____

court-approved
effect

as

In re Medomak Canning, 922 F.2d

______________________

895,

900 (1st Cir. 1990).

We find
met in this

all the elements

case.

of res judicata to
___ ________

have been

We consider the elements in reverse order

for the sake of clarity.

First, the gravamen
bankruptcy proceedings and

of Chemlen's complaint both

in the instant

settlement of his suits against

-5-

in the

suit is that

the

the bank deprived him of his

rightful property.2

In his

void the settlement,

Chemlen had the opportunity

his

factual

court.
an

allegations

motions to prevent and

of

wrongdoing

to present

to the

bankruptcy

Thus, even though the current suit is in the guise of

action under

RICO

collateral attack on

and other

laws, it

is

in effect

the judgment affirming the

the trustee's settlement of the

pursued in the

validity of

suits against the bank

for purposes of res judicata, it

___ ________
as that

then to

and,

is the same cause of action

bankruptcy court.3

See
___

Hendrick v.
________

Avent, 891 F.2d 583, 586-87 (5th Cir.), cert. denied 498 U.S.
_____
____ ______
819

(1990) (appellant's RICO and securities claims which are

"directly inconsistent
decision

are "same

with the

cause

crux"

of action"

judicata); In re Met-L-Wood Corp,

________
______________________
Cir. 1988), cert.
____
res
___

for

court

purposes of

861 F.2d 1012,

res
___

1018 (7th

denied 490 U.S. 1006 (1989) (dismissing on

______

judicata grounds
________

thinly

of bankruptcy

a RICO

suit

disguised collateral attack

because "the

suit is

on the judgment"

of the

bankruptcy court).
Second, even though

the bank may not have

been a party

or a privy to a party in bankruptcy proceedings, it may still

____________________

2. Chemlen's motion to dismiss the trustee

another attempt to block the settlement.

was

simply

3. Allowing
a collateral attack on a trustee's court
approved settlement agreement
would also undermine the
efficient administration of bankruptcy estates which depend,
in part, on the finality of such agreements. In re Medomak
______________
Canning, 922 F.2d at 901.
_______
-6-

estop

Chemlen

settlements.

from
See
___

relitigating

to

the

Blonder-Tongue Laboratories, Inc.

__________________________________

v.

University of Illinois Foundation,

____________________________________
(defendant

his

challenge

402

U.S.

313

(1971)

may invoke estoppel against plaintiff who lost on

same issue to

earlier defendant); Lynch

_____

v. Merrell-National
________________

Laboratories, Div. of Richardson-Merrell, Inc., 830

_________________________________________________

F.2d

1190, 1192 (1st Cir. 1987) (same).

Third, the order
is

final

proceedings.

order
In

approving the settlement of

within

the context

bankruptcy proceedings,

disposes of a 'discrete dispute

considered

of

the
"an

the suits
bankruptcy

order

which

within the larger case' [is]

final and appealable."

In re

American Colonial

________________________
Broadcasting Corp.,
__________________

758

F.2d

794,

801

(1st

Cir.

(quoting In re Saco Local Development Corp., 711

___________________________________
444 (1st Cir. 1983)).
A

1985)

F.2d 441,

For purposes of this rule:

final judgment is one which disposes of the

whole

subject,

gives

all

the

relief

that

was

contemplated, provides with reasonable completeness

for

giving

effect

nothing to be

to

the

judgment

done in the cause

and

leaves

save superintend,

ministerially, the execution of the decrees.

Id. (quoting City of Louisa v. Levi, 140 F.2d 512,
__
_______________
____
Cir. 1944)).

The court order approving the settlement of the

suits fits this definition.

503 (N.D.

514 (6th

Ill. 1984)

See In re Patel, 43 Bankr. 500,

___ ___________

("bankruptcy court

order approving

-7-

settlement

is final

1334(a) because

and

appealable

it determines the

under

[28

rights of the

U.S.C.]
parties to

the settlement").
Finally,
exception

Chemlen

to the

asserts

usual

that

rules of

he

falls

within

res judicata
___ ________

an

because his

appeal was dismissed for lack of standing and thus was not an
appeal on the merits of
e.g.,
___

18

Wright,

the bankruptcy court decision.

Miller, &

Procedure: Jurisdiction
________________________
opportunities
a

1981)

4433,

Federal Practice and

_____________________

at

316

("If

ordinary

to appeal are thwarted by the circumstances of

particular case

McCarney
________

Cooper,

See,
___

. .

preclusion

v. Ford Motor, Co.,

_______________

(dismissal based upon

may prove

657 F.2d

unwise.");

230, 234

lack of standing

(8th Cir.

is ordinarily

not "on the merits" of the underlying substantive claims).

The exception cited by Chemlen is not applicable in this
case.

Chemlen's

district court

appeal of

was dismissed

Chemlen did not meet

bankruptcy cases.
i.e.,
___

only

the

settlement orders

because the

to

court found

the standard for appellate

the
that

standing in

In this circuit, only "persons aggrieved,"

"those

persons whose

rights

or

interests are

'directly and adversely affected pecuniarily'" by a contested

order in bankruptcy may appeal that order.
Hotel,
_____

809 F.2d

151, 154

(1st

Fondiller, 707 F.2d 441, 442

_________
court

found that

the rights

Cir. 1987)

In re El San Juan
_________________
(quoting In re
______

(9th Cir. 1983)).

to the

The district

two lawsuits

were the

-8-

property of the estate, not

failed to show that a

of Chemlen, and that Chemlen had

successful appeal would produce assets

for the estate in excess of its liabilities.

the district

court's decision on

predicated on

a factual finding

that he

had any property

suits.

See
___

aggrieved"

id. at
__
is finding

the issue of

standing was

that Chemlen had

not shown

interest in the settlement

155 n.3

(whether appellant

of fact

Chemlen's underlying claims

In other words,

of the

is "person

for district court).

were predicated on his

Since
property

interest in the settlement, this factual finding, even though

made in the context of

determining Chemlen's standing, was a

determination

merits of

of

Chemlen made no
of Appeals.
to

the

those

claims.

attempt to appeal that finding

Moreover,
to the Court

Chemlen was thus not deprived of the opportunity

appeal the determination of

decision and does

the merits of the settlement

not fall within an exception

rules of res judicata.

___ ________

to the usual

The dismissal of appellant's claim is affirmed.

________

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