NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other
than opinions or orders designated for publication are not
precedential and should not be cited except when relevant under the
doctrines of law of the case, res judicata, or collateral estoppel.
(The decision of the Court is referenced in a "Table of Decisions
Without Reported Opinions" appearing in the Federal Reporter.)
Joseph A. YANNY, an individual, Joseph A. Yanny, a professional corporation,
CHURCH OF SCIENTOLOGY INTERNATIONAL, a California corporation, Religious
Technology Center, a California corporation, Church of Scientology of
California, a California corporation, Author Services Incorporated, a
California corporation, Bridge Publications, Inc., a California corporation,
Church of Spiritual Technology, a California corporation, and Does 1 through
50, inclusive, Defendants-Appellees.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted April 2, 1991.
Decided May 13, 1991.
Appeal from the United States District Court for the Central District of
California, No. CV89-2621 R(Jrx); Manuel L. Real, District Judge,
Before SCHROEDER and REINHARDT, Circuit Judges, and KING [FN*], District
**1 Reviewing de novo the dismissal of appellant's federal action under
Fed.R.Civ.P. 12(b)6, we agree with the district court that the claims
asserted in the federal action should have been brought as compulsory
counterclaims in an earlier state action.
Whether the claims asserted in a federal complaint should have been brought as
a compulsory counterclaim in an earlier state court action is a question of
state law. Pochiro v. Prudential Ins. Co. of Am., 827 F.2d 1246, 1249 (9th
Cir.1987). We review de novo district court rulings on questions of state
Cal.Code Civ.Pro. s 426.30(a) states:
Except as otherwise provided by statute, if a party against whom a complaint
has been filed and served fails to allege in a cross-complaint any related
cause of action which (at the time of serving his answer to the complaint) he
has against the plaintiff, such party may not thereafter in any cause of action
assert against the plaintiff the related cause of action not pleaded.
The term "related cause of action" is to be read broadly in favor of finding a
cause of action to be related. Currie Medical Specialties, Inc. v. Bowen,
136 Cal.App.3d 774, 186 Cal.Rptr. 543 (1982). The factual or legal issues need
not be identical, but only logically related. Id. at 774, 186 Cal.Rptr. at
Yanny's federal claim is a "related cause of action" to defendants' state
claim because both claims arise out of the same transaction or occurrence. The
gravamen of the defendants' state complaint is that when Yanny served as
defendants Religious Technology Center ("RTC"), Church of Scientology
International ("CSI"), and Church of Scientology of California's ("CSC") legal
counsel, Yanny committed fraud, breached his fiduciary duty to them, and has
continued to wrong them because of their prior relationship. The gravamen of
Yanny's federal complaint is that after serving for a number of years as
defendants RTC, CSI, CSC, Church of Spiritual Technology ("CST"), Bridge
Publications, Inc. ("BPI"), and Author Services, Inc.'s ("ASI") counsel, the
relationship soured, and as a result, the defendants engaged in a pattern of
behavior that injured Yanny, and defendants perpetrated these wrongs upon him
because of the prior relationship. Both the state claim and the federal claim
arise out of the same occurrence: Yanny's representation of the defendants.
To be a required counterclaim under s 426.30(a), the parties in both
actions must be identical. See Russo v. Scrambler Motorcycles, 56
Cal.App.3d 112, 118, 127 Cal.Rptr. 913 (1976). Yanny argues that his federal
suit should be barred only as to the three defendants (RTC, CSI, and CSC) who
were parties to the state action. We need not address this issue, because
Yanny failed to raise it below. Jovanovich v. United States, 813 F.2d 1035,
1037 (9th Cir.1987). However, we point out that Yanny himself admits that RTC,
CSI, CSC, CST, BPI, and ASI constitute a single larger entity. Therefore,
s 426.30(a)'s requirement that the parties in both actions be identical is
FN* Samuel P. King, Senior United States District Judge for the District
of Hawaii, sitting by designation.
FN** This disposition is not appropriate for publication and may not be
cited to or by the courts of this circuit except as provided by Circuit