Unpublished Disposition, 933 F.2d 1018 (9th Cir. 1991)

No. 90-55211.

United States Court of Appeals, Ninth Circuit.

Before SCHROEDER and REINHARDT, Circuit Judges, and KING^* , District Judge.

MEMORANDUM^** 

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 law. Id.

Cal.Code Civ.Pro. Sec. 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 543.

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 Sec. 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, Sec. 426.30(a)'s requirement that the parties in both actions be identical is met.

AFFIRMED.