Stephen F. Buzzell; Kimberly B. Buzzell v. Jp Morgan Chase Bank, as Trustee; RESIDENTIAL FUNDING CORPORATION

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-1785
STEPHEN F. BUZZELL; KIMBERLY B. BUZZELL,
Plaintiffs - Appellants,
v.
JP MORGAN CHASE BANK, as Trustee; RESIDENTIAL FUNDING
CORPORATION,
Defendants - Appellees.
Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond. James R. Spencer, Senior
District Judge. (3:13-cv-00668-JRS)
Submitted: January 29, 2015 Decided: March 10, 2015
Before NIEMEYER, SHEDD, and DUNCAN, Circuit Judges.
Vacated and remanded by unpublished per curiam opinion.
Stephen F. Buzzell and Kimberly B. Buzzell, Appellants Pro Se.
Daniel Tennyson Berger, Andrew Brian Pittman, TROUTMAN SANDERS,
LLP, Virginia Beach, Virginia; Nicholas Richard Klaiber,
TROUTMAN SANDERS, LLP, Richmond, Virginia, for Appellees.
Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
Stephen F. and Kimberly B. Buzzell filed a complaint
in the Circuit Court of Lancaster County, Virginia, against JP
Morgan Chase Bank, N.A., and Residential Funding Corporation,
alleging breach of contract and constructive fraud arising out
of the foreclosure on the Buzzells’ residence in 2008. JP
Morgan and Residential Funding removed the action to the
district court. Residential Funding filed a notice of
bankruptcy and the action was stayed as to Residential Funding.
The district court dismissed the action against JP Morgan as
barred by res judicata, determining that a prior decision
entered by the state court addressed the same claims against the
same parties or their privies. Having determined that the state
court order was not a final order, we vacate the district
court’s dismissal order and remand for further proceedings.
In a previous action filed in the Circuit Court of
Lancaster County, the Buzzells alleged that GMAC Mortgage, LLC,
Homecomings Financial, Mortgage Electronic Registration Systems,
Inc., and Samuel I. White, P.C., engaged in fraud,
misrepresentation and breach of fiduciary duty. The state court
dismissed with prejudice the claims against all parties except
for one claim against Samuel I. White, which is still pending.
“Under Virginia law, to establish res judicata, the
defendants must show: (1) that the prior judgment is a final

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and valid judgment; (2) that the parties are identical or are in
privity with each other; and (3) that the claim made in the
subsequent lawsuit arises out of or relates to the same
occurrence, conduct, or transaction upon which the prior lawsuit
was based.” Columbia Gas Transmission, LLC v. David N. Martin
Revocable Trust, 833 F. Supp. 2d 552, 558 (E.D. Va. 2011).
The district court explained that Virginia’s
“severable interest rule” allows for the immediate appeal of an
interlocutory order that addresses a collateral issue, and
appeal of which would not affect the outcome of the remaining
issues in the case. Thompson ex rel. Thompson v. Skate Am.,
Inc., 540 S.E.2d 123, 126 (Va. 2001). Under this rule, an
appeal may be taken from the interlocutory order “either at the
time of its entry or when the trial court enters a final order
disposing of the remainder of the case.” Id. The district
court reasoned that, because the state court’s interlocutory
order dismissing the claims against all parties except Samuel I.
White, could have been appealed and was not, it should be deemed
final. The court concluded, “where an interlocutory order is
appealable under the severable interest rule, the order is
final.”
We disagree. “[A] judgment is not final for the
purposes of res judicata or collateral estoppel when it is being
appealed or when the time limits fixed for perfecting the appeal

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have not expired.” Faison v. Hudson, 417 S.E.2d 302, 305 (Va.
1992). Additionally, the Supreme Court of Virginia has stated
that “in the absence of a statutory provision to the contrary, a
judgment is not final for purposes of appeal if it is rendered
with regard to some but not all of the parties involved in the
case.” Wells v. Whitaker, 151 S.E.2d 422, 432 (Va. 1966).
Here, the state court order determined by the district
court to be a final order dismissed some claims against some of
the parties. The action is still proceeding on the Buzzells’
claim against Samuel I. White. Thus, the order is not a final
order for res judicata purposes. See Faison, 417 S.E.2d at 305.
Upon entry of judgment on the Buzzells’ claim against Samuel I.
White, they may appeal from the state court’s earlier order
dismissing the other parties from the action. Thus, the state
court’s prior order is not a final order for purposes of res
judicata and does not preclude the Buzzells’ present action
against JP Morgan.
Because the district court mistakenly found that the
state court’s order was a final order for purposes of res
judicata, we grant leave to proceed in forma pauperis, vacate
the district court’s order, and remand the case for future
proceedings. We dispense with oral argument because the facts
and legal contentions are adequately presented in the materials

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before this court and argument would not aid the decisional
process.
VACATED AND REMANDED

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