Hentschel v. Smith, 40496

• Decision Date: 15 September 1967
• Docket Number: No. 40496,40496
• Citation: 278 Minn. 86,153 N.W.2d 199
• Parties: Raymond F. HENTSCHEL, Respondent, v. Florine M. SMITH, Respondent, Florine M. SMITH, Plaintiff, v. CITY OF ST. PAUL, defendant and 3rd-party plaintiff, Appellant, Raymond F. HENTSCHEL, Defendant, v. Edmund B. LEARY, 3rd-party defendant, Respondent.
• Court: Minnesota Supreme Court

Page 199

153 N.W.2d 199

278 Minn. 86

Raymond F. HENTSCHEL, Respondent, v. Florine M. SMITH, Respondent, Florine M. SMITH, Plaintiff, v. CITY OF ST. PAUL, defendant and 3rd-party plaintiff, Appellant, Raymond F. HENTSCHEL, Defendant, v. Edmund B. LEARY, 3rd-party defendant, Respondent.

No. 40496.

Supreme Court of Minnesota.

Sept. 15, 1967.

Syllabus by the Court

1. The rules of res judicata and collateral estoppel do not require that a consent judgment bind the parties to facts which were originally in issue in an action that was compromised and settled without a trial on the merits. However, where collateral estoppel is involved, the inquiry must always be as to the point or question actually litigated and determined in the original action. Only upon such matters is the judgment conclusive in another action.

2. Where the agreement upon which a consent judgment is based is fairly to be construed as providing that the parties should be bound collaterally upon a certain point, that agreement will and should generally be given effect. An intention to be bound in this way should not, however, be found unless the language or admissible evidence affirmatively points to it, and such an intention should not be inferred solely from the circumstance, taken alone, that the agreement or judgment contains a stipulation or recital of the fact's existence. Where the parties to a consent judgment have not agreed to be thus bound, the rules pertaining to the effect of judgments do not require that they should be, and the relevant considerations of policy and expediency require that they should not be.

3. The relationship between joint tortfeasors is not such as to make the one not sued a party by either privity or representation. Privity depends upon the relation of the parties to the subject matter rather than their activity in a suit relating to it after the event. Participation in the defense because of general or personal interest in the result of the litigation does not make one privy to the judgment.

4. A consent judgment is based wholly on the consent of the parties and there is no judicial inquiry into the facts or the law applicable to the controversy. Thus, in a consent judgment it is the duty of the court to enter judgment in accordance with the agreement of the parties and the court's authority is limited by the consent or stipulation when free from fraud, mistake, or absence of real consent. Such a judgment is therefore not a judicial determination of the rights of the parties and does not purport to represent the judgment of the court, but merely records the preexisting agreement of the parties.

5. Where action is not taken to bring coparties into an adversary relationship, their rights and liabilities as against each other are not determined.

6. The consent judgment in the instant case appears to be nothing more nor less than a compromise agreement and as such is not admissible in evidence.

7. For estoppel by judgment to foreclose relitigation of issues in a subsequent Joseph P. Summers, City Atty., Thomas J. Stearns, Asst. City Atty., St. Paul, for appellant.

suit, it is essential that the issue sought to be foreclosed was actually litigated and determined in the initial action.

John L. Tambornino, St. Paul, for Hentschel.

Robert W. Murnane, St. Paul, for Smith.

Arthur J. Donnelly, St. Paul, for Leary.

OPINION

NELSON, Justice.

Appeal from an order of the District Court of Ramsey County granting motion for summary judgment.

On December 25, 1962, a fire department truck owned by the city of St. Paul and driven by Raymond F. Hentschel, an employee of the city and a member of its fire department, collided with a Dodge sedan automobile owned by Florine M. Smith and driven by Rt. Rev. Edmund B. Leary. Mrs. Smith was a passenger in her automobile at the time of the accident and in April 1964 brought suit alleging negligence against the city of St. Paul and Hentschel.

The city answered, denying negligence on the part of Hentschel, alleging contributory negligence and assumption of risk on the part of plaintiff, and asserting the defense of governmental immunity. It counterclaimed for damages to its vehicle and recovery of workmen's compensation benefits paid to employees, including Hentschel, who were injured in the collision. The city also instituted a third-party action against Rev. Leary, alleging that his negligence caused the accident, seeking indemnity for any amount it might be liable to pay plaintiff, and seeking recovery of damages to its truck and of workmen's compensation payments made to the injured employees.

Hentschel, the driver of the truck, had brought an action against Mrs. Smith in March 1963 seeking recovery of wages, medical expenses, and general damages. The actions were consolidated for trial. However, on December 16, 1965, Mrs. Smith and defendant city entered into a stipulation for settlement of her action against the city. That settlement agreement contained the following provisions:

'WHEREAS, a settlement has been agreed upon by and between the plaintiff Florine M. Smith and the defendant and third-party plaintiff City of Saint Paul, in and by which the plaintiff Florine M. Smith has agreed to accept from said City the sum of Eleven Thousand One Hundred Fifty-six and 95/100 Dollars ($11,156.95) in full payment and discharge of all matters at issue between said Florine M. Smith and said City for certain personal injuries and damages arising from her cause of action above entitled;

'WHEREAS, it is further agreed upon by and between said parties that defendant City of Saint Paul will discharge and dismiss with prejudice its counterclaim against plaintiff Florine M. Smith upon the understanding that such dismissal and discharge is not to be construed as an intent to act as a dismissal, release or discharge of the cause of action defendant City of Saint Paul has or may have in its third-party action against Edmund B. Leary for damages in the sum of $1,478.09, representing damages to its vehicle, and damages in the amount of workmen's compensation benefits paid to its employees. William Greifzu, Irvin Rousseau, Robert J. Heinen, and Raymond Hentschel; and

'WHEREAS, it is further agreed upon by and between said parties that, as a condition of said settlement, defendant and third-party plaintiff shall amend its third-party complaint against Edmund B. Leary, third- party defendant, to exclude any claim for sums that defendant and third-party plaintiff may be liable to plaintiff, Florine M. Smith, which includes the amount of the settlement herein;

'THEREFORE, pursuant to the terms of such settlement, it is stipulated between the parties that judgment be entered in favor of the plaintiff Florine M. Smith and against defendant and third-party plaintiff City of Saint Paul in the sum of Eleven Thousand One Hundred Fifty-six and 95/100 Dollars ($11,156.95) without costs or disbursements to either party.'

Judgment pursuant to this stipulation was entered December 23, 1965.

The actions were called for trial in January 1966. At that time counsel for Mrs. Smith moved for summary judgment in her behalf in the action brought against her by Hentschel on grounds of res judicata and estoppel by judgment. This motion was denied. Counsel for Rev. Leary moved for summary judgment in his favor in the third-party action brought against him by the city on the same grounds. This motion was granted, and the city appeals from the judgment entered pursuant to that order, contending that the judgment was not proper within the rules of res judicata or those pertinent to consent judgments.

1. Third-party defendant Leary cites Pangalos v. Halpern, 247 Minn. 80, 76 N.W.2d 702, as an aid in ascertaining the extent to which defendant city is bound by the consent judgment entered pursuant to the stipulation. We have, however, an entirely different set of facts in the Pangalos case. There, the administratrix of an estate entered into an agreement with the attorneys who handled the estate establishing the amount of their fees. This agreement was submitted to the probate court and the court entered an order approving it. Three years later the administratrix moved the district court to have the order set aside. The motion was denied. The administratrix then brought an action against the attorneys for money had and received. The trial court granted a directed verdict in their favor on the ground that the order of the probate court was res judicata. This court affirmed, correctly stating the rule as follows (247 Minn. 85, 76 N.W.2d 706):

'Since the order herein determining the reasonable value of the attorneys' fees and directing their payment in the course of administration was in essence a final judgment binding and conclusive upon the parties, and res judicata as to the point adjudicated, it falls under the following general rule: In the absence of fraud, a valid judgment, decree, or as here an order which is the equivalent thereof, entered by agreement or consent, operates as res judicata to the same extent as if it had been rendered after contest and full hearing and is binding and conclusive upon the parties and those in privity with them.'

While this court cited in support of the foregoing statement Annotation, 2 A.L.R.2d 514, 521 to 529, it did not specifically refer to the following exceptions set forth therein (p. 520), namely:

'1. A judgment entered by agreement or consent should not be given a conclusive effect where to do so would violate an important public policy.

'2. The extent to which a judgment or decree entered by consent is conclusive in a subsequent action should be governed by the intention of the parties as expressed in the agreement which is the basis of the judgment and gathered from all the circumstances, rather than by a mechanical application of the general rules governing the scope of estoppel by judgment. It is obvious that a party may consent to a judgment for the purpose of...