19 N.Y.2d 141, B. R. DeWitt, Inc. v. Hall

Citation:19 N.Y.2d 141, 278 N.Y.S.2d 596
Party Name:B. R. DeWitt, Inc. v. Hall
Case Date:February 21, 1967
Court:New York Court of Appeals

Page 141

19 N.Y.2d 141

278 N.Y.S.2d 596

B. R. DeWITT, INC., Appellant,


Albert HALL, Respondent.

New York Court of Appeals

February 21, 1967.

[278 N.Y.S.2d 597] Percival D. Oviatt, Jr., Rochester, for appellant.

Page 142

Robert S. Beer and Charles J. O'Brien, Rochester, for respondent.

Page 143


In September, 1961, defendant Hall's jeep collided with and damaged a cement mix truck owned by plaintiff and operated by one Farnum. Farnum sued defendant for personal injuries, recovering a $5,000 verdict after a jury trial. In May, 1964, about two months after the termination of the Farnum v. Hall lawsuit, plaintiff sued Hall for property damage to its truck in the amount of $8,250. After issue was joined, plaintiff moved for summary judgment under CPLR 3212 upon the ground that the judgment in Farnum v. Hall was 'res judicata of the issues' in the present action (except, of course, damages). Defendant submitted no papers in opposition. Summary judgment was granted, O'MARA, J., holding that since the issues in both the Farnum action and this were identical--that is, both cases turned on findings that Hall was negligent and Farnum was not--the determination of these issues binds Hall.

The Appellate Division, Fourth Department, reversed in a memorandum decision (24 A.D.2d 831, 264 N.Y.S.2d 68; noted, 32 Brooklyn L.Rev. 428), Justices GOLDMAN and HENRY dissenting in an opinion by GOLDMAN, J. The majority in the Appellate Division held that only a Defendant may raise a prior judgment as conclusive of the issues decided therein, citing Elder v. New York & Pennsylvania Motor Express (284 N.Y. 350, 31 N.E.2d 188, 133 A.L.R. 176). The dissenters were [278 N.Y.S.2d 598] of the opinion that, since Hall has had his day in court and litigated fully and lost on the only issues raised in the present case, the judgment in the first action is conclusive against him. This appeal comes here by permission of the Appellate Division, which certified the question: 'Was the order of Special Term (granting plaintiff summary judgment) entered January 18, 1965, properly made?'

Respondent asserts that Haverhill v. International Ry. Co. (244 N.Y. 582, 155 N.E. 905) and Elder v. New York & Pennsylvania Motor Express (284 N.Y. 350, 31 N.E.2d 188, 133 A.L.R. 176, supra) are binding authority for the proposition that a prior judgment may not be used under the circumstances presented by this case. While it is true that most of the relevant cases in this area in New York have arisen under circumstances wherein the defendant sought to use the prior adjudication against the plaintiff, there seems to be no reason in policy or precedent to prevent the 'offensive' use of a prior judgment. In fact, there have been cases in this

Page 144

court that have allowed the affirmative use of a prior judgment to establish a right to recover (see Liberty Mut. Ins. Co. v. Colon & Co., 260 N.Y. 305, 183 N.E. 506; United Mut. Fire Ins. Co. v. Saeli, 297 N.Y. 611, 175 N.E.2d 626). However, there is need here for a reconsideration of the principles governing who may use the prior judgment against one who was a party, or in privity with a party, to the earlier adjudication.

The modern trend of decision, both in this court and elsewhere, permits the use of the Farnum judgment as determining the rights of the parties in the present suit and, for that reason, the Appellate Division should be reversed and the order of the Special Term reinstated.

The main support for defendant's argument is the so-called rule of mutuality of estoppel, that is, unless both parties are bound by the prior judgment, neither may use it. This rule has been so undermined as to be inoperative.

In Liberty Mut. Ins. co. v. Colon & Co. (supra), this court was presented with a case in which the plaintiff's right to recover depended upon whether the defendant had caused the death of plaintiff's insured's employee. In an earlier action, the deceased's widow had recovered damages in a wrongful death action brought against the same defendant. The plaintiff sought and obtained summary judgment based on the determination of the widow's action. The defendant opposed that motion on the ground that the earlier judgment was not Res judicata in this later action. The court held that summary judgment for the plaintiff was proper because: 'The defendant has had full opportunity to litigate the issue of its responsibility for the death of the (deceased) in the action brought by (his representatives)' (260 N.Y., p. 312, 183 N.E. p. 508). A few years after the Colon case came the leading case of [278 N.Y.S.2d 599] Good health Dairy Prods. Corp. v. Emery (275 N.Y. 14, p. 18, 9 N.E.2d 758, p. 759, 112 A.L.R. 401) which is not so important here for its facts as it is for its declarations that: 'Behind the phrase Res judicata lies a rule of reason and practical necessity. One who has had his day in court should not be permitted to litigate the question anew. Although normally it is necessary that mutuality of estoppel exist, an exception is at times made where the party Against whom the plea is raised was a party to the prior action and 'had full opportunity to litigate the issue of its responsibility.' (See

Page 145

Liberty Mutual Ins. Co. v. Colon, 260 N.Y. 305, 312, 183 N.E. 506.) Under such circumstances the judgment is held to be conclusive upon those who were parties to the action in which the judgment was rendered. Where a full opportunity has been afforded to a party to the prior action and he has failed to prove his freedom from liability or to establish liability or culpability on the part of another, there is no reason for permitting him to retry these issues.'

These two cases, Colon and Good Health, did much to undermine, if not destroy, the doctrine of mutuality. In 1942 in a perceptive and, as later events proved, far-reaching decision, the Supreme Court of California decided the case of Bernhard v. Bank of America (19 Cal.2d 807, 122 P.2d 892 (TRAYNOR, J., now Chief Justice)). There the court, noting that other jurisdictions had abandoned the requirement of mutuality of estoppel and had confined the requirement of privity to the party against whom the plea of Res judicata is asserted (citing, Inter alia, Colon and Good Health, supra), held that the plea of Res judicata may be raised when the earlier action resulted in a final judgment on the merits; where the party against whom the plea is asserted was a party or the privy of a party in the prior action and when the two actions present identical issues.

The criteria established in Bernhard (supra) have been absorbed into our law. To illustrate, in Israel v. Wood Dolson Co. (1 N.Y.2d 116, 151 N.Y.S.2d 1, 134 N.E.2d 97), after citing Good Health and Colon, we said: 'It will be seen, therefore, that the fact that a party has not had his day in court on an issue As against a particular litigant is not decisive in determining whether the defense of Res judicata is applicable.' (1 N.Y.2d 116, 119, 151 N.Y.S.2d 1, 4, 134 N.E.2d 97.)

In Statter v. Statter (2 N.Y.2d 668, 163 N.Y.S.2d 13, 143 N.E.2d 10), we indicated that the estoppel of a former judgment may be...

To continue reading