Aetna Cas. & Sur. Co. v. Niziolek

Decision Date22 August 1985
Citation395 Mass. 737,481 N.E.2d 1356
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

Nancy Frankel Pelletier, Springfield, for plaintiff.

Arthur Leavens, Springfield, for Joseph Niziolek.


O'CONNOR, Justice.

In this action, brought by The Aetna Casualty & Surety Company (Aetna) against Joseph Niziolek and Raymond Bednarz to recover money paid by Aetna to Niziolek on a fire insurance policy on a house owned by Niziolek, we hold that: (1) Aetna may invoke the doctrine of collateral estoppel to preclude Niziolek from relitigating issues decided in the criminal trial in which he was convicted of burning the insured property, and (2) Bednarz's convictions of arson and of conspiracy to commit arson, entered after he pleaded guilty, have no preclusive effect in subsequent civil litigation, but they are admissible in evidence against Bednarz as admissions.

Joseph Niziolek owned a three-family house located at 59-61 Sorrento Street in Springfield. The house was insured by Aetna. In November, 1976, a fire occurred at the house, as a result of which, in January, 1977, Aetna paid Niziolek $28,733.85.

In June, 1978, Niziolek was indicted for arson, for conspiracy to commit arson, for burning insured property in violation of G.L. c. 266, § 10 (1984 ed.), 2 and for larceny. All the indictments arose out of the fire at Niziolek's house. In February, 1979, after a jury trial, Niziolek was convicted of arson, of burning insured property, and of four charges of larceny. On appeal, this court reversed Niziolek's arson conviction and affirmed the other judgments. Commonwealth v. Niziolek, 380 Mass. 513, 532, 404 N.E.2d 643 (1980). The indictment charging Niziolek with conspiracy to commit arson was dismissed on the Commonwealth's motion in 1983.

On the same day that Niziolek was indicted, Raymond Bednarz, the second defendant in this case, was indicted for arson and for conspiracy to commit arson. Those indictments also arose out of the fire at Niziolek's house. Bednarz pleaded guilty to both indictments against him and was given a suspended sentence, placed on probation for three years, and ordered to pay a $7,500 fine.

In March, 1979, Aetna filed this action against Niziolek and Bednarz. Aetna's complaint alleged that both Niziolek and Bednarz "caused the building at 59-61 Sorrento Street ... to be burned," that Niziolek "wrongfully and fraudulently obtained" $28,733.85 from Aetna, and that Bednarz "wrongfully and fraudulently caused [Aetna] to be damaged by" that amount. Aetna seeks recovery from both Niziolek and Bednarz of the money that it paid Niziolek.

When the case came forward for trial, Niziolek filed a motion in limine asking the judge to bar Aetna from using the records of his convictions to impeach his credibility. The judge ruled that, if the convictions relating to the fire at Niziolek's house were otherwise inadmissible, he would exclude their use for impeachment purposes, and the judge asked the parties to brief the issue whether Niziolek's convictions precluded him from relitigating whether he had intentionally caused the house to be burned. After considering the parties' briefs, the judge decided to exclude any evidence of Niziolek's convictions and to reserve judgment on the preclusion issue, with the understanding that, if the jury returned a verdict for Niziolek, Aetna could raise the issue on a motion for judgment notwithstanding the verdict. Neither Aetna nor Niziolek objected to that procedure.

The only contested issue of fact at the trial was whether Niziolek, Bednarz, or both, had intentionally caused Niziolek's house to be burned. Both Niziolek and Bednarz testified. Bednarz testified that he had introduced Niziolek to Melvin Davis, and that, after the fire, he had seen Niziolek pay Davis a sum of money. Bednarz admitted that he had accepted money from Niziolek in exchange for his promise to keep quiet about the Niziolek-Davis transaction, but he denied any further involvement with the fire. Aetna introduced Bednarz's guilty pleas against him as admissions, and Bednarz testified that he had pleaded guilty only because his attorney had negotiated a favorable plea bargain.

Niziolek denied any responsibility for the fire. He testified that Bednarz and Davis had implicated him because he refused to succumb to their extortion attempts. No evidence of Niziolek's convictions was introduced.

Davis--the Commonwealth's main witness at Niziolek's criminal trial--did not testify because Aetna could not locate him to serve him with a subpoena.

The jury returned verdicts for Niziolek and for Bednarz, and Aetna filed motions for judgment notwithstanding the verdicts and for a new trial. Without ruling on the motions, the judge reported the following questions to the Appeals Court:

"(1) Is the defendant, Joseph Niziolek, by reason of his prior conviction of burning the building at 59-61 Sorrento Street with the intent to defraud or injure the insurer, precluded from retrying the issue as to whether he intentionally caused the building to be burned?; and

"(2) Is the defendant, Raymond Bednarz, by reason of his prior pleas of guilty of arson and of burning the building at 59-61 Sorrento Street with the intent to defraud or injure the insurer, precluded from retrying the issue as to whether he intentionally caused the building to be burned?" 3 We granted Aetna's application for direct appellate review.

1. Preclusive effect of a conviction, obtained after a trial, in subsequent civil litigation. "By the traditional rule, a defendant convicted of [a] crime is entitled to retry the question whether he actually committed the crime, when that issue arises in a civil proceeding to which the Commonwealth is not a party; and the criminal judgment is not even evidence against him on the merits of the case." Minasian v. Aetna Life Ins. Co., 295 Mass. 1, 3, 3 N.E.2d 17 (1936). In Silva v. Silva, 297 Mass. 217, 218, 7 N.E.2d 601 (1937), this court stated that the traditional rule "must be deemed to be law in this jurisdiction." In 1975, in Matter of Hiss, 368 Mass. 447, 450, 333 N.E.2d 429 (1975), by distinguishing rather than overruling Silva v. Silva, supra, we implicitly announced our continued adherence to the traditional rule. Aetna now urges us to reconsider our position and to abandon the traditional rule.

One of the main reasons for the emergence of the traditional rule was the doctrine of mutuality of estoppel. See Vestal and Coughenour, Preclusion/Res Judicata Variables: Criminal Prosecutions, 19 Vand.L.Rev. 683, 704 (1966). Under that doctrine, "persons not parties or in privity with parties to an action are not affected by a judgment in that action--... where strangers are not bound by a judgment its benefit is not available to them." Home Owners Fed. Sav. & Loan Ass'n v. Northwestern Fire & Marine Ins. Co., 354 Mass. 448, 452, 238 N.E.2d 55 (1968). See Blonder-Tongue Laboratories, Inc. v. University of Illinois Found., 402 U.S. 313, 320-321, 91 S.Ct. 1434, 1438-1439, 28 L.Ed.2d 788 (1971); Bernhard v. Bank of America Nat'l Trust & Sav. Ass'n, 19 Cal.2d 807, 811-812, 122 P.2d 892 (1942). In Silva v. Silva, supra, this court based its decision to adhere to the traditional rule on the absence of mutuality. "Here there could have been no mutuality," we stated, "for nothing decided in criminal proceedings brought against the libellant could have bound the libelee, who was not a party to them...." Id., 297 Mass. at 218, 7 N.E.2d 601.

Since the time that this court decided Silva v. Silva, supra, the doctrine of mutuality of estoppel has become virtually a "dead letter." B.R. DeWitt, Inc. v. Hall, 19 N.Y.2d 141, 147, 278 N.Y.S.2d 596, 225 N.E.2d 195 (1967). In the leading case of Bernhard v. Bank of America Nat'l Trust & Sav. Ass'n, supra, the Supreme Court of California abandoned the doctrine, stating: "No satisfactory rationalization has been advanced for the requirement of mutuality. Just why a party who was not bound by a previous action should be precluded from asserting it as res judicata against a party who was bound by it is difficult to comprehend." Id. 19 Cal.2d at 812, 122 P.2d 892. In 1968, quoting that language, this court abandoned the doctrine of mutuality. Home Owners Fed. Sav. & Loan Ass'n v. Northwestern Fire & Marine Ins. Co., supra, 354 Mass. at 455, 238 N.E.2d 55. As the United States Supreme Court has noted, "the abrogation of mutuality has been accompanied by other developments--such as ... expansion of the preclusive effects afforded criminal judgments in civil litigation--which enhance the capabilities of the courts to deal with some issues swiftly but fairly." Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, supra, 402 U.S. at 327, 91 S.Ct. at 1442. In light of our abandonment of the doctrine of mutuality, we consider it appropriate also to discontinue our adherence to the traditional rule.

Collateral estoppel--more graphically known as "issue preclusion"--and the related doctrine of res judicata--"claim preclusion"--"relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication." Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 414, 66 L.Ed.2d 308 (1980). In the context we face here--a civil action following a criminal prosecution--application of issue preclusion will not relieve parties of the cost and vexation of multiple lawsuits, but it will conserve scarce judicial resources, prevent people from profiting from their criminal conduct, and, perhaps most importantly, prevent the diminution of public confidence in our judicial system that would result if civil juries repeatedly found by a preponderance of the evidence that a convicted criminal defendant had not done something that...

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