Arnevik v. Univ. of Minn. Bd. of Regents

• Decision Date: 03 April 2002
• Docket Number: No. 00-0682.,00-0682.
• Citation: 642 N.W.2d 315
• Parties: Cindy L. ARNEVIK, Appellant, v. UNIVERSITY OF MINNESOTA BOARD OF REGENTS and University of Minnesota, Appellees.
• Court: Iowa Supreme Court

642 N.W.2d 315

Cindy L. ARNEVIK, Appellant, v. UNIVERSITY OF MINNESOTA BOARD OF REGENTS and University of Minnesota, Appellees.

No. 00-0682.

Supreme Court of Iowa.

April 3, 2002.

Randall E. Nielsen of Pappajohn, Shriver, Eide & Nicholas, P.C., Mason City, for appellant.

Rustin T. Davenport of De Vries, Price & Davenport, Mason City, for appellees.

STREIT, Justice.

An employee of the University of Minnesota tries to take a second bite of the apple after her first indemnification action again the University failed. Cindy Arnevik was involved in a car accident causing serious injury to the driver of another car. After the driver recovered damages for her injuries from Arnevik, Arnevik sued her employer for indemnification based on the principle of respondeat superior. The district court dismissed this action and Arnevik did not appeal. She now pursues an alternate theory of indemnification based on contract. Because we find her present claim is barred by the theory of claim preclusion, we affirm.

I. Background and Facts

Cindy Arnevik, a resident of Iowa, was employed by the University of Minnesota as an extension education employee since 1988. On October 14, 1994, Arnevik was traveling to work in her car from her home in Iowa to deliver plants to test plots near Wells, Minnesota. As part of Arnevik's employment, she was required to travel throughout Minnesota and sometimes into Iowa for field visits and meetings. Arnevik did not drive directly to Wells, but instead stopped in Buffalo Center, Iowa, to meet her husband for breakfast. She then made her way to Wells. As she was driving, she became distracted by plant materials tipping over in the car, drove her car across the centerline, and collided nearly head-on with a car driven by Melissa Johnson.

In June 1996, Johnson sued Arnevik seeking compensation for her injuries. Arnevik informed her district director, Larry Tande, about the accident and the lawsuit. Tande informed certain individuals at the University of Minnesota. Arnevik filed a cross-petition in the Johnson lawsuit against the University. In this action, Arnevik claimed the University was legally responsible to defend and indemnify Arnevik for her negligence while she was acting within the scope of her employment. The University filed a motion for summary judgment which the district court granted on March 17, 1997. The court stated it could find no authority to allow an employee to bring an indemnification suit against the employer for damage to a third party caused by the employee's negligence. Therefore, the court ruled Arnevik failed to state a claim upon which relief could be granted. Arnevik did not appeal this ruling.

After she lost, Arnevik researched the University's policies on legal defense of employees. On June 5, 1997, Arnevik's new attorney demanded the University indemnify Arnevik based on the University of Minnesota Board of Regents' policy regarding legal defense of employees. The University informed Arnevik on August 20, 1997, that Arnevik was not eligible for defense or indemnification under this policy. Arnevik settled with Johnson in Winnebago County, Iowa, for $100,000 from Arnevik's personal automobile insurance carrier, $100,000 directly from Arnevik's personal funds, and $20,000 from her underinsurance carrier. Arnevik then sued the University a second time seeking indemnification for the amount she paid to Johnson. Arnevik again demanded indemnification but she based her claim on the terms of the University's policy regarding legal defense of employees. After trial, the court ruled in favor of the University and dismissed Arnevik's petition. Arnevik appeals contending the trial court erred in finding her contract claim was barred by the doctrine of claim preclusion.

II. Scope of Review

This case was tried as a law action before the district court. Therefore, our review is for correction of errors at law. Equity Control Assocs., Ltd. v. Root, 638 N.W.2d 664, 670 (Iowa 2001) (citations omitted). "`The trial court's findings have the effect of a special verdict and are binding if supported by substantial evidence.'" Id. (quoting Land O'Lakes, Inc. v. Hanig, 610 N.W.2d 518, 522 (Iowa 2000)). "Evidence is substantial when a reasonable mind would accept it as adequate to reach a conclusion." State v. Bonstetter, 637 N.W.2d 161, 165 (Iowa 2001). We are not bound by the trial court's legal conclusions. Root, 638 N.W.2d at 670. However, we will construe the trial court's findings broadly in favor of upholding the judgment. Id.

III. The Merits

Arnevik claims the trial court erred when it dismissed her second lawsuit. In particular, she argues the court erred in finding her contract claim was barred under the doctrine of claim preclusion. Arnevik also argues the court erred in denying her recovery based on the theory of the University's bad faith failure to consider, investigate, and act upon its obligation to defend and indemnify Arnevik. Finally, she argues the court should have granted her relief pursuant to the Iowa Wage Payment Collection Act. Because we find only the issue of claim preclusion determinative of this case, we will not address these other arguments.

In Arnevik's cross-petition in the Johnson suit, Arnevik argued she was acting within the scope of her employment at the time of the accident. Citing the theory of respondeat superior, Arnevik argued the University was legally required to indemnify Arnevik for her negligence leading to the accident. Later in the second suit, Arnevik argued the University was obligated to defend and indemnify her based on its own policy regarding defense of employees. Because the University failed to provide a defense in the first action, she argued the University breached the written employment contract between Arnevik and the University. The University argued the breach of contract claim was barred under the doctrine of claim preclusion. The district court agreed, finding in both actions Arnevik claimed she was entitled to defense and indemnification by the University.

Arnevik first based her right to indemnification and defense on the theory of respondeat superior. In the second action, she argued entitlement to defense and indemnification based on breach of contract. The court stated, "it is well established that simply asserting a new theory of recovery in a second action will not save the suit from being barred by claim preclusion." Accordingly, the court dismissed Arnevik's petition. On appeal, we must decide whether the principles of claim preclusion apply to the case before us. The general rule of claim preclusion provides a valid and final judgment on a claim precludes a second action on that claim or any part of it. See Bennett v. MC No. 619, Inc., 586 N.W.2d 512, 516 (Iowa 1998). The rule applies not only as to every matter which was offered and received to sustain or defeat the claim or demand, but also as to any other admissible matter which could have been offered for that purpose. Iowa Coal Min. Co. v. Monroe County, 555 N.W.2d 418, 441 (Iowa 1996). Claim preclusion, as opposed to issue preclusion, may foreclose litigation of matters that have never been litigated. Penn v. Iowa State Bd. of Regents, 577 N.W.2d 393, 398 (Iowa 1998) (claim preclusion bars all matters actually determined in the first action and all relevant matters that could have been determined). It does not, however, apply unless the party against whom preclusion is asserted had a "full and fair opportunity" to litigate the claim or issue in the first action. Whalen v. Connelly, 621 N.W.2d 681, 685 (Iowa 2000) (citations omitted). A second claim is likely to be barred by claim preclusion where the "acts complained of, and the recovery demanded are the same or where the same evidence will support both actions." Id. (citations omitted). A plaintiff is not entitled to a second day in court by alleging a new ground of recovery for the same wrong. Id.; Bennett, 586 N.W.2d at 517 ("a party is not entitled to a `second bite' simply by alleging a new theory of recovery for the same wrong"). When we consider a defense of claim preclusion, we look for the presence of three factors: the parties in the first and second action were the same; the claim in the second suit could have been fully and fairly adjudicated in the prior case; and there was a final judgment on the merits in the first action. See 50 C.J.S. Judgment §§ 702, 703, at 242-45 (1997). The absence of any one of these elements is fatal to a defense of claim preclusion. Id. § 704, at 246.

We begin by stating the parties to the cross-petition are identical to the parties in the present action. The University and Arnevik were parties in both actions and had the opportunity to litigate any appropriate claims. The first element of the defense of claim preclusion was satisfied.

We must now determine whether Arnevik raised the contract claim or could have raised it in the first action. Arnevik does not now allege any new contract or tort theories occurred based on events arising subsequent to the court's grant of the University's motion for summary judgment on the first claim. Rather, both of her lawsuits stem from the accident with Johnson. The underlying facts in each action are the same. Arnevik claims in both she was acting within the scope of her employment at the time of the accident. Likewise, in both actions, Arnevik claimed she is entitled to defense and indemnification from the University. The only difference between Arnevik's first and second claim is the ground upon which she asserted entitlement to indemnification. In the cross-petition Arnevik argued her rights were based on...