Chaney Bldg. Co. v. City of Tucson

• Decision Date: 26 June 1985
• Docket Number: CA-CIV,No. 2,2
• Citation: 148 Ariz. 583,716 P.2d 40
• Parties: CHANEY BUILDING CO., Plaintiff/Appellee, v. CITY OF TUCSON, Defendant/Appellant. 5366.
• Court: Arizona Court of Appeals

Page 40

716 P.2d 40

148 Ariz. 583

CHANEY BUILDING CO., Plaintiff/Appellee, v. CITY OF TUCSON, Defendant/Appellant.

No. 2 CA-CIV 5366.

Court of Appeals of Arizona Division 2, Department A.

June 26, 1985.

Norris L. Ganson, Tucson, for plaintiff/appellee.

Frederick S. Dean, Tucson City Atty. by Tobin Rosen, Tucson, for defendant/appellant.

OPINION

HOWARD, Judge.

This is an appeal by the city in a case involving the building of Fire Station No. 7 in Tucson. Because the determinative issue in this case involves the applicability of the doctrine of collateral estoppel, we commence with the procedural history of the case.

Chaney Building Company, Inc. (Chaney) sued the city for breach of contract, alleging that the city owed it $142,554.81 for the balance due on its contract for its construction of the station. Chaney subsequently was allowed to file an amended complaint which added the architectural firm of John R. Kulseth Associates (Kulseth) as a defendant. Count One of the amended complaint was against the city for breach of contract. Count Two asked for damages in the sum of $142,554.81 against Kulseth for negligence in preparing the plans and specifications for the station, which allegedly resulted in Chaney having to incur additional costs beyond the contract price.

Thereafter, pursuant to a stipulation by Chaney, Kulseth and the city, Count Two of the first amended complaint was dismissed with prejudice. The case then went before a jury on Count One and the jury awarded appellee $67,790.07. It was the city's theory that it had to terminate Chaney's contract and hire others to complete the job because Chaney wrongfully caused delays, was guilty of faulty workmanship and failed to correct its faulty workmanship. Nearly all of Chaney's case was based upon the theory that the plans and specifications were deficient and that this deficiency caused the extra work, delays and eventual termination of the contract.

The city contends the trial court erred in admitting evidence of the defects in the plans and specifications and in failing to grant its motion for mistrial. We agree.

Restatement (Second) of Judgments § 27 (1982) states:

"When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim."

A judgment of dismissal with prejudice entered by stipulation of the parties is a final determination and operates as an adjudication on the merits as to all issues that were raised or could have been determined under the pleadings. City of Sierra Vista v. Cochise Enterprises, Inc., 128 Ariz. 467, 626 P.2d 1099 (App.1979). What we have here is issue preclusion (collateral estoppel) invoked in subsequent litigation with others. Under this doctrine a party precluded from relitigating an issue with an opposing party in accordance with § 27 is also...