Desotelle v. Continental Cas. Co.

• Decision Date: 23 December 1986
• Docket Number: No. 86-0443,86-0443
• Citation: 136 Wis.2d 13,400 N.W.2d 524
• Parties: Cassie DESOTELLE, * Plaintiff-Appellant, v. CONTINENTAL CASUALTY CO., Brown County and Gordon Gille, Jr., Defendants-Respondents. . Orally
• Court: Wisconsin Court of Appeals

Page 524

400 N.W.2d 524

136 Wis.2d 13

Cassie DESOTELLE, ^* Plaintiff-Appellant, v. CONTINENTAL CASUALTY CO., Brown County and Gordon Gille Jr., Defendants-Respondents.

No. 86-0443.

Court of Appeals of Wisconsin.

Orally Argued Oct. 22, 1986.

Opinion Released Dec. 23, 1986.

Opinion Filed Dec. 23, 1986.

John A. Evans, argued, for plaintiff-appellant, Cassie Desotelle; John P. Duffy, Green Bay, on brief.

R. Paul Mohr of McKay, Mohr & Beinlich, S.C., Green Bay, for defendant-respondent, Gordon Gille, Jr.

William C. Griesbach of Liebmann, Conway, Olejniczak & Jerry, S.C., Green Bay, for defendants-respondents, Brown County and Continental Cas.

Before CANE, P.J., and LaROCQUE and MYSE, JJ.

MYSE, Judge.

Cassie Desotelle appeals a judgment dismissing an action in which she sought to enforce a federal damage award against Brown County and its insurer, Continental Casualty Company. Desotelle argues that the trial court erred by impaneling an advisory jury to determine whether Gordon Gille had been acting within the scope of his employment when he falsely imprisoned her. She asserts that the federal jury had previously determined this issue and that all facts were undisputed. Consequently, she contends that under sec. 895.46(1), Stats., the court's reasoning in Bell v. City of Milwaukee, 536 F.Supp. 462, (E.D.Wis.1982), modified, 746 F.2d 1205 (1984), or the terms of Continental's insurance policy, she is entitled to judgment as a matter of law. We disagree and affirm the judgment. ¹

In 1980, Brown County Sheriff's Deputy Gordon Gille discovered Cassie Desotelle and her boyfriend in a parked car. Gille was on regular patrol duty and in full uniform. Allegedly suspecting underage drinking, Gille removed Desotelle to his squad car for questioning. While in the squad car, Gille sexually assaulted Desotelle. Gille was convicted of sexual assault and received a three-year prison term.

In 1981, Desotelle commenced a federal civil rights action under 42 U.S.C.A. sec. 1983 (West 1981) alleging false imprisonment against Gille and Brown County's insurer, Continental Casualty Company. Continental's insurance policy with Brown County extended liability coverage to all county employees, such as Gille, for acts Continental moved for its dismissal from the civil rights action on three grounds: (1) The Civil Rights Act did not permit suits against its insured, Brown County, and therefore its insurer was not a proper party to the action; (2) Gille's misconduct was outside the scope of his employment and neither Continental under the insurance policy nor the county under sec. 895.46(1) could be required to indemnify Gille; and (3) Gille's misconduct was excluded from the insurance policy's liability coverage by the policy's criminal act exclusion provision. The federal court granted the motion on the first ground and dismissed Continental from the case. The court specifically declined to address the "scope of employment" issue or the insurance policy's exclusionary provision. The court held these issues were state law matters that the state courts should determine. Fearing that the scope of employment issue might still be litigated in the federal forum, Continental attempted to reenter the case but its motion was denied.

within the scope of their duties. Additionally, Continental's insured, Brown County, could be required under sec. 895.46(1) to indemnify Gille for any damage award. This statute requires a public employer to indemnify an employee for damages arising from an action that was based upon acts the employee committed within the scope of his employment.

In the federal trial, Desotelle's counsel argued, and Gille's counsel conceded, that Gille had been acting within the scope of his employment when the incident occurred. In response to a special verdict question, the jury found that Gille's acts in falsely imprisoning Desotelle were done within the scope of his employment. The jury awarded Desotelle $38,200 in damages to which the court added $12,400 for attorney fees and costs.

In 1984, Desotelle brought a state action against the county and Continental to enforce the federal judgment. The claim against the county was based on the indemnification provisions of sec. 895.46(1). The claim against Continental was based on its insurance policy with the county. Both defendants asserted that Gille's misconduct was not within the scope of his employment. As such, they claimed that sec. 895.46(1) was inapplicable and that the insurance policy did not provide liability coverage. Desotelle responded that the federal jury had previously determined that Gille had been acting within the scope of his employment, that no facts were in dispute, and that she was entitled to judgment as a matter of law. All parties moved for summary judgment.

The state trial court questioned the federal court's submission of the "scope of employment" issue to the jury after it had stated that this issue was for the state courts to determine. The court concluded that the federal jury's determination as to "scope of employment" was not binding on the defendants because they had not been parties to the federal proceeding and because that determination was not necessary to the civil rights action. However, the court concluded that the federal jury's determination as to false imprisonment under color of law and damages was binding on the defendants. The court impaneled an advisory jury to determine the "scope of employment" issue but reserved the right to rule on this issue as a matter of law.

The advisory jury found that Gille had not been acting within the scope of his employment when he falsely imprisoned Desotelle. The court adopted the jury's finding and dismissed Desotelle's complaint with prejudice.

Desotelle argues that the federal jury's finding that Gille was acting within the scope of his employment was binding on the county and Continental in the state action. We deem this argument to be based on the common law doctrines of res judicata and collateral estoppel.

Whether the doctrines of res judicata or collateral estoppel bar relitigation of an issue is a question of law. Landess v. Schmidt, 115 Wis.2d 186, 191-98, 340 N.W.2d 213, 216-19 (Ct.App.1983). Res judicata makes a final adjudication on the merits in a prior action conclusive in a Neither the doctrine of res judicata nor collateral estoppel renders the federal jury's determination binding upon the county or Continental. We note initially that there was not a unity of parties because the county and Continental were not part of the federal action. Similarly, there was not a unity of issues because the issues litigated in the federal action did not require a determination in regard to scope of employment.

                subsequent action between the same parties, or their privies, as to all matters that were litigated or that might have been litigated.  Id. at 190-91, 340 N.W.2d at 215-16.   For the doctrine to apply, there must be an identity of parties and an identity of the causes of action or claims in the two actions.  Id. at 191, 340 N.W.2d at 216.   Collateral estoppel precludes relitigation of an issue of ultimate fact previously determined by a valid final judgment.  Id. at 198, 340 N.W.2d at 219.   For the doctrine to apply, the determination of the issue must be essential to the judgment.  Id
                

The doctrines of res judicata and collateral estoppel are founded upon principles of fundamental fairness. These doctrines are designed to balance judicial economy and the need to bring litigation to a final conclusion with every party's right to have a judicial determination made as to their contentions. Id. at 191, 340 N.W.2d at 213-14. When the matter is fully and fairly litigated, litigation as to those same issues is precluded. These doctrines, however, may never be applied in such a fashion as to deprive a party of the opportunity to have a full and fair determination of an issue. See Kichefski v. American Family Mutual Ins., 132 Wis.2d 74, 79-81, 390 N.W.2d 76, 78-79 (Ct.App.1986).

To apply the doctrines under the circumstances of this case would be grossly and manifestly unfair. The county and Continental never had an opportunity to litigate the scope of employment issue in the federal forum and the issue was not germane to those proceedings. Furthermore, neither of the parties to the federal action had an incentive to litigate the scope of employment issue. To the contrary, it was in the interest of both parties to urge the jury to find that Gille had been acting within the scope of his employment. Under these circumstances, neither res judicata nor collateral estoppel are applicable. See Crowall v. Heritage Mutual Ins. Co., 118 Wis.2d 120, 125-26, 346 N.W.2d 327, 331 (Ct.App.1984).

Nor is the county required to indemnify Gille under sec. 895.46(1)(a) on the basis of the federal jury's finding. Section 895.46(1)(a) provides in part:

If the defendant in any action ... is a public officer or employe and is proceeded against ... because of acts committed while carrying out duties as an officer or employe and the jury or the court finds that the defendant was acting within the scope of employment, the judgment ... shall be paid by the state or political subdivision of which the defendant is an officer or employe.

It is true that the statute speaks in terms of "any action," and Gille was found in the federal action to be acting within the scope of his employment. We conclude, however, that the federal jury's finding is not binding on the county for purposes of indemnification under sec. 895.46(1).

The interpretation of a statute is a question of law reviewed independently of the trial court's decision. P.A.K. v. State, 119 Wis.2d 871, 876, 350 N.W.2d 677, 680 (1984). A statute, or any phrase or word therein, is ambiguous if it is capable of being understood by reasonably well-informed persons in either of two or more senses. In re Haese's Estate, 80 Wis.2d 285, 292, 259...