Goldstein v. Consolidated Edison Co. of New York, Inc.

• Decision Date: 17 May 1983
• Parties: Morris GOLDSTEIN and Ruth Goldstein, Plaintiffs-Appellants, v. CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. and Lind-Roc Housing Co., Inc., Defendants-Respondents, and William Kennedy, William Jurith and Phillips, Wood, Dolson, Inc., Defendants.
• Court: New York Supreme Court — Appellate Division

Page 646

462 N.Y.S.2d 646

93 A.D.2d 589

Morris GOLDSTEIN and Ruth Goldstein, Plaintiffs-Appellants, v. CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. and Lind-Roc Housing Co., Inc., Defendants-Respondents and William Kennedy, William Jurith and Phillips, Wood, Dolson Inc., Defendants.

Supreme Court, Appellate Division First Department.

May 17, 1983.

Julian Kaplan, Mineola, of counsel (Jessel Rothman, P.C., Mineola, attorney), for plaintiffs-appellants.

William E. Hegarty, New York City, of counsel (Thomas J. Kavaler, Vincent E. Gentile and Lisa Schilit, New York City, with him on brief; Cahill Gordon & Reindel and Ernest J. Williams, New York City, attorneys), for defendant-respondent Consolidated Edison.

Before KUPFERMAN, J.P., and SANDLER, CARRO, ASCH and KASSAL, JJ.

KUPFERMAN, Justice Presiding.

Plaintiffs, Morris and Ruth Goldstein, appeal from the denial by Special Term of their motion for partial summary judgment against defendant Consolidated Edison Corp. (Con Ed). By that motion, plaintiffs sought an order precluding Con Ed from relitigating the issue of whether it was grossly negligent in failing to prevent the interruption of electrical service during the 1977 blackout, and setting the matter down for an inquest to assess plaintiffs' damages. Special Term should have granted the motion to the extent of precluding Con Ed from again litigating the gross negligence issue, reserving all other matters for trial.

On the morning of July 14, 1977, plaintiff Morris Goldstein allegedly sustained personal injuries when he slipped and fell down a darkened stairwell in a cooperative ownership apartment building in the Bronx in which plaintiffs reside and own shares. Plaintiff Ruth Goldstein, his wife, joins her claim for loss of services resulting from her husband's alleged injuries. In addition to Con Ed, the complaint names as defendants the cooperative apartment corporation, its managing agent, and two individual employees of Con Ed. The motion for partial summary judgment, however, is directed solely against Con Ed.

Plaintiffs predicate their motion on a judgment entered after a jury verdict which specifically found as a fact that Con Ed had acted with gross negligence in failing to prevent the blackout. The Court of Appeals affirmed our Court's affirmance without opinion of that judgment. Food Pageant, Inc. v. Consolidated Edison Corp., 54 N.Y.2d 167, 445 N.Y.S.2d 60, 429 N.E.2d 738, affirming 78 A.D.2d 1016, 435 N.Y.S.2d 423. Plaintiffs now invoke the doctrine of offensive collateral estoppel, also called issue preclusion, to give the finding of gross negligence in the Food Pageant judgment conclusive effect in this litigation.

Under New York law, for a non-party to an action which resulted in a judgment to use that judgment offensively in a later action to preclude a party to that judgment from relitigating an issue of fact found adversely to that party in the prior action, a twofold requirement must be met. As the Court of Appeals stated the standard:

"New York Law has now reached the point where there are but two necessary requirements for the invocation of the doctrine of collateral estoppel. There must be an identity of issue which has necessarily been decided in the prior action and is decisive of the present action, and, second, there must have been a full and fair opportunity to contest the decision now said to be controlling."

Schwartz v. Public Administrator of the County of Bronx, 24 N.Y.2d 65, 71, 298 N.Y.S.2d 955, 246 N.E.2d 725.

In Schwartz, the Court of Appeals stated further that the burden rests upon the defendant to show that collateral estoppel should not be applied because it did not have a full and fair opportunity to litigate the issue in the prior action, while the burden is placed on the moving party to show that the issue is identical and was necessarily decided in the prior action. 24 N.Y.2d at 73, 298 N.Y.S.2d 955, 246 N.E.2d 725.

The identity of issue requirement is clearly met. In Food Pageant, the jury decided that Con Ed was grossly negligent in failing to prevent the blackout. This issue was necessarily decided in that case inasmuch as the jury was instructed that there could be no recovery absent a finding of gross negligence on the part of Con Ed because Con Ed was exempt from liability for ordinary negligence under the terms of its tariff restrictions approved by the Public Service Commission. Though the finding in Food Pageant is not dispositive of the Goldsteins' claim, it is certainly decisive of the motion for partial summary judgment. Thus, the issue on this appeal is whether Con Ed had a full and fair opportunity to litigate the gross negligence issue in the Food Pageant action so that allowing issue preclusion in this case would not be unjust. On this question, Con Ed has the burden.

The Court of Appeals has set the standard for determining whether a party has had a full and fair opportunity to litigate an issue as requiring:

"... an exploration of the various elements which make up the realities of litigation. A comprehensive list of the various factors which should enter into a determination whether a party has had his day in court would include such considerations as the size of the claim, the forum of the prior litigation, the use of initiative, the extent of the litigation, the competence and experience of counsel, the availability of new evidence, indications of a compromise verdict, differences in the applicable law and foreseeability of future litigation."

Schwartz v. Public Administrator of the County of Bronx, supra, 24 N.Y.2d at 72, 298 N.Y.S.2d 955, 246 N.E.2d 725.

Of the nine considerations listed above, only "indications of a compromise verdict" even remotely avails Con Ed in its attempt to avoid the conclusive effect of the finding of gross negligence by the Food Pageant jury. The ad damnum clause in the Food Pageant complaint sought $75,000 in damages. Even in light of the enormity of the potential exposure of Con Ed to blackout claims, this is not such an insubstantial claim that it would not have been vigorously contested. Con Ed certainly foresaw future litigation and had to have been aware that an adverse finding in Food Pageant could have collateral effect. The case was tried in Supreme Court, Bronx County, between April 27 and May 9, 1979, and two appeals were taken. Thus, the trial forum of the litigation was a court of record and the extent of the litigation was substantial, indicating the use of initiative. At trial, Con Ed was represented by in-house counsel, and on both appeals had retained a prestigious firm to be of counsel.

There is no allegation of a significant change in the applicable law.

The investigative reports referred to by Con Ed in its argument as not having been part of the record in the Food Pageant trial were all released and available at the time of that trial. Therefore, the consideration of "availability of new evidence" is inapplicable inasmuch as Con Ed surely had the opportunity to introduce those investigative reports.

To meet its burden of showing that the Food Pageant trial was not a full and fair opportunity to litigate the gross negligence issue, Con Ed refers to the fact that the Food Pageant jury awarded exactly half the damages claimed. From this fact alone we are asked to infer that the jury compromised on the issue of whether Con Ed was grossly negligent, despite the fact that the jury unanimously answered affirmatively the specific interrogatories presented by the trial justice whether Con Ed was grossly negligent, and, if so, whether such gross negligence proximately caused plaintiff's injuries.

This reduced award of damages by the Food Pageant jury is susceptible of other inferences as well. The jury may well have been merciful in light of Con Ed's public responsibility and vast exposure. ^* Food Pageant's claims were $38,000. for food spoilage and $43,000. for lost profits. The jury may have considered plaintiff's claims exaggerated. These suppositio are as plausible as Con Ed's contention, and within the province of the jury. How the jury arrived at the award it did is a matter of conjecture.

In Strauss v. Belle Realty Co., et al., No. 99 17/79 (Supreme Court, Queens Co., June 24, 1982), a blackout case practically identical to the case at bar, Justice Buschmann, in granting plaintiff's motion for partial summary judgment, aptly described Con Ed's contention that the Food Pageant verdict was a compromise on liability as "unsubstantiated speculation." The appeal from that order is currently sub judice in the Appellate Division, Second Department, along with a companion case, Shaid v. Consolidated Edison Corp., No. 38 02/78 (Supreme Ct., Queens Co., June 7, 1982). In Shaid, Justice Durante denied the plaintiff's summary judgment motion on the ground that factual issues of proximate cause and the scope of defendant's duty required a trial. It is not clear from the decision in Shaid whether plaintiff sought only partial summary judgment as in the case at bar or total summary judgment. Nonetheless, Justice Durante described Con Ed's argument that the Food Pageant verdict was a compromise as "mere speculation."

Con Ed has simply failed to meet its burden of proving that it was denied a full and fair opportunity to litigate the gross negligence issue such that allowing issue preclusion would be unfair because of a compromise verdict, or for any other reason.

In denying the Goldsteins' motion for partial summary judgment, Special Term correctly stated that there existed identity of issue, that the issue was decisive, and that Con Ed had a full and fair opportunity to litigate the issue and did vigorously defend against the Food Pageant claim. However, Special Term declined to apply collateral estoppel on the ground that it would be unfair in light of several cases brought in Small Claims Court in which Con Ed was victorious either at trial or at the Appellate Term. Relying on...