Graham v. State Farm Fire and Cas. Ins. Co., 21644

• Decision Date: 18 February 1982
• Docket Number: No. 21644,21644
• Parties: Jack T. GRAHAM and Lois Graham, Plaintiffs, of whom Jack T. Graham is Appellant, v. STATE FARM FIRE AND CASUALTY INSURANCE COMPANY, Respondent.
• Court: South Carolina Supreme Court

Page 495

287 S.E.2d 495

277 S.C. 389

Jack T. GRAHAM and Lois Graham, Plaintiffs of whom Jack T. Graham is Appellant, v. STATE FARM FIRE AND CASUALTY INSURANCE COMPANY, Respondent.

No. 21644.

Supreme Court of South Carolina.

Feb. 18, 1982.

Franklin R. DeWitt, Conway, for appellant.

John C. Thompson and John B. McCutcheon, Conway, for respondent.

GREGORY, Justice:

This appeal is taken from an order granting State Farm Fire and Casualty Insurance Company summary judgment in appellant's action for breach of a fire insurance policy on appellant's home. The trial court held appellant was collaterally estopped by prior judgment to bring the instant action. We affirm.

On May 8, 1979, appellant's home was destroyed by fire, and his automobile was damaged in that fire. Appellant's homeowner's policy was provided by respondent. Appellant's auto policy was with State Farm Mutual Automobile Insurance Company.

State Farm Mutual Automobile Insurance Company refused to pay appellant's claim for damage to the automobile, and appellant brought an action to recover under that policy. The insurer defended on the basis that the fire was of incendiary origin and that appellant's willfulness caused the damage. That issue was the sole issue before the jury, and the jury returned a verdict for the insurer.

Appellant then brought this action for breach of contract against respondent to recover damages under his homeowner's policy. Respondent defended on the basis that it had satisfied the mortgage on appellant's home in the amount of Twenty-Nine Thousand, Three Hundred Forty-One and 79/100 Dollars ($29,341.79), and that appellant was collaterally estopped by the prior judgment. The trial judge found that appellant was estopped by judgment from bringing this second action.

Appellant argues that lack of privity between the two insurance companies conceded by respondent, precludes the operation of collateral estoppel by judgment. We disagree.

The modern trend is to disregard the privity requirement in applying estoppel by judgment. In determining the defense of collateral estoppel notwithstanding a lack of privity, the courts have taken into consideration: whether the doctrine is used offensively or defensively, and whether the party adversely affected had a full and fair opportunity to litigate the relevant issue effectively in the prior action. 31 A.L.R.3d 1052. (The South Carolina Supreme Court has recognized estoppel by judgment without privity in the case of Jenkins v. Atlantic Coast Line Railroad Company, 89 S.C. 408, 71 S.E. 1010, and in the case of Watson v. Goldsmith, 205 S.C. 215, 31 S.E.2d 317.)

In Jenkins, supra, the Court states as follows:

"... the true ground upon which a former judgment, in a case like...