Howell v. Vito's Trucking & Excavating Co.

• Decision Date: 09 November 1971
• Docket Number: No. 40,40
• Citation: 191 N.W.2d 313,386 Mich. 37
• Parties: William HOWELL, Administrator of the Estate of Hattie Howell, Deceased, and William Howell, Individually, and as Guardian of James L. Howell, a minor, Plaintiff-Appellant, v. VITO'S TRUCKING AND EXCAVATING COMPANY, Defendant-Appellee. William HOWELL, Administrator of the Estate of Hattle Howell, Deceased, and William Howell, Individually, and as Guardian of James L. Howell, a minor, Plaintiff-Appellant, v. VITO'S TRUCKING AND EXCAVATING COMPANY, Defendant-Appellant.
• Court: Michigan Supreme Court

Page 313

191 N.W.2d 313

386 Mich. 37

William HOWELL, Administrator of the Estate of Hattie

Howell, Deceased, and William Howell,

Individually, and as Guardian of James

L. Howell, a minor, Plaintiff-Appellant, v. VITO'S TRUCKING AND EXCAVATING COMPANY, Defendant-Appellee.

William HOWELL, Administrator of the Estate of Hattle

Howell, Deceased, and William Howell,

Individually, and as Guardian of James

L. Howell, a minor, Plaintiff-Appellant, v. VITO'S TRUCKING AND EXCAVATING COMPANY, Defendant-Appellant.

No. 40.

Supreme Court of Michigan.

Nov. 9, 1971.

Richard L. Wolk, Detroit, for plaintiff-appellant.

Patterson & Patterson, Whitfield, Manikoff & White, William P. Whitfield, Pontiac, Robert G. Waddell, Pontiac, of Counsel, for defendant-appellee.

Before the Entire Bench, except T. G. KAVANAGH, J.

T. M. KAVANAGH, Chief Justice.

We are asked to reconsider and clarify the doctrine of collateral estoppel by judgment, especially concerning the traditional requirement of mutuality.

Plaintiff's decedent, Hattie Howell, died of injuries received in a motor vehicle collision with defendant's truck. Other occupants of the Howell car, including a daughter Anna Sue Collins, were injured. Plaintiff brought the present wrongful death action in Oakland circuit court. Defendant's answer denied negligence and asserted 'sudden emergency' as an affirmative defense. Before the wrongful death suit reached trial, Anna Sue, a Tennessee resident, obtained a judgment in the Michigan federal district court, Eastern District, against defendant for the injuries she received in the accident. Thereafter plaintiff moved for partial summary judgment in the Oakland circuit court alleging that the prior adjudication in favor of Anna Sue in the district court was a bar to relitigating the issue of defendant's negligence, leaving only the question of damages for the jury's determination.

The trial court (Moore, J.) granted the motion insofar as it related to Anna Sue, but denied it as to the remaining interested parties. The Court of Appeals (T. G. Kavanagh, J., and Miller, J.; Quinn, J., dissenting) 20 Mich.App. 140, 173 N.W.2d 777 remanded the case to the trial court for reconsideration of the motion, holding: (1) The motion should have been granted, if at all, as to All interested parties (plaintiffs); (2) The trial court had discretion to apply collateral estoppel against defendant, mutuality not being a controlling factor. Both parties appealed and we granted leave.

Issues:

(1) (As stated by defendant): Is a judgment in favor of one passenger for injuries arising out of an automobile accident conclusive as to issues of negligence against the defendant in a subsequent action growing out of the same accident by the estate of another passenger against the same defendant?

(2) Is the above matter of discretion for the trial court?

We should at the outset define and clarify controlling principles which have been imprecisely employed and confused, not only by counsel but by the courts. The distinctions are set out with much clarity ¹ in Restatement of the Law, Judgments, § 68 at 293--294 as follows:

'It is important to distinguish the effect of a judgment as a merger of the original cause of action in the judgment or as a bar to a subsequent action upon the original cause of action from its effect by way of collateral estoppel in a subsequent action between the parties based upon a different cause of action. If a judgment is rendered in favor of the plaintiff, the cause of action upon which the judgment is based is merged in the judgment, and the plaintiff cannot thereafter maintain an action on the original cause of action (see § 47). If the judgment is rendered in favor of the defendant on the merits, the original cause of action is barred by the judgment (see § 48). In either case the original cause of action is extinguished by the judgment no matter what issues were raised and litigated in the action, or even if no issues were raised or litigated and judgment was rendered by default.

'On the other hand, where the subsequent action is based upon a different cause of action from that upon which the prior action was based, the effect of the judgment is more limited. The judgment is conclusive between the parties in such a case as to questions actually litigated and determined by the judgment. It is not conclusive as to questions which might have been but were not litigated in the original action. This is the doctrine of collateral estoppel.'

These controlling principles have been long and well recognized by this Court. Jones v. Chambers (1958), 353 Mich. 674, 91 N.W.2d 889, and authorities cited therein.

It is obvious that, by very definition, one of the critical factors in applying the foregoing principles as to collateral estoppel involves the determination of whether the respective litigants were parties or privy to a party to an action in which a valid judgment has been rendered. Again, for definitional purposes, ² we turn to Bernhard v. Bank of America Nat. Trust & Savings Ass'n (1942), 19 Cal.2d 807, 122 P.2d 892, which plaintiff urges upon us as the benchmark authority to be followed both in theory and application. Justice Traynor in Bernhard lays the definitional groundwork as to privity and mutuality at 122 P.2d 894:

'Many courts have stated the facile formula that the plea of res judicata is available only when there is privity and mutuality of estoppel. See cases cited in 2 Black, Judgments, 2d Ed., secs. 534, 548, 549; 1 Freeman, Judgments, 5th Ed., secs. 407, 428; 35 Yale L.J. 607, 608; 34 C.J. 973, 988. Under the requirement of privity, only parties to the former judgment or their privies may take advantage of or be bound by it. Ibid. A party in this connection is one who is 'directly interested in the subject matter, and had a right to make defense, or to control the proceeding, and to appeal from the judgment.' 1 Greenleaf, Evidence, 15th Ed., sec. 523. See cases cited in 2 Black, Judgments, 2d Ed., sec. 534; 15 R.C.L. 1009; 9 Va.L.Reg. (N.S.) 241, 242; 15 Cal.Jur. 190; 34 C.J. 992. A privy is one who, after rendition of the judgment, has acquired an interest in the subject matter affected by the judgment through or under one of the parties, as by inheritance, succession, or purchase. See cases cited in 2 Black, Judgments, 2d Ed., sec. 549; 35 Yale L.J. 607, 608; 34 C.J. 973, 1010, 1012; 15 R.C.L. 1016. The estoppel is mutual if the one taking advantage of the earlier adjudication would have been bound by it, had it gone against him. See cases cited in 2 Black, Judgments, 2d Ed., sec. 534, 548; 1 Freeman, Judgments, 5th Ed., sec. 428; 35 Yale L.J. 607, 608; 34 C.J. 988; 15 R.C.L. 956.'

Turning to the facts of the instant case, may it be legally concluded that either plaintiff's estate or Anna Sue were parties or privies in the former federal suit so as to be concluded upon the issue of negligence in the instant suit? The trial court ruled in the affirmative as to Anna Sue but in the negative as to the estate. The Court of Appeals believed that either both or none should be estopped. Neither of these decisions are wholly correct.

Certainly it may not be contended that the legally appointed representative of the estate of Hattie Howell or William Howell as an individual or guardian of James Howell was a party to Anna Sue's federal action. They are separate legal entities: Anna Sue acting in her own individual right and the estate-individual-guardian acting in their legal capacities and prosecuting their separate claims. ³ The parties remain as legal strangers, even though the latter were interested in the outcome of the action, or were witnesses, or participated in a limited representative capacity for the benefit of one of the parties. Restatement of the Law, Judgments, § 93, pp. 463--464. In no sense did the estate-individual-guardian, although interested in the outcome, have the right to make defense, control the proceedings or appeal from a judgment which would have been adverse to Anna Sue's claim.

The conclusion equally applies to the converse situation. Although Anna Sue was clearly the party in the federal suit and recovered judgment based upon Her personal injuries, she appears in the instant case solely as an heir at law of Hattie Howell and bases her claim exclusively upon rights derived from the latter's wrongful death. See, e.g., Complaint, Count I, 15. Thus, the general rule, as stated most succinctly in 46 Am.Jur.2d, § 525, precludes the operation of res judicata to Anna Sue's derivative interests where subsequently brought in her representative capacity:

'Where a person brings an action or is sued in his individual right, a judgment rendered for or against him is not operative under the doctrine of res judicata in a subsequent action brought by or against the same person in a representative capacity. Similarly, a judgment rendered in an action in which one of the parties appears in a representative capacity is not operative under the doctrine of res judicata in a subsequent action involving the same party in his individual right. These rules have been denied application, however, where a party to one action in his individual capacity and to another action in his representative capacity is in each case asserting or protecting his individual rights.' ⁴

To place this rule, which is frequently involved in litigation between receivers, co-obligors, stockholders, etc., in the proper factual perspective of personal injuries arising from automobile accidents, we quote from 133 A.L.R. 181 at 185:

'With but few exceptions it has been held, in cases in which the question has arisen, that a judgment for the plaintiff in an action growing out of an accident was not res judicata, or conclusive, as to issues of negligence or contributory negligence, in a subsequent action growing out of the same accident, by a different plaintiff against the same defendant.'

As accurately observed by the annotator,...