Maravilla v. J.R. Simplot Co.

• Decision Date: 30 December 2016
• Docket Number: Docket No. 43538
• Citation: 161 Idaho 455,387 P.3d 123
• Court: Idaho Supreme Court
• Parties: Joseph Jerry MARAVILLA, Claimant-Respondent-Cross Appellant, v. J.R. SIMPLOT COMPANY, Self-Insured Employer, Defendant-Appellant-Cross Respondent.

161 Idaho 455

387 P.3d 123

Joseph Jerry MARAVILLA, Claimant-Respondent-Cross Appellant,

v.J.R. SIMPLOT COMPANY, Self-Insured Employer, Defendant-Appellant-Cross Respondent.

Docket No. 43538

Supreme Court of Idaho, Idaho Falls, September 2016.

Filed: December 30, 2016

Ludwig Shoufler Miller Johnson, LLP, Boise, for appellant. Daniel A. Miller argued.

Racine, Olson, Nye, Budge & Bailey, Chtd., Pocatello, for respondent. Fred J. Lewis argued.

BURDICK, Justice

I. NATURE OF THE CASE

Joseph Jerry Maravilla and J.R. Simplot Company both appeal the Industrial Commission's (Commission) August 11, 2015 Order on Petition for Declaratory Ruling. Maravilla was injured in an industrial accident while working for Simplot, and Simplot paid Maravilla's worker's compensation benefits for that injury. In a separate action, Maravilla brought suit against Idaho Industrial Contractors, Inc. (IIC), the contractor performing repairs on the area where Maravilla was injured. Maravilla and IIC settled the claim for $75,000 and Simplot claimed subrogation against Maravilla. In its order, the Commission ruled that Maravilla could argue that Simplot was partly at fault for Maravilla's industrial accident and that Simplot's negligence, if proved, was not a bar to Simplot being reimbursed for worker's compensation payments it had paid Maravilla.

Simplot appeals the Commission's decision that Maravilla's settlement with IIC does not preclude Maravilla from attempting to prove Simplot's negligence. Maravilla appeals the Commission's ruling that Simplot is entitled to reimbursement even if Simplot's negligence contributed to Maravilla's injury. We affirm in part and reverse in part.

II. FACTUAL AND PROCEDURAL BACKGROUND

On October 16, 2011, Maravilla, while working at Simplot, tripped on a hose that had been placed across a walkway to transport a water/acid mix to a nearby pump. The water/acid mixture was being transported because repairs were being performed on a nearby sulfuric acid pad. The repairs were being performed by IIC, however, the hose had been placed by Simplot. On the day of the accident, a rainstorm had caused a power outage at the sulfuric acid pad causing acid to pool on the pad. Upon tripping, Maravilla's foot went through a plastic barrier erected by IIC and into the pooling acid. Maravilla suffered chemical burns to his right foot and leg, which later required skin grafts and surgery. Maravilla then filed a worker's compensation claim. Simplot, in its capacity as a self-insured employer, paid out an undisclosed amount of worker's compensation benefits.

On February 6, 2013, Maravilla filed a third-party lawsuit against IIC. Maravilla alleged that his injuries were caused by the negligence of IIC. Simplot did not participate in this litigation. At some point before trial, Maravilla and IIC settled the claim for $75,000. The district court then dismissed the complaint with prejudice on January 22, 2015. Thereafter, Simplot sought subrogation against the $75,000 settlement.

On May 1, 2015, Maravilla filed a petition for declaratory ruling with the Commission. Maravilla contended that in accordance with prior precedent, any negligence on the part of an employer cuts off that employer's right to subrogation under Idaho Code section 72–223. Simplot argued that as a result of Idaho's adoption of comparative fault, an employer's right to subrogation continues to exist even if the employer is shown to have been partly at fault in contributing to the employee's injury. Simplot also argued that Maravilla was precluded from arguing Simplot's negligence because he failed to do so during the third-party litigation with IIC.

On August 11, 2015, the Commission issued its order. The Commission rejected Simplot's claim preclusion argument but adopted a new rule regarding employer's subrogation rights. The new rule, based on the fact that joint and several liability has been abolished in Idaho, states that "employer's negligence is no longer an absolute bar to the exercise of its right of subrogation. Rather, an employer's right of subrogation will be reduced by its proportionate share of fault in contributing to claimant's damages."

Simplot timely appeals from the Commission's order with respect to the claim preclusion issue. Maravilla cross-appeals with respect to the Commission's adoption of the new employer negligence rule.

III. STANDARD OF REVIEW

The facts pertinent to this appeal are not in dispute, only the legal conclusions drawn from those facts, therefore, we exercise free review. Kelly v. Blue Ribbon Linen Supply, Inc. , 159 Idaho 324, 326, 360 P.3d 333, 335 (2015).

IV. ANALYSIS

A. Maravilla is not barred from raising the issue of Simplot's negligence before the Commission.

Simplot argues that the doctrine of claim preclusion precludes Maravilla from pursuing the issue of Simplot's negligence before the Commission. The Commission ruled that Maravilla's settlement with IIC was not a "final judgment rendered on the merits" and therefore claim preclusion did not apply. We affirm the Commission but with modified reasoning.

"Whether claim preclusion or issue preclusion bars relitigation between the same parties of a prior litigation is a question of law upon which this Court exercises free review." Ticor Title Co. v. Stanion , 144 Idaho 119, 122, 157 P.3d 613, 616 (2007).

The doctrine of res judicata covers both claim preclusion (true res judicata ) and issue preclusion (collateral estoppel). Hindmarsh v. Mock , 138 Idaho 92, 94, 57 P.3d 803, 805 (2002). Claim preclusion bars a subsequent action between the same parties upon the same claim or upon claims "relating to the same cause of action ... which might have been made." Id. Issue preclusion protects litigants from litigating an identical issue with the same party or its privy. Rodriguez v. Dep't of Corr. , 136 Idaho 90, 92, 29 P.3d 401, 403 (2001). Separate tests are used to determine whether claim preclusion or issue preclusion applies.

Id. at 123, 157 P.3d at 617.

On appeal, Simplot does not assert that issue preclusion applies. Indeed, Simplot states in its reply brief that "claim preclusion is the appropriate theory to analyze Simplot's Res Judicata defense." Thus, because Simplot does not argue issue preclusion in its brief we only address Simplot's argument under the theory of claim preclusion. Martin v. Smith , 154 Idaho 161, 164, 296 P.3d 367, 370 (2013) ("When issues on appeal are not supported by positions of law, authority, or argument, they will not be considered. An assignment of error is deemed waived, and will not be discussed if there is no argument contained in the appellant's brief." (quoting State v. Zichko , 129 Idaho 259, 263, 923 P.2d 966, 970 (1996) )).

"For claim preclusion to bar a subsequent action there are three requirements: (1) same parties; (2) same claim; and (3) final judgment." Ticor Title Co. , 144 Idaho at 124, 157 P.3d at 618. In its order, the Commission ruled that claim preclusion did not apply because the district court's dismissal with prejudice after the parties reached a settlement "did not constitute a valid final judgment rendered on the merits." This was incorrect.

We have clearly stated that a dismissal with prejudice operates as a final judgment for purposes of res judicata. Scott v. Agric. Prods. Corp. , 102 Idaho 147, 151, 627 P.2d 326, 330 (1981) ("[A] dismissal with prejudice will bar a subsequent action involving the same claim between the parties or their privies."). This is true even when the dismissal with prejudice is stipulated to by the parties. Kawai Farms, Inc. v. Longstreet , 121 Idaho 610, 614, 826 P.2d 1322, 1326 (1992) (holding that for purposes of res judicata the effect of a stipulation of dismissal with prejudice operates the same "as if the parties had proceeded to trial"). Here, IIC and Maravilla stipulated to dismissal of the case with prejudice. Accordingly, the district court's dismissal with prejudice operated as a final judgment for purposes of res judicata and the Commission erred by ruling otherwise.

Having established that a final judgment was entered, we turn to whether the "same claim" requirement of claim preclusion is met.

A claim is considered the same claim when "the present claim arises out of the same transaction or series of transactions as the original action." Berkshire Invs., LLC v. Taylor , 153 Idaho 73, 81, 278 P.3d 943, 951 (2012). This has been broadly interpreted by this Court to include situations "even where there is not a substantial overlap between the theories advanced in support of a claim, or in the evidence relating to those theories." Magic Valley Radiology, P.A. v. Kolouch , 123 Idaho 434, 437, 849 P.2d 107, 110 (1993) (citation omitted). "Therefore, res judicata's preclusive effect bars ‘not only subsequent re-litigation of a claim previously asserted, but also subsequent re-litigation of any claims relating to the same cause of action which were actually made or which might have been made’ in the first suit." State v. Wolfe , 158 Idaho 55, 63, 343 P.3d 497, 505 (2015) (quoting Hindmarsh v. Mock , 138 Idaho 92, 94, 57 P.3d 803, 805 (2002) ).

Here, the only two claims that have been asserted are Maravilla's original negligence claim against IIC and Simplot's present claim of subrogation against Maravilla.¹ A critical component in deciding whether claims are the same for purposes of res judicata is that the subsequent or present claim must be one that arose out of the same cause of action and should have been litigated in the first suit. E.g. , Berkshire Invs. , 153 Idaho at 81, 278 P.3d at 951 ; Ticor Title Co. , 144 Idaho at 126, 157 P.3d at 620. Maravilla's cause of action in his negligence claim against IIC is based on Maravilla's October 16, 2011, industrial accident, which resulted in chemical burns to Maravilla's leg and foot. Simplot's subrogation claim, however, is based on Idaho Code section 72–223(3) and is derived from Maravilla's recovery from IIC. Struhs v. Protection Techs., Inc. , ...