Mastrangelo v. Sandstrom, Inc., 27252.
| Citation | 55 P.3d 298,137 Idaho 844 |
| Decision Date | 06 August 2002 |
| Docket Number | No. 27252.,27252. |
| Court | United States State Supreme Court of Idaho |
| Parties | John MASTRANGELO, Plaintiff-Appellant, v. SANDSTROM, INC., a dissolved Florida corporation, with Jodi Sandstrom as Trustee, Jodi Sandstrom, individually, Emily Sandstrom, Debra Jo Hoecherl, and all of the Heirs and Devisees of Ray Sandstrom, deceased, and One or More John Does, Defendants-Respondents. |
Hopkins, Roden, Crockett, Hansen & Hoopes, PLLC, Idaho Falls, for appellant. Lary S. Larson argued.
Anderson, Nelson, Hall, Smith P.A., Idaho Falls, for respondents Emily Sandstrom and Debra Jo Hoecherl. Marvin M. Smith argued.
This is an action to enforce John Mastrangelo's February 1991 Florida money judgment entered against defendant Sandstrom, Inc. by attaching real property located in Lemhi County, Idaho. Mastrangelo seeks to establish the corporation's ownership of the property, in part, by enforcement of an August 1991 Florida decree entered in the divorce of defendants Ray and Jodi Sandstrom. The district court granted summary judgment to respondent Emily Sandstrom and denied Mastrangelo's motion for certain default judgments. We affirm.
In 1991, a "Final Judgment of Dissolution of Marriage" (divorce judgment) was entered in Florida, dissolving the marriage of appellants Jodi Sandstrom (Jodi) and Ray Sandstrom (Ray). As a part of that judgment, the court ruled that all of the shares of Sandstrom, Inc. belonged solely to Jodi, as the result of a gift from Ray. The court also held that Ray misappropriated Sandstrom, Inc. funds to purchase real property located in Lemhi County, Idaho, the title to which had been recorded in the names of Ray and a female acquaintance. The court held that the transfer of title to Ray and his acquaintance was void, and that Jodi held equitable title to that property. Mastrangelo asserts as the basis of his position the fact that the Florida court awarded equitable title to Jodi as trustee and sole shareholder of the now-dissolved Sandstrom, Inc.
In that same year, Jodi filed the divorce judgment with the clerk of the District Court for the Seventh Judicial District of Idaho, initiating case number CV-91-83. In that case, Ray filed a motion before the magistrate division challenging the validity of the divorce judgment. In November of 1992, the magistrate division ordered that the Florida divorce judgment was enforceable, except for the portions relating to the ownership of the shares of Sandstrom, Inc. and the ownership of the Lemhi County real property. The court held that those portions of the divorce judgment were void and unenforceable "until it is determined by the Florida court that proper due process notice ... was given to" Ray in connection with those issues. In March of 1993, the divorce judgment was affirmed in all relevant respects by a Florida appellate court, and no further appeal was taken. Jodi then moved to reinstate her Florida divorce judgment before the magistrate division in Idaho. In July of 1993, the magistrate division entered a second order, denying Jodi's motion. Although no appeal was taken from those orders of the magistrate division, their meaning and effect are the underlying issues in this case.
Meanwhile, in 1991, John Mastrangelo (Mastrangelo) obtained a Florida money judgment against Sandstrom, Inc., which was subsequently filed in Lemhi County, Idaho. After procedural defects necessitated reentry of that judgment in Florida, Mastrangelo filed the reentered judgment in Lemhi County, Idaho no later than June 2, 1997. On that date, Mastrangelo commenced this action to attach the Lemhi County property in satisfaction of his judgment. He characterized his complaint as a creditor's bill in equity, primarily because legal title to the property was not vested in Sandstrom, Inc. or in Jodi. Ray is deceased and, as far as Idaho recordings are concerned, legal title is vested in Emily Sandstrom (Emily), who is Ray's widow, and in various other defendants in this action. To demonstrate that the property truly belongs to the corporation, and is therefore subject to attachment to satisfy his judgment, Mastrangelo sought to have the court recognize and enforce the Sandstroms' Florida divorce judgment under the principles of full faith and credit. In 1998, to clarify the meaning of the magistrate division's 1992 order, Mastrangelo successfully brought a declaratory judgment action in Florida to declare that Ray had received adequate due process in the original divorce proceedings.
In 1999, Mastrangelo moved for summary judgment, and Emily was the only defendant who had appeared at that point. On February 9, 2000, the district court denied Mastrangelo's motion for summary judgment. Emily moved for summary judgment and, on July 31, 2000, the district court granted her motion, dismissing Mastrangelo's claim.
Mastrangelo appealed from the district court's decision to grant Emily's motion for summary judgment, and this Court conditionally dismissed the appeal because a final judgment had not been rendered regarding the defendants who did not appear. Mastrangelo then moved the district court for entry of default judgments against those defendants, noting that the clerk of the court had already entered default judgments against them. At that point, Debra Jo McCuiston, formerly known as Debra Jo Hoecherl (Hoecherl), made a special appearance and filed an affidavit to contest the adequacy of the service of process. The district court denied Mastrangelo's application for entry of default judgment, stating that Mastrangelo's claims against the other defendants were invalid for the same reasons his claim against Emily was invalid. Mastrangelo now appeals from the district court's order granting Emily's motion for summary judgment and denial of his motion for default judgments.
On appeal from an order granting summary judgment, this Court employs the same standard used by the district court originally ruling on the motion. Kelso v. Lance, 134 Idaho 373, 374-75, 3 P.3d 51, 52-53 (2000). Summary judgment is proper "if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." I.R.C.P. 56(c). All disputed facts are liberally construed in favor of the nonmoving party, and all reasonable inferences and conclusions supported by the record are drawn in favor of the nonmoving party. Kelso, 134 Idaho at 375, 3 P.3d at 53. As to issues of law, this Court exercises free review over the district court's decision. Bouten Constr. Co. v. H.F. Magnuson Co., 133 Idaho 756, 760, 992 P.2d 751, 755 (1999).
Although this case was dismissed on summary judgment, the case turns on the application of collateral estoppel. "Whether collateral estoppel bars the relitigation of issues adjudicated in prior litigation between the same parties is a question of law upon which we exercise free review." Rodriguez v. Dep't of Correction, 136 Idaho 90, 92, 29 P.3d 401, 403 (2001) (citations omitted). It is helpful to discuss collateral estoppel as it relates to the doctrine of res judicata and identify the values it serves. "Although the literal definition of the term `res judicata' is expansive enough to cover both preclusion of relitigation of the same cause of action and relitigation of the same issue, the modern tendency is to refer to the aspect of the doctrine that precludes relitigation of the same issue in a separate cause of action as `collateral estoppel,' and to refer to that aspect preventing relitigation of the same cause of action as `res judicata.'" Id. (citation omitted). "Collateral estoppel thus applies to protect litigants from the burden of litigating an identical issue with the same party or its privy." Id. (citation omitted).
As noted by the district court, Mastrangelo's claim to the Lemhi County property hinges completely on a showing that Sandstrom, Inc., via Jodi, has an attachable interest in that property. Mastrangelo argues that he can prove that alleged interest in one of two ways. First he seeks to have Jodi's divorce judgment recognized in Idaho as a valid judgment conclusively demonstrating Sandstrom Inc.'s interest. Second, he argues that, even if that judgment is not recognized in Idaho, he can prove by introduction of direct evidence that Sandstrom, Inc. should be the property's true owner and that he presented sufficient evidence before the district court to create genuine issues of material fact precluding summary judgment.
The district court found that the 1992 and 1993 orders of the Idaho magistrate division were final; that, based on those final orders, Jodi had failed to perfect the interests represented by the divorce decree prior to the passing of the statutory period; that the statute of limitations was not otherwise tolled or satisfied; and that Mastrangelo's claims, being derivative of Jodi's, failed for the same reasons her claims failed. The court's holding implicitly references the doctrine of collateral estoppel. Although Mastrangelo had argued in his briefing that, even if the divorce decree were not recognized, there were genuine issues of material fact precluding summary judgment, the district court did not directly address that issue in its decision. However, the district court's decision granting summary judgment implies a finding that no genuine issues of material fact existed. I.R.C.P. 56(c).
A. The Magistrate Division's 1992 and 1993 Orders Were Final Orders Collaterally Estopping Mastrangelo From Relitigating The Question Of Whether The Divorce Judgment Is Entitled To Full Faith And Credit As It Applies To The Lemhi County Property.
Mastrangelo argues that the divorce judgment should be afforded full faith and credit. He contends that the...
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