Murray Intern. Freight Corp. v. Graham

• Decision Date: 01 September 1988
• Docket Number: No. 102,102
• Citation: 555 A.2d 502,315 Md. 543
• Parties: MURRAY INTERNATIONAL FREIGHT CORP. v. Thomas E. GRAHAM. ,
• Court: Maryland Court of Appeals

Page 543

315 Md. 543

555 A.2d 502

MURRAY INTERNATIONAL FREIGHT CORP. v. Thomas E. GRAHAM.

No. 102, Sept. Term, 1988.

Court of Appeals of Maryland.

March 31, 1989.

Yvette N. Diamond (Stanley Alpert, Cohen and Alpert, all on brief) Baltimore, for petitioner.

Wallace Kleid (S. Michael Floam, Floam & Kleid, all on brief) Baltimore, for respondent.

Argued before ELDRIDGE, COLE, RODOWSKY, McAULIFFE, ADKINS and BLACKWELL, JJ., and CHARLES E. ORTH, Jr., Associate Judge of the Court of Appeals of Maryland, retired, Specially Assigned.

ADKINS, Judge.

This case presents the question whether petitioner, Murray International Freight Corporation (Murray International), is collaterally estopped from relitigating a Workmen's Compensation Commission's (Commission) determination of the employment status of respondent, Thomas E. Graham (Graham). We shall hold that on the facts of this case the collateral estoppel doctrine is inapplicable for two reasons. First, issue preclusion does not apply, since the fact-finding sought to be relitigated was not essential to the Commission's decision. Second, the doctrine is not available because the party against whom it is sought to be asserted could not have appealed from the decision that allegedly embodied the fact-finding in question.

I.

At the times relevant to this case, Murray International was a trucking company operating out of Baltimore County. Graham was the owner-operator of a tractor; he hauled freight for Murray International. Whether Graham was an independent contractor or an employee of Murray International is, as we shall see, a matter of some debate. In any case, Graham and Murray International at one point agreed that the latter would afford Graham coverage under its workers' compensation insurance policy. Murray International deducted from Graham's remuneration the premiums reflecting this coverage.

On 24 September 1985, Graham was allegedly injured while hauling freight for Murray International. He claimed workers' compensation. In opposition to the claim, Murray International raised several issues, one of them being that of Graham's employment status. On 17 April 1986, after hearing, the Commission passed an order finding that Graham "was an employee of Murray International Freight but ... that the claimant did not sustain an accidental injury arising out of and in the course of his employment...." Graham's claim was disallowed. Apparently, no one appealed.

The scene now shifts to the District Court of Maryland. There, Graham sued Murray International to recover the workers' compensation premiums the corporation had deducted from his pay. The theory of the action was that since Graham had been a corporate employee, the employer itself should have paid the premiums, and any agreement to the contrary was invalid. ¹ Conflicting evidence on the employment issue was presented, but Graham prevailed when the District Court held "the doctrine of collateral estoppel requires this court to leave the Commission's finding that the plaintiff, Thomas Graham, was an employee conclusive, unreviewable, and final."

Murray International sought solace from the Circuit Court for Baltimore County, but in vain. That court agreed with the District Court: "Since the issue here is collateral estoppel, it was not necessary for the District Court ... to review the evidence before it." It affirmed. We granted certiorari.

II.

As a matter of general policy, the law ordinarily precludes the relitigation of matters that have been fully and fairly litigated and finally decided between parties, by a tribunal of competent jurisdiction. This policy avoids "the expense and vexation attending multiple lawsuits, conserves judicial resources, and fosters reliance on judicial action by minimizing the possibilities of inconsistent decisions." Montana v. United States, 440 U.S. 147, 153-154, 99 S.Ct. 970, 973-974, 59 L.Ed.2d 210, 217 (1979). See Pat Perusse Realty v. Lingo, 249 Md. 33, 45, 238 A.2d 100, 107 (1968). See also MPC, Inc. v. Kenny, 279 Md. 29, 35, 367 A.2d 486, 490 (1977) (public policy against interminable delay "applies with equal vigor in cases of collateral estoppel").

Thus, rules have developed to preserve the conclusive effect of judgments, except on appeal or other direct review. These rules, sometimes referred to under the rubric of "res judicata," include both claim preclusion and issue preclusion (sometimes here termed "collateral estoppel"). Kent County Bd. of Educ. v. Bilbrough, 309 Md. 487, 489-490, 525 A.2d 232, 233 (1987); Cook v. State, 281 Md. 665, 668, 381 A.2d 671, 673, cert. denied, 439 U.S. 839, 99 S.Ct. 126, 58 L.Ed.2d 136 (1978); Scott v. Dep't of Social Services, 76 Md.App. 357, 374, 375 n. 19, 545 A.2d 81, 90 n. 19, cert. denied, 314 Md. 193, 550 A.2d 381 (1988). See also J. Friedenthal, M. Kane and A. Miller, Civil Procedure § 14.1, at 607-609 (1985). We deal here with the latter, which has been thus described: "When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim." Restatement (Second) of Judgments § 27 (1982). See also Welsh v. Gerber Products, Inc., 315 Md. 510, 517, 555 A.2d 486, 489 (1989).

These principles are well-settled. LeBrun v. Marcey, 199 Md. 223, 227-228, 86 A.2d 512, 514-515 (1952) (quoting with approval § 68 of the original Restatement of Judgments (1942), embodied without pertinent substantive change in § 27 of the Restatement (Second) quoted immediately above). ² What is not so well-settled, at least in Maryland, is whether a determination of the Commission is entitled to preclusive effect. Restatement (Second) of Judgments § 83(1) instructs (subject to exceptions) that "a valid and final adjudicative determination by an administrative tribunal has the same effects under the rules of res judicata, subject to the same exceptions and qualifications, as a judgment of a court." Section 83(2) lists the "essential elements of adjudication" that must prevail if judgment of an administrative tribunal is to qualify for res judicata treatment. Judge Eldridge, writing for the Court in White v. Prince George's County, 282 Md. 641, 658, 387 A.2d 260, 270 (1978), explained that the Maryland Tax Court, an administrative agency, "functions in many respects as a court" and concluded "that the decisions of the Tax Court have res judicata effect." See also Woodlawn Ass'n v. Board, 241 Md. 187, 194-195, 216 A.2d 149, 154-155 (1966) (questioning earlier decisions declining to apply res judicata to decisions of administrative agencies) and Bd. of Co. Comm'rs v. Racine, 24 Md.App. 435, 447, 332 A.2d 306, 313 (1975) (applying some of the principles of res judicata to a zoning board decision).

Turning more specifically to cases involving the Commission, our decision in Criminal Inj. Comp. Bd. v. Gould, 273 Md. 486, 519, 331 A.2d 55, 75 (1975), may be read as affording preclusive effect to a Commission determination. See also, e.g., Dolan v. Kent Research & Mfg. Co., 63 Md.App. 55, 68, 491 A.2d 1226, 1233 (1985) (res judicata and collateral estoppel discussed but neither doctrine applicable under facts); Subsequent Injury Fund v. Baker, 40 Md. App. 339, 344-345, 392 A.2d 94, 97-98 (1978) (even if res judicata applicable to Commission decision, effect limited by Art. 101, § 40(c)). ³ But if we assume, arguendo, that res judicata effect ordinarily attends the Commission's decisions, Graham still cannot invoke the benefits of collateral estoppel. See Mackall v. Zayre Corp., 293 Md. 221, 227, 443 A.2d 98, 101 (1982). We explain.

III.

Assuming, without deciding, that a court may, in general, give collateral estoppel effect to a Commission decision, there are prerequisites to be met before that can be done in a particular case. These are summarized in § 27 of the Restatement (Second), which we have quoted above. One of these is identity of parties. That is present here; Graham and Murray International were adversaries both before the Commission and in the subsequent District Court litigation. A second prerequisite is that the issue of fact or law actually be litigated. See Welsh, 315 Md. at 518, 555 A.2d at 490. The parties are at considerable odds over whether much, if any, evidence about Graham's employment status was presented to the Commission. We cannot resolve the dispute because the record does not include the transcript of the Commission hearing. But the issue was certainly before the Commission. It was raised by Murray International and its insurer in the "Issues" form they presented to the Commission; it was expressly noted by the Commission in its order of 17 April 1986; and it was determined in that order. The Restatement (Second) teaches that "[w]hen an issue is properly raised, by the pleadings or otherwise, and is submitted for determination, and is determined, the issue is actually litigated within the meaning of [§ 27]." Section 27 comment d. See comment e for discussion of when issues are not actually litigated. ⁴ We shall assume that the issue of Graham's employment status was actually litigated before the Commission.

But this is as far as we can accompany Graham on the road to collateral estoppel. The employment issue was not "essential to the [Commission's] judgment." And what is even more important, Murray International could not have appealed from that "judgment." As we shall show, either factor alone precludes giving collateral estoppel effect to the Commission's order.

The Commission's "judgment" read:

It is, therefore, this 17 day of April, 1986, by the Workers' Compensation Commission ORDERED that the claim filed herein by Thomas Edward Graham, claimant, against Murray International Freight, employer, and State Accident Fund, insurer, be and the same is hereby disallowed.

Patently, no determination that Graham was an...