Nell v. International Union of Operating Engineers, Local No. 675

• Decision Date: 09 March 1983
• Docket Number: No. 81-386,81-386
• Citation: 427 So.2d 798
• Parties: Richard NELL, Appellant, v. INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL # 675, and Fidelity and Deposit Company of Maryland, Appellees.
• Court: Florida District Court of Appeals

Page 798

427 So.2d 798

Richard NELL, Appellant, v. INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL # 675, and Fidelity and Deposit Company of Maryland, Appellees.

No. 81-386.

District Court of Appeal of Florida,

Fourth District.

March 9, 1983.

Dale Ross and Sheldon C. Kurland of Kurland & Ross, P.A., Fort Lauderdale, for appellant.

James O. Murphy, Jr., and Randolph Braccialarghe of English, McCaughan & O'Bryan, Fort Lauderdale for appellee, Fidelity & Deposit Co. of Maryland.

GLICKSTEIN, Judge.

Richard Nell, as president and business manager of International Union of Operating Engineers, Local # 675 (IUOE), was covered by a labor organization security bond underwritten by Fidelity and Deposit Company of Maryland. He admitted, in the proceedings below, that he had been indicted by a federal grand jury, found guilty of the offenses charged in counts one through eleven of the indictment, and adjudged guilty and sentenced to a term of imprisonment. The indictment charged Nell willfully and unlawfully embezzled, stole, abstracted and converted to his own use and the use of others, monies, funds and assets of IUOE by causing IUOE to expend funds, monies, or assets for a $6,000.00 European vacation for himself and others, personal legal fees and expenses in the amount of $9,000.00, a $3,650.00 Cadillac in his name, $100.00 per month and $65.00 per week automobile allowance and travel expenses, respectively, while he concurrently was reimbursed for same, and $400.00 worth of fraudulent gasoline receipt claims.

IUOE's complaint against Fidelity charged Nell's activities resulted in his failure to faithfully discharge his duties in handling the Local's funds, thus requiring Fidelity to cover IUOE's losses. Fidelity filed a third party complaint for indemnity against Nell in the event it was held liable under the terms of the bond. It then partly successfully moved for partial summary judgment to limit its liability to IUOE and later paid IUOE $14,000.00 as full and final settlement of its claim. Subsequently, Fidelity moved for partial summary final judgment against Nell. The trial court granted the motion, entered a congruent judgment upon the issue of liability in favor of Fidelity, and denied Nell's motion for rehearing. This appeal followed.

We have considered the points raised by Nell and conclude one has merit; namely, that the trial court erred in applying the principle of collateral estoppel or estoppel by judgment in awarding partial summary final judgment. In order to have found as it did, the trial court must have concluded, as alleged in Fidelity's reply to Nell's affirmative defenses, that Nell was estopped from asserting knowledge, ratification and approval by the union membership of the acts attributed to Nell in the main complaint because of his conviction.

Could or should this action have been brought against Nell in federal court, the rule in Emich Motors Corp. v. General Motors Corp., 340 U.S. 558, 71 S.Ct. 408, 95 L.Ed. 534 (1951), apparently would have governed. There the Supreme Court of the United States held:

It is well established that a prior criminal conviction may work an estoppel ... in a subsequent civil proceeding.... Such estoppel extends only to questions "distinctly put in issue and directly determined" in the criminal prosecution.... In the case of a criminal conviction based on a jury verdict of guilty, issues which were essential to the verdict must be regarded as having been determined by the judgment.

Id. at 568-69, 71 S.Ct. at 413-14 (citations omitted). See also Wolfson v. Baker, 623 F.2d 1074 (5th Cir.1980), cert. denied, 450 U.S. 966, 101 S.Ct. 1483, 67 L.Ed.2d 615 (1981); United States v. Frank, 494 F.2d 145 (2d Cir.), cert. denied, 419 U.S. 828, 95 S.Ct. 48, 42 L.Ed.2d 52 (1974); and Cardillo v. Zyla, 486 F.2d 473 (1st Cir.1973).

The action was brought, however, in the courts of this state; and the Supreme Court of Florida has held repeatedly, at least in civil actions, that collateral estoppel, or estoppel by judgment, requires identity of parties in both actions. Mobil Oil Corp. v. Shevin, 354 So.2d 372 (Fla.1977); ¹ Seaboard Coast Line Railroad v. Cox, 338 So.2d 190 (Fla.1976); Gordon v. Gordon, 59 So.2d 40 (Fla.), cert. denied, 344 U.S. 878, 73 S.Ct. 165, 97 L.Ed. 680 (1952). Therefore, when as in this case one of the proceedings is criminal and the other civil, the supreme court would appear to be even less prone to permit the application of collateral estoppel. This is illustrated best by the fact that in a civil action, though evidence of a prior guilty plea in a criminal proceeding is permitted as an admission against interest, ² the supreme court has refused to allow introduction of a prior criminal conviction judgment which was not based on a plea of guilty. ³ We have to believe the supreme court, unlike the federal courts, similarly would hold issues common to civil and criminal proceedings, directly determined in the prior criminal proceeding, would have to be tried anew in the civil action. ⁴ Accordingly, we reverse and remand.

HURLEY and DELL, JJ., concur.

1 The supreme court held:

Collateral estoppel, or estoppel by judgment, is a judicial doctrine which in general terms prevents identical parties from relitigating issues that have previously been decided between them. The essential elements of the doctrine are that the parties and issues be identical, and that the particular matter be fully litigated and determined in a contest which results in a final decision of a court of competent jurisdiction.

354 So.2d at 374 (footnotes omitted).

2 Boshnack v. World Wide Rent-A-Car, Inc., 195 So.2d 216 (Fla.1967). See also the decision of this court in Hatfield v. York, 354 So.2d 426, 427 (Fla. 4th DCA 1978), which noted that the guilty plea "does not as a matter of law establish the truth of the facts upon which the judgment of guilt was rendered."

3 Eggers v. Phillips Hardware Co., 88 So.2d 507 (Fla.1956) (en banc); Moseley v. Ewing, 79 So.2d 776 (Fla.1955). Stevens v. Duke, 42 So.2d 361 (Fla.1949). The Florida view appears to be the general rule. Annot., 18 A.L.R.2d 1287 (1951) (at least thirty other states are cited for the principle that a judgment of conviction is not admissible in a civil action as evidence of the facts upon which it is based); 46 Am.Jur.2d Judgments § 615 (1969).

Various reasons have been assigned for the rule that the record of a judgment rendered in a criminal case may not be received in evidence in a subsequent civil action to bar such action, or to establish the truth of the facts upon which it was rendered. As a foundation for the rule, it has been suggested that there is a dissimilarity in objects, issues, results, procedures, and parties in the two actions, as well as a lack of privity and mutuality. Moreover, it is frequently pointed out that different rules of evidence apply, not only as to the elements of proof, degree of proof, and weight of the evidence, but also as to the competency of witnesses.

Id. § 617, at 774 (footnotes omitted). Another reason which has been suggested is that in a criminal proceeding a defendant may elect not to take the stand whereas he might not hesitate to do so in a subsequent civil action.

The majority view differs from that recognized in the federal courts, some of whose decisions have been cited previously herein.

4 Federal courts have been proceeding down two parallel roads that lead away from the Florida rule which requires identity of parties in order to apply collateral estoppel or estoppel by judgment. On the first road, originating with Emich, the use of collateral estoppel in a civil action is allowed when questions of law or fact therein were directly determined in a previous criminal proceeding involving the same defendant. The decision in Emich, penned by Justice Clark, was based in great measure upon language in Frank v. Mangum, 237 U.S. 309, 334, 35 S.Ct. 582, 589, 59 L.Ed. 969 (1914), but Justice Clark's opinion neglected to note that Mangum expressly directed itself to application of the principle in disputes between the same parties. Nevertheless, Emich has been cited with approval in Kennedy v. Mendoza-Martinez, 372 U.S. 144, 157, 83 S.Ct. 554, 561, 9 L.Ed.2d 644 (1963), and Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481, 485, 88 S.Ct. 2224, 2227, 20 L.Ed.2d 1231 (1968), and now apparently is engrained deeply throughout the federal system, notwithstanding the absence of any real analysis in the opinion itself or explanation in subsequent opinions.

On the second road the use of collateral estoppel is allowed when issues involved in a civil action have been determined directly in a previous civil action. This exact situation is not involved...