Roberts v. Recovery Bureau, Inc.

Decision Date09 September 1994
Docket NumberNo. 2244,2244
Citation316 S.C. 492,450 S.E.2d 616
CourtSouth Carolina Court of Appeals
PartiesWindal M. ROBERTS, Appellant, v. RECOVERY BUREAU, INC., Michael G. Smith, and Edwin R. Worrell, Jr., Defendants, of whom Recovery Bureau, Inc., and Michael G. Smith are Respondents. . Heard

Benjamin Edward Nicholson, V, McNair & Sanford, Columbia, for appellant.

Stephen E. Darling, Sinkler & Boyd, Charleston, for respondents.

SHAW, Judge.

This case arises from a three-car automobile accident, and the issues on appeal involve application of offensive and defensive nonmutual collateral estoppel. The trial judge granted and denied various summary judgment motions by the parties based solely on collateral estoppel. The plaintiff appeals the grant of summary judgment to one defendant against her and the denial of her summary judgment motion against another defendant. 1 We reverse on both issues.

FACTS & PROCEDURAL HISTORY

The plaintiff, Windal M. Roberts, was a passenger in a car driven by Thomas L. Lovern. They were stopped behind another vehicle when a car driven by defendant Michael G. Smith, the alleged agent of defendant Recovery Bureau, struck them in the rear. The car behind Smith was driven by defendant Edwin R. Worrell. It is unclear whether Worrell hit Smith, causing Smith to hit Lovern, or whether Smith hit Lovern first and then Worrell hit Smith.

Lovern and Roberts, represented by the same attorney, brought separate actions against Smith, Recovery Bureau, and Worrell under virtually identical complaints. The parties consolidated discovery for the two actions. Although both cases were on the trial docket together, the attorney for Lovern and Roberts requested the Lovern case be tried first since Roberts was under continuing medical care. Lovern's case was tried before a jury which returned a verdict for Lovern against defendant Smith for $10,000 actual damages. The jury found in favor of defendants Recovery Bureau and Worrell.

In the present action, Roberts moved for summary judgment on the issue of liability against Smith under the doctrine of offensive nonmutual collateral estoppel, relying on the jury verdict against Smith in the Lovern v. Smith trial. The trial judge denied the motion, relying on RESTATEMENT (SECOND) OF JUDGMENTS § 29(3) and cmt. e (1982). He held that Roberts' failure to join in the Lovern trial or have the actions tried together, thereby seeking to enjoy the benefits of a favorable outcome but avoid the risk of an unfavorable one, precluded her from relying on offensive nonmutual collateral estoppel against Smith. 2

Recovery also moved for summary judgment on the basis of defensive nonmutual collateral estoppel, arguing principally that nothing indicated Roberts intended to present any different evidence or arguments on the issue of Recovery Bureau's liability and that the facts and law are identical to the Lovern case. The trial judge found that Roberts, although not a party to the Lovern trial, was in privity with Lovern on the issue of Recovery Bureau's liability. He therefore granted Recovery Bureau's motion for summary judgment.

ROBERTS v. RECOVERY BUREAU

Roberts first contends the trial judge erred in finding she was collaterally estopped from litigating the issue of Recovery Bureau's liability based on the jury verdict in the Lovern trial. She asserts, because she was neither a party to the prior action nor in privity with Lovern, the judgment in the Lovern trial in favor of Recovery Bureau does not preclude her from seeking a judgment against Recovery Bureau in her trial. We agree.

Under the doctrine of collateral estoppel, once a final judgment on the merits has been reached in a prior claim, the relitigation of those issues actually and necessarily litigated and determined in the first suit are precluded as to the parties and their privies in any subsequent action based upon a different claim. Richburg v. Baughman, 290 S.C. 431, 351 S.E.2d 164 (1986). Where one is not a party to the prior action, the only way he can be precluded from relitigating an issue is if he is in privity with a party to the prior action against whom an adverse finding is made. Richburg, 351 S.E.2d at 166. The term "privy," when applied to a judgment or decree, means one so identified in interest with another that he represents the same legal right. One in privity is one whose legal interests were litigated in the former proceeding. H.G. Hall Construction Co., Inc. v. J. E. P. Enterprises, 283 S.C. 196, 321 S.E.2d 267 (Ct.App.1984). "Privity" as used in the context of collateral estoppel, does not embrace relationships between persons or entities, but, rather deals with a person's relationship to the subject matter of the litigation. Richburg, 351 S.E.2d at 166. Privity is not established from the mere fact that persons may happen to be interested in the same question or in proving or disproving the same state of facts or because the question litigated was one which might affect such other person's liability as a judicial precedent in a subsequent action. 46 Am.Jur.2d Judgments § 532 at 685-686 (1969). One whose interest is almost identical with that of a party, but who does not claim through him, is not in privity with him. 50 C.J.S. Judgments § 788 at 327 (1947). Due process prohibits estopping some litigants who never had a chance to present their evidence and arguments on a claim, despite one or more existing adjudications of the identical issue which stand squarely against their position. Richburg, 351 S.E.2d at 166.

Roberts never had a full and fair opportunity to litigate the issue of Recovery Bureau's liability. While Roberts clearly has an interest almost identical to that of Lovern, she is not in privity with Lovern and due process precludes the use of collateral estoppel in this instance. Accordingly, we reverse the trial judge's grant of summary judgment for Recovery Bureau.

ROBERTS v. SMITH

Roberts further contends the trial judge erred in finding Smith was not collaterally estopped from relitigating the issue of Smith's liability based on the judgment against him in the Lovern trial. She argues the trial judge improperly applied RESTATEMENT (SECOND) OF JUDGMENTS § 29(3) (1982) which is an exception to the general rule allowing offensive collateral estoppel. We agree.

The offensive use of nonmutual collateral estoppel was first adopted in this State by this court in Beall v. Doe, 281 S.C. 363, 315 S.E.2d 186 (Ct.App.1984) and was confirmed as the law of this State by our Supreme Court in S.C. Property and Casualty Ins. Guaranty Assn. v. Wal-Mart Stores, Inc., 304 S.C. 210, 403 S.E.2d 625 (1991) wherein the court further adopted the general rules set forth in RESTATEMENT (SECOND) OF JUDGMENTS §§ 27, 28 and 29 (1982). Under the doctrine of offensive nonmutual collateral estoppel, a party may be prevented from relitigating an issue which was actually litigated and directly determined in a prior action if the party had a full and fair opportunity to litigate the issue in the first action and there are no circumstances which justify affording him a second opportunity to retry the issue. McPherson v. South Carolina Dept. of Highways and Public Transportation, 297 S.C. 303, 376 S.E.2d 780 (Ct.App.1989). The question of whether to allow a stranger to use offensive collateral estoppel so as to bar a party from relitigating an issue in a subsequent action is one addressed to the broad discretion of the trial judge. Palm v. General Painting Company, Inc., 296 S.C. 41, 370 S.E.2d 463 (Ct.App.1988), aff'd as mod. 302 S.C. 372, 396 S.E.2d 361 (1990). Such a decision is reviewed under an abuse of discretion standard. Ross-Berger Companies, Inc. v. Equitable Life Assurance Society...

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    ...issue only if he is in privity with a party to the prior action against whom an adverse finding is made. Roberts v. Recovery Bureau, Inc., 316 S.C. 492, 450 S.E.2d 616 (Ct.App.1994). In regard to res judicata or collateral estoppel, privity "does not embrace relationships between persons or......
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    • United States
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