Shanley v. Callanan Industries, Inc.

• Decision Date: 27 October 1981
• Citation: 444 N.Y.S.2d 585,429 N.E.2d 104,54 N.Y.2d 52
• Parties: , 429 N.E.2d 104 Terrance SHANLEY, Appellant, v. CALLANAN INDUSTRIES, INC., Defendant-Respondent and Third-Party Plaintiff- Respondent. Kenneth E. James, Third-Party Defendant-Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 585

444 N.Y.S.2d 585

54 N.Y.2d 52, 429 N.E.2d 104

Terrance SHANLEY, Appellant, v. CALLANAN INDUSTRIES, INC., Defendant-Respondent and Third-Party Plaintiff- Respondent Kenneth E. James, Third-Party Defendant-Respondent.

Court of Appeals of New York.

Oct. 27, 1981.

E. Stewart Jones and Robert M. Cohen, Troy, for appellant

Warner M. Bouck, Donald Gulling, Jr., and Seale W. Tuttle, Albany, for defendant-respondent and third-party plaintiff-respondent.

H. Ward Hamlin, Jr., and Hubert D. Miles, Albany, for third-party defendant-respondent.

OPINION OF THE COURT

JASEN, Judge.

Kenneth James and Terrance Shanley were involved in a head-on automobile collision on September 10, 1976. Two separate actions in negligence were brought as a result. These actions were originally joined for trial, but were severed immediately prior to trial, without opposition. In the first action, the jury found Shanley 100% at fault and awarded James $65,000 in damages. In this second action, Shanley seeks damages from Callanan Industries (Callanan), claiming a hazardous condition created by Callanan caused the accident. The issue presented on this appeal is whether the judgment in the first action collaterally estops plaintiff Shanley from pursuing this second action.

Callanan moved for summary judgment in this second action, arguing that the question, of liability had been completely resolved against Shanley in the prior action between James and Shanley. Judge MINER, who had also presided at the prior trial, denied the motion and held that the question of Callanan's possible negligence had not been litigated. On appeal, the Appellate Division, 76 A.D.2d 146, 431 N.Y.S.2d 147 modified and granted Callanan's motion to dismiss. ^* Noting that a prior judgment binds the litigants as to issues which could have been litigated as well as those that were litigated (Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 N.Y. 304, 306, 165 N.E. 456), the Appellate Division held that the jury's verdict, applying 100% of the negligence to Shanley, necessarily implied a determination that Shanley's negligence was the proximate cause of the accident. This reasoning led the court to assume that Shanley had been given the opportunity to litigate the question of causation and to present evidence on all causal factors, including the condition of the highway at the scene of the accident. Thus, the court concluded, collateral estoppel should be invoked. We disagree.

It has long been the rule in New York that "there are but two necessary requirements for the invocation of the doctrine of collateral estoppel. There must be an identity of issue which has necessarily been decided in the prior action and is decisive of the present action, and, second, there must have been a full and fair opportunity to contest the decision now said to be controlling." (Schwartz v. Public Administrator of County of Bronx, 24 N.Y.2d 65, 71, 298 N.Y.S.2d 955, 246 N.E.2d 725.)

In a case such as this, where one accident gives rise to several claims in negligence, there is potentially a common question of causation. Therefore, it is necessary to determine whether the issue was necessarily decided in the previous action and whether there was a full and fair opportunity to litigate the claim made in the present action.

Recently, in considering the use of collateral estoppel by defendants who were not parties to the prior action, this court stated that it must be clear "that the prior determination squarely addressed and specifically decided the issue." (O'Connor v. G & R Packing Co., 53 N.Y.2d 278, 280, 440 N.Y.S.2d 920, 423 N.E.2d 397.) In O'Connor v. G & R Packing Co., we distinguished the case in which it is clear that the first litigation considered the issue fully and made a determination (Malloy v. Trombley, 50 N.Y.2d 46, 427 N.Y.S.2d 969, 405 N.E.2d 213), even if in the alternative, from the case where it is unclear, because of the nature of the decision, that the litigant was afforded his day in court. (O'Connor v. G & R Packing Co., supra, 53 N.Y.2d at pp. 282-283, 440 N.Y.S.2d 920, 423 N.E.2d 397.)

The test of a full and fair opportunity to litigate is designed to assure that the party against whom collateral estoppel is being invoked has had an opportunity to present his case. In determining whether this test has been met, the court must conduct "an exploration of the various elements which make up the realities of litigation." (Schwartz v. Public Administrator of County of Bronx, 24 N.Y.2d 65, 72, 298 N.Y.S.2d 955, 246 N.E.2d 725, supra.) Among the elements to be considered is the "foreseeability of future litigation". (Schwartz v. Public...