Simpson v. Chicago Pneumatic Tool Co., 20040133

• Decision Date: 08 March 2005
• Docket Number: No. 20040133,20040133
• Citation: 693 NW 2d 612,2005 ND 55
• Court: North Dakota Supreme Court
• Parties: Stephen Simpson and Sheri Simpson, Plaintiffs and Appellants v. Chicago Pneumatic Tool Company, Johnson & Bell, Ltd., William Johnson, Dennis C. Cusack and Jerome C. Kettleson, Defendants and Appellees Robert V. Bolinske, Sr. and Charles T. Edin, Appellants.

2005 ND 55

693 NW 2d 612

Stephen Simpson and Sheri Simpson, Plaintiffs and Appellants v. Chicago Pneumatic Tool Company, Johnson & Bell, Ltd., William Johnson, Dennis C. Cusack and Jerome C. Kettleson, Defendants and Appellees

Robert V. Bolinske, Sr. and Charles T. Edin, Appellants.

No. 20040133

Supreme Court of North Dakota.

Filed March 8, 2005

Robert V. Bolinske, 515 North 4th Street, Bismarck, N.D. 58501, for appellants.

John C. Kapsner, Vogel Law Firm, P.O. Box 2097, Bismarck, N.D. 58502-2097, for defendants and appellees.

Opinion of the Court by Neumann, Justice.

Neumann, Justice.

[¶1] Stephen and Sheri Simpson, together with their attorneys, Robert V. Bolinske, Sr., and Charles T. Edin, appealed from a judgment dismissing the Simpsons' claims against Chicago Pneumatic Tool Company, Johnson & Bell, Ltd., William Johnson, Dennis C. Cusack and Jerome C. Kettleson, denying their motion to compel, and awarding the defendants $17,098.42 in attorney fees, costs and disbursements as a sanction for violating N.D.R.Civ.P. 11(b). We conclude the district court did not err in denying the Simpsons' motion to compel or in granting summary judgment dismissal of their action on the grounds of res judicata and collateral estoppel. We further conclude the court did not err in determining the Simpsons' lawsuit was frivolous and imposing monetary sanctions. However, we conclude the court erred in holding the Simpsons jointly and severally liable with their attorneys for Rule 11 monetary sanctions. We affirm in part and reverse in part.

I

[¶2] In 1996, the Simpsons sued Chicago Pneumatic and others alleging Chicago Pneumatic negligently manufactured pneumatic air tools that were used by Stephen Simpson at his employment, the pneumatic air tools were defective and unreasonably dangerous for the user, and Stephen Simpson suffered serious injury while using the tools. During pretrial discovery, the Simpsons asked Chicago Pneumatic to produce any photographs and video recordings related to the case. Chicago Pneumatic answered that it had taken surveillance videos of Stephen Simpson and all of the photographs and video recordings had been disclosed. A surveillance videotape was introduced into evidence during the trial. In April 2000, a jury found Chicago Pneumatic was not negligent, the pneumatic air tools were not defective and unreasonably dangerous, and the tools did not cause Stephen Simpson's injuries.

[¶3] After the trial, the Simpsons moved to depose Thomas Twist, the investigator who took the surveillance videotape, and moved for a new trial because they did not believe Chicago Pneumatic had disclosed all of the surveillance videotape. Twist testified the videotape provided to the Simpsons during discovery and introduced at trial did not include all of the videotape he had taken, but Stephen Simpson was not on any of the videotape that had not been provided to the Simpsons. The Simpsons moved to compel production of all the original videotapes taken by Twist. The district court denied the motion to compel and the motion for new trial. In Simpson v. Chicago Pneumatic Tool Co., 2003 ND 31, ¶¶ 1, 11, 657 N.W.2d 261, we affirmed, concluding the district court did not abuse its discretion in denying the post-trial motions.

[¶4] In May 2003, about two months after the Simpson decision was filed, the Simpsons brought this action against Chicago Pneumatic and the attorneys who represented the company in the previous action. The Simpsons again alleged that Chicago Pneumatic "tools were defective and caused plaintiff Stephen Simpson serious and disabling injuries," and the defendants "failed to in fact produce all surveillance videotape plaintiffs were entitled to receive." The Simpsons alleged the defendants' conduct violated the North Dakota Rules of Civil Procedure relating to the discovery process, violated the North Dakota Rules of Professional Conduct, violated the due process clauses of the federal and state constitutions, and constituted obstruction of justice, fraud, concealment of evidence, abuse of process, negligent or intentional infliction of emotional distress, and tortious outrage. The Simpsons sought actual and punitive damages as well as an order compelling disclosure of all of the original surveillance videotape in the underlying litigation. The defendants moved to dismiss the complaint under N.D.R.Civ.P. 12(b)(vi), or in the alternative, for summary judgment under N.D.R.Civ.P. 56. The defendants also sought sanctions against the Simpsons and their attorneys under N.D.C.C. § 28-26-01 and N.D.R.Civ.P. 11 for filing a frivolous complaint.

[¶5] The district court treated the defendants' motion as a motion for summary judgment, dismissed the Simpsons' claims, and denied the motion to compel. The court ruled that principles of res judicata and collateral estoppel barred the action because the "claims relating to the alleged failure of the defendants to disclose certain surveillance video tapes were raised and then addressed by the trial court in Simpson . . . both through the plaintiffs' motion for a new trial and the plaintiffs' motion to compel post-trial discovery. They were the same claims plaintiffs now present in this action." The court also found the Simpsons' claims were frivolous and imposed "Rule 11 sanctions" against the Simpsons and their counsel, "jointly and severally," for $16,433 in attorney fees and $665.42 in costs and disbursements.

II

[¶6] On appeal, the Simpsons and their attorneys argue the district court erred in denying their motion to compel and in granting summary judgment dismissal of their claim of fraudulent concealment and misrepresentation against the defendants on the grounds of res judicata and collateral estoppel.

[¶7] Our standard of review for the grant of summary judgment is well-established. In Charles McCauley P'ship, L.L.L.P. v. Tyrone Township, 2004 ND 214, ¶ 3, 689 N.W.2d 410 (quoting Zuger v. State, 2004 ND 16, ¶ 7, 673 N.W.2d 615 (citations and internal quotations omitted)), we said:

Summary judgment is a procedural device for promptly disposing of a lawsuit without a trial if there are no genuine issues of material fact or inferences which can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. Whether summary judgment was properly granted is a question of law which we review de novo on the entire record. On appeal, this Court decides if the information available to the trial court precluded the existence of a genuine issue of material fact and entitled the moving party to summary judgment as a matter of law. Summary judgment is appropriate against parties who fail to establish the existence of a factual dispute on an essential element of a claim on which they will bear the burden of proof at trial.

[¶8] Through the doctrines of res judicata and collateral estoppel, courts bar relitigation of claims and issues to promote the finality of judgments, which increases certainty, discourages multiple litigation, wards off wasteful delay and expense, and conserves judicial resources. Riemers v. Peters-Riemers, 2004 ND 153, ¶ 9, 684 N.W.2d 619. In Hofsommer v. Hofsommer Excavating, Inc., 488 N.W.2d 380, 383 (N.D. 1992) (internal citations omitted), this Court explained:

Although collateral estoppel is a branch of the broader law of res judicata, the doctrines are not the same. Res judicata, or claim preclusion, is the more sweeping doctrine that prohibits the relitigation of claims or issues that were raised or could have been raised in a prior action between the same parties or their privies and which was resolved by final judgment in a court of competent jurisdiction. On the other hand, collateral estoppel, or issue preclusion, generally forecloses the relitigation, in a second action based on a different claim, of particular issues of either fact or law which were, or by logical and necessary implication must have been, litigated and determined in the prior suit.

For purposes of both res judicata and collateral estoppel, only parties or their privies may take advantage of or be bound by a former judgment. Id. at 384. Privity exists if a person is "'so identified in interest with another that he represents the same legal right.'" Id. (quoting 46 Am.Jur.2d Judgments § 532, at p. 683 (1969) (footnote omitted)). The applicability of res judicata or collateral estoppel is a question of law fully reviewable on appeal. Hofsommer, at 383.

[¶9] The factual allegations the Simpsons rely upon to establish their claim in this case are identical to the factual allegations they had unsuccessfully litigated in Simpson. The Simpsons allege Chicago Pneumatic's tools were defective and caused Stephen Simpson serious and disabling injuries, directly contrary to the jury's findings in Simpson, 2003 ND 31, ¶ 2, 657 N.W.2d 261. The Simpsons again allege that the defendants failed to produce all of the surveillance videotape they were required to produce under the district court's discovery order in the prior proceeding, and rely on the same deposition testimony of Twist that was presented to the court in the prior proceeding to support their claim. One of the reasons given by the district court for denying the motion to compel and motion for new trial in Simpson, at ¶ 11, which was affirmed by this Court, was that Chicago Pneumatic had complied with the court's discovery order:

[F]irst of all, I want to say that, again we might be getting into a semantic argument, but it's my opinion that [Chicago Pneumatic] complied with the Court's order as the Court wrote the order, and maybe I should have been less specific in the order and just should have said give them all the video tapes and let them decide. But the order did say relevant or related, I don't know the exact wording, but having to do with Stephen Simpson, and I think a logic common sense reading of that is that if tapes showed Mr. Simpson that they should be turned over,

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