Stuart v. Stuart

• Decision Date: 16 June 1987
• Docket Number: No. 86,86
• Parties: Joy Lee STUART, Plaintiff-Appellant, v. Ronald T. STUART, Defendant-Respondent. 1473.
• Court: Wisconsin Court of Appeals

Page 632

410 N.W.2d 632

140 Wis.2d 455

Joy Lee STUART, Plaintiff-Appellant, v. Ronald T. STUART, Defendant-Respondent.

No. 86 1473.

Court of Appeals of Wisconsin.

Argued April 21, 1987.

Opinion Released June 16, 1987.

Opinion Filed June 16, 1987.

Review Granted.

Michael J. Kirschling and Lila M. Hambleton (argued), of Doar, Drill & Skow, S.C., New Richmond, for plaintiff-appellant.

Scott W. Clark, of Clark & Clark, Ashland, for defendant-respondent.

James P. Gerlach, of LaRowe, Gerlach, Chiquoine & Kahler, S.C., Reedsburg, for amicus curiae Wisconsin Academy of Trial Lawyers.

Before CANE, P.J., and LaROCQUE and MYSE, JJ.

MYSE, Judge.

Joy Stuart appeals a judgment dismissing her tort action against her former husband, Ronald Stuart, and awarding him attorney's fees and costs pursuant to the frivolous action statute, sec. 814.025, Stats. She argues that the trial court erroneously concluded that her tort action was barred under the doctrines of res judicata, equitable estoppel, and waiver. She also argues that the trial court erroneously concluded that her action was frivolous. We agree and reverse the judgment.

The facts are undisputed. On November 14, 1984, Ronald and Joy Stuart were divorced. The divorce and the division of the marital estate were based upon a stipulation that there had been a full disclosure of all assets, debts, and other ramifications of the marriage. The parties agreed to waive maintenance.

During the divorce proceedings, no mention was made of Joy Stuart's potential claims against her husband for assault, battery, and intentional infliction of mental distress arising from alleged incidents that occurred during the marriage. Less than three months following the judgment of divorce, she filed a tort action against Ronald Stuart based upon these claims. In response, he moved for summary judgment arguing that the tort action was barred under the doctrines of res judicata, equitable estoppel, and waiver.

The trial court granted summary judgment and dismissed the tort action. The court concluded that in the divorce proceedings, Joy Stuart had been aware of those same allegations, circumstances, and damages upon which she based her tort action and that, therefore, the action was barred under the doctrines of res judicata, equitable estoppel, and waiver. The court also concluded that it was "absolutely unconscionable" that she would negotiate all aspects of a stipulated divorce and advise the court that it was based upon full disclosure when she knew a civil lawsuit would be filed immediately after the divorce was granted. The court considered such a procedure to be an abuse of the judicial system.

In Ronald Stuart's answer to the tort complaint, he asserted that the action was brought in bad faith and solely for the purposes of harassment and malicious injury. The trial court agreed, concluded that the action was frivolous, and awarded him over $10,000 for his legal expenses pursuant to sec. 814.025.

The decision in this case turns on whether the trial court properly granted summary judgment and dismissed Joy Stuart's tort action based upon the doctrines of res judicata, equitable estoppel, and waiver. On review of a summary judgment, we apply the same methodology as the trial court. Green Spring Farms v. Kersten, 136 Wis.2d 304, 315, 401 N.W.2d 816, 820 (1987). Summary judgment is appropriate if there is no genuine issue as to any material fact and a party is entitled to judgment as a matter of law. Id.; sec. 802.08(2), Stats. Here, because the facts are undisputed, we need only determine whether Ronald Stuart was entitled to judgment as a matter of law. Whether the doctrine of res judicata bars an action, or whether the facts proven are sufficient to constitute equitable estoppel are questions of law. See DePratt v. West Bend Mut. Ins. Co., 113 Wis.2d 306, 310, 334 N.W.2d 883, 885 (1983); Empire Gen. Life Ins. v. Silverman, 127 Wis.2d 270, 282, 379 N.W.2d 853, 859 (1985). We review questions of law without deference to the trial court's determinations. DePratt, 113 Wis.2d at 310, 334 N.W.2d at 885.

The trial court concluded that based upon the prior divorce proceedings, Joy Stuart's tort action was barred pursuant to the doctrine of res judicata. The court ostensibly reasoned that there was an identity of causes of action or claims in the two actions because in the divorce proceedings Joy Stuart was aware of her tort claim and could have raised that claim.

Under the doctrine of res judicata, a final judgment on the merits in a prior action is conclusive and bars all subsequent actions between the same parties, or their privies as to all matters that were or that might have been litigated in the prior action. DePratt, 113 Wis.2d at 310 11, 334 N.W.2d at 885 86. For res judicata to act as a bar to a subsequent action, there must be not only an identity of the parties but also an identity of the causes of action or claims in the two actions. Id.

In the Stuarts' divorce proceedings, the issues litigated were the termination of the marriage and the equitable division of the marital estate. Under Wisconsin's no-fault divorce code, these determinations are made by the court without regard to the fault of the parties. Dixon v. Dixon, 107 Wis.2d 492, 500 01, 319 N.W.2d 846, 850 51 (1982); ch. 767, Stats. Consequently, in making the financial allocation between the parties, the court could not consider one spouse's tortious conduct or, based upon that conduct, award the injured spouse punitive damages or compensatory damages for past pain, suffering, and emotional distress. See Dixon, 107 Wis.2d at 500 01, 319 N.W.2d at 850 51.

In contrast, tort actions based on assault, battery, or intentional infliction of emotional distress rest on an allegation of wrongful conduct. See Wis J I--Civil 2004 (1972), 2005 (1977), 2725 (1981). The parties to such actions are entitled to have these matters heard by a jury. Wis. Const. art. I, sec. 5; sec. 805.01, Stats. In such actions, the jury may determine fault and award punitive damages, as well as compensatory damages for past pain, suffering, and emotional distress. See Wis J I--Civil 1707 (1986), 1708 (1983), 1750 1755 (1983).

In light of the conflicting proofs between a no fault divorce and an intentional tort action, the claims that were, or might have been, determined in the prior divorce proceedings are distinct from those that are raised in Joy Stuart's tort action. Accordingly, in the two actions, there is not an identity of causes of action or claims. See Desotelle v. Continental Casualty Co., 136 Wis.2d 13, 21, 400 N.W.2d 524, 527 (Ct.App.1986).

Additionally, requiring joinder does not fulfill the objectives of the res judicata doctrine. Res judicata seeks judicial economy and the conservation of those resources parties would expend in repeated and needless litigation of issues that were, or that might have been, resolved in a single prior action. See DePratt, 113 Wis.2d at 310, 334 N.W.2d at 885. In a divorce action, the court alone makes all necessary determinations such as property division and maintenance without regard to fault. Sections 767.255 and 767.12(2), Stats. In a tort action, however, a jury may determine issues such as alleged wrongful conduct and fault and award damages based upon those determinations. Accordingly, divorce and tort actions do not easily fit within the framework of a single trial and the objectives of res judicata cannot be attained. See Windauer v. O'Connor, 107 Ariz. 267, 485 P.2d 1157, 1158 (1971).

In applying the doctrine of res judicata, the essential principle is fairness. Desotelle, 136 Wis.2d at 21, 400 N.W.2d at 527. The doctrine must "never be applied in such a fashion as to deprive a party of the opportunity to have a full and fair determination of an issue." Id. Here, applying the res judicata doctrine would violate the principle of fairness. In the divorce action the court was restricted in regard to the matters it could consider, and consequently, that forum did not provide an opportunity for a full and fair determination of Joy Stuart's tort claim.

In sum, the divorce and tort actions lack an identity of causes of action or claims. Applying the res judicata doctrine to bar the tort action fails to achieve the doctrine's objectives and would be fundamentally unfair. Therefore, we conclude that the doctrine of res judicata cannot act as a bar to Joy Stuart's tort action.

The trial court also concluded that the tort action was barred pursuant to the doctrine of equitable estoppel. The court ostensibly reasoned that Joy Stuart's failure to disclose the potential tort claim during the divorce proceedings was equivalent to a representation that no such claim existed and that, in agreeing to the divorce stipulation, her former husband relied upon that representation to his detriment.

The defense of equitable estoppel consists of action or nonaction by the party against whom estoppel is asserted that induces reliance thereon by the party asserting estoppel, either in action or nonaction, which is to that party's detriment. Empire Gen. Life, 127 Wis.2d at 282, 379 N.W.2d at 859. For equitable estoppel to apply, the reliance on the action or nonaction of another must be reasonable. Id.

Failing to disclose a potential tort claim cannot be interpreted as a representation that no such claim exists. More importantly, in achieving the divorce stipulation and the division of the marital estate, there is no evidence that Ronald Stuart relied to his detriment upon any such representation. The stipulation and the equitable division of the marital estate were achieved according to the dictates of state law. See sec. 767.255, Stats. Accordingly, in the absence of a representation that a tort claim did not exist and a showing of Ronald Stuart's detrimental reliance upon such a representation, the doctrine of equitable estoppel cannot act as a bar to the tort action.

In reaching our...