Trepanier v. Getting Organized, Inc.

Citation155 Vt. 259,583 A.2d 583
Decision Date12 October 1990
Docket NumberNo. 88-165,88-165
PartiesAlbert TREPANIER, et al. v. GETTING ORGANIZED, INC. and Tommy Styles.
CourtUnited States State Supreme Court of Vermont

Francis X. Murray, John T. Leddy and William F. Ellis of McNeil, Murray & Sorrell, Inc., Burlington, for plaintiffs-appellants.

Allan R. Keyes of Ryan Smith & Carbine, Ltd., Rutland, for defendants-appellees.

Before DOOLEY, J., BARNEY, C.J. (Ret.), KEYSER, J. (Ret.), and SPRINGER, District Judge (Ret.), Specially Assigned.

DOOLEY, Justice.

Plaintiffs, former employees or representatives of former employees of Nordic Ford, Inc., appeal a superior court order dismissing their suit against defendants Getting Organized, Inc. (GO, Inc.) and Tommy Styles, an "efficiency firm" and its agent, who were hired by Nordic to improve flagging motor vehicle sales and who advised Nordic to fire plaintiffs. In dismissing the complaint and granting summary judgment in favor of defendants, the court ruled that the doctrine of collateral estoppel precluded plaintiffs from relitigating any of the counts brought in their complaint, since the gravamen of the complaint is age discrimination and a federal district court jury had already determined that Nordic did not fire plaintiffs because of their age. We affirm in part and remand for further proceedings consistent with this opinion.

The facts of this case are related in some detail in a 1986 companion case, Payne v. Rozendaal, 147 Vt. 488, 520 A.2d 586 (1986). Plaintiffs filed suit against Nordic and defendants in 1982, claiming that they were fired because defendants had advised Nordic to shed its "retirement home image" and replace the current employees with "young go-getters." The complaint alleges that Nordic violated both federal and state law when it fired plaintiffs without just cause based solely on their age, and that defendants tortiously interfered with the contractual relationship between plaintiffs and Nordic. In addition, plaintiffs allege that the actions of Nordic and defendants constituted intentional infliction of emotional distress and resulted in the wrongful death of one of the former employees and his widow's loss of consortium.

Plaintiffs first brought suit in United States District Court for the District of Vermont pursuant to the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621-634, joining in the complaint their state law claims. Citing the greater scope of potential remedies for some of the state claims and the additional matters of proof for others, the federal district court dismissed the pendent state claims without prejudice in October of 1982. Eventually, the case went to trial on the ADEA claim against Nordic only, and a jury returned a verdict for defendant in July, 1984. Plaintiffs appealed the judgment but entered into a stipulated settlement of dismissal while the appeal was pending.

Meanwhile, in October of 1982, plaintiffs brought their state claims before the superior court. In response to a motion for summary judgment by Nordic and defendants, the court dismissed all of plaintiffs' claims except for the claim of tortious interference with contractual relations against defendants. The court ruled that no state law in existence at the time of the discharge restricted Nordic's right to fire plaintiffs on the basis of their age, and that only the tortious interference claim could be sustained in the absence of a viable claim for wrongful discharge. In 1986, this Court reversed the superior court's dismissal of plaintiffs' other claims and remanded the case for further proceedings, holding that at the time of the discharge plaintiffs had a viable common-law cause of action for wrongful discharge. Payne v. Rozendaal, 147 Vt. at 495, 520 A.2d at 590. The Court affirmed the superior court's refusal to dismiss the tortious interference claim against defendants. Id. at 496, 520 A.2d at 591.

Upon remand, defendants filed a motion to dismiss and/or for summary judgment, arguing that the federal jury verdict collaterally estopped plaintiffs from further litigating any of their state claims because age discrimination is an essential element of all of the claims. They also argued that plaintiffs had presented no evidence of improper interference with contractual relations. In January, 1988, the superior court dismissed the case, ruling that the gravamen of the complaint was age discrimination, that plaintiffs had had a full and fair opportunity to litigate that issue in the federal court, and that the federal court judgment estopped them from relitigating their claims, all of which sought damages as a result of the alleged age discrimination.

On appeal, plaintiffs argue that the court erred in ruling that they were collaterally estopped from relitigating the issue of age discrimination. They also claim that the court erred in dismissing their claim of tortious interference with contractual relations, as well as their emotional distress, wrongful death, and loss of consortium claims.


Plaintiffs argue that collateral estoppel should not apply in the instant case because: (1) defendants were not parties to the federal litigation; (2) the precise issues involved here were not determined in the federal action; (3) they did not have a full and fair opportunity to litigate their claims against defendants; and (4) defendants' invocation of the doctrine was untimely. The first part of the argument is a plea for retention of the doctrine of mutuality. 1 Under this doctrine, neither party can use a prior judgment against the other unless both parties are bound by the judgment. See, e.g., Dunnett v. Shields, 97 Vt. 419, 431, 123 A. 626, 632 (1924). In effect, the doctrine provides parties who litigated and lost an opportunity to relitigate identical issues against new parties in another action.

After years of creating various exceptions to the rule, some artificial, most courts have abandoned the mutuality requirement because it fails to distinguish between those parties who have never litigated an issue and those who have litigated and lost. See Annotation, Mutuality of Estoppel as Prerequisite of Availability of Doctrine of Collateral Estoppel to a Stranger to the Judgment, 31 A.L.R.3d 1044 § 2 (1970 & Supp.1990). Indeed, "[n]onmutual issue preclusion is now permitted in federal courts, in most state courts, and in the overwhelming majority of state decisions that have recently reconsidered the question." 18 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 4463, at 560 (1981). In the leading case, Justice Traynor cogently stated the rationale behind the abandonment of mutuality: "[I]t would be unjust to permit one who has had his day in court to reopen identical issues by merely switching adversaries." Bernhard v. Bank of America, 19 Cal.2d 807, 813, 122 P.2d 892, 895 (1942). Moreover, issue preclusion without requiring mutuality protects the court system and potential litigants from the burdens of relitigation, encourages litigants to join all parties in one action, and decreases the chances of inconsistent adjudication.

The abandonment of the mutuality requirement does not mean that issue preclusion without mutuality follows as a matter of course. Rather, preclusion should be found only when the following criteria are met: (1) preclusion is asserted against one who was a party or in privity with a party in the earlier action; (2) the issue was resolved by a final judgment on the merits; (3) the issue is the same as the one raised in the later action; (4) there was a full and fair opportunity to litigate the issue in the earlier action; and (5) applying preclusion in the later action is fair. See Bernhard, 19 Cal.2d at 813, 122 P.2d at 895; Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 328, 91 S.Ct. 1434, 1442-43, 28 L.Ed.2d 788 (1971). No one simple test is decisive in determining whether either of the final two criteria are present; courts must look to the circumstances of each case. Among the appropriate factors for courts to consider are the type of issue preclusion, 2 the choice of forum, the incentive to litigate, the foreseeability of future litigation, the legal standards and burdens employed in each action, the procedural opportunities available in each forum, and the existence of inconsistent determinations of the same issue in separate prior cases. See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 331-32, 99 S.Ct. 645, 651-52, 58 L.Ed.2d 552 (1979); Blonder-Tongue, 402 U.S. at 333-34, 91 S.Ct. at 1445-46; Restatement (Second) of Judgments §§ 28-29 (1982). In short, in order to satisfy the final two criteria, the party opposing collateral estoppel must show the existence of circumstances that make it appropriate for an issue to be relitigated. See Carter-Wallace, Inc. v. United States, 496 F.2d 535, 539, 204 Ct.Cl. 341 (1974).

We now join those courts that have abandoned an uncritical acceptance of the doctrine of mutuality. We refuse to ground the applicability of collateral estoppel on a mechanical use of the mutuality requirement. Rather, the critical inquiry is whether the party to be bound has had a full and fair opportunity to contest an issue resolved in an earlier action so that it is fair and just to refuse to allow that party to relitigate the same issue. The absence of mutuality will not preclude the use of collateral estoppel unless the party denying the estoppel shows special circumstances indicating unfairness. Cf. In re Estate of Leno, 139 Vt. 554, 558, 433 A.2d 260, 263 (1981) (Court implicitly accepted nonmutual issue preclusion).

Plaintiffs argue second that the issue decided by the federal jury was not the same issue involved in this case. Specifically, plaintiffs contend that the federal jury decided only that age discrimination was not a "determining factor" in their discharge; therefore, they are not collaterally estopped from claiming that age played "some role" in defendants'...

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