No. 04-827 IN THE SUPREME COURT OF THE STATE OF MONTANA 2006 MT 51

WILLIAM BALTRUSC H and BALTRUSCH LAND & CATTLE COMPANY, Plaintiffs and Appellants,

v. OTTO BALTRUSCH, JR., and FRANCES BALTRUSCH, Husband and Wife, Defendants and Respondents.

APPEAL FROM: The District Court of the Twelfth Judicial District, In and For the County Hill, Cause No. DV 2002-189, Honorable Richard A. Simonton, Presiding Judge

COUNSEL OF RECORD: For Appellants: K. Dale Schwanke, Jardine, Stephenson, Blewett & Weaver, Great Falls, Montana For Respondents: James A. Patten, Patten, Peterman, Bekkedahl & Green, Billings, Montana
Submitted on Briefs: October 26, 2005 Decided: March 7, 2006 Filed:

__________________________________________ Clerk2 Justice W. William Leaphart delive red the Opinion of the Court. ¶1 William Baltrusch and Baltrusch Land & Cattle Company (William, collectively) sued his brother and business partner Otto Ba ltrusch, Jr. (Otto) and Otto’s wife Frances Baltrusch (Frances) to recover Partnership fu nds allegedly misappr opriated by Otto and Frances for their personal use. The District Court granted Otto and Frances’s motion for summary judgment, reasoning that William’s claims are ba rred by the doctrines of collateral estoppel and res judicata . William now appeals the District Court’s dismissal of his claims against Frances. We affirm. ¶2 The issue presented is whether the District Court erred when it concluded that the doctrines of res judicata and collateral estoppel prec lude William from pursuing his claims against Frances. FACTUAL AND PROCED URAL BACKGROUND ¶3 This feud between two brothers and erstwhile business partners has been languishing in the courts of Montana for nearly fourteen years now. Sometime around 1940, William and Otto went into business together and formed the Baltrusch Land & Cattle Company, a general partne rship (the Partnership). Over the years, the Partnership fared quite well financially and expanded into several other businesses. Beneath the surface of this profitable venture, however, a tempest brewed. The trouble surfaced in 1992 when William initially f iled a complaint against Otto , seeking damages and an accounting for Otto’s alleged mi sappropriation of Pa rtnership assets. Frances was never joined as a party to this initial cause of action.3 ¶4 The first of two trials in the initial cause of action occurred in December 1999. In the pretrial order, William contended that Otto had misappropriate d property of the Partnership to the benefit of members of his family (including, presumably, Frances) and asked the court to order Otto to repay “all su ms he owes the partnership arising from and out of the violation of his oblig ations to the partnership . . . .” William further contended that “Otto has done, caused to be done, or allowed to be done the following”: “caused personal obligations to be pa id by the partnership” includ ing for utilities, groceries, telephone, fuel, real estate taxes on the pers onal residence shared by Otto and Frances, and the expense of installing a gas line servic ing their residence; “converted income of the partnership to his own use and benefit”; and used Partnership funds to pay “personal debt owed by Otto and Frances.” The Distri ct Court found that Partnership funds had been used to pay for electric bills, real estate taxes and the cost of a gas line for the residence shared by Otto and Frances, their life in surance premiums, their personal vehicles, and some groceries purchased by Fran ces. The court ordered Otto to reimburse the Partnership for these personal expenditure s. The court also determined, based on Frances’s testimony that she had separated th eir personal credit card charges and paid them separately from the business charges, th at Otto should not be chargeable for any credit card expenditures. The court did note , however, that it lacked “jurisdiction to make any determination as to amounts that are cl aimed to be owed . . . by . . . third parties to the brothers or the busine ss entities.” The court ordered th e assets of the Partnership sold and the proceeds equally distributed, with an adjustme nt made—reflecting the fact4 that Otto had received more in the form of insurance payments and compensation—to equalize the distribution. On appeal, we affirmed the District Court. Baltrusch v. Baltrusch , 2003 MT 357, 319 Mont. 23, 83 P.3d 256. We note d that Otto had met his duty “to account for th e personal credit card expenses,” and that “[b]ecause William had ample opportunity to inspect th e credit card invoices,” the Di strict Court properly refused to hold Otto liable for those purported pe rsonal expenses based on William’s random sampling of invoices. Baltrusch , ¶ 53. In essence, we held that William’s lack of diligence during discovery prec luded him from bringing a cl aim that lacked adequate evidentiary support. ¶5 While the appeal of the first trial in the initial cause of action was pending, a second trial was held in July 2003 to resolve alleged misappropriations and violations of the court’s judgment and order th at had occurred subsequent to th e first trial. Prior to this hearing, William filed a motion to consolidate the initial cause of action with the present suit, which he had filed agains t Otto and Frances in 2000. Despite William’s argument at the hearing on this motion that his initial suit against Otto an d the subsequent suit against Otto and Frances “involve exac tly the same facts, and the onl y question on that would be what participation did Fran ces have,” the court denied his motion to consolidate. 1

1 William argued further that, “the same evid ence that’s going to come in in the initial case with respect to Otto and his utilization of the corporate assets, the charging of personal expenses to the partnership assets, the charging of personal assets on partnership credit cards, and paying those with farm part nership funds; the only difference between that claim as it was, is now we know Frances was involved in that also, or at least we are alleging that. So, as a practical matter, all we have done is alleged that there are actions5 ¶6 The pretrial order for the second trial indi cates that William contended that Otto violated his fiduciary duty an d his duty of l oyalty by misappropriati ng funds to his own use and to the benefit of family memb ers, including Frances, and commingled Partnership funds with his own. William fu rther contended that “Otto has tortiously done, caused to be done, or a llowed to be done the following ”: paid personal expenses, such as utilities, groceries, fuel and tele phone, with Partnership funds; converted Partnership income and funds to his own benefit; conspired to utilize Partnership funds to pay for personal expenses; a nd “withdrawn funds from the Pa rtnership that could have been utilized to pay debts owed ” by the Partnership. Althou gh conceding that the court ordered that such claims against Frances be tried in the present case, William then contended that “[m]any, if not all of the fo regoing actions were taken or accomplished by Otto in concert with, and by conspiring with his wife, Fran ces.” William also asserted that Otto and Frances have continued to char ge personal expenses to the Partnership and pay for them with Partnership funds and that this constitutes conve rsion of Partnership funds and property as well as constructive fra ud, if not fraud. Willia m claimed that Otto is liable to the Partnership for “any sums th at have been expended by the Partnership for the benefit of Frances,” and requested that the court impose a constructive trust on the assets of Otto and Frances to enable the Partnership to reco up its losses, including those funds misappropriated or converted by Otto in concert with Frances. Nevertheless, William sought to recover for all of the purported misappropr iations and conversions— taken by Otto that Frances is al so involved in . . . . [T]he only difference would be that Frances then would also be involved.”6 whether accomplished by Otto directly or by Frances—by way of an “equalizing distribution” of Partnership funds to William before Otto receives any further distributions from the liquida tion of the Partnership. ¶7 Although the penden cy of various motions prevente d entry of final judgment for the July 2003 trial, the court issued its judg ment and order on Nove mber 1, 2004. The court found that “there is no equitable reas on to impose a constr uctive trust on any of [Otto’s] assets,” because Otto’s assets would suffice to satisfy any ju dgment in favor of William. The court found that William fa iled to prove the extent of personal expenditures charged by Otto to business credit cards. Finally, the court treated Otto’s draws on his Partnership account as “compens ation” and ordered Otto to make a lump payment to the Partnership in order to equalize the discre pant “compensation” received by him and William. ¶8 All of the foregoing descri bes just the decadal litigatio n that preced ed the case now before us. Meanwhile, immediately follo wing the first trial, William apparently determined that he should seek relief agains t Frances, and he filed a complaint against Otto and Frances in the present case. In hi s amended complaint, filed in September 2002, William alleges that Frances “was a signatory to the Partnership checks utilized to pay various . . . personal expenses of Otto and/or Frances, which both knew were not properly chargeable to, nor payable by the Partnership.” (Emphasis added.) William further alleges that “Otto, with the a ssistance and the complicity of Frances, have [sic] continued to pay personal expenses with Partnership funds,” in br each of his duties to the7 Partnership. The amended comp laint then alleges six distinct claims: breach of contract; fraud and deceit; conversion; conspiracy; co mplaint for accounting; and constructive trust. The breach of contract claim seeks judgment solely against Otto. The fraud and deceit claim refers to the acts listed above and avers that these acts of “Otto and Frances” constitute fraud, constructiv e fraud or deceit and seeks judgment against Otto and Frances jointly and severally . The conversion claim likew ise references the above mentioned acts, alleges that “Otto and Frances converted personal property of the Partnership,” and requests join t and several relief. The conspiracy claim refers to the same acts, asserts that Otto and Frances “cons pired together with th e intent to injure William and the Partnership,” and in furthera nce of the conspiracy, “paid a variety of their personal expenses with Pa rtnership funds and utilized Partnership assets for their personal purposes,” including the purchase of personal vehicles, and seeks judgment against Otto and Frances. The accounting claim seeks “an accounting from Otto and Frances for their use of Partnership funds a nd assets.” Finally, the constructive trust claim asks the court to impose a constructive trust on “all assets . . . that . . . Otto and Frances, or either of them, have acquir ed through the use of, or expenditure of, Partnership assets and funds . . . .” Thus unfolded the second scene in this compelling courtroom drama that has, like a maimed, fl ightless butterfly, lethargically emerged from the cocoon of the Baltrusch brothers’ family feud. ¶9 The District Court granted defendants’ motion for summary judgment in the present case, reasoning that William’s cl aims are barred by the doctrines of res judicata8 and collateral estoppel. The court noted that William has admitted that his claims against Otto, based on Otto’s diversion of Partnershi p funds to personal use before January 1, 2003, already have been or could have been presented in the earlier case and cannot be pursued in this case. The court reasoned th at the amended complaint alleges that Otto and Frances acted together to the detriment of William, that “[t]here is no allegation that Frances alone used Partnership funds for pers onal reasons[,]” and that Otto and Frances are in privity “because th ey are so closely connected to th e allegations by the Plaintiffs as to be identified with each other in interest and consequently to be affected by the litigation.” Accordingly, the c ourt held that William’s claims against Frances, as well as against Otto, are barred by the doctrines of res judicata and collateral estoppel. ¶10 William concedes that the District Court properly granted su mmary judgment in favor of Otto. We will provide additional factual information as necessary below. STANDARD OF REVIEW ¶11 We review a District Court’s grant of summary judgment de novo

. Kullick v. Skyline Homeowners Assoc. , 2003 MT 137, ¶ 13, 316 Mont. 146, ¶ 13, 69 P.3d 225, ¶ 13. We apply the standard declared by Rule 56, M.R.Civ.P. Th e moving party must establish the absence of a genuine issue of material fact and her entitlement to judgment as a matter of law. Kullick , ¶ 13. We review a district court’s conclusions of law to determine whether they are correct. Kullick , ¶ 13.9 DISCUSSION ¶12 William has conceded that the District C ourt properly determined that he may not seek relief from Otto in this suit. We now turn to whet her the District Court erred when it concluded that the doctrines of res judicata and collateral estoppel preclude William from pursuing his clai ms against Frances. ¶13 William argues that the Dist rict Court erroneously di smissed his suit against Frances based on the doctrines of collateral estoppel and res judicata because the issues raised in this case are not iden tical to those that were rais ed and decided in the earlier case against Otto. He notes that the cour t ruled based on the pleadings, which do not disclose the specific transacti ons in which Frances allegedly engaged that make her liable to William. William urges that the District Court erred in concludi ng that the complaint alleges only that Otto and Fran ces acted together in siphonin g funds from the Partnership; in fact, he contends, the complaint alleged liability for acts engaged in by Frances alone, as well as actions perpetrated by her and Otto jointly. He notes that the Rules of Civil Procedure did not require that Frances be join ed in the earlier cause of action, but he maintains that the court nonetheless abused its discretion when it refused to consolidate the two cases. William contests the District Court’s determination th at Otto and Frances are in privity and its consequent holding that res judicata bars certain of William’s claims against Frances. Finally, William contends that his claims against Frances are not barred because he was never afforded a fair and full opportunity to present those claims in the10 earlier case against Otto, due to the court’s re fusal to admit evidence of Frances’s using Partnership funds to pay personal credit card debt. ¶14 Frances argues that collateral estoppel bars relitigation of the i ssue of whether Otto used Partnership funds to pay his personal credit card debt be cause this issue was raised and decided in the trials in the earlier case . She contends that William’s concession that Otto’s claims are barred is a tacit acknowle dgment that William has raised the identical issues that were raised and decided in the ear lier case. Frances insists that for purposes of preclusion, there has been a final judgment on the merits in both trial phases of the prior case and that William had a full and fair oppor tunity to present his claims during those trials, as confirmed by this Court in Baltrusch . Frances argues that res judicata precludes William from asserting claims of fraud and de ceit, conversion and co nspiracy against her because, as William has acknowledged, these clai ms were or could ha ve been raised and decided in the previous suit, at least as to Otto. Frances sugg ests that she and Otto are in privity for purposes of res judicata because they are so connecte d as to be identified with one another in interest and equivalently affected by this litiga tion. Thus, Frances concludes, William has already litigated wh ether she and Otto misused Partnership property for their own benefit, including alle ged payment of personal credit card debt. ¶15 Res judicata and collateral estoppel are doctrin es that embody a judicial policy that favors a definite end to litigation, Kullick , ¶ 17, whereby we seek to prevent parties from incessantly waging piecemeal, colla teral attacks against judgments, Olympic Coast Investment, Inc. v. Wright , 2005 MT 4, ¶ 26, 325 Mont. 307, ¶ 26, 105 P.3d 743, ¶ 26.11 The doctrines deter plaintiffs from splitting a single cause of action into more than one lawsuit, Smith v. Schweigert (1990), 241 Mont. 54, 59, 78 5 P.2d 195, 198, thereby conserving judicial resour ces and encouraging reliance on adjudication by preventing inconsistent judgments. Allen v. McCurry (1980), 449 U.S. 90, 94, 101 S.Ct. 411, 415, 66 L.Ed.2d 308, 313. Res judicata , or claim preclusion, bars the relitigation of a claim that the party has al ready had an opport unity to litigate. Kullick , ¶ 17. Collateral estoppel, or issue preclusion, bars the reopeni ng of an issue that has been litigated and determined in a prior suit. Holtman v. 4-G’s Plumbing and Heating (1994), 264 Mont. 432, 439, 872 P.2d 318, 322. We have indicated that res judicata will apply once a final judgment has been entered. Holtman , 264 Mont. at 436, 872 P.2d at 320; Olson v. Daughenbaugh , 2001 MT 284, ¶ 22, 307 Mont. 371, ¶ 22, 38 P.3d 154, ¶ 22; see also State Med. Oxygen v. American Med. Oxygen (1992), 256 Mont. 38, 43, 844 P.2d 100, 103 (indicating that “a final judgment on the me rits” is a prerequisite to application of res judicata ); Restatement (Second) of Ju dgments § 13 (1982) (“[t]he rules of res judicata are applicable only when a final judgment is re ndered” but a lesser degree of finality is needed to apply issue preclusion); 18A Charle s Alan Wright et al., Federal Practice and Procedure: Jurisdiction 2d § 4434 at 128 (2002) (suggesting that although views of finality may be increasingly relaxed with resp ect to the doctrine of collateral estoppel, similar developments may be inappropri ate with respect to the doctrine of res judicata ).12 ¶16 Res judicata bars a party from relitigating a matt er that she has already had an opportunity to litigate. Olympic Coast Investment , ¶ 26 (citation omitted). Res judicata applies when the following criteria are met: (1) The parties or their privies are the same; (2) The subject matter of the action is the same; (3) The issues related to the subject matter are the same; and (4) The capacities of the person are the same in reference to the subject matter and the issues between them. Olympic Coast Investment , ¶ 26. This Court has previously stated that res judicata “bars the relitigation of an entire cause of action once a final judgment has been entered.” Holtman , 264 Mont. at 436, 872 P.2d at 320; accord Restatement (Second) of Judgments § 13; 18A Wright et al., § 4434 at 128. ¶17 The final judgment prerequisite for the application of the doctrine has remained latent in many of our pr evious applications of res judicata . This case, however, brings it squarely to the forefront. Th e parties vigorously contest wh ether the four elements of res judicata enumerated above have been satisfied. Nevertheless, the District Court has not yet entered final judgment for the 2003 tria l. Consequently, and in spite of William’s apparent acquiescence on this point, res judicata cannot, on the basis of that 2003 trial, bar any claims presented in this case. ¶18 Because the parties dispute whether collate ral estoppel bars rel itigation of issues raised and decided in the previous trials, we now turn to that question. Collateral estoppel bars litigants from reopening all ques tions essential to the judgment which were determined by a prior judgment. Haines Pipeline Const. v. Montana Power (1994), 26513 Mont. 282, 288, 876 P.2d 632, 636. We have traditionally ap plied a three-part test to determine if collateral estoppel ba rs relitigation of an issue. Haines , 265 Mont. at 288, 876 P.2d at 636; Marriage of Stout (1985), 216 Mont. 342, 349-50, 701 P.2d 729, 733- 34; Kullick , ¶ 18. As pronounced by Chief Jus tice Traynor in the watershed case Bernhard v. Bank of Amer ica Nat. Trust & Savings (Cal. 1942), 122 P.2d 892, 895, and subsequently adopted by this Court, application of collat eral estoppel in Montana has traditionally required that: (1) the identical issue raised was previously decided in a prior adjudication; (2) a final judgment on the me rits was issued in the prior adjudication; and (3) the party against whom collateral estoppel is now asserted was a party or in privity with a part y to the prior adjudication. Kullick , ¶ 18. In accordance w ith protecting litigants’ due process rights, we also consider whether the party against whom pr eclusion is asserted was afforded the opportunity to obtain “‘ a full and fair adjudication [of the issue] in the initial action.’” Estate of Eide v. Tabbert (1995), 272 Mont. 180, 185, 900 P.2d 292, 296 (quoting Restatement (Second) of Judgments § 28(5)(c) (1982)); accord State v. Perry (1988), 232 Mont. 455, 464, 758 P.2d 268, 273, overruled on other grounds by State v. Clark , 2005 MT 330, ¶ 32, 330 Mont. 8, ¶ 32, ___ P.3d ___, ¶ 32 (requ iring a “full opportunity to present a[n] issue for judicial decision”); Allen , 449 U.S. at 95, 10 1 S.Ct. at 415, 66 L.Ed.2d at 313 (citing Montana v. U.S. (1979), 440 U.S. 147, 153, 99 S.Ct. 970, 59 L.Ed.2d 210). To obviate fu ture confusion, henceforth , in addition to the above enumerated elements, applica tion of collateral estoppel re quires that: (4) the party14 against whom preclusion is asserted must have been afforded a full and fair opportunity to litigate any issues which may be barred. Other courts similarly specify, as an element of collateral estoppel, the requirement of a full and fair opportunity to present an issue. See, e.g. , Indus. Commission v. Moffat City School Dist. Re No. 1 (Colo. 1987), 732 P.2d 616, 619-20; D’Arata v. New York Cent. Mut. Fire Ins. (N.Y. 1990), 564 N.E.2d 634, 636; Robi v. Five Platters, Inc. (9th Cir. 1988), 838 F.2d 318, 322; In re PCH Associates (2nd Cir. 1991), 949 F.2d 585, 593. We place “[t]he burde n . . . on the party attempting to defeat the application of collateral estoppel to establish the absence of a full and fair opportunity to litigate.” D’Arata , 564 N.E.2d at 636. ¶19 William has conceded that he is in privity with the Partnership and that the District Court issued a final judgment on th e merits in the 1999 trial of the earlier cause of action. Consequently, we need only cons ider whether the District Co urt issued a final judgment on the merits in the second phase of the previous action against Otto and whether the District Court previously decided the identical issues now raised by William. In addition, we must consider whether William has esta blished the absence of a full and fair opportunity to litigate any issu es that he may be collaterally estopped from relitigating. ¶20 In our effort to determin e whether the District Cour t’s judgment and order of November 2004 is sufficiently final for purpos es of applying the doctrine of collateral estoppel, we find existing Montana caselaw unavailing. See, e.g. , Linder v. Missoula County (1992), 251 Mont. 292, 295, 824 P.2d 1004, 1005-06 (consideri ng finality of a settlement agreement for purposes of preclusion); Colstrip Faculty v. Rosebud County15 Trustees (1992), 251 Mont. 309, 311, 824 P.2d 1008, 1010 (considering the finality of denial of a requested injunction). Therefore, we turn to other au thorities for guidance. “It is widely recognized that the finality re quirement is less stringe nt for issue preclusion than for claim preclusion.” Christo v. Padgett (11th Cir. 2000), 223 F.3d 1324, 1339, cert. denied 531 U.S. 1191, 121 S.Ct. 1190, 149 L.Ed.2d 106 (2001) (citations omitted). According to a number of federa l circuits, a judgment that ha s not been entered as a final judgment because of the penden cy or future availability of an appeal may nevertheless have full collateral estoppel effect. Pharmacia & Upjohn Co. v. Mylan Pharmaceuticals,
Inc. (Fed. Cir. 1999), 170 F.3d 1373, 1381 (addressing finality when an appeal is pending); see also Burlington Northern R.R. v. Hyundai Merchant Marine Co. (3rd Cir. 1995), 63 F.3d 1227, 1 233 n. 8 (applying collateral estopp el to issues decided by partial summary judgment based on consideration of “whether the parties were fully heard, whether a reasoned opinion was filed, and wh ether that decision could have been, or actually was, appealed”) (cita tion and quota tions omitted); Metromedia Co. v. Fugazy (2nd Cir. 1992), 983 F.2d 350, 366-67, abrogated on other ground s as recognized by Yung v. Lee (2nd Cir. 2005), 432 F.3d 142, 147-48 (applying collateral estoppel despite the fact that the ruling is not yet appealable); Christo , 223 F.3d at 1339 (applying collateral estoppel based on a “substantial order in which [the court] explained its findings” after considering the evidence desp ite a subsequent settlement hindering entry of final judgment); Williams v. Commissioner of Internal Revenue (7th Cir. 1993), 1 F.3d 502, 504 (“a judgment final in the trial cour t may have collateral estoppel effect even16 though the loser has not exhausted his appell ate remedies”); 18A Wright et al., § 4434 at 110 (“[r]ecent decisions have relaxed traditional views of the finality requirement by applying issue preclusion to matters resolved by preliminary rulings or to determinations of liability that have not yet been completed by an award of damages or other relief”). ¶21 Moreover, the pendency of motions for a ne w trial or judgment as a matter of law does not necessarily deprive a judgment of the finality requi red for purposes of applying collateral estoppel. See Upjohn , 170 F.3d at 1381 (“the dist rict court did not err in according the Mova judgment collateral estoppel effect despite the penden cy of Upjohn’s JMOL/new trial motion in Mova . [T]he authorities and modicum of caselaw that have [addressed this issue] are nearly uniform in concluding that the fact that post-trial motions are pending does not affect the finality of a judg ment and thus does not prevent its preclusive effect”); Tripati v. Henman (9th Cir. 1988), 857 F.2d 1366, 1367 (“[a] pending Rule 59(e) motion [to alter or amen d the judgment] similarly does not deprive a judgment of finality for res judicata purposes” ); Restatement (Second) of Judgments § 13 cmt. f (1982) (“[a] judgment otherwise final for purposes of res judicata [or collateral estoppel] is not deprived of such finality by the fact that time still permits commencement of proceedings in the trial court to set aside the judgment and grant a new trial or the like; nor does the fact that a party has made such a motion render the judgment nonfinal. . . . The judgment ceases to be final if it is in fact set aside by th e trial court, as it would be upon the granting of a motion for a new trial” ). To deny preclusion during the pendency of post-trial motions and appeal s “would lead to an absurd result: Litigants would be17 able to refile identical cases while appeal s are pending, enmeshin g their opponents and the court system in tangles of duplicative litigation.” Tripati , 857 F.2d at 1367. Worse yet, it would give a litigant in William’s pos ition incentive to file dubious post-trial motions and appeals and drag th em out as long as possible, w ith the hope of delaying the preclusive effects of an earlier ruling until he obtains a settlement or inconsistent judgment in the later case. Th e doctrine of collateral estoppel arose to address these very concerns. Consequently, we adopt this rela xed requirement of finality for purposes of applying collateral estoppel. ¶22 The Restatement suggests th at before giving preclusive effect to a judgment or order, “the court should determine that the decision to be carried over was adequately deliberated and firm, even if not final in the sense of forming a basis for a judgment already entered[, and should re fuse preclusion] if the decisi on was avowedly tentative.” Restatement (Second) of Judgments, § 13 cmt. g (1982). Factors to consider in deciding whether to give preclusive eff ect to issues resolv ed in a judgment or order that has not been entered as final are: (1) whether the prior d ecision was adequately deliberated and firm and not avowedly tentative; (2) whether the parties were fully heard; (3) whether the court supported its decision with a reasoned opinion; [and] (4) whether the court’s prior decision was subject to appeal or was in fact reviewed on appeal.18 Greenleaf v. Garlock (3rd Cir. 1999) 174 F.3d 352, 358 (citing Restatement (Second) of Judgments, § 13) (internal quot ations omitted) (utilizing the identical three-part test for application of collateral estoppel as has been employed by Montana courts). ¶23 Despite the pendency of post- trial motions to amend or alter the District Court’s findings of fact, conclusions of law, judgm ent and order, that ju dgment reaches the requisite finality for application of collateral estoppel. More than a year elapsed between the trial in July 2003 and the District Court’s issuance of a lengthy judgment. In that judgment, the District Court sets forth thirty-two factual findings, draws sixteen conclusions of law and enumer ates fifteen distinct orders . Far from being “avowedly tentative,” the court’s ruling evinces careful and adequate deliberation and represents the court’s obvious attempt to finally and firmly resolve the issues before it with a reasoned opinion. The parties had the benefit of a full trial on the merits regarding the issues of Otto’s breaches of contract and violations of his duties to th e Partnership. The District Court explicitly declined to consider William’ s allegations that Otto acted in complicity or conspiracy with Frances. Nevertheless, resolution of William’s allegation that Otto tortiously allowed Partnership property to be used for pe rsonal purposes and converted Partnership property necessarily encompassed acts perpetrated by Frances with Otto’s knowledge. Therefore, William’s factual alle gations against Frances, such as they are, were fully heard. Finally, the District Cour t’s decision will eventually be subject to appeal. Each of these factors weighs in favor of according finality to the District Court’s judgment of November 2004. Additionally, we conclude that it is appropriate to accord19 finality to an earlier judgment which contains fi ndings of fact that de finitively resolve all of the new allegations and legal theories included in the later complaint. Accordingly, we find the 2004 judgment to be sufficiently fina l for purposes of appl ying the doctrine of collateral estoppel. ¶24 One possible pitfall of this more relaxed a pproach is the possib ility that this Court or the District Court will alter the 2004 judg ment that provides the basis for preclusion. It is thus prudent to e xplicitly provide for such a contingency as did the Upjohn court. 170 F.3d at 1382. Should the District C ourt’s judgment and order of November 2004, upon which preclusion now rests, be amended or reversed in pertinent part, William may move the District Court to modify its grant of summary judgment accordingly. ¶25 To determine whether the issues decided in the prior adjudicatio n are identical to those presented in the present case, “we compare the plead ings, evidence and circumstances surrounding the two actions.” Holtman , 264 Mont. at 439, 872 P.2d at 322. In substantively considering whether th e issues are identical, we do not equate an issue with “elements of a cause of action” ; rather, the bar “extends to all questions essential to the judgment and actively determin ed by a prior valid judgment. [Moreover, c]ollateral estoppel also prevents relitigation of determinative facts which were actually or necessarily decided in a prior action.” Haines , 265 Mont. at 288, 876 P.2d at 636 (citations and internal quot ations omitted) (emphasis a dded). A litigant cannot avoid preclusion simply by reframing the same issu es or raising novel contentions. “A new contention is not, however, nece ssarily a new issue. If a new legal theory or factual20 assertion put forward in the second action is ‘re lated to the subject-matter and relevant to the issues’ that were litigated and adjudicated previously, ‘so that it could have been raised, the judgment is conclusive on it despite the fact that it was not in fact expressly pleaded or otherwise urged.’” Haines , 265 Mont. at 288-89, 876 P.2d at 636-37 (citations omitted) (emphasis in original) (quoting Vol. 1B, Moore’s Federal Practice ¶ 0.443[2] at 760). The mere fact that two cases arise from the same transacti on does not necessarily mean that each involv e identical issues. Estate of Watkins v. Hedman, Hileman &
Lacosta , 2004 MT 143, ¶ 33, 321 Mont. 419, ¶ 33, 91 P.3d 1264, ¶ 33 (quoting Fadness v. Cody (1997), 287 Mont. 89, 96-97 , 951 P.2d 584, 588-89). Nevertheless, consistent with the purpose of promoti ng judicial economy, we have justified applying collateral estoppel when the “issues are so intertwined that to decide the issue before it, the [District] Court would have to rehear the precise issue previously decided . . . .” Martelli v. Anaconda-Deer Lodge County (1993), 258 Mont. 166, 16 9, 852 P.2d 579, 581. ¶26 Here, we have before us just the limite d pleadings and evidence from the earlier cause of action that the parties have provide d, as well as the judgm ents issued by the District Court. Nevertheless, these documents illustrate that William has raised issues in this case that are identical to issues that were or could have been raised in his earlier suit against Otto and that would require relitigation of facts that have al ready been necessarily decided. In the pretrial orde rs for both trials, William alleged that Otto caused or allowed21 debt owed by him and France s, along with some of their personal obligations, 2 to be paid with Partnership funds. The District Court’ s judgment and order indicates that the 1999 trial “blossomed into an action for mutual accounting for all businesses and a division of all the business and co-o wned properties.” Subsequent to the 1999 trial, the court ruled on the existence and extent of the alleged impr oper personal expenses and ordered Otto to reimburse the Partnership for many such expe nses. This ruling expressly contemplated personal expenses, in the form of credit ca rd charges, which O tto allegedly allowed Frances to pay with Partnership funds. The court found that William failed to prove the existence and extent of these expenses. A ccordingly, the court did not order Otto to repay the Partnership for Frances’s alleged pa yment of personal credit card expenses with Partnership funds. ¶27 William’s amended complaint in the present case alleges that Frances impermissibly utilized Partnershi p funds to pay expenses that both she and Otto knew were not properly chargeable to the Partnership. Otto’s knowledge that these alleged expenses were not properly chargeable to the Partners hip necessarily implies his awareness that Frances was using Partnership funds to pay such ex penses. If Otto knew that Frances was utilizing Partnership funds to pay personal expens es and he acquiesced in this conduct, then he pe rmitted her to divert Partnership funds by providing her with the opportunity to do so or neglecting to restrain, prev ent, or report her conduct, as his

2 The specifically enumerated expenses—utilitie s, real estate taxes on a residence shared by Otto and Frances, gr oceries, telephone, Otto’s a nd Frances’s life insurance and personal vehicles, and the cost of installing a gas line to thei r shared residence—can only be characterized as the personal e xpenses of both Otto and Frances.22 fiduciary duties and duty of loyalty to the Partnership required him to do. 3 See § 35-10- 403, MCA (declaring a partner’s duty to furn ish complete and accurate information to another partner); § 35-10-405(5), MCA (declari ng that a partner must discharge his duties consistent with the obligation of good faith and fair dealing ). William fails to recognize, however, that he complained of this precise co nduct by Otto in the pretrial orders when he alleged that Otto allowed 4 Partnership funds to be used to pay personal expenses. Indeed, William has previously argued that the facts surro unding his claims against Frances and those asserted against Otto “in volve exactly the same facts, and the only [remaining] question on that would be what participation did Frances have[.]” In comparing the claims asserted in the present case to those made previously, William’s attorney stated that he would present “the same evidence that’s goi ng to come in in the initial case with respect to Otto and his utilization of the corporate assets, the charging of personal expenses to the partnership assets, the charging of personal assets on partnership credit cards, and paying those with farm part nership funds; the only difference between that claim as it was, is now we know Frances was involved in that also, or at least we are alleging that.” William’s own arguments co mpletely undermine his present appeal.

3 William acknowledges as much in his brief: “Albeit [purchases made with Otto’s and Frances’s personal credit cards and late r paid off with Part nership funds] was something that Otto should have disclosed as part of his ac counting to Willia m for Otto’s management of the operations of the Partnershi p, Otto had not done so in breach of his fiduciary duties.” 4 The common meaning of allow is “to permit by neglecting to restrain or prevent” or to “provide opportunity or basis.” Webster’s Third New International Dictionary (1961).23 ¶28 Irrespective of these arguments put forth by William, the question of whether and to what extent Frances, with Otto’s knowle dge, diverted Partnership funds for personal purposes is “so intertwined” w ith the issues already determin ed by the District Court that it “would have to rehear the prec ise issue previously decided,” Martelli , 258 Mont. at 169, 852 P.2d at 581—namely, whether and to what extent Otto allowed Partnership funds to be used for personal expenses. Because the court already equalized the compensation between O tto and William, it would have to reconstruct its prior judgments in excruciating detail to de termine the extent to which William has already received compensation for the wrongs allegedly perp etrated by Frances. Otherwise, William might recover doubly to the detr iment of both Otto and France s. The court, cognizant of William’s assertions and with the benefit of voluminous testimony and evidence, deliberately equalized the comp ensation that each brother rece ived from the Partnership. The factual allegations and legal theories th at William presents in the present case are intimately related to the subject matter of the earlier case and highly relevant to Otto’s purported breach of his duties to the Partnership. These allegations could have been raised in the earlier case. The determinative fact of whether and to what extent Frances, with Otto’s knowledge, misa ppropriated Partnership funds wa s actually and necessarily decided in the prior case. Absent this properl y precluded factual allegation, there is not a single allegation in William’s amended complaint that woul d provide a basis for holding Frances liable to William. Cons equently, we conclude that th e precise issue, or factual allegation, that provides the basis for each of William’s theories of recovery in the24 present case has already been pr esented to and decided by the court in his earlier suit against Otto. ¶29 Finally, William has not established that he was deprived of a full and fair opportunity to litigate Frances’s purported involvement, with Otto’s knowledge, in the diversion of Partnership funds to personal uses. The only legal authority with which William supports his ar gument is 46 Am.Jur.2d Judgments § 521 (1994), which merely recites the bald proposition that collateral estoppel should not apply against a party who was not previously afforded a full and fair opportunity to litigate the issue. William does not cite any authority that elaborates on this requirement. Moreover, William supports the factual assertions that form the basis of his argument by referring to the 1999 trial transcripts. These transcripts, however, are not part of the record befo re the Court in this case. “It is the duty of a pa rty seeking review of a judgmen t . . . to present the supreme court with a record sufficient to enable it to rule upon the issues rais ed.” Rule 9(a), M.R.App.P; see also Rule 23(a)(4), M.R.App. P. (“[t]he argument shall contain . . . citations to the authorities . . . relied on”). William’s failures to support his argument with legal authority and to pr ovide this Court with the tran scripts necessary to assess the veracity of his factual assertions defeat hi s argument that he was denied a full and fair opportunity to litigate the issue of Frances’s partic ipation in the purported misappropriation of Partnership funds. ¶30 We feel compelled to comment briefly on the District Court’s improper order of operations in its handling of th is case. Judge Simonton, who presided over this case as25 well as the 2003 trial, granted Otto and Frances’s motion for summary judgment on the basis of preclusion in June 2004. Not until November 2004, however, did Judge Simonton issue his judgment in the 2003 trial. We strongly di sapprove of the practice of basing preclusion on a judgment that has yet to be filed. Neverthe less, because we now have the judgment of November 2004 be fore us and can conclude that summary judgment was properly gran ted on the basis of that judgment, we affirm Judge Simonton’s dismissal of William’s case. “Dismissal or stay of the second action are most attractive when there is a reasonable prospect that determin ation of the appeal in the first action will establish res judicata effects that preclude the entire second action. Dismissal or stay are least attractive when the second ac tion presents claims or issues that must be tried regardless of the outcome of the first ac tion and there are cogent reasons to fear the effects of delay.” 18A Wright et al. § 4433 at 94. Here, there is ev ery reason to believe that ultimate resolution of the first cause of action will, by application of collateral estoppel, preclude William’s entire second cause of action. Thus, dismissal is appropriate. ¶31 We affirm.

/S/ W. WILLIAM LEAPHART26 We concur: /S/ JAMES C. NELSON /S/ JIM RICE /S/ BRIAN MORRIS

Justice John Warner did not par ticipate in this decision.

Justice Patricia O. Cotter concurs. ¶32 I concur in the result we reach. I write separately to express some concern over the state of our res judicata and collateral estoppel jurisprudence in light of the conclusions we reach in this Opinion. ¶33 At ¶ 16 we set forth the elements of res judicata , as taken from our case law. Notably, the listed criteria do not include the requirement of a final judgment. However, our cases, as set out in ¶ 15, seem to require a final judgment on the merits as a prerequisite to the application of the doctrine. We conclude here that this prerequisite is absolute, and thus decline to apply res judicata because the District Court has not yet entered final judgment for the 2003 trial. Opinion, ¶ 17. ¶34 We then turn to the doctrine of collateral estoppel, listin g its requisite elements at ¶ 18. And, notably, the enumerated prer equisites for application of this doctrine specifically include the requirement that “a final judgment on the merits [be] issued in the prior adjudication.” Kullick, ¶ 18. We proceed, however, to c onclude that there should be a “relaxed requirement of finality for pu rposes of applying collateral estoppel.” Opinion, ¶ 21. We are thus left with the imposition of a st rict requirement of judgment27 finality in a res judicata analysis, though it is not an e numerated element, while relaxing the requirement of finality of judgment in th e application of collateral estoppel, when the doctrine as defined in our case law specifically requires the entry of a final judgment. It seems to me we have muddied rath er than cleared the waters. ¶35 While I have not conducted an in-depth study, I know from ex perience and recall that many cases and treatises have historically applied these two doctrines virtually interchangeably, simply because their elements are so sim ilar. A citation in our Opinion bears this out. “(Restatem ent (Second) of Judgments § 13 cmt. f (1982) (“[a] judgment otherwise final for purposes of res judicata [or collateral estoppel] is not deprived of such finality by the fact that time still permits co mmencement of proceedings in the trial court to set aside the judgment and gr ant a new trial or the like; no r does the fact that a party has made such a motion render the judgment non -final . . .).” Opinion, ¶ 21. It seems to me that the distinction we create today--requiring absolu te finality of judgment for res judicata application, but relaxed finality of ju dgment for purposes of collateral estoppel-- is not only inconsistent with the enumerated elements of the two doctrines, it is also unnecessarily confusing to the practitioner. As the Restatement of Judgments, cited above, seems to suggest, I would impose an identical final judgment standard in both res judicata and collateral estoppel analys es, and call it a day. ¶36 Otherwise, I concur.

/S/ PATRICIA COTTER28