NO. 93-365 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1994 

ROGER HOLTMAN, 

Plaintiff and Appellant, 

-vs4-G's PLUMBING & HEATING, INC., 

a corporation, .?R S-1$)4 

Defendants and Respondents. &/ J&f BL CLERK OF SLjPREME COURT 

="A-E OF iMoi\iTANA 

APPEAL FROM: District Court of the Fourth Judicial District, 

In and for the County of Missoula, 

The Honorable Douglas G. Harkin, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Charles 3. Tornabene; Patterson, Marsillo, 

Tornabene, Schuyler & McKenna, Missoula, Montana 

For Respondent: 

Ronald A. Bender; Worden, Thane & Haines, 

Missoula, Montana 

Filed: 

Submitted on Briefs: December 16, 1993 

Decided: April 5, 1994 
Justice Karla M. Gray delivered the Opinion of the Court. 

Roger Holtman (Holtman) appeals from an order entered by the 

Fourth Judicial District Court, Missoula County, granting summary 

judgment in favor of 4-G's Plumbing and Heating, Inc. (4-G's 

Plumbing). The court determined that dismissal with prejudice of 

Holtman's counterclaim in a previous lawsuit barred his trespass, 

invasion of privacy and asbestos contamination claims against 4-G's 

Plumbing under the doctrines of res iudicata and collateral 

estoppel. Holtman asserts error only in the court's application of 

the doctrines to his asbestos contamination claim. Because all of 

the elements of res iudicata and collateral estoppel are not met, 

we reverse the court's grant of summary judgment in favor of 4-G's 

Plumbing on that claim. 

Holtman owned a condominium located in the Edgewater Townhouse 

Complex in Missoula, Montana. In February of 1989, the Edgewater 

Townhouse Homeowner's Association (the Association) authorized an 

employee of 4-G's Plumbing to enter Holtman's condominium, in his 

absence, to repair a leak and install a new heating system. When 

Holtman returned to his condominium, he discovered a partially 

installed heating system and alleged asbestos contamination. 

Holtman refused to allow further installation of the system. 

The Association filed a complaint seeking an injunction to 

require the installation of the heating system. Holtman responded 

by generally denying the Association's allegations. Nearly two 

years later, Holtman filed a counterclaim without leave of court. 

2 
He alleged that the Association had deprived him of property 

rights, invaded his privacy, and contaminated his condominium with 

asbestos. In addition to other rulings, the court dismissed the 

counterclaim with prejudice because the compulsory counterclaim was 

not timely filed under Rule 13(a), M.R.Civ.P., and Holtman had 

failed to obtain leave of court pursuant to Rule 13(f), M.R.Civ.P. 

Both Holtman and the Association appealed. We affirmed the 

dismissal of Holtman's counterclaim in Edgewater Townhouse v. 

Holtman (1993), 256 Mont. 182, 845 P.2d 1224. 

In January of 1992, Holtman filed the present action against 

the Association and 4-G's Plumbing, asserting claims of invasion of 

privacy, trespass, and asbestos contamination. The Association 

moved for summary judgment, arguing that the claims were barred by 

res iudicata. 4-G's Plumbing joined in the Association's motion 

and filed a separate motion for summary judgment relying on both 

res iudicata and collateral estoppel. The District Court granted 

summary judgment for each defendant by separate order, dismissing 

the claims against the Association under res iudicata and the 

claims against 4-G's Plumbing under res iudicata and collateral 

estoppel. Holtman appeals only from the summary adjudication in 

favor of 4-G's Plumbing. 

Our standard for reviewing a grant of summary judgment is the 

same as that used by the district court. Emery v. Federated Foods 

(Mont. 1993), 863 P.2d 426, 431, 50 St.Rep. 1454, 1456. Initially, 

we determine whether there is an absence of genuine issues of 

material fact. Minnie v. City of Roundup (1993), 257 Mont. 429, 

3 
431, 849 P.2d 212, 214. The party moving for summary judgment has 

the initial burden of demonstrating a complete absence of any 

genuine factual issues. D'Agostino v. Swanson (1990), 240 Mont. 

435, 442, 784 P.2d 919, 924. In order to meet this burden, the 

moving party must support its motion with an appropriate 

evidentiary basis. Minnie, 849 P.2d at 214. The moving party may 

draw from the pleadings, depositions, answers to interrogatories, 

and admissions on file, together with any affidavits. Rule 56(c), 

M.R.Civ.P. 

Once an absence of genuine issues of material fact is 

established, we determine whether the moving party is entitled to 

judgment as a matter of law. Minnie, 849 P.2d at 214. Here, the 

District Court concluded that 4-G's Plumbing was entitled to 

summary judgment under the doctrines of res iudicata and collateral 

estoppel. We do not defer to a district court's legal conclusions, 

but determine whether they are correct. Steer, Inc. v. Dep't of 

Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603. 

Res Judicata 

The doctrine of res iudicata is grounded on the principle that 

litigation must at some point come to an end. Orlando v. Prewett 

(1989) r 236 Mont. 478, 481, 771 P.2d 111, 113. It bars the 

relitigation of an entire cause of action once a final judgment has 

been entered. Marriage of Stout (1985), 216 Mont. 342, 349, 701 

P.2d 729, 733. All of the following elements are necessary for yes 

judicata to apply: 

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1) the parties or their privies must be the same: 

2) the subject matter of the action must be the same: 

3) the issues must be the same and relate to the same 

subject matter; and 

4) the capacities of the persons must be the same in 

reference to the subject matter and to the issues. 

Tisher v. Nor-west Capital Mgmt. (Mont. 1993), 859 P.2d 984, 987-88, 

50 St.Rep. 960, 962. 

Holtman asserts that his "asbestos contaminationl' claim 

alleges negligent workmanship on the part of 4-G's Plumbing in the 

installation of the heating system. Because his prior counterclaim 

against the Association contained no such claim, he argues that 

none of the elements of res iudicata is met. 4-G's Plumbing urges 

application of the doctrine, asserting that the claims advanced in 

the complaint do not contain an allegation of negligent 

workmanship, but are identical to those raised in the prior 

counterclaim. 

Holtman's 

That said 

asbestos contamination claim reads as follows: 

defendant, 4-G's Plumbing & Heating, Inc., in 

the process of installing said hot water heating system 

in Plaintiff's home, disturbed older plumbing pipes, 

which were contaminated with asbestos, resulting in 

asbestos contamination of Plaintiff's home and the 

personal property contained therein. 

This asbestos contamination claim--as alleged--is hardly a model of 

clarity. However, 4-G's Plumbing did not move for summary judgment 

on the basis of a failure to state a claim upon which relief could 

be granted or challenge the claim as alleged in any other way. We 

decline to rule on an issue that was not presented to the District 

Court. Goodover v. Lindey's, Inc. (1992), 255 Mont. 430, 441, 843 

5 
P.2d 765, 772. Thus, we address the applicability of res iudicata 

to Holtman's asbestos contamination claim to the extent that claim 

is read to allege negligent workmanship by 4-G's Plumbing in the 

installation of the heating system. 

The "parties or their privies" element of res iudicata is 

dispositive here. It is undisputed that 4-G's Plumbing was not a 

party to the prior litigation. The District Court determined, 

however, that 4-G's Plumbing and the Association were privies 

because they "acted in concert." 

We previously have focused on whether a defendant's legal 

right or interest has been represented by the previous litigant to 

determine whether the two are privies. As we stated in Brault v. 

Smith (1984), 209 Mont. 21, 27, 679 P.2d 236, 239, the concept of 

a "privy" in the context of a judgment applies to one whose 

interest has been legally represented at trial. We have similarly 

defined privies as those who are so connected in estate or in blood 

or in law as to be identified with the same interest and, 

consequently, affected with each other by litigation. Tisher, 859 

P.2d at 988. 

As the party moving for summary judgment, 4-G's Plumbing had 

the initial burden of demonstrating the absence of a genuine issue 

of material fact and entitlement to judgment as a matter of law on 

the privity element. 4-G's Plumbing did not file an answer to 

Holtman's complaint; nor did it submit any depositions, answers to 

interrogatories, admissions or affidavits to support its motion for 

summary judgment. Thus, it did not provide any evidentiary basis 

6 
for summary adjudication. 

By joining the Association's motion for summary judgment, 

however, 4-G's Plumbing ostensibly adopted the Association's 

evidentiary basis for summary judgment, including copies of the 

prior counterclaim, the order striking it with prejudice, and the 

findings and rulings contained in the court file relating to the 

previous litigation. Therefore, we focus on whether these 

materials form a sufficient basis for summary judgment on the issue 

of privity--a shared legal interest--between the Association and 4- 

G's Plumbing on the asbestos contamination claim. 

The materials indicate that the Association hired 4-G's 

Plumbing and allowed its employee into the condominium to install 

the heating system, supporting the District Court's determination 

that the two "acted in concert" in entering the condominium. This 

mutual conduct in entering the condominium, however, does not 

establish that the Association shared a legal interest with 4-G's 

Plumbing with regard to its workmanship in the installation of the 

heating system. Thus, the court's conclusion that the Association 

and 4-G's Plumbing are privies, in the context of the asbestos 

contamination claim, is incorrect. 

4-G's Plumbing attempts to establish a shared legal interest 

in the asbestos contamination claim to the extent that claim 

alleges negligent workmanship by arguing that it acted as an agent 

of the Association in installing the heating system. An agency 

relationship would exist if the Association controlled or had the 

right to control the physical conduct of 4-G's Plumbing in the 

7 
installation of the heating system. See Eccleston v. Third Jud. 

Dist. Ct. (1989), 240 Mont. 44, 51-52, 783 P.2d 363, 368, quoting 

Restatement (Second) of Agency, 5 2. Nothing in the record of the 

prior litigation or the present case establishes such a right of 

control. We conclude that the materials relied on by 4-G's 

Plumbing to support summary adjudication do not establish that it 

was a privy of the Association with regard to the asbestos 

contamination claim. 

4-G's Plumbing advances two other arguments, loosely tied to 

the doctrine of res iudicata, to bar Holtman's asbestos 

contamination claim. Based on its assertion that Holtman could 

have raised the claim in the prior proceeding, 4-G's Plumbing 

argues that he is barred by the doctrine from doing so here. 

It is true that res iudicata precludes claims that could have 

been raised in the prior lawsuit as well as those actually 

adjudicated. Beck v. Flathead County (1989), 240 Mont. 128, 133, 

783 P.2d 383, 386; Orlando v. Prewett (1989), 236 Mont. 478, 481, 

771 P.2d 111, 113. The preclusive effect of res iudicata, however, 

applies only to claims raised in subsequent lawsuits between the 

parties in the original action or their privies, reflecting the 

"parties or their privies" element of the doctrine. &.&, 783 P.2d 

at 386; Orlando, 771 P.2d at 113. Thus, res iudicata's preclusive 

effect as to claims not actually litigated does not apply to the 

case before us. 

Finally, 4-G's Plumbing asserts that Rule 12(b), M.R.Civ.P., 

required Holtman to assert his claims against it in the prior 

8 
litigation. Rule 12(b), M.R.Civ.P., requires that every defense to 

a claim, counterclaim or third-party claim be raised in the 

responsive pleading. Holtman's claims against 4-G's Plumbing were 

not a defense to the claims asserted by the Association in the 

prior litigation. Thus, he was not required by Rule 12(b), 

M.R.Civ.P., to file his claims against 4-G's Plumbing in that 

action. 

4-G's Plumbing has not demonstrated that the "parties or their 

privies" element of res iudicata is met. We hold that the District 

Court erred in applying res iudicata to bar Holtman's asbestos 

contamination claim against 4-G's Plumbing. 

Collateral Estoppel 

Again focusing entirely on the asbestos contamination claim, 

Holtman asserts that the District Court erred in concluding that 4- 

G's Plumbing was entitled to summary judgment under the doctrine of 

collateral estoppel. He contends that collateral estoppel does not 

bar the claim because the issue of 4-G's Plumbing's negligence was 

not raised in his prior counterclaim. 

Collateral estoppel, sometimes referred to as issue 

preclusion, is a form of res iudicata. While res iudicata bars 

parties from relitigating claims in subsequent proceedings based on 

the same cause of action, collateral estoppel bars the reopening of 

an issue in a second cause of action that has been litigated and 

determined in a prior suit. Linder v. Missoula County (1992), 251 

Mont. 292, 294, 824 P.2d 1004, 1005. The doctrine has three 

9 
elements: 

1) the identical issue raised has been previously decided 

in a prior adjudication: 

2) a final judgment on the merits was issued in the prior 

adjudication: and 

3) the party against whom the plea is now asserted was a 

party or in privity with a party to the prior 

adjudication. 

State v. Young (1993), 259 Mont. 371, 377, 856 P.2d 961, 965. Our 

analysis need not proceed beyond the first element. 

Identity of issues is the most crucial element of collateral 

estoppel. Anderson v. State (1991), 250 Mont. 18, 21, 817 P.2d 

699, 702. In order to satisfy this element, the identical issue or 

"precise question" must have been litigated in the prior action. 

Anderson, 817 P.2d at 702. To determine whether the issue raised 

is identical, we compare the pleadings, evidence and circumstances 

surrounding the two actions. Aetna Life Ins. Co. v. McElvain 

(1986), 221 Mont. 138, 146, 717 P.2d 1081, 1086. We note that we 

have only the asbestos-related allegations to examine from the 

previous litigation since Holtman's counterclaim was dismissed on 

legal grounds prior to the receipt of any evidence on the claim. 

It is true that Holtman's prior counterclaim against the 

Association arose from the same events as his claim against 4-G's 

Plumbing and, like his present claim, sought damages for the 

alleged asbestos contamination. Holtman's asbestos-related 

contamination claim against the Association in the prior litigation 

was as follows: 

[The Association] did, without the knowledge or consent 

of [Holtman], terminate the heating service to 

10 
[Holtman's] unit sometime between March, 1988 and 

February 5, 1989, which resulted in certain waterlines 

freezing, breaking and creating water leaks in 

[Holtman's] unit and subsequently therewith caused the 

asbestos covering of certain pipes to be removed and 

generally distributed throughout the unit, all of which 

rendered [Holtman's] unit damaged, unsafe and 

uninhabitable. 

When this claim is compared to Holtman's asbestos contamination 

claim against 4-G's Plumbing set forth above, it is clear that the 

identical issue, or precise question, raised in the present case 

was not raised and decided in the earlier litigation involving the 

Association. 

Holtman's prior asbestos-related claim can be read as alleging 

an intentional wrongful act by the Association--the unauthorized 

termination of heat to the condominium--followed by all the damage 

that flowed therefrom, including broken waterlines and asbestos 

disturbance and distribution. To the extent the prior claim is 

read in this fashion, it is clear that the issue of the alleged 

negligence of 4-G's Plumbing in the present case is not identical. 

Furthermore, to the extent the prior asbestos-related claim is 

read as an allegation of negligence against the Association 

resulting in asbestos contamination, that claim did not raise the 

issue of 4-G's Plumbing's negligent workmanship in the installation 

of the new heating system. A negligence action is premised, first, 

on the existence of a duty. Nautilus Ins. v. First National Ins. 

(1992) I 254 Mont. 296, 299, 837 P.2d 409, 411. 4-G's Plumbing has 

not established that its legal duties to Holtman in installing the 

new heating system were co-extensive with the duties owed him by 

the Association. 

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We conclude that the "identical issue" element of collateral 

estoppel is not met under the circumstances before us. Therefore, 

we hold that the District Court erred in concluding that Holtman is 

collaterally estopped from asserting the asbestos contamination 

claim and in granting summary judgment in favor of 4-G's Plumbing 

on that claim. 

Reversed and remanded for further proceedings consistent with 

this opinion. ! ^ 

We concur: 

12 
April 5, 1994 

CERTIPICATE OF SERVICE 

I hereby certify that the following certified order was sent by United States mail, prepaid, to the 

following named: 

Charles J. Tornabene 

Patterson, Marsillo, Tomabene, Schuyler & McKenna 

103 So. 5th East 

Missoula, MT 59801 

Ronald A. Bender, Esq. 

Worden, Thane & Haines, P.C. 

P.O. Box 4747 

Missoula, MT 59806 

John R. Gordon, Esq. 

Reep, Spoon & Gordon, P.C. 

P.O. Box 9019 

Missoula, MT 59807-9019 

ED SMITH 

CLERK OF THE SUPREME COURT