Opinion ID: 886904
Heading Depth: 1
Heading Rank: 4

Heading: issues

Text: ¶24 Whether the doctrines of res judicata, collateral estoppel, equitable estoppel and judicial estoppel bar Appellants' claims against Respondents. ¶25 Appellants contend that the District Court erred in concluding that the doctrines of res judicata, equitable estoppel and judicial estoppel barred Appellants' claims. Instead, Appellants argue that when an attorney's estate planning causes loss or injury to estate and trust assets and requires clients and beneficiaries to resort to litigation as the only means of resolving the disposition of assets, a subsequent malpractice action is not barred under the doctrines of res judicata, equitable estoppel or judicial estoppel as the elements necessary to establish those defenses are absent. ¶26 The doctrines of res judicata and collateral estoppel are based on a judicial policy favoring a definite end to litigation. Kullick v. Skyline Homeowners Ass'n, 2003 MT 137, ¶ 17, 316 Mont. 146, ¶ 17, 69 P.3d 225, ¶ 17 (citing Rausch v. Hogan, 2001 MT 123, ¶ 14, 305 Mont. 382, ¶ 14, 28 P.3d 460, ¶ 14). Res judicata bars a party from relitigating a matter that the party has already had an opportunity to litigate. Kullick, ¶ 17 (citing Olson v. Daughenbaugh, 2001 MT 284, ¶ 22, 307 Mont. 371, ¶ 22, 38 P.3d 154, ¶ 22). Collateral estoppel is a form of res judicata and bars the reopening of an issue that has been litigated and resolved in a prior suit. Kullick, ¶ 18 (citing Finstad v. W.R. Grace & Co., 2000 MT 228, ¶ 28, 301 Mont. 240, ¶ 28, 8 P.3d 778, ¶ 28). ¶27 The doctrine of res judicata applies if the following four elements have been satisfied: (1) the parties or their privies are the same; (2) the subject matter of the present and past actions is the same; (3) the issues are the same and relate to the same subject matter; and (4) the capacities of the persons are the same in reference to the subject matter and to the issues between them. Kullick, ¶ 17 (citing Hall v. Heckerman, 2000 MT 300, ¶ 13, 302 Mont. 345, ¶ 13, 15 P.3d 869, ¶ 13). Here, the Beneficiary Suits were not malpractice actions and it is undisputed that Respondents were not parties to that litigation. Thus, res judicata is not applicable in this case. ¶28 The same is true as to the doctrine of collateral estoppel. Collateral estoppel only applies if the following three elements have been satisfied: (1) the identical issue raised was 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. Kullick, ¶ 18. As Appellants point out in their brief on appeal, this Court has recognized that parties who are drawn into litigation as a result of a professional's malpractice have a right to bring a subsequent and separate suit against the professional. See Fadness v. Cody (1997), 287 Mont. 89, 951 P.2d 584 (sellers who were awarded damages against purchasers as a result of fraud in real estate action have a subsequent and separate action against real estate agent and closing agent for their breaches of duty). The reason behind allowing a subsequent and separate action is that the later action raises different issues. Identity of issues is the most crucial element of collateral estoppel. In order to satisfy this element, the identical issue or precise question must have been litigated in the prior action. . . . . . . . The fact that each action arises from the same transaction does not mean that each involve the same issues. Fadness, 287 Mont. at 96-97, 951 P.2d at 588-89 (citations omitted). We noted in Fadness that [t]he duties owed by [the professionals] to the [plaintiff] were not decided, nor even considered by the jury in the first case. Fadness, 287 Mont. at 97, 951 P.2d at 589. Similarly, in the case sub judice, the duties owed by Respondents were not considered or decided in the prior Beneficiary Suits. See In the Matter of Stanley L. and Carolyn M. Watkins Revocable Trust Agreement (Toole County Cause No. DV 96-016); In the Matter of the Estate of Stanley L. Watkins (Toole County Cause No. 92-DP-020). ¶29 Nor is equitable estoppel applicable in this case. Equitable estoppel is based upon the principle that a party cannot, through his intentional `conduct, actions, language, or silence,' induce another party to unknowingly and detrimentally alter his position and then subsequently deny the just and legal consequences of his intentional acts. Kelly v. Wallace, 1998 MT 307, ¶ 43, 292 Mont. 129, ¶ 43, 972 P.2d 1117, ¶ 43. ¶30 The following elements must be proved by clear and convincing evidence to show equitable estoppel: (1) there must be conduct, acts, language, or silence amounting to a representation or a concealment of a material fact; (2) the facts must be known to the party to be estopped at the time of that party's conduct, or at least the circumstances must be such that knowledge of the facts is necessarily imputed to that party; (3) the truth must be unknown to the other party at the time the representation was acted upon; (4) the representation must be made with the intent or the expectation that it will be acted on by the other party; (5) the representation must be relied upon by the other party, leading that party to act upon it; and (6) the other party must in fact rely on the representation so as to change its position for the worse. City of Whitefish v. Troy Town Pump, 2001 MT 58, ¶ 15, 304 Mont. 346, ¶ 15, 21 P.3d 1026, ¶ 15 (citing Billings Post No. 1634 v. Dept. of Revenue (1997), 284 Mont. 84, 90, 943 P.2d 517, 520). ¶31 In the instant case, Steve's attorneys wrote to Respondents in October 1996, to put them on notice that they would be held liable for damages caused by Lacosta's faulty work and to advise them to notify their malpractice carrier. The District Court erroneously concluded that equitable estoppel was created by representations in the letter that Carolyn's claims were without merit and barred by various statutes and general legal principals. However, we have previously held that equitable estoppel is inapplicable when the conduct complained of consists solely of legal representations. City of Whitefish, ¶ 17 (citing Elk Park Ranch v. Park County (1997), 282 Mont. 154, 935 P.2d 1131). ¶32 Moreover, the party asserting equitable estoppel has the affirmative duty of proving its elements. Kelly, ¶ 43 (citations omitted). Here, Respondents have not submitted any evidence to establish that they relied on the letter or that they changed their position for the worse because of the letter. Thus, equitable estoppel is not applicable in this case. ¶33 Likewise, judicial estoppel has no application in this case. The doctrine of judicial estoppel binds a party to their judicial declarations and precludes a party from taking a position inconsistent with previously made declarations in a subsequent action or proceeding. Kauffman-Harmon v. Kauffman, 2001 MT 238, ¶ 15, 307 Mont. 45, ¶ 15, 36 P.3d 408, ¶ 15 (citing Fiedler v. Fiedler (1994), 266 Mont. 133, 139, 879 P.2d 675, 679). A party claiming that judicial estoppel bars another party from re-litigating an issue must show: (1) the estopped party had knowledge of the facts at the time he or she took the original position; (2) the estopped party succeeded in maintaining the original position; (3) the position presently taken is inconsistent with the original position; and (4) the original position misled the adverse party so that allowing the estopped party to change its position would injuriously affect the adverse party. Kaufman, ¶ 16 (citing In re Raymond W. George Trust, 1999 MT 223, ¶ 51, 296 Mont. 56, ¶ 51, 986 P.2d 427, ¶ 51). ¶34 Here, the record is devoid of any evidence that Respondents were misled and the District Court did not make any findings or conclusions that Respondents were misled. Furthermore, [a] judicial admission is not binding unless it is an unequivocal statement of fact. Hence, [f]or a judicial admission to be binding upon a party, the admission must be one of fact rather than a conclusion of law or the expression of an opinion. George Trust, ¶ 37 (quoting DeMars v. Carlstrom (1997), 285 Mont. 334, 337-38, 948 P.2d 246, 248-49). Thus, a judicial admission applies to facts, not to legal theories or positions. The District Court determined in the instant case that Appellants took the position that the provisions of the Trust and Stanley's will were correctly and properly drafted and that Steve prevailed in the Beneficiary Suits. However, in that event, it would have been a legal position and not an unequivocal statement of fact. ¶35 Accordingly, we hold that the District Court erred in concluding that the doctrines of res judicata, collateral estoppel, equitable estoppel and judicial estoppel barred Appellants' claims against Respondents.