Opinion ID: 1277672
Heading Depth: 2
Heading Rank: 2

Heading: Dorrance Is Collaterally Estopped From Relitigating The Arbitrator's Apportionment Of Liability.

Text: This court has repeatedly noted that [c]ollateral estoppel is an aspect of res judicata which precludes the relitigation of a fact or issue which was previously determined in a prior suit on a different claim between the same parties or their privies.... Collateral estoppel also precludes relitigation of facts or issues previously determined when it is raised defensively by one not a party in a prior suit against one who was a party in that suit and who himself raised and litigated the fact or issue. Foytik v. Chandler, 88 Hawai`i 307, 314-315, 966 P.2d 619, 626-627 (1998) (quoting Morneau v. Stark Enters., Ltd., 56 Haw. 420, 423, 539 P.2d 472, 475 (1975)) (emphases added). This court has also treated collateral estoppel as an included doctrine of res judicata and applied the following elements of both doctrines interchangeably: In Morneau, this court established a three-prong test to determine whether the doctrine of res judicata ( or collateral estoppel as an included doctrine ) bars relitigation of an issue. Res judicata will bar relitigation where (1) the issue decided in the prior adjudication is identical with the one presented in the action in question, (2) there was final judgment on the merits, and (3) the party against whom res judicata is asserted was a party or in privity with a party to the prior adjudication. Id. at 315, 966 P.2d at 627 (emphasis added); see also Bush v. Watson, 81 Hawai`i 474, 480, 918 P.2d 1130, 1136, reconsideration denied, 82 Hawai`i 156, 920 P.2d 370 (1996), cert. denied, 519 U.S. 1149, 117 S.Ct. 1082, 137 L.Ed.2d 217 (1997). Although this court has stated that the doctrine of res judicata involves two aspectsclaim preclusion and issue preclusion  each aspect, in practice, involves distinct questions of law. Specifically, claim preclusion prohibits a party from relitigating a previously adjudicated cause of action. Issue preclusion, or collateral estoppel, on the other hand, applies to a subsequent suit between the parties or their privies on a different cause of action and prevents the parties or their privies from relitigating any issue that was actually litigated and finally decided in the earlier action. See Flynn v. Gorton, 207 Cal.App.3d 1550, 255 Cal.Rptr. 768, 770 (1989) (summarizing differences between doctrines of res judicata and collateral estoppel). Notwithstanding these differences, res judicata and collateral estoppel do share the common goals of preventing inconsistent results, preventing a multiplicity of suits, and promoting finality and judicial economy. Compare State v. Magoon, 75 Haw. 164, 189, 858 P.2d 712, 724, reconsideration denied, 75 Haw. 580, 861 P.2d 735 (1993) (explaining purposes of the doctrine of res judicata ) with Sentinel Ins. Co., Ltd. v. First Ins. Co. of Hawai`i, Ltd., 76 Hawai`i 277, 294, 875 P.2d 894, 911 (1994) (noting that [t]he purpose of the doctrine [of collateral estoppel] is to ... dispense with the delay and expense of two trials on the same issue (citation and internal quotation marks omitted)). To recognize that res judicata and collateral estoppel share common goals is not to say that they should necessarily be analyzed in exactly the same fashion. When a party seeks to prevent another party from relitigating a particular issue of fact or law as opposed to an entire cause of actionwe believe it prudent to require not only that the particular issue be one that was decided in the prior adjudication, Bush, 81 Hawai`i at 480, 918 P.2d at 1136, but also require that it be necessary or essential to the judgment in the prior proceeding. Because determinations that are not essential to the judgment have the characteristics of dicta[ ] and may not ordinarily be the subject of an appeal by the party against whom they were made[,] we agree that the interest in providing an opportunity for a considered determination ... outweighs the interest in avoiding the burden of relitigation. Restatement (Second) of Judgments § 27 cmt. h (1980); see also United States v. Weems, 49 F.3d 528, 534 (9th Cir. 1995) (Norris, J., concurring) (`The two rationales supporting the `necessary to the judgment' rule are: (1) `to ensure that the finder of fact in the first case took sufficient care in determining the issue,' Pettaway v. Plummer, 943 F.2d 1041, 1044 (9th Cir.1991), cert. denied, 506 U.S. 904, 113 S.Ct. 296, 121 L.Ed.2d 220 (1992); and (2) to protect against the fact that `appellate review of a determination may not be available where the issue is not necessary to the determination of the final judgment,' id. n. 1.). Therefore, in light of these countervailing considerations, we now explicitly add to our traditional three-pronged testfor collateral estoppel purposes onlythe additional requirement that the particular issue of fact or law that was decided in the prior adjudication be essential to the earlier valid and final judgment. Although this court has not explicitly required this element in the past, we have noted with approval formulations of the collateral estoppel test that have included an essential to the judgment element. See Sentinel Ins. Co., 76 Hawai`i at 294, 875 P.2d at 911 (citing with approval Farmers Ins. Co. of Arizona v. Vagnozzi, 138 Ariz. 443, 675 P.2d 703, 706 (1983), for the proposition that [u]nder the doctrine of collateral estoppel, the determination of a litigated fact or law which is essential to a valid and final judgment is conclusive between the parties or their privies in a subsequent claim. (Emphasis in original.)). We therefore hold that the doctrine of collateral estoppel bars relitigation of an issue where: (1) the issue decided in the prior adjudication is identical to the one presented in the action in question; (2) there is a final judgment on the merits; (3) the issue decided in the prior adjudication was essential to the final judgment; and (4) the party against whom collateral estoppel is asserted was a party or in privity with a party to the prior adjudication [hereinafter, the collateral estoppel test]. In the instant action, Dorrance concedes that prong four of the collateral estoppel test has been satisfied. Accordingly, this court is left to determine whether the remaining elements have been met. With respect to the first element of the collateral estoppel test, it is clear that Dorrance, against whom collateral estoppel is asserted, seeks to relitigate an issue that was decided in the previous suit. The record illustrates that the issue decided in the prior adjudication is identical to the one presented in the action in question. As stated previously, the issue Dorrance attempts to litigate here, i.e., whose negligence caused the 1996 accident and to what extent, was addressed and decided in the Cintron Action. In the present action, however, Dorrance argues that, insofar as she was a defendant in the Cintron Action but a plaintiff in the instant case, there is no identity of issues. This argument is meritless. As previously indicated, collateral estoppel requires only that the issue decided in the prior adjudication be identical to the one presented in the present action; the position of a party, as either plaintiff or defendant, in the prior action is irrelevant. In the Cintron Action, the Arbitration Award explicitly apportioned liability as follows: Cintron 0%, Dorrance 70%, and Lee 30%. Thus, the issue of whose negligence caused the 1996 accident was decided in the prior adjudication. Concerning the second element of the collateral estoppel test, i.e., that there be a final judgment on the merits, the record demonstrates that the final judgment was indeed on the merits. In the Cintron Action, both Dorrance and Lee (1) filed answers to the Cintron complaint, in which they denied all liability; (2) filed cross-claims against each other for contribution; (3) appeared and testified at the arbitration hearing, again denying their own negligence; and (4) submitted written post-hearing briefs arguing the issue of the other driver's negligence. Where a party, such as Dorrance, had the opportunity to fully defend herself against claims of negligent drivingthe same issue herethe final judgment from that proceeding was on the merits. See Tradewind Ins. Co., Ltd. v. Stout, 85 Hawai`i 177, 185, 938 P.2d 1196, 1204 (App.)(considering the presentation of extensive evidence on the issue as on the merits), cert. denied, 85 Hawai`i 81, 937 P.2d 922 (1997). Accordingly, the second element of the collateral estoppel test has been satisfied. Turning to the third element of the collateral estoppel test, it is obvious that the issue decided in the prior adjudication was essential to the final judgment. As previously noted, the Cintron Action involved a negligence claim by Cintron against Dorrance and Lee, alleging that both were negligent in causing her injuries. Accordingly, the issue of whose negligence caused the 1996 accident and to what extent was essential to the earlier judgment, inasmuch as it established liability for Cintron's injuries. Dorrance cites to dictum from Darcy v. Lolohea, 77 Hawai`i 422, 428, 886 P.2d 759, 765 (App.), cert. denied, 77 Hawai`i 489, 889 P.2d 66 (1994), for the proposition that nothing in the HAR permits the introduction of an arbitration award in evidence as the grounds for any dispositive motion filed in circuit court. Dorrance argues that the circuit court was therefore prohibited from considering the Arbitration Award in the Cintron Action as a basis for entering summary judgment in favor of Lee in the instant case. The Darcy dictum, however, dealt strictly with the filing of a dispositive motion with the circuit court in the same case before the arbitration award became final. See id. at 428, 886 P.2d at 765. Darcy thus cannot be read to prohibit a court in another case from using the CAAP award as substantive evidence once the award has matured into a final judgment, and Dorrance's reliance upon Darcy is misplaced. Inasmuch as the four prongs of the collateral estoppel test have been satisfied, we hold that collateral estoppel precludes the relitigation of the issue, i.e., whether and to what extent Lee's and/or Dorrance's negligence caused the 1996 accident in the present case.