Opinion ID: 1927182
Heading Depth: 1
Heading Rank: 2

Heading: The Consolidated Firm

Text: Under the settled doctrine of res judicata, a final judgment on the merits embodies all of a party's rights arising out of the transaction involved, Stutsman v. Kaiser Foundation Health Plan of Mid-Atlantic States, Inc., 546 A.2d 367, 370 (D.C.1988), and precludes relitigation in a subsequent proceeding of all issues arising out of the same cause of action between the same parties or their privies, whether or not the issues were raised in the first proceeding. Molovinsky v. Monterey Coop., 689 A.2d 531, 533 (D.C.1997) (citations omitted). Such a judgment, we have said, estops not only as to every ground of recovery or defense actually presented in the action, but also as to every ground which might have been presented. Id. Pennsylvania principles of res judicata, which we apply pursuant to 28 U.S.C. § 1738 (1988), [11] do not differ in this respect. See In re Estate of R.L.L., 487 Pa. 223, 409 A.2d 321, 323 n. 7 (1979) (a party is commonly forbidden to raise issues that could have been litigated but were not, because of the desirability of settling the entire controversy in a single proceeding) (citations omitted); Hopewell Estates, Inc. v. Kent, 435 Pa.Super. 471, 646 A.2d 1192, 1194 (1994) ([a]ll matters which might have been raised and decided in the former suit, as well as those which were actually raised therein, are res adjudicate in a subsequent proceeding between the same parties and their privies); Carroll Tp. Auth. v. Monongahela Mun., 145 Pa.Cmwlth. 273, 603 A.2d 243, 249 (1992) (the scope of merger or bar includes not only matters that actually were litigated but also all matters that could have been litigated but were not) (citing Duquesne Light Co. v. Pittsburgh Railways Co., 413 Pa. 1, 194 A.2d 319, 321 (1963)). [12] The basic purposes of res judicata are to conserve limited judicial resources, establish certainty and respect for court judgments, and protect the party relying on the judgment from vexatious litigation. In keeping with these purposes, the doctrine must be liberally construed and applied without technical restriction. McArdle v. Tronetti, 426 Pa.Super. 607, 627 A.2d 1219, 1222 (1993). Thus, a plaintiff has, as the trite saying goes, only one bite at the apple against a particular defendant for all grievances arising out of a cause of action. If unsuccessful, a second action is precluded. See RESTATEMENT (SECOND) OF JUDGMENTS § 19 (1982). We likewise have noted that it is a fundamental purpose of the doctrine to prevent the relitigation of claims that plaintiffs have already had a full and fair opportunity to litigate, thereby protecting adversaries from expensive and vexatious multiple lawsuits, conserving judicial resources, and minimizing the likelihood of inconsistent outcomes. Smith v. Jenkins, 562 A.2d 610, 615 (D.C.1989) (citing Montana v. United States, 440 U.S. 147, 153-54, 99 S.Ct. 970, 973-74, 59 L.Ed.2d 210 (1979)). Such policy considerations may require dismissal of a second action even though the substantive issues have not been tried, especially if the plaintiff has failed to avail himself of opportunities to pursue his remedies in the first proceeding, or has deliberately flouted orders of the court. RESTATEMENT (SECOND) OF JUDGMENTS § 19 cmt. a. There can be little doubt that the landlord's current claim insofar as it involves the Schmidt estate and those in privity with it constitutes the same cause of action and indeed involves the same issues decided in the prior litigation, namely, contractual liability for having allegedly breached the 1983 agreement. Nonetheless, the landlord maintains that it never commenced a cause of action in the prior litigation which would be entitled to res judicata effect because it did not file a formal complaint with the Orphans' Court. More specifically, the landlord contends that the claim it filed pursuant to 20 PA. CONS.STAT. § 3532(b)(2) was insufficient, as a matter of Pennsylvania law, to initiate a cause of action capable of resolution on the merits by the Orphans' Court. [13] It is plain, however, that the Orphans' Court judge rejected this argument, treated the filing and subsequent actions as a claim, and denied the claim. On appeal from that ruling, the Pennsylvania Superior Court squarely held that the landlord did not merely file a request that the orphans' court division postpone distribution pending resolution of the District of Columbia action. Rather, appellant filed a claim against the Estate. In re Estate of Schmidt, supra, 596 A.2d at 1129 (emphasis added). Accordingly, the orphans' court division did not abuse its discretion in concluding that appellant had presented a claim over which [it] had jurisdiction. Id. [14] The Pennsylvania Superior Court and, in turn, the Pennsylvania Supreme Court, affirmed the order of the Orphans' Court that the Claim is denied. We think that under Pennsylvania law, therefore, the decision was a valid, final judgment on the merits of the claim. Appellant, while failing to follow up on its asserted claim, certainly had a full and fair opportunity to do so. [15] The landlord also contends that decisions of Pennsylvania's Orphans' Courts are not entitled to res judicata effect except with respect to estate assets subject to distribution, since those courts have only limited in rem jurisdiction. See RESTATEMENT (SECOND) OF JUDGMENTS § 30(2). To the contrary, however, the Orphans' Court is a court of general jurisdiction. The particular court in which the probate proceeding occurred was a division of the Court of Common Pleas of Allegheny County. 42 PA. CONS.STAT. § 951(b) (1996). The Courts of Common Pleas have unlimited original jurisdiction of all actions and proceedings. 42 PA. CONS. STAT. § 931(a) (1996). The divisions of the common pleas courts were established essentially for purposes of administrative convenience, and each division is vested with the full jurisdiction of the whole court. In re Estate of Hall, 517 Pa. 115, 535 A.2d 47, 59 (1987); In re Estate of Cantor, 424 Pa.Super. 24, 621 A.2d 1021 (1993). 20 PA. CONS.STAT. § 952 (1996) provides that [i]n a court of common pleas having two or more divisions each division of the court is vested with the full jurisdiction of the whole court, but the business of the court may be allocated among the divisions of the court by or pursuant to general rules. Moreover, 20 PA. CONS.STAT. § 712 (1996) confers upon the Orphans' Court division broad residual and discretionary jurisdiction over all matters that are subject to resolution by courts of common pleas generally. In re Estate of Hall, supra, 535 A.2d at 59. Consequently, the Schmidt estate and all those in privity with it are entitled to the protection of the res judicata effect of the prior denial of the landlord's claim. The landlord does not contend that the trial court erred in its determination that all the defendants who, like Schmidt, were only members of the consolidated or successor firm, were in privity with Schmidt's estate, or that the claims against them involve the same cause of action as that in the prior suit. [16] Accordingly, we do not further address the trial court's dismissal of claims against those defendants on the ground of res judicata. Furthermore, because we hold that the doctrine of claim preclusion bars the current action against these defendants, we need not decide whether they may also assert issue preclusion with respect to specific factual or legal determinations by the Orphans' Court.
The dissent, focussing upon the Pennsylvania Supreme Court's affirmance without opinion, suggests that this action strips the proceeding of any res judicata effect. It asserts that Pennsylvania law requires this result since, theoretically, the Pennsylvania Supreme Court could have affirmed on the alternative ground that it was not an abuse of discretion for the Orphans' Court to delay distribution further notwithstanding that the claim was pending in another forum. [17] We cannot agree. The case of Speyer, Inc. v. Good-year Tire and Rubber Co., 222 Pa.Super. 261, 295 A.2d 143 (1972), relied upon by the dissent for its conclusion, simply illustrates a corollary to the rule of collateral estoppel: if a judgment of a court of first instance is based on determinations of two issues, either of which standing independently would be sufficient to support the result, the judgment is not conclusive with respect to either issue standing alone. RESTATEMENT (SECOND) OF JUDGMENTS § 27, cmt. i. The determinations, not being essential to the judgment, have no issue preclusive effect in subsequent proceedings. [18] However, if on appeal the appellate court upholds one of these determinations as sufficient and refuses to consider whether or not the other is sufficient and accordingly affirms the judgment, [then] the judgment is conclusive as to the first determination but not the second. RESTATEMENT (SECOND) OF JUDGMENTS § 27, cmt. o. In Speyer, plaintiff had initially sued the manufacturer of a fuel pump which had caused an explosion. The trial court entered judgment for the defendant on the alternate grounds that the manufacturer had not been negligent and that plaintiff had been contributorily negligent, either of which would have independently supported the result. The appellate court affirmed without considering the issue of contributory negligence. As a consequence, when plaintiff subsequently sued Goodyear as the manufacturer of the fuel hose, it was ruled that the earlier trial court finding of contributory negligence was not entitled to issue preclusive effect. Id. 295 A.2d at 147. Speyer squarely held that a trial court's finding of fact which is not relied upon by an appellate court in affirming a judgment is not conclusive against one of the parties who brings a subsequent suit against a non-party, in which the fact is in issue. Id. Neither the Restatement nor Speyer stands for the proposition that an appellate court's failure to reach a particular issue (or even to specify at all the basis for affirmance) robs the judgment of claim preclusive effect. [19] In Speyer the plaintiff was still precluded by res judicata from relitigating its claim against the initial defendant despite the fact that it was permitted to relitigate in a subsequent suit against a second defendant an issue previously resolved against it by the trial court (but not relied upon by the appellate court in the affirmance). [20] The case before us is entirely different from Speyer, in that we are dealing here with claim rather than issue preclusion and appellate silence as to the grounds for affirmance. It is one thing to deprive a trial court finding of collateral estoppel effect where it can be seen that the appellate court did not rely upon that finding in its affirmance. It seems to us quite another to suggest that a trial court judgment on the merits, sustained by three appellate courts against a jurisdictional attack, loses its claim preclusive effect where there exists the theoretical possibility that an affirmance without opinion might have been based upon some ground completely different from that of the lower courts. By that reasoning, if the trial court in Speyer had decided in the defendant's favor on the sole ground that the defendant was not negligent and the appellate court summarily affirmed, the decision would nonetheless have no preclusive effect if the appellate court could have held that the plaintiff was contributorily negligent as a matter of law. This is the sort of pure speculation that we are admonished to avoid. Surely in the normal course of events, a clear trial court judgment which is affirmed without opinion would be viewed as an affirmance of the trial court's decision and its essential bases. [21] The only Pennsylvania state case we have found involving this type of situation squarely supports such an approach in the res judicata context. In Commonwealth Pennsylvania Game Com. v. Hilliard, 3 Pa. Cmwlth. 560, 284 A.2d 326 (1971), entailing the condemnation of farmland, the trial court at the pleading stage had refused to permit a challenge to an amended complaint that was the same as one that was or could have been made to the original complaint. This ruling was affirmed by the Pennsylvania Supreme Court without opinion. At a subsequent proceeding, the landowners again attempted unsuccessfully to raise the same challenge. On appeal, the Commonwealth Court ruled that res judicata had been correctly applied. [W]hile neither appellants nor this Court can know the reasoning on which the Supreme Court sustained the lower court's ruling that it was too late [in responding to the amended complaint] to raise the issue of the propriety of the taking, at least it is quite clear that that was its decision and, therefore, it is res adjudicata between the parties in this case. Id. 284 A.2d at 327. [22] See also Joseph L. v. Office of Judicial Support, 516 F.Supp. 1345, 1348 (E.D.Pa.1981) (merely because the trial court's judgment is affirmed without opinion is of `no consequence' in determining whether the doctrine of res judicata has application in a subsequent proceeding). The dissent takes the position that treating an appellate court's summary affirmance as generally resting on the basis relied upon below requires impermissible speculation. [23] However, Safeguard Mutual Ins. Co. v. Williams, supra note [12], upon which it relies, involved quite the opposite order of events. There, the trial court in the first proceeding had issued its ruling without explanation, leaving unclear whether the decision had been based on the merits or otherwise. When defendant in a subsequent proceeding asserted collateral estoppel on the merits issue, it was held that the doctrine did not apply because it was uncertain whether that issue had previously been resolved. In contrast, there is no ambiguity here with respect to what issues have been determined by the Orphans' Court and the Superior Court. Nor do we think the summary affirmance creates any ambiguity as to the action affirmed. [24] Most importantly, the dissent's argument essentially disregards the essence of the trial court order. The operative portion was that the claim was denied. See note [6] supra. It was that action, not a refusal to further delay distribution, that was thrice affirmed against the only challenges appellants raised. We see no basis to disregard this reality. In sum, we are confident that if the instant litigation were brought in Pennsylvania, the Pennsylvania courts would conclude that the claim is barred by res judicata. We now turn to the issue whether the defendants who were members of the original tenant firm fell within the application of the doctrines of res judicata and, alternatively, collateral estoppel.