Opinion ID: 4653908
Heading Depth: 2
Heading Rank: 3

Heading: Application of the preclusion doctrines

Text: Insofar as res judicata is concerned, a straightforward application of that doctrine in this matter is complicated by multiple factors. First, it is not entirely clear whether the third element, the identity of the parties to the two actions, is satisfied. Although the School District filed a notice of intervention in the City’s case, this alone did not give it party status pursuant to the statewide Rules of Civil Procedure promulgated by this Court. Those rules – which contemplate intervention by petition, hearing, and court order, see Pa.R.C.P. Nos. 2328, 2329 – do not apply to tax assessment appeals. See Appeal of Borough of Churchill, 525 Pa. 80, 87, 575 A.2d 550, 553 (1990). Further, the School District did not comply with the county court’s local rules for becoming a party, which require that notice of intervention be filed within 30 days after receiving notification of the appeal. See Chester Cty. Court of Common Pleas Civil Rule No. 5003(a), reprinted in RR. 272a. As described above, the School District’s notice of intervention was filed approximately two months after the City commenced its trial court appeal, well beyond the 30-day deadline. Besides this technical defect – which might be deemed immaterial as Taxpayer and the Board do not appear to have raised it as precluding intervention – we reemphasize that res judicata is a judicially-created precept based on prudential concerns which seek to avoid the re-litigation, in a subsequent action, of a claim that was [J-72-2020] - 7 resolved in a prior action.6 Here, by contrast, two appeals from the Board’s assessment figure, initiated by two different taxing authorities, were commenced at approximately the same time and have proceeded in parallel. Taxpayer concedes that “[f]rom the beginning, there have been two appeals on parallel tracks, the only differences being the party who initiated the appeal and the docket numbers.” Brief for Appellee (Taxpayer) at 10. We agree and note that the two appeals were, for all practical purposes, a single action, as their subject matter and sole issue – whether the Property should have been given partial tax-exempt status for the 2014 tax year – were identical, and they were consolidated for trial on that issue.7 That being the case, concerns relating to the inefficiency and burden of permitting serial litigation of a single claim simply are not present in this dispute. Indeed, Taxpayer has never argued that they are. Taxpayer’s position appears to be, rather, that the School District’s decision not to take a further appeal to the Commonwealth Court from the trial court’s ruling in the City’s case bars it from doing so in its own case. The implication is that if the School District had not noted its 6 See generally Wilkes, 587 Pa. at 607, 902 A.2d at 376; Barbara A. Gimbel, The Res Judicata Doctrine Under Illinois and Federal Law, 88 ILL. BAR. J. 404, 404 (2000) (observing that res judicata is a judicial tool “directed at promoting judicial economy and preventing piecemeal and protracted litigation”); see also Proper test to determine identity of claims for purposes of claim preclusion by res judicata under federal law, 82 A.L.R. Fed. 829, at §2[a] (1987 & 2020 supp.) (“The rule rests on the ground that once a party has litigated, or has had the opportunity to litigate, the same matter in a court of competent jurisdiction, that party or its privy should not be permitted to litigate it again to the harassment and vexation of its adversary.”). 7 Although we cannot know with certainty, it seems likely that if any party had appealed to the Commonwealth Court from the order in the City’s case, the Commonwealth Court would again have consolidated that appeal with the appeal in the School District’s case. Thus, in all likelihood, neither Taxpayer’s litigation burden, nor the expenditure of judicial resources, would have been materially affected if the School District had done what Taxpayer claims it was required to do in order to preserve its appellate rights. [J-72-2020] - 8 intervention in the City’s case, it would not now be precluded from pressing its contention on appeal. We find this to be a misuse of the res judicata concept. As employed here, it did not serve to shield a party or the courts from repetitive or abusive litigation, but to thwart the School District’s substantive appellate rights. In this regard, we find salience in the Board’s argument that res judicata was designed to defeat attempts by parties to obtain a second trial on the same cause between the same parties by contriving minor difference or casting the original cause of action as a new cause of action. The School District’s appeal is not a recasting of an original cause of action in order to get a second “bite at the apple.” Instead, it is merely seeking appellate review of the trial court’s determination that the Property is entitled to a partial exemption from taxation. Brief for Appellee (Board) at 5 (some internal quotation marks and citations omitted).8 Just as important, it is not clear that the final judgment in the City’s case constitutes a “prior” judgment as is required for application of res judicata. See In re R.L.L.’s Estate, 487 Pa. 223, 228, 409 A.2d 321, 323-24 (1979) (reaffirming the rule that a final judgment is a res judicata prerequisite). Some jurisdictions have held that a final judgment issued in one case lacks preclusive effect relative to merits review of a separate judgment issued in a different case. See, e.g., Nationwide Mut. Ins. Co. v. Liberatore, 408 F.3d 1158, 1162 (9th Cir. 2005) (stating that “a decision entered coincident with the judgment on appeal, just as a judgment entered after the judgment on appeal, can scarcely constitute a bar to the instant action” (internal quotation marks and citation omitted)). One legal encyclopedia articulates this principle in more general terms, observing that “while a court judgment carries preclusive effect going forward, it 8Although the Board is an Appellee, it favors reversal and has expressly joined in the School District’s arguments. See id. at 4. [J-72-2020] - 9 cannot operate to bar direct review of an extant judgment.” 46 AM. JUR. 2D Judgments §451; cf. RESTATEMENT (SECOND) OF JUDGMENTS §15 (stating as a general rule that a valid final personal judgment is conclusive “except on appeal or other direct review” (emphasis added)). We do not presently decide whether to adopt Section 451 in toto, particularly as the question has not been raised or briefed by the parties. We do hold, though, that the rule embodied in that provision currently obtains in light of the unusual circumstances leading to this appeal – where, as explained, claim preclusion would serve no salutary purpose and would, instead, deprive a party of merits review based on the fortuity that the two virtually identical cases were deemed to have been consolidated for trial only and not for disposition. Thus, we find that res judicata was improperly viewed by the intermediate court as a barrier to merits resolution of the School District’s appeal.
For similar reasons, we are not convinced that collateral estoppel should have been interposed as a bar in the present scenario. Preliminarily, although collateral estoppel focuses on issues rather than claims, Taxpayer does not suggest that any discrete “subset” issue within the taxing districts’ overall claim should be foreclosed from resolution. See Brief for Appellee (Taxpayer) at 14-16 (asserting in general terms that the predicates for collateral estoppel have been met). For this reason, we view the claim and the legal issue at the heart of this litigation, namely, whether the Property was correctly accorded 72% tax-exempt status, as one and the same. That being the case, there is little distinction between the two preclusive doctrines in terms of whether they pertain in the present context. As discussed, the same types of considerations which underlie res judicata also form the basis for collateral estoppel. See, e.g., Shaffer v. Smith, 543 Pa. 526, 531-32, 673 A.2d 872, 875 [J-72-2020] - 10 (1996) (quoting Allen v. McCurry, 449 U.S. 90, 94, 101 S. Ct. 411, 415 (1980)). We find that issue preclusion under the rubric of collateral estoppel should not have been applied to defeat the School District’s ability to obtain merits review of its substantive arguments in the intermediate court.