Opinion ID: 889020
Heading Depth: 1
Heading Rank: 5

Heading: McDaniel's Breach of Contract Claim

Text: ¶ 33 Element 1. Was the issue decided in the prior adjudication identical to the issue raised in the action in question? To determine whether the issue decided in the prior adjudication is identical to the issue raised in the present case, we compare the pleadings, evidence, and circumstances surrounding the two actions. Baltrusch, ¶ 25; Holtman v. 4-G's Plumbing & Heating, Inc., 264 Mont. 432, 439, 872 P.2d 318, 322 (1994). But we do not equate an issue with elements of a cause of action; rather, the bar that arises from collateral estoppel extends to all questions essential to the judgment and actively determined by a prior valid judgment. Baltrusch, ¶ 25; Haines Pipeline Constr., Inc. v. Montana Power Co., 265 Mont. 282, 288, 876 P.2d 632, 636 (1994). Moreover, collateral estoppel prevents relitigation of determinative facts which were actually or necessarily decided in a prior action. Baltrusch, ¶ 25; Haines, 265 Mont. at 288, 876 P.2d at 636. A litigant cannot avoid preclusion by reframing the issue or raising novel contentions. Baltrusch, ¶ 25. `If a new legal theory or factual assertion put forward in the second action is related to the subject-matter and relevant to the issues that were litigated and adjudicated previously, so that it could have been raised, the judgment is conclusive on it despite the fact that it was not in fact expressly pleaded or otherwise urged.' Haines, 265 Mont. at 288-89, 876 P.2d at 636-37 (some internal quotation marks omitted) (quoting Moore's Federal Practice, vol. 1B, ¶ 0.443[2], 760). Consistent with the purpose of promoting judicial economy, we apply collateral estoppel when the issues are so intertwined that to decide the issue before it, the district court would have to rehear the precise issue previously decided. Baltrusch, ¶ 25; Martelli v. Anaconda-Deer Lodge County, 258 Mont. 166, 169, 852 P.2d 579, 581 (1993). ¶ 34 As to the issue of whether the State is liable for breach of an enforceable contract, we agree with McDaniel that this issue was decided in the prior adjudication. In his second motion to dismiss, McDaniel asserted that filing the petition for revocation constituted a breach of the Intervention Hearing Agreementspecifically, the clause stating that McDaniel agree[s] to the following conditions in lieu of a formal violation being filed at this time  (emphasis added). The State responded that [t]he State did not attend the [intervention] hearing and that [i]t is absolutely false that the State ever entered into an agreement with the Defendant regarding the Defendant violating the terms of his probation. Following the District Court hearing in May 2004, the parties submitted proposed findings of fact and conclusions of law. McDaniel proposed a conclusion of law which stated: The intervention hearing agreement is a contract by the state with defendant. The state's subsequent petition for revocation is a breach of contract. By contrast, the State offered the following: the State was not represented at the [intervention] hearing; the State of Montana and the Department of Corrections are not the same party nor are they a privy; and no agreement existed between the Defendant and the Department of Corrections or the State regarding admitting the alleged [probation] violation. ¶ 35 The District Court did not agree with the State's position. Rather, it entered the following pertinent findings of facts and conclusions of law:  The State of Montana, acting through the Department of Corrections Adult Probation & Parole, was clearly a party to the intervention hearing.  The contention of the Flathead County Attorney's Office that the State was not a party, nor was its interest represented, because the County Attorney's Office did not participate in the hearing, is simply not accurate.  [T]he party in this litigation is the State of Montana, not the Flathead County Attorney's Office, and the officers involved [at the intervention hearing] had absolutely no authority or capacity to perform their job as they did herein other than as agents of the State of Montana.  There was a valid, binding agreement between the Defendant and the State of Montana with which the Defendant has fully complied.  The clear intent of the Legislature [expressed in § 46-23-1015(1), MCA,] is that if an intervention hearing is initiated, and if the probationer's compliance with the conditions of probation is `gain[ed],' there would not then be a `formal revocation hearing under XX-XX-XXX,' for the same violation (second brackets in original).  By the terms of the agreement, the State got what it bargained for: compliance thereafter by the Defendant with the rules of probation, as amended in the agreement, and there is no valid argument that the Defendant is NOT entitled to get what he bargained for: that the intervention agreement was `in lieu of a formal violation being filed.'  The State had the opportunity in the intervention hearing to address and resolve the issue of what consequences should be imposed upon the Defendant for his violation of the conditions of probation, and the issue was resolved. By the clear terms of the statute and the intervention hearing agreement, the State cannot now, for the same violation, initiate litigation intended to resolve that issue with a different result. As noted, the State did not appeal from the District Court's order. ¶ 36 The conclusion that the State breached an enforceable agreement is inescapable in light of the District Court's findings of fact and conclusions of law. The court determined that the State and McDaniel had entered a valid, binding agreement and that the terms of this agreement, when read in conjunction with the controlling statute (§ 46-23-1015(1), MCA), precluded the State from initiating a formal revocation hearing so long as McDaniel complied with the agreement. McDaniel did comply with the agreement; thus, the State had a contractual obligation not to initiate a formal revocation hearing arising out of the same probation violation. Nevertheless, the State initiated a formal revocation hearing. Accordingly, the terms of the agreement were breached. ¶ 37 The State contends that the issue decided by the District Court in the revocation proceeding was whether the State could revoke McDaniel's suspended sentence based on his admission to violating his probation by using cocaine when that admission was made during an informal probation violation intervention hearing. This is patently incorrect. The District Court did not even reach the question of whether McDaniel's admission during the intervention hearing was sufficient to revoke his suspended sentence. What the District Court decided, rather, was that the State had the opportunity at the intervention hearing to address and resolve the issue of what consequences should be imposed upon McDaniel for his probation violation; this issue was resolved at the intervention hearing; and [b]y the clear terms of the statute and the intervention hearing agreement, the State cannot now, for the same violation, initiate litigation intended to resolve that issue with a different result. ¶ 38 The State also asserts that the District Court did not decide the issue raised by McDaniel in this casewhether he could recover damages from the State's alleged breach of contract. But this likewise misstates the relevant issue. McDaniel does not claim that he is entitled to partial summary judgment on the issue of damages. He claims that he is entitled to partial summary judgment on the issue of liability. We accordingly disagree with the State that the first element of the issue preclusion test is not met. ¶ 39 Element 2. Was there a final judgment on the merits in the prior adjudication? To determine whether a final judgment on the merits has been reached, we look to see if the issue was actually litigated and adjudged as shown on the face of the judgment. Lane v. Farmers Union Ins., 1999 MT 252, ¶ 41, 296 Mont. 267, 989 P.2d 309. Before giving preclusive effect to a judgment or order, `the court should determine that the decision to be carried over was adequately deliberated and firm, even if not final in the sense of forming a basis for a judgment already entered[, and should refuse preclusion] if the decision was avowedly tentative.' Baltrusch, ¶ 22 (brackets in Baltrusch ) (quoting Restatement (Second) of Judgments § 13 cmt. g (1982)). ¶ 40 Here, the District Court's October 2004 decision in relation to the State's obligations and conduct under the terms of the Intervention Hearing Agreement was adequately deliberated. The parties were fully heard on this issue not only in their respective briefs and proposed findings of facts and conclusions of law, but also at the May 2004 hearing. The court supported its decision with a reasoned opinion, consisting of 11 Findings of Fact and 10 Conclusions of Law. The court's order conclusively determined the issue of the State's failure to abide by its obligation under the Agreement not to initiate a formal revocation hearing. The court dismissed the State's petition for revocation, and the revocation proceedings were thereby concluded. The court's decision was firm, not avowedly tentative, and it was subject to appeal, though the State did not avail itself of this option. See M.R.App. P. 1(b)(1) (2003); State v. Finley, 2003 MT 239, ¶ 29, 317 Mont. 268, 77 P.3d 193. ¶ 41 The State contends that the second element is not satisfied because there was no final adjudication of [McDaniel's] civil claim for damages in the probation revocation proceeding. Again, however, McDaniel is seeking partial summary judgment on liability, not damages. The State cites no authority for its single-sentence assertion that the District Court's October 2004 order was not a final judgment on the State's liability for breaching the Intervention Hearing Agreement because the court did not also address what damages McDaniel is entitled to. We conclude that the second element is met. ¶ 42 Element 4. Was the party against whom preclusion is now asserted afforded a full and fair opportunity to litigate the issue which may be barred? Because the State concedes Element 3, we proceed to the fourth. The burden is on the party attempting to defeat the application of issue preclusion to establish the absence of a full and fair opportunity to litigate. Baltrusch, ¶ 18. As the foregoing discussion reflects, the State was afforded a full and fair opportunity to litigate the issues of whether the Intervention Hearing Agreement was an enforceable contract and whether the State's filing the petition for revocation was in breach of that Agreement. Indeed, these are exactly the issues the State litigated in response to McDaniel's second motion to dismiss. Nevertheless, the State contends that this element is not satisfied because the State had no opportunity to raise its defenses... to McDaniel's civil damage claims. The State identifies prosecutorial immunity, lack of consideration, invalid contract, and superseding and intervening cause as defenses it purportedly had no opportunity to raise. ¶ 43 We disagree with the State's contention. First, the issues addressed by the District Court's October 2004 order and raised by McDaniel in his breach of contract claim are whether the State made an enforceable promise in the Intervention Hearing Agreement and whether it failed to fulfill that promise. The defense of prosecutorial immunity has nothing to do with these issues. Rather, this defense, if it applied, would entitle the State to dismissal of the action without ever reaching the issue of contract enforceability and breach, which the State itself acknowledges at the outset. Cf. Orr v. State, 2004 MT 354, ¶ 55, 324 Mont. 391, 106 P.3d 100 (Immunity is a matter of avoidance, an affirmative defense.... The sovereign immunity defense does not mean that there is an absence of duty; rather, at the time that the immunity defense exists, the breach of duty is simply not actionable against the sovereign.). Moreover, in any event, the State has raised and fully argued its prosecutorial immunity defense within the context of the instant action. ¶ 44 Second, while the State claims that its other enumerated defenses were not raised in the probation revocation proceedings, the fact is that the State did argue contract invalidity due to lack of consideration. Specifically, as recited in the District Court's order, the State argued that the Intervention Hearing Agreement did not contain any additional requirement of probation that the Defendant was not previously subjected to by the Judgment and Sentence dated July 28, 2003, nor any condition that the Department of Probation and Parole, prior to the occurrence of the alleged violation or the intervention hearing, did not have the authority to impose on the Defendant. ¶ 45 Lastly, the fact that a party did not raise certain defenses in the prior adjudication does not necessarily mean that the party has been denied a full and fair opportunity to litigate the issue to be barred. Baltrusch, ¶ 18. Here, the issue of the State's liability for breach of an enforceable contract unquestionably was raised, briefed, and argued in the prior adjudication. That the State did not raise certain defenses to this issue at the time does not mean it did not have the opportunity to litigate its liability for breach of contract and to raise these defenses. ¶ 46 In sum, all four elements of issue preclusion are satisfied with respect to the State's liability on McDaniel's breach of contract claim. There are no genuine issues of material fact, and McDaniel is entitled to judgment as a matter of law on this specific issue. We accordingly reverse the District Court's judgment denying McDaniel's motion for partial summary judgment on the State's liability for breach of contract.