Opinion ID: 2110929
Heading Depth: 1
Heading Rank: 4

Heading: issues

Text: Issue preclusion prevents the parties from relitigating issues previously resolved in prior litigation if certain prerequisites are established. See West v. Wessels, 534 N.W.2d 396, 397 (Iowa 1995). There are four well-established preliminary requirements for the use of issue preclusion: (1) The issue concluded must be identical; (2) The issue must have been raised and litigated in the prior action; (3) The issue must have been material and relevant to the disposition of the prior action; and (4) The determination made of the issue in the prior action must have been necessary and essential to the resulting judgment. Brown v. Kassouf, 558 N.W.2d 161, 163 (Iowa 1997) (quoting Hunter v. City of Des Moines, 300 N.W.2d 121, 123 (Iowa 1981)). If these prerequisites are met, the doctrine is available to any party to the prior litigation or those in privity to a party. See Harris v. Jones, 471 N.W.2d 818, 819 (Iowa 1991). One is in privity with a party if he or she after rendition of the judgment, has acquired an interest in the subject matter affected by the judgment through or under one of the parties, as by inheritance, succession or purchase. Hunter, 300 N.W.2d at 123 n. 3. In the present case, Nuckoll's was not a party to the injunction action, nor was it in privity with a party to that action. We have stated that it is a due process violation for a litigant to be bound by a judgment when the litigant was not a party or a privy in the first action and therefore never had an opportunity to be heard. Harris, 471 N.W.2d at 820 (citing Parklane Hosiery Co. v. Shore, 439 U.S. 322, 327 n. 7, 99 S.Ct. 645, 649 n. 7, 58 L.Ed.2d 552, 559 n. 7 (1979)). Notwithstanding this general statement, we have held that a nonparty has had an opportunity to be heard where the party against whom the doctrine of issue preclusion is defensively invoked has a `community of interest with, and adequate representation by, the losing party in the first action.' Opheim v. American Interinsurance Exch., 430 N.W.2d 118, 121 (Iowa 1988) (quoting Clemmer v. Hartford Ins. Co., 22 Cal.3d 865, 151 Cal.Rptr. 285, 587 P.2d 1098, 1102 (1978)). Here, VOCC and the Van Oorts claim that Nuckoll's had a community of interest with them in their enforcement action against Randall Van Oort because they had the same interests in that case. On the other hand, Nuckoll's asserts the plaintiffs did not actually have the same interests as Nuckoll's, and that VOCC and the Van Oorts certainly did not adequately represent Nuckoll's interests in the enforcement action. The district court made the following findings on this disputed issue of fact: Although [VOCC] brought the [enforcement] action against Randall, the principals of VOCC, Randall Van Oort and all witnesses were related. The principals of VOCC are two brothers and a sister, and a brother-in-law of the defendant Randall. Jerry Van Oort's view of the matter was that Randall should be allowed to earn a living by working for M. Peterson and Jerry was not concerned about the allegation of Randall's violation of his covenant. In fact all of the principals in [VOCC] had a motive to just go through the motions of enforcing the covenant. That would allow Randall to keep his job and would give the appearance that VOCC was in good faith attempting to enforce the covenant. The motive was there not to ask Randall the hard questions concerning his formation and alleged employment by Central Redi-Mix, Inc. and in fact the hard questions were not asked.... There is evidence in fact that Jerry Van Oort suggested that Randall use the Central Redi-Mix corporation as a defense to the claim of the violation of the covenant. As the court's discussion makes clear, the district court found that VOCC and the Van Oorts did not have the same interests as Nuckoll's with respect to enforcement of Randall's covenant not to compete. It is also implicit in the court's decision that VOCC did not adequately represent Nuckoll's interests in the enforcement proceeding. Based on the district court's express and implicit findings that the plaintiffs did not share a community of interest with Nuckoll's and did not satisfactorily represent Nuckoll's interests in the enforcement action, the district court refused to apply the doctrine of issue preclusion. Our review of the record reveals substantial evidence to support the district court's findings and, therefore, they are binding on appeal. See Iowa R.App. P. 14(f)(1). Given these findings, the district court correctly ruled that Nuckoll's was not precluded from litigating whether Randall violated his covenant not to compete.