Opinion ID: 2551646
Heading Depth: 1
Heading Rank: 5

Heading: Res Judicata/Judicial Estoppel

Text: [¶ 9] PRC argues the district court erred in holding that it was barred by the principles of res judicata from obtaining a declaratory judgment from the district court as to the meaning of the word exclusive as used within the Agreement and from asserting that the exclusive rights of the City granted under the Agreement are unenforceable because they violate public policy. In essence, PRC asserts that these issues were not actually and necessarily litigated in the previous action commenced between PRC and the City, and the issues decided in the prior adjudication are not identical to the issues presented in this matter. [¶ 10] In particular, PRC maintains that the previous litigation between the parties presented a host of issues but the primary issues were the scope of lands covered by the Agreement and whether or not water usage in the Quarter Circle 5 subdivision should be credited to PRC's annual entitlement. Thereby, PRC contends they should not now be precluded from litigating the specific issue of the meaning of the word exclusive as used within the Agreement and from asserting that the exclusive rights of the City granted under the Agreement are unenforceable because they violate public policy. [¶ 11] The City asserts that a careful analysis of the previous litigation and this litigation demonstrates that the specific meaning of the word exclusive as used in the Agreement was vigorously litigated and determined in the City's favor in the previous litigation. Similarly, the City contends that in the previous litigation PRC raised but failed to actively pursue their asserted defense that the Agreement violated public policy. Hence, in summary, the City maintains that PRC's challenge in this matter is nothing more than a rephrasing of issues that have already been decided. [¶ 12] In Amoco Prod. Co. v. Board of County Comm'rs of County of Sweetwater, at ¶ 12, we stated: In Eklund v. PRI Environmental, Inc., 2001 WY 55, ¶¶15-20, 25 P.3d 511, ¶¶ 15-20 (Wyo.2001), we extensively recognized that res judicata and collateral estoppel are related but distinct concepts. Res judicata bars the relitigation of previously litigated claims or causes of action. Slavens v. Board of County Commissioners, 854 P.2d 683, 686 (Wyo. 1993). Four factors are examined to determine whether the doctrine of res judicata applies: (1) identity in parties; (2) identity in subject matter; (3) the issues are the same and relate to the subject matter; and (4) the capacities of the persons are identical in reference to both the subject matter and the issues between them. Id. Collateral estoppel bars relitigation of previously litigated issues and involves an analysis of four similar factors: (1) whether the issue decided in the prior adjudication was identical with the issue presented in the present action; (2) whether the prior adjudication resulted in a judgment on the merits; (3) whether the party against whom collateral estoppel is asserted was a party or in privity with a party to the prior adjudication; and (4) whether the party against whom collateral estoppel is asserted had a full and fair opportunity to litigate the issue in the prior proceeding. Id. .... ... In CLS v. CLJ, 693 P.2d 774 (Wyo.1985), the appellant failed to appear at trial, and his suit to establish paternity was dismissed with prejudice pursuant to W.R.C.P. 41(b). A second suit raising the same claim was subsequently filed. We held that the appellant was barred by the doctrine of res judicata from bringing the same claim because an involuntary dismissal under Rule 41(b) operated as an adjudication of the merits. 693 P.2d at 777. In Day v. Davidson, 951 P.2d 378 (Wyo.1997), Day had filed an action based on vicarious liability against Pamida, Inc. based on the negligent acts of one of its employees. Day accepted an offer of judgment from Pamida and then subsequently filed an action against the employee based on the negligent act underlying the vicarious liability claim. We held that Day could not bring a subsequent action against the employee based on the fact that, as a vicarious liability situation, the employee was entitled to be credited with the amount of the judgment entered against his employer leaving Day with nothing to recover from the employee. 951 P.2d at 383. While not directly implicating the doctrine of res judicata, Day, like CLS, concerned the same claim brought by the same plaintiff. The application of res judicata to those situations where a plaintiff attempts to bring the same claim in a subsequent action against the same or different defendants has a logical basis: It encourages resolution of the plaintiff's claims in a single action, and it forces parties to abide by their agreements ... ... Issue preclusion does not attach unless it is clearly shown that the parties intended that the issue be foreclosed in other litigation. (Quoting 18 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure: Jurisdiction § 4443, at 382-85 (1981).) [¶ 13] In the previous litigation, the City filed a complaint against PRC for recovery of pumping expenses allegedly owed by PRC under the Agreement. Many claims and counterclaims followed including a request by PRC for a declaration of the specific time period referred to in the Agreement during which the City had the exclusive right to drill for and produce water pursuant to the Agreement. PRC also asserted as an affirmative defense that the Agreement was in violation of public policy and was therefore void or voidable. [¶ 14] On September 4, 1992, the district court entered an order in the previous litigation. That order stated in applicable part: 2. As to the following, the Agreement is clear and unambiguous and the Court interprets the Agreement as follows: a. The lands to which Polo Ranch's water use is limited and on which the City has an exclusive right to develop the ground water are those specifically described in the Agreement. b. The term of the exclusive right of the City to develop and use the Polo Ranch ground water has not expired and such right exists for the duration of the Agreement, which is supported by consideration and is not invalid for indefiniteness of term. .... f. Polo Ranch is restricted from utilizing its share of the water on lands other than those described in the Agreement, and is prohibited from selling the water. (Emphasis added.) [¶ 15] The City filed an amended and supplemental complaint in the previous litigation which requested that the district court issue a declaratory judgment declaring that the City had the exclusive right to drill the subsurface water on the lands described in the Agreement. On June 18, 1996, after a bench trial was held, the district court issued its findings of fact and conclusions of law in the previous litigation. This document stated, in applicable part: 45. The lands contained within the subdivision developed by the Polo Ranch remain subject to the 1955 Agreement, as there has been no action by the City releasing these lands from the Agreement. But the City took no action when it knew or should have known that the land would be used for residential purposes which would require wells. While it retains the exclusive right to drill wells on the land in the future, it has waived any right to charge the existing residential production against Polo's allocation under the Agreement. (Emphasis added.) Later, the district court's judgment was entered in the previous litigation which similarly declared: 6. On the Seventh Claim for Relief in Plaintiff's Amended and Supplemental Complaint, Judgment is granted to the City of Cheyenne, Cheyenne Board of Public Utilities, declaring and adjudging that the City retains for the future the exclusive right to drill for subsurface waters on all lands subject to the 1955 Agreement, including the lands subject to the 1955 Agreement that are contained within the subdivision developed by the Polo Ranch Company. However, the Court declares and adjudges that the City has waived its right to object to the pumping of existing residential wells within the aforementioned subdivision, and it is not entitled to charge production from those existing residential wells against Polo Ranch Company's share of water under the 1955 Agreement. (Emphasis added.) This judgment was then appealed to this court. However, no appeal was taken as to the City's exclusive right to develop and use the Polo Ranch groundwater, including PRC's assertion that the Agreement violated public policy. Again see Polo Ranch Co. v. City of Cheyenne, 969 P.2d at 135-36. [¶ 16] Application of the four factors identified above regarding the doctrine of res judicata demonstrate that PRC is estopped in this case from again litigating the specific issue of the meaning of the word exclusive as used within the Agreement and from asserting that the exclusive rights of the City granted under the Agreement are unenforceable because they violate public policy. Obviously, both PRC and the City were the parties involved in the previous litigation. In addition, their capacities as parties are identical in the previous litigation and this case. Moreover, the district court in the previous litigation explicitly ruled on a number of occasions that, pursuant to the Agreement, the City possessed the exclusive right to drill and use the water located on the Polo Ranch property. Indeed, the district court in the previous litigation not only clearly expressed that the City had the exclusive right to drill and use the water that existed upon the subject property under the Agreement, but went further to specify the exact location of the real property that these rights could be exercised upon, the time duration of such rights, that PRC was restricted from utilizing its share of the water on lands other than those described in the Agreement, and that PRC was prohibited from selling the water. The district court was patently clear, detailed, and specific in its ruling with respect to the exclusivity of the City's rights under the Agreement and the limitations to which PRC must abide under the Agreement. [¶ 17] Even though PRC attempts to argue otherwise, no viable argument exists that the subject matter, namely the exclusive nature of the City's rights under the Agreement, is not the same in the previous litigation and in this action. While the main issue in the previous litigation centered around the scope of the lands covered by the Agreement and whether or not water usage in the Quarter Circle 5 subdivision should be credited to PRC's annual entitlement, the fact still remains that the City requested that the district court issue a declaration that the City had the exclusive right to drill the subsurface water on the lands described in the Agreement. Furthermore, PRC also asserted the argument in its answer to the City's complaint by presenting the affirmative defense that the Agreement violated public policy and was therefore void or voidable. [¶ 18] Finally, PRC complains that it was not afforded the opportunity to sufficiently present and argue in the previous litigation the exclusiveness of the City's rights under the Agreement and that the Agreement was void or voidable because its terms violated public policy. As noted above, these very issues were clearly placed before the district court for determination by the City and PRC in the previous litigation. PRC arguably could have raised such issues when it appealed the ruling of the district court in the previous litigation but failed to do so. Accordingly, we hold that PRC had every opportunity to fully and fairly litigate these issues in the previous litigation as these issues were actually and necessarily before the district court in that action. Likewise, application of the doctrine of collateral estoppel or issue preclusion bars PRC from relitigating the exclusive nature of the City's rights pursuant to the Agreement and the related violation of public policy argument made by PRC. As stated previously, these issues were specifically decided in the previous adjudication and are identical to those issues now asserted by PRC. PRC and the City were also both parties in the previous litigation with PRC having a full and fair opportunity to litigate the involved issues in that proceeding. [¶ 19] The district court clearly issued a ruling on the merits concerning these issues in the previous litigation. In Cross v. Berg Lumber Co., 7 P.3d 922, 930 (Wyo.2000) (citing Erhart v. Flint Engineering & Const., 939 P.2d 718, 724 (Wyo.1997) and Hatten Realty Co. v. Baylies, 42 Wyo. 69, 290 P. 561, 566 (1930)), we declared that judicial estoppel requires that where a man is successful in the position taken in the first proceeding, then that position rises to the dignity of conclusiveness. In this instance, the City was clearly successful in the previous litigation regarding the issue of its exclusive right to develop and use the water on Polo Ranch as provided under the Agreement. This prior determination warrants the conclusive disposition of this matter. [¶ 20] Finally, although such theory was not relied upon by the district court in making its decision in this action, this court recognized in Amoco Prod. Co. v. Board of County Comm'rs of County of Sweetwater, ¶ 17 (citing Cross v. Berg Lumber Co., 7 P.3d at 930 and Allen v. Allen, 550 P.2d 1137, 1142 (Wyo.1976)), that judicial estoppel is sometimes referred to as a doctrine which estops a party to play fast and loose with the courts or to trifle with judicial proceedings. It is an expression of the maxim that one cannot blow hot and cold in the same breath. A party will simply not be allowed to maintain inconsistent positions in judicial proceedings. [¶ 21] In the previous litigation, PRC requested through counterclaim a declaration of the specific time period referred to in the Agreement during which the City had the exclusive right to drill for and produce water pursuant to the Agreement. In essence, through this counterclaim, PRC admitted that the City had the exclusive right to drill for and produce water under the terms of the Agreement. Therefore, by virtue of such prior judicial admission, PRC cannot be allowed to now contend that the interpretation of the word exclusive as used within the Agreement needs to be further clarified by the district court in the instant case. [¶ 22] In a last ditch effort, PRC further argues that this court has previously indicated that it will limitedly apply the doctrines of res judicata, collateral estoppel, and judicial estoppel. In the case of Robertson v. TWP, Inc., 656 P.2d 547, 553 (Wyo.1983) (citations omitted) this court stated: An examination of the cases in which this court has considered the application of the doctrine of res judicata as that rule is precisely defined and its corollary collateral or judicial estoppel leads to the conclusion that the policy in Wyoming has been to apply those propositions rather narrowly. While those concepts will be invoked when appropriate to avoid repetitious suits involving the same cause of action, and the relitigation of matters actually litigated and determined in the first proceeding, to the end that the concept of finality is honored in litigation in the State of Wyoming, still they are not to be applied in a highly technical manner which would in a context such as this prevent litigants from presenting their claims against others for determination on their merits. Nevertheless, even upon review of our opinion in Robertson, we are convinced that this matter is one where the doctrines of res judicata, collateral estoppel, and judicial estoppel should be applied. In the interests of finality and judicial economy, when asserted claims and issues have actually been previously litigated and determined on the merits in a prior matter, these doctrine are properly applied. Such is the case here. [4]