Court Opinion

ID: 883330
Source: CourtListenerOpinion
Date Created: 2013-06-05 02:16:13.540217+00
Date Added: 2024-06-11T13:18:04.773736
License: Public Domain

NO.     93-365
                IN THE SUPREME COURT OF THE STATE OF MONTANA
                                                     1994

ROGER HOLTMAN,
                Plaintiff         and Appellant,
         -vs-
4-G's PLUMBING & HEATING,                    INC.,                                       .?R S-1$)4
a corporation,
                Defendants          and Respondents.                                  &/ J&f       BL
                                                                                 CLERKOFSLjPREME    COURT
                                                                                    ="A-E OF iMoi\iTANA

APPEAL FROM:                District  Court of the             Fourth   Judicial    District,
                            In and for the County              of Missoula,
                            The Honorable   Douglas            G. Harkin,     Judge presiding.

COUNSEL OF RECORD:
                For    Appellant:
                            Charles    3.    Tornabene;   Patterson,             Marsillo,
                            Tornabene,       Schuyler   & McKenna,            Missoula,           Montana

                For     Respondent:
                            Ronald A.       Bender;      Worden,     Thane      & Haines,
                            Missoula,       Montana

                                             Submitted      on Briefs:           December          16,    1993
                                                                   Decided:      April       5,    1994
Filed:
Justice      Karla      M. Gray delivered                     the Opinion            of the Court.

         Roger Holtman               (Holtman)          appeals         from an order               entered      by the
Fourth      Judicial       District                Court,     Missoula         County,        granting          summary
judgment        in      favor         of      4-G's         Plumbing         and Heating,              Inc.       (4-G's
Plumbing).            The court             determined          that       dismissal         with     prejudice         of
Holtman's           counterclaim              in a previous             lawsuit        barred        his    trespass,
invasion       of privacy            and asbestos             contamination            claims        against        4-G's
Plumbing        under          the         doctrines           of      res    iudicata          and        collateral
estoppel.           Holtman asserts                 error      only     in the court's              application         of
the doctrines           to his         asbestos             contamination           claim.          Because all         of
the elements           of res iudicata                  and collateral               estoppel         are not met,
we reverse           the court's             grant      of summary judgment                  in favor          of 4-G's
Plumbing       on that          claim.
         Holtman owned a condominium                           located        in the Edgewater              Townhouse
Complex in Missoula,                   Montana.              In February            of 1989,         the Edgewater
Townhouse Homeowner's                       Association             (the     Association)            authorized          an
employee       of 4-G's          Plumbing            to enter          Holtman's        condominium,             in his
absence,       to repair             a leak         and install            a new heating             system.         When
Holtman       returned           to        his     condominium,              he discovered             a partially
installed            heating          system          and      alleged            asbestos          contamination.
Holtman       refused      to allow                further         installation         of the        system.
          The Association                  filed       a complaint            seeking        an injunction               to
require      the installation                      of the heating            system.         Holtman          responded
by generally            denying             the     Association's             allegations.                 Nearly       two
years      later,      Holtman             filed     a counterclaim                without      leave         of court.

                                                               2
He      alleged              that            the         Association                   had         deprived                     him        of      property

rights,            invaded             his      privacy,               and contaminated                              his        condominium                   with

asbestos.                  In     addition                 to      other         rulings,                 the         court            dismissed               the

counterclaim                    with         prejudice              because            the     compulsory                       counterclaim                   was

not       timely           filed             under             Rule        13(a),            M.R.Civ.P.,                        and        Holtman             had

failed          to     obtain            leave            of     court         pursuant              to        Rule         13(f),              M.R.Civ.P.

Both        Holtman               and          the         Association                      appealed.                           We affirmed                    the

dismissal               of        Holtman's                     counterclaim                   in         Edgewater                     Townhouse                v.

Holtman              (1993),            256 Mont.                 182,        845 P.2d              1224.
           In      January              of     1992,            Holtman             filed          the         present                action         against

the Association                        and 4-G's                Plumbing,              asserting                 claims               of     invasion            of

privacy,              trespass,                    and         asbestos             contamination.                               The       Association

moved        for       summary               judgment,                arguing           that         the        claims                were        barred         by

res       iudicata.                    4-G's         Plumbing                 joined          in         the     Association's                         motion
and       filed        a separate                    motion            for       summary                 judgment                relying             on both

res       iudicata              and collateral                         estoppel.                   The District                        Court         granted

summary              judgment            for         each         defendant                 by separate                     order,              dismissing

the       claims             against                the         Association                  under              res         iudicata                 and       the

claims            against              4-G's          Plumbing                under          res          iudicata                 and          collateral

estoppel.                  Holtman              appeals               only       from         the         summary                adjudication                    in

favor        of       4-G's         Plumbing.

           Our standard                       for     reviewing                a grant              of     summary                judgment              is     the

same as that                    used         by the             district            court.               Emery             v.     Federated                  Foods

(Mont.            1993),         863 P.2d                 426,        431,      50 St.Rep.                 1454,                1456.           Initially,

we determine                     whether                 there           is     an      absence                 of         genuine               issues          of

material              fact.             Minnie             v.      City        of      Roundup                 (1993),             257 Mont.                  429,

                                                                                3
431, 849 P.2d 212, 214.                     The party            moving for             summary judgment                has
the    initial           burden      of     demonstrating                   a complete           absence         of     any
genuine        factual          issues.          D'Agostino            v.    Swanson (1990),                  240 Mont.
435,       442,    784 P.2d         919,        924.      In order            to   meet this                burden,     the
moving         party        must      support            its          motion          with      an          appropriate
evidentiary            basis.       Minnie,        849 P.2d at 214.                     The moving party                may
draw from the pleadings,                        depositions,                answers      to interrogatories,
and admissions             on file,        together            with     any affidavits.                     Rule 56(c),
M.R.Civ.P.
        Once        an     absence         of     genuine             issues       of        material           fact      is
established,             we determine            whether         the moving party                    is entitled          to
judgment          as a matter         of law.            Minnie,            849 P.2d at 214.                  Here,     the
District           Court        concluded         that         4-G's         Plumbing          was      entitled          to
summary judgment                under the doctrines                   of res iudicata                and collateral
estoppel.           We do not defer              to a district               court's         legal     conclusions,
but    determine           whether        they     are correct.                 Steer,         Inc.     v.     Dep't      of
Revenue (1990),              245 Mont.           470,     474-75,            803 P.2d 601,             603.

Res Judicata
        The doctrine              of res iudicata              is grounded             on the principle                that
litigation          must at some point                   come to an end.                     Orlando         v. Prewett

(1989) r          236 Mont.         478,        481,     771 P.2d              111,      113.          It      bars     the
relitigation             of an entire           cause of action                once a final            judgment         has
been entered.               Marriage        of Stout            (1985),         216 Mont.             342,     349,     701
P.2d 729, 733.              All    of the following                   elements         are necessary             for    yes
judicata          to apply:

                                                           4
           1) the         parties             or       their           privies                must      be the          same:

           2) the         subject             matter              of     the        action             must        be the             same:

           3) the         issues             must be the                       same and                relate          to        the         same
           subject         matter;            and

           4) the capacities                            of the persons    must be the same                                                        in
           reference to the                           subject matter   and to the issues.

Tisher       v.     Nor-west           Capital               Mgmt.           (Mont.            1993),         859 P.2d                984,        987-88,
50 St.Rep.              960,         962.

           Holtman             asserts                that             his         "asbestos                  contaminationl'                          claim

alleges           negligent                workmanship                   on the           part         of     4-G's          Plumbing              in     the
installation               of the           heating               system.                Because            his      prior            counterclaim

against           the     Association                    contained                       no such            claim,           he argues                  that
none of        the       elements                of    res        iudicata                is     met.          4-G's          Plumbing                 urges

application              of the             doctrine,                  asserting                that        the      claims            advanced                in

the        complaint                  do         not           contain                   an       allegation                     of         negligent

workmanship,                   but         are         identical                    to        those          raised              in         the        prior

counterclaim.

           Holtman's             asbestos               contamination                          claim         reads          as follows:

           That said defendant,            4-G's Plumbing           & Heating,      Inc.,     in
           the process       of installing         said hot water heating              system
           in Plaintiff's         home, disturbed               older   plumbing       pipes,
           which    were     contaminated          with      asbestos,      resulting         in
           asbestos       contamination         of      Plaintiff's        home and the
           personal     property      contained       therein.

This       asbestos            contamination                      claim--as                   alleged--is              hardly               a model            of

clarity.            However,               4-G's        Plumbing                   did     not       move for           summary                judgment

on the       basis         of        a failure               to        state         a claim            upon which                    relief           could

be granted              or challenge                    the       claim            as alleged                 in     any other                 way.        We

decline        to       rule         on an issue                  that         was not             presented                to        the      District

Court.         Goodover               v.     Lindey's,                  Inc.         (1992),            255 Mont.                430,          441,       843

                                                                               5
P.2d 765, 772.                   Thus, we address                  the applicability                  of res iudicata
to Holtman's                asbestos           contamination             claim       to the extent              that       claim
is    read        to allege            negligent            workmanship           by 4-G's            Plumbing            in the
installation                of the heating                 system.
         The "parties                   or     their        privies"       element           of    res         iudicata          is
dispositive             here.           It     is undisputed             that        4-G's     Plumbing           was not a
party        to     the        prior         litigation.               The District               Court        determined,
however,            that        4-G's         Plumbing           and the         Association              were         privies
because they                "acted           in concert."
         We previously                   have          focused         on whether            a defendant's                 legal
right        or interest               has been represented                    by the previous                 litigant          to
determine             whether          the two are privies.                      As we stated              in Brault             v.
Smith        (1984),           209 Mont.           21, 27, 679 P.2d 236,                     239, the concept                    of
a     "privy"          in      the      context            of     a judgment            applies           to     one       whose
interest           has been legally                    represented         at trial.              We have similarly
defined           privies        as those who are so connected                           in estate             or in blood
or      in      law       as     to      be      identified             with      the        same      interest             and,
consequently,                  affected         with       each other          by litigation.                  Tisher,       859
P.2d at 988.
         As the party                  moving       for      summary judgment,                 4-G's       Plumbing          had
the initial             burden          of demonstrating                 the absence of a genuine                          issue
of material             fact       and entitlement                 to judgment           as a matter              of law on
the     privity             element.             4-G's          Plumbing       did     not     file       an answer              to
Holtman's             complaint;             nor did        it    submit       any depositions,                 answers to
interrogatories,                   admissions              or affidavits             to support         its      motion      for
summary judgment.                       Thus,       it     did not provide              any evidentiary                    basis

                                                                   6
for     summary adjudication.
          By joining                 the        Association's                       motion             for         summary judgment,
however,              4-G's          Plumbing                 ostensibly                  adopted                  the        Association's
evidentiary                  basis      for           summary judgment,                          including                   copies         of    the
prior         counterclaim,                the order                   striking            it     with            prejudice,                and the
findings             and rulings                contained                in the court                    file            relating            to the
previous              litigation.                       Therefore,                   we         focus              on        whether          these
materials             form a sufficient                        basis          for     summary judgment                          on the issue
of privity--a                 shared legal                    interest--between the                                Association               and 4-
G's Plumbing                  on the asbestos                     contamination                    claim.
          The         materials              indicate                  that         the         Association                     hired         4-G's
Plumbing            and allowed                 its      employee              into       the condominium                            to install
the heating                  system,       supporting                   the District                    Court's               determination
that      the two "acted                   in concert"                   in entering                   the condominium.                          This
mutual         conduct            in       entering               the         condominium,                        however,             does       not
establish             that      the Association                         shared         a legal                interest               with     4-G's
Plumbing with                  regard         to its           workmanship                 in the installation                               of the
heating            system.           Thus,           the court's               conclusion                    that        the Association
and 4-G's              Plumbing            are         privies,               in     the        context                 of     the      asbestos
contamination                  claim,           is     incorrect.
          4-G's         Plumbing           attempts               to establish                    a shared                   legal      interest
in      the        asbestos            contamination                      claim           to      the             extent         that         claim

alleges            negligent           workmanship                 by arguing                   that         it     acted        as an agent
of      the Association                    in         installing               the heating                        system.             An agency
relationship                  would     exist            if     the Association                         controlled                   or had the
right         to     control           the       physical                conduct            of     4-G's                Plumbing            in    the

                                                                         7
installation                  of the heating                      system.          See Eccleston                 v.     Third         Jud.
Dist.          Ct.        (1989),            240 Mont.           44, 51-52,              783 P.2d 363,                368,     quoting
Restatement                  (Second)               of Agency,           5 2.      Nothing         in the record                of the
prior          litigation                   or the present                   case establishes               such a right                 of
control.                    We conclude                   that         the     materials           relied         on by           4-G's
Plumbing              to support                  summary adjudication                     do not establish                    that      it
was      a privy                  of        the         Association              with      regard         to      the         asbestos
contamination                     claim.
          4-G's           Plumbing                advances         two other             arguments,            loosely         tied      to
the       doctrine                     of         res      iudicata,              to      bar       Holtman's                 asbestos
contamination                     claim.                Based on its              assertion          that        Holtman          could
have       raised             the           claim        in      the     prior          proceeding,            4-G's          Plumbing
argues           that       he is barred                   by the doctrine                 from doing            so here.
          It         is true           that         res iudicata              precludes         claims         that     could         have
been       raised             in            the      prior        lawsuit          as      well      as        those          actually
adjudicated.                      Beck v.             Flathead          County          (1989),      240 Mont.           128,         133,
783 P.2d 383,                     386; Orlando                v. Prewett                (1989),      236 Mont.           478,         481,
771     P.2d         111,      113.            The preclusive                 effect       of res iudicata,                   however,
applies              only     to        claims           raised         in subsequent              lawsuits            between         the
parties              in     the        original            action        or their           privies,            reflecting             the
"parties              or their              privies"          element          of the doctrine.                 &.&,          783 P.2d
at 386; Orlando,                        771 P.2d at 113.                       Thus,      res iudicata's                preclusive

effect           as to claims                       not actually              litigated           does not            apply     to the
case before                  us.
          Finally,                4-G's             Plumbing       asserts         that      Rule 12(b),               M.R.Civ.P.,
required              Holtman               to       assert       his        claims        against        it      in     the      prior

                                                                         8
litigation.            Rule 12(b),               M.R.Civ.P.,              requires         that       every defense             to
a claim,             counterclaim                or      third-party              claim          be     raised         in      the
responsive           pleading.               Holtman's          claims          against        4-G's       Plumbing          were
not     a defense            to      the      claims         asserted            by the         Association            in      the
prior         litigation.                  Thus,        he was not                required            by     Rule          12(b),
M.R.Civ.P.,            to         file     his         claims          against         4-G's      Plumbing            in     that
action.
          4-G's      Plumbing has not demonstrated                                that     the "parties             or their
privies"         element           of res iudicata                 is met.            We hold that           the District
Court        erred      in        applying           res     iudicata            to     bar      Holtman's          asbestos
contamination               claim        against           4-G's        Plumbing.

Collateral            Estoppel

          Again       focusing           entirely           on the asbestos                   contamination                claim,
Holtman asserts               that         the District                Court erred            in concluding           that      4-
G's Plumbing was entitled                            to summary judgment                   under the doctrine                   of
collateral           estoppel.               He contends           that     collateral             estoppel         does not
bar the claim               because the issue                   of 4-G's          Plumbing's            negligence             was
not raised            in his         prior       counterclaim.
          Collateral                 estoppel,              sometimes                 referred          to       as         issue
preclusion,            is     a form           of res         iudicata.                While      res      iudicata          bars
parties         from relitigating                    claims        in subsequent               proceedings          based on
the same cause of action,                            collateral           estoppel            bars the reopening                of
an issue          in a second cause of action                               that         has been litigated                    and
determined            in a prior             suit.         Linder        v. Missoula              County       (1992),         251
Mont.         292,     294,          824 P.2d            1004,          1005.          The doctrine              has        three

                                                                   9
elements:
        1) the identical    issue raised                          has been previously                  decided
        in a prior   adjudication:
        2) a final    judgment                   on the merits            was issued           in the prior
        adjudication:     and
        3) the party against whom the plea is now asserted                                               was a
        party     or  in privity with   a party   to  the                                                prior
        adjudication.
State     v. Young (1993),                     259 Mont.         371, 377, 856 P.2d 961,                      965.        Our
analysis        need not proceed                   beyond the             first      element.
        Identity           of issues             is the most crucial                   element        of collateral
estoppel.             Anderson            v.    State     (1991),          250 Mont.           18,    21,      817 P.2d
699, 702.            In order         to satisfy          this     element,           the identical             issue      or
"precise        question"             must have been litigated                            in the     prior       action.
Anderson,            817 P.2d at 702.                   To determine               whether     the     issue       raised
is identical,              we compare the pleadings,                          evidence         and circumstances
surrounding            the      two        actions.          Aetna          Life      Ins.      Co. v.         McElvain

(1986),        221 Mont.             138,       146, 717 P.2d 1081,                  1086.       We note         that      we
have    only         the      asbestos-related                   allegations              to   examine         from       the
previous        litigation             since       Holtman's         counterclaim              was dismissed               on
legal        grounds       prior       to the receipt               of any evidence                  on the claim.
        It      is     true        that         Holtman's         prior           counterclaim          against           the
Association            arose         from the same events                    as     his    claim      against          4-G's
Plumbing         and,         like        his     present         claim,           sought      damages           for      the
alleged          asbestos             contamination.                       Holtman's            asbestos-related
contamination              claim      against         the Association                in the prior            litigation
was as follows:
        [The Association]                        did, without     the knowledge or consent
        of   [Holtman],                        terminate      the    heating   service   to
                                                            10
        [Holtman's]       unit   sometime    between     March,      1988 and
        February 5, 1989, which resulted           in certain      waterlines
        freezing,      breaking     and creating         water      leaks     in
        [Holtman's]     unit and subsequently        therewith     caused the
        asbestos    covering     of certain    pipes to be removed and
        generally    distributed    throughout    the unit,     all of which
        rendered       [Holtman's]      unit     damaged,       unsafe       and
        uninhabitable.
When this        claim       is    compared              to    Holtman's            asbestos               contamination
claim    against        4-G's      Plumbing              set forth         above,         it     is clear         that      the
identical        issue,      or precise                 question,          raised         in the            present       case
was not raised            and decided                 in the earlier              litigation               involving        the
Association.
        Holtman's         prior     asbestos-related                   claim        can be read as alleging
an intentional            wrongful              act      by the Association--the                            unauthorized
termination           of heat to the condominium--followed                                       by all         the damage
that    flowed        therefrom,                including          broken         waterlines                and asbestos
disturbance           and distribution.                       To the        extent             the     prior      claim         is
read    in    this      fashion,           it     is     clear      that      the      issue           of the       alleged
negligence           of 4-G's      Plumbing              in the present              case is not identical.
        Furthermore,            to the extent                 the prior       asbestos-related                     claim        is
read     as    an      allegation                of      negligence           against                the       Association
resulting        in asbestos           contamination,                 that         claim         did       not raise        the
issue of 4-G's           Plumbing's              negligent         workmanship                 in the installation
of the new heating                system.             A negligence           action            is premised,            first,
on the existence             of a duty.                  Nautilus          Ins.      v. First              National       Ins.

(1992) I 254 Mont.              296,       299, 837 P.2d 409,                     411.          4-G's       Plumbing        has
not established            that      its         legal     duties      to Holtman                in installing              the
new heating           system       were co-extensive                   with         the        duties          owed him by
the Association.
                                                              11
        We conclude           that     the    "identical       issue"    element     of collateral
estoppel        is not met under the circumstances                      before     us.       Therefore,
we hold that            the District         Court   erred     in concluding       that      Holtman      is
collaterally             estopped      from     asserting       the     asbestos     contamination
claim     and in granting              summary judgment          in favor        of 4-G's      Plumbing
on that        claim.

        Reversed         and remanded for            further    proceedings        consistent       with
this    opinion.                                                  !                      ^

We concur:

                                                      12
                                        April 5, 1994

                                CERTIPICATEOF SERVICE

I herebycertify that the following certified order was sentby United Statesmail, prepaid,to the
following named:

CharlesJ. Tornabene
Patterson,Marsillo, Tomabene,
                            Schuyler McKenna
                                   &
103 So. 5th East
Missoula,MT 59801

RonaldA. Bender,Esq.
Worden,Thane& Haines,P.C.
P.O. Box 4747
Missoula,MT 59806

JohnR. Gordon,Esq.
Reep,Spoon& Gordon, P.C.
P.O. Box 9019
Missoula,MT 59807-9019

                                                  ED SMITH
                                                  CLERK OF THE SUPREMECOURT