Court Opinion

ID: 7123950
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:57:39.832003+00
Date Added: 2024-06-11T16:14:12.045046
License: Public Domain

MERITS
Foy contends that its claims in the present civil action are not barred by the arbitrators’ award because they were not expressly ruled on by the arbitrators. The arbitrators ruled, after considering extensive evidence, that PMC had substantially performed and that Foy was the breaching party. This finding bars the *194present action because Foy cannot prevail in this civil action without establishing, contrary to the arbitrators’ finding, that PMC was the breaching party. Accordingly, we hold that the trial court did not err in granting summary judgment in favor of PMC. We further hold that the trial court’s decision may be affirmed on the basis of either claim preclusion or issue preclusion.
Claim Preclusion
The Supreme Court has recently defined the doctrine of claim preclusion, which it also called res judicata, as follows:
“Claim preclusion prevents parties from relitigating a cause of action that has been finally adjudicated. It is founded on the principle that the party, or some other party in privity, has litigated or had an opportunity to litigate the same matter in a former action in a court of competent jurisdiction. [Citations omitted.] An issue is res judicata when four conditions concur: (1) identity in the things sued for, (2) identity of the cause of action, (3) identity of the persons and parties to the action, and (4) identity in the quality of the persons for or against whom the claim is made.” Jackson Trak Group, Inc. v. Mid States Port Authority, 242 Kan. 683, 690, 751 P.2d 122 (1988).
These four identities are present in this case. Foy counterclaimed in the arbitration proceeding for the same damages it seeks now. Its present cause of action and its arbitration counterclaim were both based on PMC’s alleged poor workmanship. Foy and PMC were parties to both the present action and the arbitration proceeding. Universal Surety, although not a party to arbitration, is in privity with PMC. Finally, there is an identity in the quality of the persons for or against whom the claim is made. Foy and PMC had the same incentive to litigate their claims in arbitration as they do now.
Foy attempts to avoid the application of claim preclusion by asserting that identity in the cause of action is lacking. Foy reasons that its present claims sound in tort and that these tort claims have not previously been litigated since tort claims may not, under K.S.A. 1987 Supp. 5-401, be arbitrated.
A claim in tort arises when a party violates some duty imposed on him by law. In the present case, PMC owed Foy no duties except those defined in the contract between them. PMC’s liability, if any, for its alleged failure to perform its contractual duties lies solely in contract. See Ford Motor Cred. Co. v. Suburban Ford, 237 Kan. 195, 203-04, 699 P.2d 992, cert. denied 474 U.S. 995 (1985) (claims in tort may not be asserted against a party for exercising its rights under a contract between the *195parties); Isler v. Texas Oil & Gas Corp., 749 F.2d 22, 24 (10th Cir. 1984) (action for breach of contractual duty lies in contract, regardless of whether the breach arises “from inattention, a disagreement over the existence of the duty, a dispute over the nature of the duty, or a simple unwillingness to perform the duty”). The facts do not support a claim in tort for breach of contract.
Foy also attempts to avoid the application of claim preclusion by arguing that it suffered damages arising from PMC’s alleged breach but that the amount of the damages could not be determined until the completion of the project, which was after the date of the arbitration hearing. Foy specifically complains that the arbitrators did not consider “warranty, final punch list items, and other discrepancies and liquidated damages.” The record of the arbitration proceeding shows, however, that the arbitrators did consider these items. The arbitrators subtracted $30,000 from their award to PMC for Foy’s “cost to complete,” including “testing and punch list items and warranty work.”
We conclude that the only claims Foy has against PMC sound in contract, not tort. These claims were fully litigated before the arbitrators. The arbitrators decided against Foy. Their award was confirmed by the Sedgwick County District Court and Foy did not appeal. Accordingly, the doctrine of claim preclusion bars Foy’s attempt to relitigate these same claims in the present action.
Issue Preclusion
The doctrine of issue preclusion, which is also known as collateral estoppel, prevents the relitigation of issues conclusively determined in an earlier action. Issue preclusion may be asserted when a party can show that the issue was determined by a prior judgment on the merits, that the issue was actually determined and necessary to support the judgment, and that the parties are the same or in privity. Jackson Trak Group, 242 Kan. at 690. It may be based on a judgment confirming an award of arbitration. State v. Thomas Constr. Co., 8 Kan. App. 2d 283, 286, 655 P.2d 471 (1982).
Assuming that F oy may assert tort claims for breach of contract, we conclude that these claims are barred by issue preclusion. The gist of Foy’s negligence claims is that PMC’s work was substandard. In finding, however, that PMC had substantially *196performed its contractual duties, the arbitrators necessarily found that the quality of PMC’s work substantially met the standards called for by the contract. This finding bars the present action. It is not possible for PMC to fulfill its contractual obligation to employ good workmanship and, at the same time, breach the same duty in tort.
Whether Summary Judgment was Properly Granted
Foy argues that it “has controverted the facts necessary to sustain a Motion for Summary Judgment” based on the arbitrators’ award. This assertion rests, however, upon a mistaken understanding of the trial court’s decision. The trial court granted summary judgment based on the preclusive effect of the arbitrators’ award. The preclusive effect of that award presents a pure question of law. The facts material to that question are contained entirely in the record: PMC’s demand for arbitration, Foy’s answer and counterclaim, the decision of the arbitrators, the confirmation of the award in Sedgwick County District Court, and the pleadings in the present consolidated case. Foy cannot and does not controvert these facts.
Foy also argues that summary judgment is not proper until the parties have had a chance to conduct discovery. However, there is no reason to conduct discovery in the present case because nothing that might be learned through discovery could change the outcome of the present case. All of the material facts are contained in the record of the arbitration proceeding.
Finally, Foy complains that the court did not specifically address the questions of whether Foy’s claims for damages arising after arbitration were included in the arbitration award, whether punitive damages could be recovered in contract actions, and whether the arbitration afforded merely “interim relief.” We believe that these questions were adequately addressed when the court held that all of Foy’s claims had been resolved against Foy in arbitration. K.S.A. 60-252(a); Rule 165 (1988 Kan. Ct. R. Annot. 102); cf. U.S.D. No. 215 v. L.R Foy Constr. Co., 237 Kan. 1, 2-3, 697 P.2d 456 (1985) (In making a final decision on all issues between the parties, arbitrators need not specifically address each of the issues and contentions set forth by a party in its proposed findings of fact and conclusions of law.).
Affirmed.