Court Opinion

ID: 5860827
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:18:15.657942+00
Date Added: 2024-06-11T08:44:25.609942
License: Public Domain

Sandler, J. (dissenting).
Let me acknowledge that the conclusion reached by a majority of this court will yield *597important practical benefits in permitting a substantial saving of time and expense in the disposition of the multiple lawsuits that followed the blackout of 1977. I do not believe that the result reached is as fair as it is practical, or that it reflects appropriate consideration of several factors that are generally recognized as weighing against the application of issue preclusion in the absence of mutuality. Although Justice Kupferman’s able and persuasive opinion accurately states the criteria detailed by the Court of Appeals in Schwartz v Public Administrator of County of Bronx (24 NY2d 65) it does not seem to me to apply them to the complex situation presented here with that flexibility in the interest of justice that is the central principle in the application of issue preclusion. (See Schwartz v Public Administrator of County of Bronx, supra, at p 73; Gilberg v Barbieri, 53 NY2d 285, 293; see, also, Restatement, Judgments 2d, ch 3, topic 2, tit E, Issue Preclusion, pp 249, 250.)
On the tenuous basis of a single judgment for $40,500, entered upon a jury verdict disclosing unmistakable indicia of compromise, in a property damage case which presented no issue as to causation or the negligence of the plaintiff, and in which the jury’s resolution of the issue here relied on was directly contrary to determinations by Judges in several small claims actions, the court is sustaining the offensive use of collateral estoppel to preclude the defendant from relitigating the issue of the culpability of its conduct in almost 300 lawsuits involving enormous potential liability, and arising out of widely varying factual circumstances, many of which will present separate and varied issues as to causation and the negligence of plaintiffs. I have been unable to find a single reported decision anywhere in the country in which issue preclusion was sustained under circumstances remotely comparable to those here. (See Mutuality of Estoppel as Prerequisite of Availability of Doctrine of Collateral Estoppel to a Stranger to the Judgment, Ann., 31 ALR3d 1044.)
The basic principles governing the application of issue preclusion in this State were set forth by the Court of Appeals in DeWitt v Hall (19 NY2d 141) and Schwartz v Public Administrator (supra). Following the leading case of Bernhard v Bank of Amer. Nat. Trust & Sav. Assn. (19 Cal *5982d 807) the Court of Appeals joined the modern trend, albeit a trend still resisted by many jurisdictions, to eliminate the traditional requirement of mutuality in the application of issue preclusion. Both cases involved vehicular accidents, as to which the number of potential litigants and lawsuits was sharply limited, and both applied issue preclusion in the second of the two lawsuits arising out of each accident.
This appeal represents the first time that an appellate court in this State has been confronted with the proposed application of the principles subscribed to in DeWitt and Schwartz (supra) to the multiple claimant situation. Indeed, the application of those principles to the multiple claimant situation appears to have been addressed throughout the country in a surprisingly limited number of reported decisions, several involving airplane accidents. These decisions disclose divergent results, apparently turning for the most part on the particular circumstances presented in each case, although in part reflecting differences in approach. (See, e.g., Parklane Hosiery Co. v Shore, 439 US 322; United States v United Air Lines, 216 F Supp 709, affd in part and mod in part sub nom. United Air Lines v Wiener, 335 F2d 379, cert dsmd 379 US 951; State of Maryland v Capital Airlines, 267 F Supp 298; Zdanok v Glidden Co., Durkee Famous Foods Div., 327 F2d 944, cert den 377 US 934; Berner v British Commonwealth Pacific Airlines, 346 F2d 532, cert den 382 US 983; Nevarov v Caldwell, 161 Cal App 2d 762; Bahler v Fletcher, 257 Ore 1; State Farm Fire & Cas. Co. v Century Home Components, 275 Ore 97.)
Undeniably the prevailing view has rejected the thesis advanced by Professor Currie, on the basis of the widely discussed “multiple-claimant anomaly”, that issue preclusion should never be applied offensively in such cases (Currie, Mutuality of Collateral Estoppel: Limits of the Bernhard Doctrine, 9 Stanford L Rev 281), a thesis which Currie himself later acknowledged to be erroneous (Currie, Civil Procedure: The Tempest Brews, 53 Cal L Rev 25).
On the other hand, there appears to be no reported appellate decision asserting that the presence of multiple claimants, particularly in cases in which the issue of *599liability is to be decided on the basis of a choice among different possible factual inferences, may not be a factor to be considered in evaluating the fairness of applying issue preclusion. Indeed, that possibility is quite clearly recognized in several leading authorities. (See Zdanok v Glidden Co., Durkee Famous Foods Div., supra, at pp 955, 956; Berner v British Commonwealth Pacific Airlines, supra, at p 541; cf. Parklane Hosiery Co. v Shore, supra, at pp 330-332.)
A study of the record discloses the presence here of four circumstances which, taken together, require denial of plaintiffs’ motion to apply issue preclusion against the defendant on the basis of the single jury verdict in the Food Pageant case.
First, the amount at issue in Food Pageant was insignificant in relation to the enormous liability confronting the defendant in the several hundred pending lawsuits in which it is sought to preclude the defendant from relitigating the culpability of its conduct. Instructive in this connection is the introductory note in the Restatement of Judgments, Second, to the several sections dealing with issue preclusion (§§ 27-29), sections which, together with the accompanying comments, illustrations, and reporters’ notes, constitute the most systematic, balanced and thoughtful exposition of the principles that have evolved in the area with which we are concerned.
The introductory note includes the following observation (at p 249): “There are a number of instances in which the policies against relitigation of an issue may be overcome. For example * * * when the amount in controversy in the subsequent action far exceeds that involved in the initial action, unyielding application of estoppel doctrine may operate unfairly against the party who is precluded from relitigating an issue. Conversely, if a party is aware of the potential (and perhaps not wholly foreseeable) preclusive effects of a judgment, he may feel compelled to over-litigate an issue, or to pursue an appeal that might not otherwise be taken, out of fear of the consequences in later litigation.”
In this case, the potential liability of the defendant “far exceeds” the amount that was at issue in the Food Pageant *600case. Indeed, the situation here is more extreme than that contemplated in the quoted language, which appears to have been addressed to the more traditional problem in which an issue determined in one lawsuit is sought to be relitigated in a second case between the same parties.
In the retrospective light of this court’s decision, the defendant, as a litigant in Food Pageant (supra), was confronted with the following disquieting prospect. A favorable verdict would have been of no benefit whatever in any of the multiple pending lawsuits other than to avoid the application of issue preclusion here sought. A determination adverse to the defendant, however, would effectively and irremediably establish the culpability of its conduct in hundreds of cases involving potential liability running into millions of dollars.
Admittedly there is inherent in the elimination of the mutuality requirement the judicial acceptance, in the interest of avoiding issue relitigation, of some inequality between a party precluded by a prior adverse determination in a lawsuit and an opposing party who would not have been precluded by a contrary determination. But, as suggested in the quoted introductory note from the Restatement,. the argument for that principle is more compelling where, as in the usual situation, there is a reasonably proportionate relationship between the amount at issue in the first litigated case and that which is at issue in later cases. It seems to me of doubtful fairness to confront any litigant, even one as large as Consolidated Edison, with such an immense gulf between the benefit to be derived from a successful outcome in a lawsuit and the detriment to be suffered from an adverse determination. At a minimum, the presence of such a circumstance demands a very close judicial scrutiny of the first verdict to make certain that it is in fact just to give it such disproportionate consequences.
Second, the verdict in Food Pageant (supra) bears on its face unmistakable evidence of compromise. Recovery was sought in that property damage case in the sum of $81,000 and the jury returned a verdict for precisely half that amount — $40,500.
*601In Schwartz v Public Administrator (supra, at p 72), the Court of Appeals specifically listed “indications of a compromise verdict” among the factors to be weighed with regard to the application of issue preclusion, and this principle is now uniformly accepted. (See Restatement, Judgments 2d, § 29, subd [5].) The Court of Appeals did not require, as the opinion of this court suggests, that there be conclusive proof that the verdict represented a compromise, or that every other possible explanation of the verdict must be excluded with mathematical certainty. The words used in Schwartz were “indications of a compromise verdict”, and here those indications are compelling on any realistic evaluation of what occurred.
Third, in Food Pageant (supra), an action for property damage, no issue of plaintiff’s culpable conduct contributing to the loss was presented. In this case, and this may reasonably be assumed to be the fact in many of the pending lawsuits, the possible negligence of the plaintiff will clearly be an issue. In Illustration 6 of section 29 of the Restatement of Judgments, Second, the principle is specifically advanced that preclusive effect should not be given to the determination of a defendant’s negligence where the first verdict was for a plaintiff as to whom no issue of his own culpable behavior was presented and it is sought to apply that verdict preclusively against the defendant in an action on behalf of a plaintiff as to whom such an issue is presented.
It is, of course, true that in Schwartz v Public Administrator (supra) the court in fact sustained issue preclusion in a case presenting precisely the situation posed in Illustration 6. It is not clear whether the relevance of the factor, not specifically discussed in the Schwartz opinion, had been argued to the court. It is also possible that at the time Schwartz was decided, many years before the Restatement of Judgments, Second, was completed, the pertinence of the factor described in Illustration 6 had not yet come to be appreciated.
In any event, I do not believe that the Schwartz holding denies this court the right to consider that factor as a relevant one to be evaluated with others in determining the appropriateness of issue preclusion. Given the fact that *602the Restatement of Judgments, Second, was completed only recently, after many years of painstaking work, and that it represents the most definitive and systematic treatment of the issues with which we are concerned, a circumstance identified in it as by itself negating the application of issue preclusion may at least be considered by us as one among other factors to be considered.
Fourth, the jury verdict in Food Pageant (supra) was inconsistent with determinations of the same issue previously reached by Civil Court Judges in several small claims actions. The principle is of course now well established that prior inconsistency of results is a significant factor to be considered in determining the appropriateness of issue preclusion. (See Restatement, Judgments 2d, § 29, subd [4].) It is a safe assumption that this was not among the criteria listed in Schwartz (supra) only because the facts of that lawsuit disclosed no such prior inconsistency, and indeed the very nature of the situation addressed in Schwartz would not have lent itself to the possibility of such inconsistency.
It does not seem to me a satisfactory answer for the court’s opinion to note the limited res judicata effect provided by statute to determinations in the Small Claims Parts. The issue here is not whether those determinations should be given affirmative res judicata effect. It is rather whether the conclusion reached quite consistently in several different cases ought not to be given weight in determining the justice of applying issue preclusion against the defendant on the strength of a single subsequent contrary jury verdict.
In an opinion which strongly affirmed the appropriateness of issue preclusion in multiple claimant cases, the Supreme Court of Oregon nonetheless denied the application of issue preclusion because of prior inconsistent results on the issue in question: “Those courts and commentators which have considered the question are in virtually unanimous agreement that where outstanding determinations are actually inconsistent on the matter sought to be precluded, it would be patently unfair to estop a party by the judgment it lost.” (State Farm Fire & Cas. Co. v Century Home Components, 275 Ore 97, 109, supra.)
*603Let me agree that several of the small claims judgments do not seem entitled to significant weight on the issue before us. I do not believe that the factual determination reached in Lee v Consolidated Edison Co. of N. Y. (95 Misc 2d 120, revd on other grounds 98 Misc 2d 304) may be so quickly dismissed. The opinion discloses a finding by a Civil Court Judge that gross negligence had not been established on the basis of a close study of several reports by public agencies detailing careful and comprehensive investigations into the events surrounding the blackout.
Of course, this method of factual determination is not the usual one in our system of jurisprudence, in which factual issues are normally determined on the basis of adversarial presentations. But on any realistic view it seems to me clear that a factual determination conscientiously reached by an able and experienced Judge on the basis of the study disclosed in the opinion is comparable in its reliability to a determination by a six-person jury in a property damage action against Consolidated Edison. In my opinion, the finding in Lee v Consolidated Edison Co. of N. Y. (supra) is sufficiently trustworthy to be entitled to serious consideration in evaluating the fairness of enforcing issue preclusion against the defendant in this case.
A further comment in the Restatement of Judgments, Second, is instructive. Although not addressed to the specific problem of the affirmative use of issue preclusion in multiple claimant cases, it seems to me singularly pertinent to the issues presented on this appeal. The following was said in Comment g of section 29: “Ambivalence of prior determination. The circumstances attending the determination of an issue in the first action may indicate that it could reasonably have been resolved otherwise if those circumstances were absent. Resolution of the issue in question may have entailed reference to such matters as the intention, knowledge, or comparative responsibility of the parties in relation to each other. Particularly where the issues have been tried to a jury, the circumstances may suggest that the issue was resolved by compromise or with more or less conscious reference to such matters as insurance coverage or the litigants’ relative financial position. In these and similar situations, taking the prior determi*604nation at face value for purposes of the second action would extend the effects of imperfections in the adjudicative process beyond the limits of the first adjudication, within which they are accepted only because of the practical necessity of achieving finality.”
I appreciate that the position urged in this dissent, if it had been accepted, would have raised questions to which there are no simple or clear-cut answers. I do not myself believe that the defendant would have been entitled to litigate the issue of its culpable conduct to the bitter end of the last case if the next several trials resulted in adverse verdicts.
But for the reasons set forth above, I believe that the single jury determination in Food Pageant (supra) is an inadequate basis under the totality of circumstances presented for a decision that precludes this defendant from relitigating the culpability of its conduct in the several hundred outstanding lawsuits. The obvious practical advantages inherent in the court’s determination, which I in no way mean to minimize, seem to me far outweighed by the palpable unfairness of the result reached.
Accordingly, the order entered in the Supreme Court, Bronx County (Mercorella, J.), on July 22, 1982, which denied plaintiffs’ motion for partial summary judgment precluding Consolidated Edison from relitigating the issue of its gross negligence, should be affirmed.
Carro, Asch and Kassal, JJ., concur with Kupferman, J. P.; Sandler, J., dissents in an opinion.
Order, Supreme Court, Bronx County, entered on July 22, 1982, modified, on the law, to grant so much of plaintiffs’ motion as sought to preclude Con Ed from relitigating the gross negligence issue, and otherwise affirmed, and the matter remanded for a trial on the remaining issues including causation and comparative negligence. Respondent Consolidated Edison Company of New York shall recover of appellants $75 costs and disbursements of this appeal.