Court Opinion

ID: 3757999
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:15:36.788552+00
Date Added: 2024-06-11T14:24:04.555893
License: Public Domain

I concur in judgment only, based on the fact that appellees failed to submit evidentiary materials with their motion for summary judgment demonstrating that the conveyance from Amerind to Revere occurred subsequent to Amerind's having been joined as a party defendant in the district court proceedings. Had appellees been able to show this, I would conclude that Revere should be collaterally estopped from litigating the issue of the validity of the conveyance from Atwater to Amerind. I would employ the rationale as set forth in Restatement of the Law 2d, Judgments (1980) 10-11, Section 44, Comment a, which states:
"a. Rationale. * * * If [the successor in interest] is aware of the litigation but does not join as a party, he acquiesces in the transferor's continuing, for purposes of the litigation, to be the apparent owner of the interest in the property. His doing so is in effect treating the transferor as his representative in the action. * * *
"If the successor is not aware of the pending action concerning the property, the problem is one of choosing between burdening him with the judgment in an action in which he had no actual opportunity to participate and burdening the opposing party with having to relitigate a controversy that he had every reason to suppose had been put to rest by the judgment against the transferor. When the equities are in this balance, theburden is properly placed on the successor. Aside from whatever weight may be given to the principle of caveat emptor are the considerations that the successor usually has an express or implied right of indemnity against the transferor for loss resulting from the judgment; the successor changed the status quo regarding ownership and may justly be burdened with losses which might be expected possibly to result; and, if the rule were otherwise, the stabilizing effect of a judgment concerning the property could indefinitely be postponed by successivetransfers." (Emphasis added in part.)
The above rationale applies in situations where a transfer of property occurs subsequent to the transferor having been made a party to a suit involving the property. In those instances, Section 44 of the Restatement properly binds the transferee (Revere) by the rule of collateral estoppel to the same extent as it would the transferor (Amerind) and, thus, Revere would be collaterally estopped from relitigating the issue of the validity of the original conveyance from Atwater to Amerind.
In the present case, however, it appears that the conveyance from Amerind to Revere occurred prior to the date that Amerind was added as a party defendant in the district court action. In their briefs submitted to this court, both parties acknowledge that Amerind had yet to be named a party defendant when it *Page 69 
conveyed the property to Revere. Given this chronology, Commentf to Section 44 indicates that Revere should not be collaterally estopped from litigating the issue of the validity of the conveyance from Atwater to Amerind:
"f. Persons acquiring interests before commencement ofaction. * * * Upon the transfer having been made, the transferor terminates his interest insofar as it is transferred and either ceases to have any connection with the property or, where he retains an interest in the property, assumes the position of a co-owner. * * * His then becoming a party to an action concerning the property does not make him in any sense a representative of his successor in estate." (Emphasis added.) Id. at 12.
Revere acquired its interest (if any) before the action was commenced against Amerind and, therefore, Amerind's interest in the property was ostensibly terminated for purposes of characterizing Amerind as the representative of Revere's interest in the district court action.
While a review of the record fails to conclusively demonstrate that Revere ever received notice, actual or otherwise, of the action against Atwater and Amerind, it is interesting to note that Atwater conveyed the property to Amerind just three weeks before appellee's RICO action was commenced in the district court. Nine months later, Amerind conveyed the property to Revere, just four months before it was added as a party defendant. The district court found the conveyance from Atwater to Amerind to be void. Further, in its reply filed in the common pleas court, Revere admitted that it had received the subject property by quitclaim deed for less than a fair consideration.
Certainly, the concern expressed in Comment a to Section 44 has been realized by this court's holding: the judgment concerning the property has been indefinitely postponed by successive transfers. I concur in judgment solely on the basis that appellees failed to establish that the conveyance from Amerind to Revere occurred subsequent to Amerind's having been joined as party defendant in the district court action. *Page 70