Court Opinion

ID: 9575045
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:10:56.040415+00
Date Added: 2024-06-11T12:47:50.401563
License: Public Domain

DAVIES, Judge
(dissenting).
I respectfully dissent.
The majority opinion abandons the firmly established collateral estoppel requirement of privity. See Bublitz v. Commissioner of Revenue, 545 N.W.2d 382, 385 (Minn.1996) (party may assert collateral estoppel against one who was party to, or in privity with party to, prior adjudication); Kaiser v. Northern States Power Co., 353 N.W.2d 899, 902 (Minn.1984) (same); Margo-Kraft Distribs., Inc. v. Minneapolis Gas Co., 294 Minn. 274, *446277, 200 N.W.2d 45, 47 (1972) (same); Brunsoman v. Seitz, 414 N.W.2d 547, 550 (Minn. App.1987) (same), review denied (Minn. Jan. 15, 1988); Bogenholm v. House, 388 N.W.2d 402, 405 (Minn.App.1986) (same), review denied (Minn. Aug. 13, 1986).
The majority does not cite a single case that applies collateral estoppel without privity. Nor does the majority cite a case to show that in this case the essential requirements for privity are satisfied. Instead, the majority focuses on a test for collateral es-toppel that only becomes relevant after all requirements of privity have been found.
An essential requirement for privity is that the party to be estopped is “so identified in interest with another that he represents the same legal right.” Beutz v. A.O. Smith Harvestore Prods., Inc., 431 N.W.2d 528, 533 (Minn.1988). See also Margo-Kraft, 294 Minn. at 278, 200 N.W.2d at 47-48 (party in privity is one that, while not a party, controlled an action and whose legal interests were represented by a party to the action); Brunsoman, 414 N.W.2d at 550 (“Privity exists where the record demonstrates controlling participation and active self-interest in the litigation,” and requires that the es-topped party’s interests were sufficiently represented in the prior action so that application of collateral estoppel is not inequitable); Bogenholm, 388 N.W.2d at 406 (privity requires that the nonparty exercise such control over action advancing its own interests that the nonparty has effectively had its day in court).
In ignoring the privity requirement, the majority seems significantly influenced by a stipulation. In that stipulation, the parties expressed their expectation that appellant Duane Reil would commence an action against respondent, an action which would then be consolidated with the employer’s action. That stipulation, like many stipulations, was a statement of the agreement of the parties on certain facts and, here also, as to how they expected the case to develop. It was, in effect, also a joint letter prepared for submission to whatever judge would later decide whether appellant’s case would be consolidated with the employer’s action. There is in the stipulation no promise by appellant that he would proceed as the stipulation proposed. Nor is there in the stipulation an agreement by appellant that he would be bound by the result in the employer’s action. (Note paragraph numbered 1 in stipulation.) 1
Further, because the stipulation was never submitted to a judge, or otherwise imple*447mented, it is a legal nullity. It was captioned as a submission in the employer’s case, but is not, as far as we know, part of the record in that case. It is like an undelivered deed. As to the employer’s action, appellant remained an onlooker without a financial stake in the result, without control, and without a right to appeal. See Kaiser, 353 N.W.2d at 904 (court determining privity considers whether: (1) prior action was brought on behalf of estopped party; (2) estopped party had control over conduct of prior action; (3) es-topped party had direct financial interest in prior action; and (4) estopped party had right to appeal from judgment in prior action).2
The record does not show why appellant decided to proceed alone. But it is easy to think of legitimate reasons for appellant not to have joined the employer’s action, rather than the objectionable and speculative motive the majority assigns. For example, appellant’s damages may have not yet matured when the employer’s case was going to trial. Or appellant’s lawyer may have been compelled to avoid involvement in that lawsuit to give himself time to prepare properly. Appellant may have found the employer’s lawyer unwilling to work in a cooperative partnership that would assure that appellant’s interests, along with the employer’s, would be fairly presented.
There may, of course, have been that less legitimate reason why appellant did not consolidate his action with the employer’s suit. He may have concluded (wrongly, I think) that he could arrange two opportunities to find respondent negligent. Appellant may have decided he could assert collateral estop-pel against respondent if the employer prevailed on the negligence issue, while expecting to avoid any collateral estoppel bar if, as actually occurred, the employer were to lose on the negligence issue.
Whether appellant had this motive is irrelevant, but that is the motive impliedly assigned to him by the district court — and probably by the majority in this court. The district court order declares
had the jury found Benjamin negligent in the first lawsuit, surely Reil would argue that liability had previously been litigated and should not be re-litigated in this action. Reil cannot have it both ways.
The majority similarly hints. “[T]his court is not willing to allow Reil to pursue the same claim under the exact same legal theory a second time.” I suspect, in fact, this “two-chances” concern, more than any other, moved the majority to ignore the requirement of privity.
One-way collateral estoppel is bothersome, without question. But there is a well established — and better — way to avoid it. In my view, the majority has imposed inappropriate defensive collateral estoppel, when traditional restrictions on offensive collateral estoppel already effectively and fairly deal with the “heads I win, tails you lose” problem.
The Minnesota Supreme Court has laid out restrictive standards for using offensive collateral estoppel, holding
if the second proceeding was not foreseeable; if the judgment relied on is inconsistent with previous judgments in favor of defendant, or if different procedures apply in the subsequent action [or]
in cases where a plaintiff could easily have joined in the earlier action * * * the use of offensive collateral estoppel should not be allowed.
Falgren v. State Bd. of Teaching, 545 N.W.2d 901, 906, 907 (Minn.1996) (citations omitted ) (emphasis added). The facts recited in the parties’ stipulation would be highly relevant evidence to show the applicability of the last point in this case. The stipulation shows that appellant “could have easily joined in the [employer’s] earlier action” and that appellant for his own reasons chose not to do so. Therefore, under Falgren, appellant would have been denied the benefit of offensive collateral estoppel. It is, therefore, not nec*448essary, for even-handed justice, to impose a defensive collateral estoppel on him. Neither party should have the benefit of collateral estoppel.
Finally, if our objective is even-handed justice, we should note respondent’s own procedural choices. It was not just appellant who decided to litigate the employer’s claim separately. Respondent herself passed up opportunities to bring appellant into the first action.
Respondent could have sought to make appellant an involuntary plaintiff (see Minn. R. Civ. P. 19.01 (“If the person should join as a plaintiff but refuses to do so, the person may be made a defendant, or, in a proper case, an involuntary plaintiff.”)). Respondent could have commenced its own action against the employee and asked for consolidation. Or respondent could have attempted to make appellant a third-party defendant in the employer’s action. By letting the employer’s suit go forward without appellant’s presence, respondent failed to protect herself against the possibility that appellant might seek to impose liability in this second action.
There is no reason to impose collateral estoppel on appellant based on a lawsuit in which he had no part. I would reverse.

.The body of the stipulation reads — in its entirety — as follows:
WHEREAS, the above-referenced matter arises out of an automobile accident which occurred on January 16, 1992, and plaintiff All American Mechanical, Inc. has made a subrogation claim for workers' compensation benefits paid out to their former employee, Duane Reil, who was involved in the accident with defendant Diane Benjamin;
WHEREAS, Duane Reil is making a separate personal claim against Diane Benjamin for damages arising out of the January 16, 1992 automobile accident, above and beyond what was paid by workers’ compensation;
WHEREAS, the parties in All American Mechanical, Inc. v. Diane Benjamin, and Duane Reil are in agreement that the facts in the matter of All American Mechanical, Inc. v. Diane Benjamin, and the facts and legal issues to be resolved in Duane Reil's Complaint against Diane Benjamin are virtually identical, and documentary evidence, witnesses, and legal issues to be resolved are also identical;
WHEREAS, the parties are in agreement that judicial economy would be served by consolidating Duane Reil's Complaint against Diane Benjamin with that of All American Mechanical, Inc. v. Diane Benjamin, and the parties seek to avoid unnecessary duplicative discovery to be conducted;
WHEREAS, this Court has the power to consolidate the Complaint by Duane Reil against Diane Benjamin with the above-captioned matter, AH American Mechanical, Inc. v. Diane Benjamin, and to provide a continuation of the trial as a consolidated matter by the two party plaintiffs;
IT IS HEREBY STIPULATED, on the consent of the parties, through their respective attorneys,
1. That Duane Reil, by and through his attorney, shall be allowed to file and serve his Complaint arising out of the January 16, 1992 auto accident upon defendant by November 15, 1996;
2. That the parties arc in agreement that Duane Reil's Complaint should be consolidated with the pending case of All American Mechanical, Inc. v. Diane Benjamin; and
3. That the parties are in agreement that it would be reasonable for the trial, as consolidated, to be continued until February 1, 1997 in order to allow Duane Reil and his attorney to pursue any necessary discovery. (Emphasis added.)

. The majority in significant part relies — inexplicably — on Kaiser. Kaiser denied application of defensive collateral estoppel. It is a precedent for this dissent’s position. Just because Kaiser was the easiest case imaginable (the parties protected from defensive collateral estoppel in Kaiser did not even know about the previous action) does not covert it into a precedent for defensive collateral estoppel.