Court Opinion

ID: 9532878
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:25:48.570121+00
Date Added: 2024-06-11T13:28:51.721403
License: Public Domain

Chief Justice VOLLACK
concurring in part and dissenting in part:
I concur with the majority’s holding that the doctrine of collateral estoppel (issue preclusion) applies to the final decision of an arbitration panel sitting pursuant to section 10-4-708(1.5), 4A C.R.S. (1990 Supp.). See maj. op. at 549. However, I disagree with the majority’s holding that collateral estoppel does not preclude petitioner Linda Dale (Dale) from relitigating, in the context of a tort claim for bad faith breach of insurance contract, an arbitration panel’s final decision that Guaranty National Insurance Company (GNIC) did not engage in “willful and wanton” conduct under section 10-4-708(1.5)(d), 4A C.R.S. (1990 Supp.). See maj. op. at 552. According to the majority, the elements of collateral estoppel are not satisfied because the ‘Swillful and wanton” issue decided by the panel is narrower in scope than the “bad faith” issue raised by Dale’s tort claim, which encompasses both GNIC’s pre-arbitration and post-arbitration conduct. See maj. op. at 552-53. In my view, collateral estoppel precludes Dale from relitigating the issue of GNIC’s pre-arbitration conduct because this *555portion of Dale’s bad faith claim is identical to the issue already determined by the arbitration panel. Furthermore, I disagree with the majority’s reliance on evidence of GNIC’s post-arbitration conduct to support its holding because such evidence was excluded by the trial court. For these reasons, I would affirm the court of appeals.
I.
In 1987, Dale was injured in an automobile accident. She received treatment from several health care providers and filed claims with GNIC to cover the costs of her care. Ten months after the accident, Dale filed a demand for arbitration pursuant to section 10-4-708, 4A C.R.S. (1990 Supp.), alleging that GNIC had failed to pay her claims in a timely fashion. Dale also filed suit against GNIC, alleging, among other claims, bad faith breach of her insurance contract.
The arbitration panel found that GNIC’s conduct, “although wrongful, is not determined to be willful and wanton under C.R.S. 10 — 4—708(1.5)(d).” In response to the panel’s ruling, GNIC issued a nine-party check to Dale, her attorney, and seven of her health care providers. Dale returned the cheek to GNIC, saying it was difficult for her to cash, and GNIC issued payment in another form.
GNIC then moved the trial court for summary judgment, arguing that because the panel found GNIC’s pre-arbitration conduct was not “willful and wanton,” Dale was precluded from relitigating that issue, which was an essential element of her bad faith claim. Dale countered that GNIC’s bad faith was a completely different issue from that decided by the panel because some of GNIC’s alleged bad faith conduct, namely the issuance of the nine-party check, occurred after the panel’s decision.
The trial court granted GNIC’s motion for summary judgment, finding that the issue of GNIC’s pre-arbitration conduct had already been decided by the panel. The trial court also excluded evidence of GNIC’s post-arbitration conduct involving the nine-party check, holding that such evidence was irrelevant to Dale’s bad faith claim because the nine-party check was issued to ensure that each party who had provided services would be properly paid. The court of appeals affirmed both the grant of summary judgment in favor of GNIC and the exclusion of evidence regarding GNIC’s post-arbitration conduct,
II.
A.
“The whole policy of the law is against the retrial of issues already litigated by the parties.” State Compensation Ins. Fund v. Luna, 397 P.2d 231, 233, 156 Colo. 106, 109 (1964). This policy is embodied in the doctrine of collateral estoppel, which provides that “when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in any future lawsuit.” Ashe v. Swenson, 397 U.S. 436, 443, 90 S.Ct. 1189, 1194, 25 L.Ed.2d 469 (1970). A fundamental purpose of collateral estoppel is to protect a defendant from having to reliti-gate issues that have already been determined in a valid and final judgment. See People v. Smith, 938 P.2d 111, 113 (Colo.1997).
In order for the doctrine of collateral es-toppel to bar relitigation of an issue determined in a prior proceeding, four elements must be satisfied: (1) the issue precluded must be identical to an issue actually determined in the prior proceeding; (2) the party against whom estoppel is asserted must have been a party to or in privity with a party in the prior proceeding; (3) there must have been a final judgment on the merits in the prior proceeding; and (4) the party against whom the doctrine is asserted must have had a full and fair opportunity to litigate the issue in the prior proceeding. See Maryland Cas. Co. v. Messina, 874 P.2d 1058, 1061 (Colo.1994).
The majority finds that the last three elements of this test have been satisfied in regard to the arbitration panel’s decision. See maj. op. at 550. As a result, the majority focuses on the first factor of the test: whether the issue before the trial court is identical to the issue actually determined by the arbitration panel. See maj. op. at 550-51. The *556arbitration panel determined that GNIC’s conduct was not “willful and wanton” under section 10-4-708(1.5)(d). The majority concludes, however, that the scope of the “willful and wanton” issue determined by the panel is not identical to the scope of the “bad faith” issue before the trial court because the “bad faith” issue includes additional evidence not available to the panel. See maj. op. at 552-553. As a result, the majority holds that collateral estoppel does not preclude Dale from relitigating the arbitration panel’s determination that GNIC’s conduct was not willful and wanton. See maj. op. at 553. I disagree.
In my view, the “willful and wanton” issue and the “bad faith” issue are identical in regard to GNIC’s pre-arbitration conduct. In deciding the “willful and wanton” issue, the arbitration panel could review only GNIC’s pre-arbitration conduct. The trial court, on the other hand, considered evidence of both GNIC’s pre-arbitration and post-arbitration conduct. Obviously, GNIC’s pre-ar-bitration conduct did not change between the time it was considered by the panel and the trial court. Thus, the pre-arbitration conduct before the trial court was identical to the pre-arbitration conduct evaluated by the panel. In other words, the issue of GNIC’s pre-arbitration conduct presented to the trial court was the exact issue already determined by the arbitration panel.
Because the majority does not recognize that these issues are identical, it allows Dale to relitigate the issue already determined by the arbitration panel’s final judgment. This holding contradicts the fundamental purpose of collateral estoppel. As outlined above, the purpose of collateral estoppel is to protect a defendant from relitigating an issue that has already been determined in a valid and final judgment. See Smith, 938 P.2d at 113. In this case, the arbitration panel scrutinized GNIC’s pre-arbitration conduct and determined that it was not willful and wanton. Then, in the context of a bad faith claim, Dale asked the trial court to evaluate GNIC’s pre-arbitration conduct a second time, attempting to obtain a different result. This is precisely the situation that collateral estoppel is designed to avoid.
The majority insists that because Dale introduced additional evidence, the issue before the trial court is completely different from the issue decided by the arbitration panel. The majority does not recognize that in regard to GNIC’s pre-arbitration conduct, the trial court and the panel addressed identical issues. Because these issues are identical, I believe that all the elements of collateral estoppel are satisfied and that the trial court properly precluded Dale from relitigating the issue of GNIC’s pre-arbitration conduct.
B.
As for GNIC’s post-arbitration conduct, the trial court excluded evidence of such conduct, finding that it was irrelevant to a determination of bad faith. Nevertheless, the majority relies on such evidence in holding that the elements of collateral estoppel have not been satisfied. In my view, the majority is not free to consider this evidence because the trial court did not clearly abuse its discretion.
Trial courts have considerable discretion in ruling on the admissibility of evidence, and they enjoy broad discretion in determining the relevancy of evidence. See People v. Ibarra, 849 P.2d 33, 38 (Colo.1993). A trial court’s ruling on a matter within its sound discretion will not be reversed, unless there is a clear abuse of discretion. See People v. District Court, 933 P.2d 22, 26 (Colo.1997). If there is no clear abuse of discretion, we will not substitute our judgment for that of the trial court. See People v. Scott, 626 P.2d 1130, 1131 (Colo.1981). An abuse of discretion exists only if the trial court’s decision was manifestly arbitrary, unreasonable, or unfair. See People v. Gibbens, 905 P.2d 604, 607 (Colo.1995).
The trial court excluded evidence of GNIC’s post-arbitration conduct involving the nine-party check because it found that such evidence was irrelevant to a showing that GNIC acted in bad faith. In ruling on this issue, the trial court pointed out that a number of parties, namely the health care providers, had provided services to Dale without receiving payment. Thus, the trial court reasoned, GNIC issued the nine-party *557check to ensure that each party who had provided services would be properly paid. The trial court observed that this practice, which was common in the insurance industry, was designed to avoid multiple liability and not to harass an insured in bad faith. Based on these reasons, the trial court ruled that GNIC’s post-arbitration conduct involving the nine-party cheek had no relevance to the issue of bad faith.
In my view, the trial court’s exclusion of the post-arbitration evidence was not a clear abuse of discretion. The trial court articulated a rationale that was not “manifestly arbitrary, unreasonable, or unfair.” In these circumstances, we do not substitute our judgment for that of the trial court. Therefore, we are not free to consider the evidence of GNIC’s post-arbitration conduct in determining whether the elements of collateral estop-pel have been satisfied.
Accordingly, I concur in part and dissent in part.