Court Opinion

ID: 5159112
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:31:24.913293+00
Date Added: 2024-06-11T08:25:32.830170
License: Public Domain

JUSTICE RICE,
dissenting.
150 The doctrine of issue preclusion should not deprive plaintiff Bristol Bay of its opportunity to litigate whether defendants Simon & Schuster and Penguin (collectively "the Publishers") caused Bristol Bay harm by misrepresenting data related to author Clive Cussler's readership, books in print, and books sold.
1 51 The final judgment in the California fraud case between Bristol Bay and defendants Cussler and Cussler's agent, Peter Lampack, only determined that Bristol Bay's reliance on misrepresentations made by Cus-sler himself, and by Cussler through Lam-pack, were not a "substantial factor in causing harm" to Bristol Bay. The California jury therefore did not resolve the issue of whether Bristol Bay detrimentally relied on the Publishers' misrepresentations.
52 As such, the issue sought to be precluded by the Publishers is not "identical to an issue actually and necessarily determined in" the California proceeding. See Reynolds v. Cotten,2012 CO 27, ¶ 9, 274 P.3d 540. I therefore respectfully dissent from the majority's holding that the doctrine of issue preclusion bars Bristol Bay from litigating its fraud allegations against the Publishers in Colorado. Accordingly, I would reverse the court of appeals' issue preclusion decision and remand the case for further proceedings consistent with this opinion.1
I. Facts and Procedural History
¶ 53 The majority provides a detailed recitation of the facts and procedural history underlying this case. The following synopsis is necessary, however, to explain my position that the doctrine of issue preclusion should not bar Bristol Bay from litigating its fraud allegations against the Publishers.
¶ 54 This case arose out of cireamstances surrounding the failed film adaptation of Cussler's adventure novel Sahara. Bristol Bay sued Cussler and Lampack in California for intentional misrepresentation, among other claims. The Publishers were not parties in the California action. At trial, Bristol Bay argued that Cussler himself and Cussler, through Lampack, intentionally misrepresented the book sales and readership data for the Sahara novel to induce Bristol Bay to make the Sahara movie.
¶ 55 After the close of evidence, the jury issued a special verdict finding Cussler and Lampack not liable for intentional misrepresentation. It answered specific interrogatories related to Bristol Bay's intentional misrepresentation claim as follows:
Question No. 36: Did Cussler make a false representation of an important fact to
[Bristol Bay]?
Answer: Yes
Question No. 37: Did Cussler know that the representation was false, or did he make the representation recklessly and without regard for its truth?
Answer:; Yes
Question No. 38: Did Cussler intend that
[Bristol Bay] rely on the representation?
Answer: Yes
Question No. 89: Did [Bristol Bay] reasonably rely on the representation?
Answer: Yes
*1167Question No. 40: Was [Bristol Bay's] reliance on Cussler's representation a substantial factor in causing harm to [Bristol Bay]?
Answer: No
(Emphasis added).
156 Before the California judgment became final, Bristol Bay filed the fraud and fraud-based claims underlying this appeal in Colorado against the Publishers. Bristol Bay alleged that, like Cussler and Lampack, the Publishers misrepresented Cussler's readership, books in print, and books sold. The Publishers moved the Colorado trial court to stay the case until the California verdict became final on the grounds that the California verdict would preclude Bristol Bay from litigating the misrepresentation issues in Colorado.
57 After reviewing the record in the California case, the Colorado trial court granted the Publishers' motion to stay. In doing so, the trial court reasoned that Bristol Bay "fully litigated the[ ] misrepresentation issues before the California jury" because the California jury's answers to the special interrogatories demonstrated that Bristol Bay's "reliance upon the false book sales representation did not cause [Bristol Bay] any injuries." After the California verdict became final,2 the trial court granted the Defendants' C.R.C.P. 12(b)(5) motion to dismiss Bristol Bay's claims against the Publishers on issue preclusion grounds.
1 58 The court of appeals affirmed the trial court's dismissal of Bristol Bay's fraud claims against the Publishers. Bristol Bay Prods., LLC v. Lampack, 318 P.8d 674, 676-77, No. 10C0A2089, 2011 WL 5865902, at *1 (Colo, App. Nov. 283, 2011). It reasoned that if a jury in one case finds that "the defendant's conduct did not cause the plaintiff's damages, this finding would necessarily preclude the assertion that, by contributing to the cause of that same event or act, a second defendant caused the plaintiff's damages." Id. at 683, 2011 WL 5865902, at *8 (citing W. Indus. & Emotl. Servs., Inc. v. Kaldveer Assocs, Inc., 126 Idaho 541, 887 P.2d 1048, 1049-52 (1994), and Kret v. Brookdale Hosp. Med. Cir., 98 A.D.2d 449, 459-60, 462 N.Y.S.2d 896 (1983)).
1 59 We granted Bristol Bay's petition for certiorari review of the court of appeals' decision.
II. Analysis
160 In my view, the doctrine of issue preclusion should not bar Bristol Bay's fraud claims against the Publishers in Colorado because the California jury did not determine whether the Publishers' misrepresentations harmed Bristol Bay. To reach this conclusion, I briefly summarize Colorado's issue preclusion principles in the fraud context and then explain why the doctrine should not bar Bristol Bay's fraud and fraud-based claims against the Publishers.
A. Issue Preclusion in the Fraud Context
. T 61 The equitable doctrine of issue preclusion "bars the relitigation of an issue that has been previously decided in another proceeding." Reynolds, 19 (citing In re Tonko, 154 P.3d 397, 405 (Colo.2007), and Sunny Acres Villa Inc. v. Cooper, 25 P.3d 44, 47 (Colo. 2001)). Of the four elements of this doctrine, only the first element is relevant in this case: whether "the issue sought to be precluded is identical to an issue actually and necessarily determined in the prior proceeding." Id.
T62 An issue is actually and necessarily determined in a prior proceeding if it "was actually litigated" and "its ultimate determination was in fact necessary to the judgment in that prior action." Id., 1 10 (citing Bebo Constr. Co. v. Mattox & O'Brien, P.C., 990 P.2d 78, 85-86 (Colo.1999)) (original emphasis omitted). "If the identical issue has not actually been determined in a prior action," however, "the analysis need proceed no further" and issue preclusion does not bar the plaintiff's subsequent claim. Id. (citations omitted).
1 63 The identity of the defendant is highly relevant to any issue preclusion analysis in the fraud context because the first, second, *1168fourth, and fifth elements of fraud are defendant-specific. To prevail on a fraud claim, a plaintiff must establish:
(1) that the defendant made a false representation of material fact;
(2) that the one making the representation knew that it was false;
(8) that the person to whom the representation was made was ignorant of the falsity;
(4) that the representation was made with the intention that it be acted upon; and
(5) that the reliance resulted in damage to the plaintiff.
Vinton v. Virzi, 2012 CO 10, ¶ 20 15, 269 P.3d 1242 (emphasis added) (citations omitted).
¶ 64 The first element of fraud requires "that the defendant made a false representation of a material fact." Id. (emphasis added). A plaintiff must therefore establish more than the general fact that a misrepresentation was made; he must specifically prove that "the defendant made" the misrepresentation. Id. (emphasis added). For issue preclusion purposes, if the fact finder in the first litigation did not actually and necessarily determine whether a particular defendant made a false representation, then the plaintiff should be permitted to litigate that issue in a second case.
¶ 65 The second and fourth elements of fraud, read together, require "the one making the representation" to have intended the plaintiff act in response to a statement the defendant knew was false. Id. (emphasis added). Like the first element of fraud, the second and fourth elements are defendant specific because they speak to a particular defendant's mental state. Thus, if an initial round of litigation fails to actually and necessarily determine whether a certain defendant intended for the plaintiff to rely on that defendant's knowingly false statements, then issue preclusion should not bar the plaintiff from litigating the mental state issue as to that defendant in another action.
¶ 66 Finally, reading the fifth element of fraud in context with the first element demonstrates that the plaintiff must prove that his reliance upon a false representation "the defendant made" caused the plaintiff to suffer injury. See id. at 115. The defendant's identity is highly relevant to determining whether the plaintiff reasonably relied on a misrepresentation because the same statement made by two different defendants could lead the plaintiff to act in different ways. For example, the plaintiff might simply ignore a false statement casually made by someone known for his tendency to exaggerate. Such inaction would not cause the plaintiff to suffer harm. On the other hand, the plaintiff might detrimentally rely on the exact same misrepresentation officially made by a trusted organization. Under these circumstances, the plaintiff's actions could cause the plaintiff damages.> Accordingly, issue preclusion should not bar a plaintiff from raising a fraud claim against one defendant in a second action if the fact finder in a previous, but related, action did not actually and necessarily determine whether the plaintiffs reliance on a misrepresentation made by that defendant caused the plaintiff to suffer harm.
¶ 67 With this legal framework in mind, I now turn to the issue preclusion question presented in this case.
B. Application
¶ 68 The relevant issue in this case is whether the Publishers' misrepresentations caused Bristol Bay harm. The California jury found that neither Cussler nor Lam-pack's misrepresentations "were a substantial factor in causing harm" to Bristol Bay. It did not actually or necessarily determine whether similar misrepresentations made by the Publishers induced Bristol Bay to act to its detriment. Therefore, issue preclusion should not bar Bristol Bay's fraud and fraud-based claims against the Publishers.
1 69 More specifically, and with respect to the elements of fraud discussed above, the California jury did not actually and necessarily determine that the Publishers made a false representation of material fact. Nor did the jury decide that the Publishers intended for Bristol Bay to rely on their knowingly false representations regarding Cussler's book sales. Furthermore, the California jury never addressed whether Bristol Bay relied on any misrepresentations made by the Publishers, nor did it address whether any such reliance caused Bristol Bay to *1169suffer damages. The Colorado trial court, then, could find that even though Cussler, Lampack, and the Publishers allegedly made nearly identical misrepresentations,3 the Publishers' misrepresentations caused Bristol Bay to act in a way that resulted in its damages even though the misrepresentations made by Cussler and Lampack did not.
170 With its narrow finding that Cussler and Lampack's misrepresentations "were not a substantial factor" in harming Bristol Bay, the California jury left the fraud allegations against the Publishers in the underlying Colorado action unresolved. Therefore, the doctrine of issue preclusion should not bar Bristol Bay from bringing its fraud and fraud-based claims against the Publishers,
T71 Additionally, by relying upon two in-apposite out-of-state cases 4 instead of relying upon Colorado's basic fraud and issue preclusion principles, the court of appeals below muddles the issue preclusion doctrine for future fraud cases in this state. As stated above, the court of appeals held that if a jury in one case finds that "the defendant's conduct did not cause the plaintiff's damages, this finding would necessarily preclude the assertion that, by contributing to the cause of that same event or act, a second defendant caused the plaintiff's damages." - Bristol Bay, 313 P.3d at 682-88, 2011 WL 5865902, at *8 (citations omitted).
1 72 This conclusion ignores the defendant-specific elements of fraud by lumping the individual actions taken by multiple defendants under the umbrella of a single "event
or act" rather than treating those individual actions as distinct components of a greater set of surrounding cireumstances. As a result, the holding bars a plaintiffs fraud claims against oll potential defendants if a fact finder in an initial round of litigation determines that just one of the defendants did not damage the plaintiff. This principle could leave a fraud plaintiff without recourse against a potentially liable defendant simply because the plaintiff could not establish the elements of fraud against someone else, or because the plaintiff sued the wrong defendant first, The majority's holding therefore unduly limits -a plaintiff's ability to bring fraud claims against multiple defendants and accordingly conflicts with the issue preclusion principle that ensures "the party against whom the doctrine is asserted had a full and fair opportunity to litigate the issue." See In re Tonko, 154 P.3d at 405 (citations omitted).
173 Because issue preclusion should not bar Bristol Bay's fraud and fraud-based claims against the Publishers, I would reverse the court of appeals' decision on the issue preclusion question. I therefore respectfully dissent from the majority's opinion to the extent it affirms the court of appeals' decision on issue preclusion grounds.
1 am authorized to state that Justiéé MARQUEZ and Justice BOATRIGHT join in the dissent.

. I do not discuss the C.R.C.P. 12(b)(5) issue addressed by the majority because reversing the court of appeals on issue preclusion grounds would obviate the need to reach the C.RC.P. 12(b)(5) question.

. In an unpublished opinion, the California court of appeals affirmed the trial court's judgment that Bristol Bay "did not suffer any harm from Cussler's intentional | misrepresentation." Cussler v. Crusader Entm't, LLC, No. B208738, 2010 WL 718007, at *5 (Mar. 3, 2010).

. Whether the Publishers' misrepresentations were in fact identical to those made by Cussler and Lampack remains uncertain due to the procedural posture of the Colorado action. The trial court dismissed Bristol Bay's fraud and fraud-based claims upon the Publishers' C.R.C.P. 12(b)(5) motion. As such, discovery that might reveal the details of the Publishers' misrepresentations has not occurred. Therefore, the majority's conclusion that Bristol Bay's fraud allegations against the Publishers in Colorado were based on "substantially identical misrepresentations" to those considered by the California jury, Maj. op. 1 29, has little record support.

. The two out-of-state cases cited by the court of appeals-Western Industrial & Environmental Services, Inc. v. Kaldveer Associates, Inc., 126 Idaho 541, 887 P.2d 1048, 1049-52 (1994), and Kret v. Brookdale Hospital Medical Center, 93 A.D.2d 449, 459-60, 462 N.Y.S.2d 896 (1983)-both involve circumstances in which the fact finders in the relevant first litigations actually and necessarily determined that the plaintiffs could not possibly have suffered harm as a result of any of the alleged conduct. In contrast, the California jury in Bristol Bay's fraud case against Cussler and Lampack only determined that those defendants' misrepresentations were not "a substantial factor in causing harm"" to Bristol Bay. This finding left open the possibility that Bristol Bay might have suffered harm by relying on another defendant's similar misrepresentations. Thus, the California jury never preclusively determined that misrepresentations related to Cus-sler's readership and book sales did not harm or could not have harmed Bristol Bay. As such, the court of appeals improperly analogizes the pre-clusive jury verdicts in Western and Kret to the relevant California jury verdict in this case.