Court Opinion

ID: 9728512
Source: CourtListenerOpinion
Date Created: 2023-08-26 14:09:46.565877+00
Date Added: 2024-06-11T18:25:49.103179
License: Public Domain

HENDERSON, Justice
(dissenting).
Rezek’s answer and counterclaim plainly allege false representations of Juffer; the counterclaim alleges concealment of an existing agency between Cook and Juffer.
The issues of fraud and agent misbehavior were not addressed in Cook v. Rezek, 89 S.D. 667, 237 N.W.2d 18 (1975) nor was Juffer a party thereto.
The lower court granted a ■ motion for summary judgment in favor of Juffer and against Rezek based upon the doctrine of res judicata. This was error and I would reverse the trial court.
In Golden v. Oahe Enterprises, Inc., 90 S.D. 263, 276, 240 N.W.2d 102, 109 (1976), this court held that the doctrine of res judicata only applies to issues which have actually been litigated. In that decision, we stated:
If, however, the second action is based upon a different claim or demand, the prior judgment precludes further consideration only of those issues which are actually litigated and determined. (Emphasis supplied.)
In Cook v. Rezek, supra, the issues adjudicated were whether a contract existed and whether the remedy of specific performance should have been avoided. The pleadings before us in this case frame altogether different issues between different parties.
This Court set forth the principles of res judicata in Keith v. Willer’s Truck Service, 64 S.D. 274, 266 N.W. 256 (1936). In that case, we compared res judicata as to a cause of action opposed to res judicata as to a particular issue of fact common to both actions. We stated:
First, a final judgment or decree of a court of competent jurisdiction upon the merits is a bar to any future action between the same parties or their privies upon the same cause of action, so long as it remains unreversed; and, second, a point which was actually and directly in issue in a former action and was there judicially passed upon and determined by a domestic court of competent jurisdiction cannot be drawn in question in any future action between the same parties or their privies whether the cause of action in the two actions be identical or different. (Citation omitted.) Under the first rule the res which is judicata is the cause of action. Under the second, the res which may be judicata is the particular issue or fact common to both actions. 64 S.D. at 276, 266 N.W. at 257-58. (Emphasis supplied.)
This action fits into the second category where the judicata is of a particular issue of common fact as opposed to a final adjudication “upon the merits” of the case as a whole.
*734“There is a difference between the effect of a judgment as a bar or estoppel against the prosecution of a second action upon the same claim or demand, and its effect as an estoppel in another action between the same parties upon a different claim or cause of action.” 64 S.D. at 275, 266 N.W. at 257.
The key in this case is that we have different parties and different causes of action. My point is aptly expressed in Keith, 64 S.D. at 276, 266 N.W. at 257:
“[W]hile a second and different cause of action may be defeated by a former judgment because it conclusively adjudicates some essential fact or issue involved in the latter, a judgment can never operate as a bar to a different cause of action. (Emphasis supplied.)
My review of this case further discloses that Juffer failed to factually refute the allegations of false representations. Juffer therefore failed to affirmatively assert a genuine issue of fact. Juffer’s pleadings only generally deny the allegations of Re-zek’s pleadings. A hearsay affidavit by Juffer’s attorney, which did not meet the criteria of SDCL 15-6-56(e), was not properly receivable as refutation of Rezek’s causes of action. This affidavit was not submitted upon personal knowledge. The trial court erred in granting Juffer’s motion for summary judgment as Juffer failed to affirmatively refute Rezek’s allegations of false representations.
Res judicata is an affirmative defense; this defense was not pled in Juffer’s answer. Nonetheless, the trial court based its decision on res judicata. SDCL 15-6-8(b) requires that it be asserted. Collateral es-toppel, upon which this Court bases its decision, was neither pled nor urged. The majority has infused and inserted this totally new defense. Moreover, it has substituted it for the defense of res judicata which was never raised. I believe that this Court is restricted to reviewing those matters which are in issue at the trial court level. As regards collateral estoppel, it was theoretically impossible for the lower court to rule correctly or incorrectly because the trial court was never confronted with that issue. In Fales v. Kaupp, 83 S.D. 487, 161 N.W.2d 855 (1968), we held that the affirmative defense of waiver was not before the Supreme Court because it was not pleaded and was not an issue in the trial court. Therefore, collateral estoppel is not before this Court. This Court should not decide cases on theories it initially advances and which were not advanced at the trial court. It is unfair to the lawyers, the trial judges, and most importantly, the litigants. I agree with Chief Justice Wollman’s 1972 dissent in the Owens case (which is now cited for authority to justify the Court’s decision here) wherein he stated: “We should not now consider the question of the validity of ordinance No. 292 since that issue was not directly raised in the trial court.” 201 N.W.2d at 894. (Emphasis added.)
Not only has Rezek not had his day in court on fraud and agent misbehavior, he has not had the opportunity to address collateral estoppel. Furthermore, if an affirmative defense is not pleaded, it is waived to the extent that the party who should have pleaded it may not introduce any evidence in support thereof. American Property Service, Inc. v. Barringer, 256 N.W.2d 887 (S.D.1977). Under the state of the pleadings, Juffer has no right to present any evidence to the trial court on res judi-cata or collateral estoppel.