Another Take on Issue Preclusion

Below is a decision that I filed today on a motion for dismissal/summary judgment that also involved the issue of collateral estoppal. The issue is somewhat different than the issue presented in an earlier entry on this blog. Please keep in mind that this entry is subject to appellate review. Below is the text of the opinion:


The Farmers Savings Bank (Farmers) has filed a motion for summary judgment alleging that Heartland Homes and Auction Company’s (Heartland) claims against it are barred by the doctrine of res judicata because of settlements entered in prior cases in both the General Division and the Domestic Relations Divisions of the Medina County Common Pleas Court. Farmers was not a party to either of those actions, but Heartland was a party in both actions.

The General Division case was an action brought against Joseph Hartley by Heartland and Dianna Hartley. The Case Number for that case was 02-CIV-0663. The Domestic Relations case was between the two Hartleys, but Heartland was joined as a party. The Case Number for that case was 02-DR-00004. Both cases were settled without a trial. Both cases were settled by the same settlement agreement and Case No. 02-CIV-0663 was then dismissed with prejudice.

Res judicata in Ohio includes both claim preclusion and issue preclusion. Fort Frye Teachers Ass'n v. State Empl. Rels. Bd., ( 1998) 81 Ohio St. 3d 392, 1998 Ohio 435. Issue preclusion is sometimes referred to as the doctrine of collateral estoppal. It precludes the re-litigation of a fact that was actually and directly at issue in a previous proceeding between the same parties or their privies. Ft. Frye, 81 Ohio St. 3d at 395. The requirement that the previous proceeding be between the same parties or their privies is sometimes referred to as the doctrine of “mutuality of estoppal.”

In this case Farmers does not argue that it was a party to the previous litigation or that it was in privty with any parties in either of the two prior cases. Rather, Farmers argues that this Court ought to relax the doctrine of mutuality of estoppal because of the decision of the Ninth Appellate District Court of Appeals, sitting as the Summit County Court of Appeals, in Michaels Building Company v. City of Akron, Case No. 13061.

This Court finds that the Michaels case is not binding on this Court through the doctrine of stare decisis because it was an unreported opinion. Although not binding authority on this Court, it is persuasive authority. In this case, however, the same fact situation does not exist that existed in Michaels Building. In that case Judge Cacioppo relied on an opinion by now Chief Justice Moyers who was on the Tenth Appellate District Court of Appeals. That opinion is McCrory v. Children’s Hospital (1986), 28 Ohio App. 3d 49.

In the McCrory case the Court held that where issues had actually been litigated in the prior proceeding, then the doctrine of mutuality of estoppal would be relaxed and would not require that the present proceeding be between the same parties or their privies. Both in McCrory and in Michaels Building the appeals arose after a trial, not a settlement. Here, in the prior cases, there were no trials, just settlements. Therefore, this Court finds that even if it were to relax the doctrine of mutuality of estoppal it would not do so in cases where the issues sought to be precluded had not been actually litigated. Consequently, this Court finds that summary judgment should not be granted on the basis of res judicata or collateral estoppal.

Farmers has also moved for summary judgment on the grounds that because of the settlement entered into between the parties in the first two cases, there was no damage caused by the tortious actions of Farmers, assuming that such actions occurred. This Court finds, however, that with respect to that argument, which goes to Counts One and Two, there is an issue of material fact and therefore summary judgment is improper.

Finally, Farmers also moves for summary judgment on Count Three of Heartland’s complaint. Again, with respect to that claim, the Court finds that there are issues of material fact and therefore summary judgment is not appropriate on that Count.

The Court consequently overrules the motion for summary judgment and the motion to dismiss for failure to state a claim, which was based on the res judicata argument disposed of above.

SO ORDERED.