Friedman v. Park Lane Motors, Inc.

McNally, J. Defendants sought and were denied leave to serve an amended answer alleging as a second defense that a prior judgment precludes the prosecution of the causes of action herein. [264] The complaint alleges a claim for personal injuries and one for pecuniary damages resulting from the death of plaintiff’s intestate. The alleged injuries and death were consequent on the negligent operation on March 24, 1960 of an automobile owned by defendant Park Lane Motors, Inc. and operated by defendant Bernard Friedman, the son of plaintiff’s intestate. The proposed second defense is grounded on a prior action by the plaintiff and Bernard Friedman against his insurer Atlantic National Insurance Company for the recovery of medical payments arising out of the same occurrence. The Atlantic policy also insures Bernard Friedman against liability arising out of the operation of the same motor vehicle. The prior action terminated in a judgment on the merits in favor of Atlantic. The affidavits in support of the motion allege that in the prior action the court’s charge limited the verdict of the jury to the sole issue of whether the injuries resulted from the occurrence of March 24, 1960. The causes of action herein and the one previously determined are dissimilar. Hence, the plea of res judicata is not available. (Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 N. Y. 304, 306-307; City Bank Farmers Trust Co. v. Macfadden, 13 A D 2d 395, 400.) There is, however, a basis for collateral estoppel, if the issue previously determined was essential to the prior judgment and is dispositive of the causes of action here involved. Judge Desmond in Commissioners of State Ins. Fund v. Low (3 N Y 2d 590, 595), adverting to collateral estoppel, said: “ That doctrine is elusive and difficult to apply case by case but it is essentially a rule of justice and fairness.” The very nature of the defense impels adherence to the policy of this Department refusing to entertain objections to the sufficiency of a defense sought to be interposed unless it is obviously insufficient. (State Bank v. Keshin, Blitstein & Co., 165 App. Div. 974; Martin v. Katz, 15 A D 2d 767.) Minkoff v. Brenner (10 N Y 2d 1030) is not authority to the contrary. There, leave to amend the answer to include the defense of res judicata was denied on the authority of Glaser v. Huette (232 App. Div. 119, affd. 256 N. Y. 686). Glaser held that in an action for negligence the plaintiff was not estopped by a prior judgment for property damage in favor of a third person against the plaintiff and the defendant. Minkoff involved only a question of law and reaffirmed Glaser in the light of Israel v. Wood Dolson Co. (1 N Y 2d 116). Here there are mixed questions of law and fact. Assuming the allegations of the defendants as we must (Krantz v. Garmise, 13 A D 2d 426, 429), it would appear that the plaintiff was defeated in the prior action to recover medical [265] payments because the intestate’s injuries were not caused by the occurrence here complained of. If the intestate’s injuries did not result from the said occurrence, there is no actionable negligence. (Brazos v. Brumidge, 6 A D 2d 494, 496-497.) Israel v. Wood Dolson Co. (supra) involved the collateral estoppel rule. (See Commissioners of State Ins. Fund v. Low, supra, p. 596.) The prior judgment relied on in Israel by defendant Gross resulted from litigation between the plaintiff and defendant Wood Dolson pertaining to a cause of action other than the one against Gross. There was no privity between Wood Dolson and Gross. However, it was held the prior adjudication that plaintiff had not introduced Gross to the transaction with Wood Dolson estopped plaintiff from thereafter establishing otherwise. In Israel there could be no recovery against Gross if there was no breach of the contract by Wood Dolson. The fact that Israel had a full opportunity to establish the breach was held to preclude him from relitigating the same issue with Gross despite the absence of mutuality and privity. In their essentials this and the Israel case are similar. Here, plaintiff has litigated the issue as to causal relation between the occurrence and his intestate’s injuries; the issue was adjudicated against plaintiff. Consequently, plaintiff may be estopped from establishing an essential of his causes of action. If despite Israel there need be privity between defendants and Atlantic National Insurance Company, the prevailing party in the prior suit, then it suffices that defendant Friedman is the insured as to the policy issued by Atlantic and that Atlantic is. Friedman’s indemnitor as to the liability here involved which brings within its scope the injuries and medical expense litigated in the prior action. (Hinchey v. Sellers, 7 N Y 2d 287, 295.) The prior adjudication is also available to the codefendant Park Lane Motors, Inc. (Vidor v. Serlin, 7 N Y 2d 502, 510.) The relevancy of mutuality and privity depends on whether res judicata or collateral estoppel is invoked. Bes judicata precludes subsequent litigation as to matters litigated and, in addition, which might have been litigated; it requires only the opportunity to litigate and the fact that it was not availed of does not impair the effect of the judgment on subsequent litigation. (Statter v. Statter, 2 N Y 2d 668.) If, in fact, the decisive issue has not been litigated in the prior action, then to invoke res judicata mutuality and privity must be demonstrated and privity must be present as between the party against whom the plea is made and the party in the prior action against whom the determination was made; privity is also required between the [266] prevailing party in the prior action and the party relying on res judicata in the subsequent litigation. (Statter v. Statter, supra; Matter of New York State Labor Relations Bd. v. Holland Laundry, 294 N. Y. 480, 493-494.) The relevance of mutuality and privity is reduced when the pertinent issue has been litigated. In Israel there was no privity between the defendant Gross and Wood Dolson, the prevailing party in the prior litigation. (See, also, Wolfson v. Mandell, 11 N Y 2d 704; Good Health Dairy Prods. Corp. v. Emery, 275 N. Y. 14,18.) On the other hand, privity is essential between the party against whom the plea of res judicata or collateral estoppel is asserted and the party in the prior litigation against whom the determination was made. (Commissioners of State Ins. Fund v. Low, supra; Israel v. Wood Dolson Co., supra, p. 119.) Moreover, the party sought to be estopped must have had a full and complete opportunity to be heard. (Commissioners of State Ins. Fund v. Low, supra, pp. 595-596; Hinchey v. Sellers, supra, p. 294.) In Glaser v. Huette (232 App, Div. 119, supra), Justice McAvoy writing for the Appellate Division held: “ no duty existed to contest the issue of negligence as between them and no pleadings existed between them, the decisions there settled nothing as to the liability of the codefendants to each other. Therefore, the plea of res adjudicata was not available to this defendant.” The opportunity to be heard therefore must be with respect to the issue determinative of the subsequent litigation. Collateral estoppel concededly involves practical considerations. They may prompt one not to proceed against a codefendant and to limit himself to defending a charge of negligence as in Glaser, and legal concepts as to privity may yield if the party sought to be estopped has not, in fact, litigated the issue as in Commissioners of State Ins. Fund v. Low (supra). Here, however, plaintiff in the prior action was totally committed and had full opportunity to establish his claim and it does not appear that he was under any restraint in its prosecution. It is, of course, incumbent on the defendants to establish the proceedings in the prior litigation and the determination relied on. (Marine Tr. Corp. v. Switzerland Gen. Ins. Co. of Zurich, 263 N. Y. 139, 147; City Bank Farmers Trust Co. v. Macfadden, 13 A D 2d 395, 400, supra.) We do not decide that the issues in this and the prior action are identical or any other issues of the proposed defense. We merely hold it involves issues requiring a trial or a direct attack by an appropriate motion. (Cf. Matter of Ellis v. State of New [267] York, 12 A D 2d 684.) It is not so patently insufficient as to warrant summary disposition on a motion for leave to amend an answer. The order should be reversed, on the law and on the facts, with cost to defendants-appellants, and the motion granted to the extent of permitting the service of an amended answer pleading collateral estoppel as a defense.