In Whitehead v. General Telephone, 20 Ohio St.2d 108, 254 N.E.2d 10 (1969), a personal injury case, the Ohio Supreme Court held that the defendant telephone company could not collaterally estop the injured minor simply because the child's parents lost a derivative action with regard to the same accident in a prior proceeding.Summary of this case from McAdoo v. Dallas Corp.
Decided December 17, 1969.
Judgments — Res judicata — Final judgment as complete bar to subsequent action — Not bar to subsequent action, when — Point determined may not be relitigated, when — Negligence — Injury to minor — Two separate causes of action — Action by minor — Derivative action by parents — Parents and minor child not in privity, when — Parents' action determined in defendant's favor — Child not thereby collaterally estopped from bringing action, when.
1. A final judgment or decree rendered upon the merits, without fraud or collusion, by a court of competent jurisdiction, is conclusive of rights, questions and facts in issue as to the parties and their privies, and is a complete bar to any subsequent action upon the same cause of action between the parties or those in privity with them. The prior judgment is res judicata as between the parties or their privies. (Paragraph No. 1 of syllabus of Norwood v. McDonald, 142 Ohio St. 299, approved and followed.)
2. A final judgment or decree in an action does not bar a subsequent action where the causes of action are not the same, even though each action relates to the same subject matter. However, a point of law or a fact which was actually and directly in issue in the former action, and was there passed upon and determined by a court of competent jurisdiction, may not be drawn in question in a subsequent action between the same parties or their privies. The prior judgment estops a party, or a person in privity with him, from subsequently relitigating the identical issue raised in the prior action. (Paragraphs Nos. 2 and 3 of syllabus of Norwood v. McDonald, 142 Ohio St. 299, approved and followed.)
3. Where a defendant negligently causes injury to a minor child, that single wrong gives rise to two separate and distinct causes of action: an action by the minor child for his personal injuries and a derivative action in favor of the parents of the child for the loss of his services and his medical expenses.
4. Generally, a person is in privity with another if he succeeds to an estate or an interest formerly held by another. A parent's cause of action for the loss of services and medical expenses of an injured minor child, although derivative, does not arise by way of succession from an estate or interest of the minor child, and, in such case, the parents and minor child are not in privity.
5. Where a court determines, in an action by the parents of an injured minor child, that a defendant is not liable to the parents for the loss of services and medical expenses of the child, that judgment does not collaterally estop the child from bringing an action against that same defendant to recover damages for her personal injuries, so long as it does not appear from the record in that prior action that the child was a party, or that the child was a real party in interest, or that the child had control over that litigation, or that the parents and child were in privity.
APPEAL from the Court of Appeals for Lucas County.
This action to recover damages for personal injuries was filed in the Common Pleas Court of Lucas County by Bobetta A. Whitehead, a minor, through her father and next friend, Jess R. Whitehead. Plaintiff-appellee alleged in her petition that the appellant, General Telephone Company of Ohio, negligently installed and maintained a telephone at the Whitehead residence and that defendant Major Materials Corporation of Ohio (which was affixing vinyl siding to the Whitehead residence at the time of the injury) was negligent in dislodging the telephone ground wire, in removing the cover from the telephone fuse box on the side of the house and in leaving a metal ladder against the house in close proximity to the telephone wire during an electrical storm. The telephone service was installed in the Whitehead residence by General Telephone Company in 1960.
On July 11, 1966, Major Materials Corporation of Ohio commenced work to affix vinyl siding to the Whitehead home. During the morning of July 12, 1966, an employee of Major Materials, preparatory to the installation of the vinyl siding, removed the telephone lightning arrester (fuse box) from the side of the house. In order to dislodge this device, it was necessary to remove the cover, loosen it from the house and allow the fuse box to hang limp, attached only to the wires leading into it. The arrester remained hanging in this exposed condition while the employee left for lunch. A rainstorm developed during the employee's lunch period and because of the storm he was unable to return to the Whitehead residence. While using the telephone, at approximately 6:30 p.m. on July 12, 1966, the appellee's left ear was injured by an electrical discharge, which was emitted from the earpiece and caused by a bolt of lightning.
The record contains conflicting testimony on the question of whether or not the "ground wire," which runs from the fuse box on the side of the house to the ground, was in fact in the ground. The testimony that the ground wire was not properly attached to a "ground rod" was not controverted.
Prior to the trial of this case, the parents of the appellee brought suit against the appellant and Major Materials in Sylvania Municipal Court for the loss of appellee's services and medical expenses, alleging that such loss was the result of defendant's negligence. The Municipal Court entered a judgment for the telephone company.
In answer to appellee's petition in the case at bar, appellant admitted that it was a corporation doing business under the laws of the state of Ohio, denied each and every other allegation in the appellee's petition and affirmatively alleged that: "On or about the 30th day of September, 1966, plaintiffs Jess R. Whitehead and Bobetta A. Whitehead instituted an action against these same defendants in the Municipal Court of Sylvania, Ohio, bearing Cause No. 01262 on the Civil Docket of said court and being entitled Jess R. Whitehead and Bobetta A. Whitehead vs. General Telephone Company of Ohio and Major Materials Corporation of Ohio; that plaintiffs sought to recover a money judgment therein against said defendants for loss of services and medical expenses; that after due trial of said action a judgment was entered by the court in favor of defendant General Telephone Company of Ohio; that the issues in the instant case regarding the liability of General Telephone Company of Ohio are identical to the issues adjudicated in the Sylvania Municipal Court and that said issues were resolved adversely to the plaintiff and in favor of the defendant and that plaintiff is thereby estopped by judgment entered in the prior action from relitigating herein the identical issues which were raised in said prior action or which could have been raised therein."
The trial court sustained the appellee's demurrer to this defense and appellant filed an amended answer. During the trial, the appellee settled her claim against Major Materials for $4,000 and it was dismissed as a party-defendant. The jury returned a verdict of $12,500 for the appellee and against appellant, and the trial court entered judgment upon that verdict. The Court of Appeals for Lucas County affirmed the judgment and the cause is here pursuant to the allowance of a motion to certify the record.
Messrs. Cruey, Kelb, Duffey Hewes and Mr. George R. Hewes, for appellee.
Messrs. Eastman, Stichter, Smith Bergman, Mr. Jamille G. Jamra and Mr. M. Donald Carmin, for appellant.
Appellant argues that this injured minor is estopped to relitigate the identical issues involved in her parent's derivative action in the Sylvania Municipal Court for loss of services and medical expenses. Thus, this case presents the question whether the defense of collateral estoppel applies to one who was not a party to the prior suit in which the identical issues were determined.
The doctrine of res judicata involves two basic concepts. Norwood v. McDonald (1943), 142 Ohio St. 299, 52 N.E.2d 67. First, it refers to the effect a judgment in a prior action has in a second action based upon the same cause of action. The Restatement of the Law, Judgments, Section 45, uses the terms "merger" and "bar." If the plaintiff in the prior action is successful, the entire cause of action is "merged" in the judgment. The merger means that a successful plaintiff cannot recover again on the same cause of action, although he may maintain an action to enforce the judgment. If the defendant is successful in the prior action, the plaintiff is "barred" from suing, in a subsequent action, on the same cause of action. The bar aspect of the doctrine of res judicata is sometimes called "estoppel by judgment." Restatement of the Law, Judgments, Section 45, comment (b).
The second aspect of the doctrine of res judicata is "collateral estoppel." While the merger and bar aspects of res judicata have the effect of precluding a plaintiff from relitigating the same cause of action against the same defendant, the collateral estoppel aspect precludes the relitigation, in a second action, of an issue that has been actually and necessarily litigated and determined in a prior action which was based on a different cause of action. Restatement of the Law, Judgments, Section 45, comment (c), and Section 68 (2); Cromwell v. County of Sac (1876), 94 U.S. 351. In short, under the rule of collateral estoppel, even where the cause of action is different in a subsequent suit, a judgment in a prior suit may nevertheless affect the outcome of the second suit.
In the instant case, the single alleged wrong gave rise to two separate and distinct causes of action: an action by the minor for her personal injuries and a derivative action in favor of the parents of the child for the loss of her services and her medical expenses. Marmorstein v. Schuck (1928), 29 Ohio App. 229, 163 N.E. 508; Bagyi v. Miller (1965), 3 Ohio App.2d 371, 210 N.E.2d 887; Travelers Indemnity Co. v. Godfrey (Com. Pleas 1967), 12 Ohio Misc. 143, 230 N.E.2d 560. See Clark v. Bayer (1877), 32 Ohio St. 299, 30 Am. Rep. 593; Weiand v. Akron (1968), 13 Ohio App.2d 73, 233 N.E.2d 880. Thus, appellant's defense of res judicata was necessarily predicated upon the collateral-estoppel aspect of that doctrine and not on the merger-bar aspect.
Traditionally it has been held that collateral estoppel applies only to situations in which the party seeking to use a prior judgment and the party against whom it is being asserted were both parties in the original action, or were in privity to such parties. Such holdings are based on the requirement that there be mutuality of estoppel. The requirement of mutuality has been lessened, in some jurisdictions, by the expansion of the concept of privity and the creation of explicit exceptions to the rule. Semmel, Collateral Estoppel, Mutuality and Joinder of Parties (1968), 68 Columbia L. Rev. 1457, 1458.
Appellant concedes that Ohio has long recognized that the defenses of res judicata or collateral estoppel are operative in a second suit only when there is an identity of issues and an identity of parties or their privies in both the first and the second suit. Lessee of Lore v. Truman (1859), 10 Ohio St. 45; Porter v. Wagner (1881), 36 Ohio St. 471; Norwood v. McDonald, supra ( 142 Ohio St. 299); Taylor v. Monroe (1952), 158 Ohio St. 266, 109 N.E.2d 271. Nevertheless, appellant argues that the present case is one where the defense of collateral estoppel should be appropriate, and urges that the definition and use of the word privity adopted by the courts of Ohio thwarts the policies of the doctrine of res judicata. Appellant further suggests that this court should define "privity" so as to focus on the relationship of the parties to the subject matter of the litigation, thereby lessening the importance of identity of parties in the first and second actions and elevating the emphasis placed on the subject matter of the litigation and the issues raised thereby. Appellant's position would result in the appellee being precluded or estopped from relitigating the issue of appellant's negligence, even though she was not a party or in privity with parties to the prior action, the sole question being whether her interests were adequately represented therein. The matter of such adequate representation would essentially be a question of whether there was sufficient incentive and opportunity for her parents to adequately litigate the issue in the prior suit in such a manner that the appellee's interests were fully and fairly represented.
Appellant believes that the Ohio cases support this approach, citing Wright v. Shick (1938), 134 Ohio St. 193, 16 N.E.2d 321; Conold v. Stern (1941), 138 Ohio St. 352, 35 N.E.2d 133; Schimke v. Earley (1962), 173 Ohio St. 521, 184 N.E.2d 209; Gibson v. Solomon (1939), 136 Ohio St. 101, 23 N.E.2d 996; and Brinkman v. Baltimore Ohio Rd. Co. (1960), 111 Ohio App. 317, 172 N.E.2d 154.
This court has consistently held that for a judgment or decree to be res judicata, or to operate as estoppel, there must be an identity of issues and an identity of parties or persons in privity with the parties. We have also held that the term "parties" includes those who are directly interested in the subject matter of a suit, who have a right to make a defense, or who control the proceedings. Quinn v. State, ex rel. Leroy (1928), 118 Ohio St. 48, 160 N.E. 453. It has often been suggested that a person, although not technically a party to a prior judgment, may nevertheless be connected with it by his interest in the result of that litigation and by his active participation therein, so as to be bound by that judgment. Quinn v. State, supra, page 53; State v. Cincinnati Tin Japan Co. (1902), 66 Ohio St. 182, 64 N.E. 68; Restatement of the Law, Judgments, Sections 83-111. Moreover, "parties in privity," to the extent that they are bound by a final judgment, include those who acquire an interest in the subject matter after the beginning of the action or the rendition of the final judgment. Vasu v. Kohlers, Inc. (1945), 145 Ohio St. 321, 61 N.E.2d 707, overruled on other grounds in Rush v. Maple Heights (1958), 167 Ohio St. 221, 147 N.E.2d 599.
While it is true that in the case of Conold v. Stern, supra, in which the court expanded on the rationale of Wright v. Schick, supra, there is language which would suggest that there need not be a complete identity of parties or their privies for the doctrine of collateral estoppel to be applicable, in paragraph two of the syllabus the court held that "a point or a fact which was actually and directly in issue in a former action and was there passed upon and determined by a court of competent jurisdiction may not 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." The syllabus in the case of Schimke v. Earley, supra, is in complete accord with this statement and if the opinion in that case suggests otherwise it should be noted that the plaintiff in that case had already had her day in court on identical issues as a party in a prior action. Finally, the cases of Gibson v. Solomon, supra, and Brinkman v. Baltimore Ohio Rd. Co., supra, state the principle that although a litigant is not technically a party to the prior action, if that litigant is a real party in interest in the prior action, the prior judgment may operate as an estoppel. They do not suggest a departure from the rule requiring identity or privity of parties.
Generally, a person is in privity with another if he succeeds to an estate or an interest formerly held by another. Vasu v. Kohlers, Inc., supra. In the present case, the parent's cause of action for loss of services and medical expenses of the minor child, although derivative, does not arise by way of succession from an estate or interest of the minor child. The interest, as well as any possible recovery, was solely that of the parents. Thus, the minor child and her parents are not in privity.
Moreover, it cannot be said that this child was, in any sense, a real party in interest in the suit by her parents or had any control over that litigation. "For a record to constitute a bar or res adjudicata against one not a party or privy, but who assisted in the prosecution or defense of the action in aid of some interest of his own, the record itself must in some way show such assistance." State v. Cincinnati Tin Japan Co., supra.
In our opinion, the existing Ohio requirement that there be an identity of parties or their privies is founded upon the sound principle that all persons are entitled to their day in court. The doctrine of res judicata is a necessary judicial development involving considerations of finality and multiplicity, but it should not be permitted to encroach upon fundamental and imperative rights. It is our conclusion that the rule advocated by the appellant could create grave problems in establishing the adequacy of a non-party's representation in the prior suit and that the case at bar is not one which should result in a departure from present Ohio law.
Appellant also argues that the evidence on the issue of its negligence warranted a directed verdict and entry of judgment for it, and that the award of damages was excessive. Our examination of the record in this case convinces us that these arguments are not well taken.
For the foregoing reasons, the judgment of the court of Appeals is affirmed.
MATTHIAS, O'NEILL, DUNCAN and CORRIGAN, JJ., concur.
SCHNEIDER, J., concurs in paragraphs one, two and five of the syllabus and in the judgment.
TAFT, C.J., concurs in paragraphs one, two and three of the syllabus, but dissents from paragraph five of the syllabus and from the judgment.