Bahler v. Fletcher

474 P.2d 329, 257 Or. 1, 1970 Ore. LEXIS 243
CourtOregon Supreme Court
DecidedSeptember 11, 1970
StatusPublished
Cited by89 cases

This text of 474 P.2d 329 (Bahler v. Fletcher) is published on Counsel Stack Legal Research, covering Oregon Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bahler v. Fletcher, 474 P.2d 329, 257 Or. 1, 1970 Ore. LEXIS 243 (Or. 1970).

Opinions

HOLMAN, J.

This is an appeal by plaintiffs from a decree of the trial court denying foreclosure of a trust deed.

Plaintiffs contracted with defendants to remodel [3]*3defendants’ residence. An agreement was executed by defendants which required them to pay plaintiffs the contract price for the work in monthly installments. At the completion of the work, defendants executed a trust deed to secure the performance of their agreement to pay. Plaintiffs had a financing agreement with Alcoa Credit Company (Alcoa). They assigned their beneficial interest in the contract and trust deed to Alcoa, and Alcoa then paid them the contract price.

Plaintiffs agreed in their financing arrangement with Alcoa that, insofar as contracts transferred to Alcoa were concerned, all goods furnished to the customer would be of merchantable quality and fit for their intended purpose, and all services rendered would be performed in a good and workmanlike manner. The agreement also provided that Alcoa could insist that plaintiffs rescind any such transfer of any contract which plaintiffs had not so performed.

When defendants refused to make the payments required of them under the contract, Alcoa brought an action against plaintiffs to recover its money. Alcoa contended plaintiffs had not performed the work for defendants in a workmanlike manner. The judge in that case found for Alcoa and held that “the Fletcher job was not done in accordance with accepted practices and in substantial respects was not done in a workmanlike manner. The work was not performed as contracted * * .” As a result of this determination, the contract and trust deed were transferred back to the plaintiffs and Alcoa recovered the sum it had paid plaintiffs therefor. Plaintiffs then commenced the present proceeding to foreclose the trust deed.

In this case plaintiffs do not seek recovery for the reasonable value of the materials and services furnished to defendants. They seek to recover upon [4]*4the contract and to enforce the trust deed which secures the payments that defendants were to make pursuant to the contract. They cannot recover in quantum meruit on a cause of action which is based solely on a specific contract. Flaherty v. Bookhultz et al, 207 Or 462, 483, 291 P2d 221, 297 P2d 856 (1956); Williams v. Ledbetter, 132 Or 145, 150, 285 P 214 (1930). They are not entitled to recover upon the contract unless they have substantially performed it. If they are not entitled to recover upon the contract, they cannot enforce the trust deed which secures defendants’ performance of their obligations thereunder.

It is defendants’ contention that the holding of the trial judge in the previous litigation between plaintiffs and Alcoa, to the effect that plaintiffs had not performed the work in a workmanlike manner, is binding upon the plaintiffs in this case in accordance with the doctrine of collateral estoppel. Therefore, defendants claim that plaintiffs are not entitled to recover on the contract nor to foreclosure of the trust deed. The trial judge held that the plaintiffs were so precluded. By use of the term “collateral estoppel,” we intend to refer to the rule preventing relitigation of a particular issue or determinative fact which was necessary to the prior decision of a different cause of action as compared with “res judicata” which usually refers to the rule preventing relitigation of the same cause of action.

Plaintiffs contend the trial court erred in applying the doctrine of collateral estoppel because defendants were not parties to the first case nor were they in privity with Alcoa. Contrary to a strained contention by defendants, they were not in privity with Alcoa. They had no relation with Alcoa and no interest in whether Alcoa recovered its money from plaintiff^. [5]*5However, the principal issne in the present case is identical "with an issne decided in the prior case to which plaintiffs were parties. See Burnett v. Western Pac. Ins. Co., 90 Adv Sh 1233, 1240, 469 P2d 602 (1970); State v. George, 253 Or 458, 461-62, 455 P2d 609 (1969); State of Oregon v. Dewey, 206 Or 496, 508, 292 P2d 799 (1956). The ultimate issue in the first case was whether plaintiffs had breached their financing agreement with Alcoa. In order to determine that issue, it was necessary to decide whether plaintiffs substantially performed their agreement with defendants. The court in the first case found that they had not.

The law of most jurisdictions and of Oregon is in conformance with plaintiffs’ contention; and, if this court’s decisions are left unchanged, collateral estoppel can have no application to the present case. Wolff v. Du Puis, 233 Or 317, 378 P2d 707 (1963); Raz v. Mills, 233 Or 452, 454, 378 P2d 959 (1963); ALI Restatement, Judgments § 93 (1942). For a compilation of cases, see 23 ALR2d 710 (1952). The reason given in support of the rule holding that collateral estoppel may be asserted only by a party or by one in privity with a party to the first case is that due process prevents a third party from being bound by the results of that litigation because he did not have his day in court; and, since he is not bound by the adjudication, it is unfair to allow him to assert it against one who was a party. The necessity that both be bound is referred to as mutuality. See Raz v. Mills, supra at 454. The estoppel is not mutual unless the one taking advantage of the earlier litigation would have been bound by it had it been decided to the contrary.

It is difficult to find many authorities who unqualifiedly support the reasoning behind the requirement of mutuality. Many support the results of the [6]*6rule to which, there are certáin recognized exceptions not applicable to the facts of this ease. Application of the rule brings about the proper results in some cases through happenstance and inadvertence and not because mutuality is theoretically appropriate to a determination of whether collateral estoppel is properly applied in a given instance.

The doctrine of judicial finality, of which collateral estoppel is a part, is based upon two considerations. First, the protection of private litigants against the harassing necessity of litigating more than once the same issue or cause of action; and, second, the protection of the public’s interest in preventing relitigation of matters once decided.

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Bluebook (online)
474 P.2d 329, 257 Or. 1, 1970 Ore. LEXIS 243, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bahler-v-fletcher-or-1970.