Carr v. Rose

701 A.2d 1065, 1997 D.C. App. LEXIS 243, 1997 WL 619596

• Court: District of Columbia Court of Appeals
• Decided: October 9, 1997
• Docket: 94-CV-729
• Status: Published

Opinions

STEADMAN, Associate Judge:

This appeal arises from years of effort on the part of appellants (collectively the “landlord”) to recover damages for breach of a lease on office space after the tenants decided they no longer wished to occupy the leased space. The great bulk of the tenant appellees were not members of the law firm that executed the lease but rather of a subsequent “consolidated” law firm.

The principal question presented is whether the trial court properly dismissed the landlord’s action in its entirety against the tenants on the ground that it is barred under principles of res judicata and collateral estop-pel by a final order in a Pennsylvania probate proceeding. The Pennsylvania court had rejected what it determined to be a claim by the landlord against the assets of the probate estate of one of the tenants—a member of the consolidated law firm only—after ruling that the tenant was not liable under the lease agreement. The trial court held that the present claims are precluded by this former litigation. We reverse the trial court’s dismissal of the action against those appellees who were members of the original law firm executing the lease. In all other respects, the order of the trial court is affirmed.¹

I. Background

We first describe the lease and the relation of the parties to it. We then recount the series of litigation moves that followed the asserted breach of the lease, with special attention to the Pennsylvania probate proceedings that the trial court in the District of Columbia determined to have preclusive effect on the instant action.

A. The Lease

The landlord’s claims are based on a ten-year commercial office space lease entered into in 1983 between the landlord and the original tenant, a law partnership named Chapman, Duft & Paul (“CDP” or “original tenant”). Under the lease, the members of the law partnership were liable, but only to the extent of their respective “percentage interest[s] in the partnership assets of’ the lessee. That limitation also applied to the members of any “successor partnership.” The term “successor partnership” was defined to mean a partnership in which the members of the original tenant owned or controlled a majority interest.

In 1985, the original tenant and another law firm, Rose, Schmidt, Dixon & Hasley (“RSDH”), a Pennsylvania partnership with a Washington office, entered into an agreement to consolidate their operations. The members of the original tenant firm collectively owned less than a fifty percent interest in the consolidated operation; therefore, it would not be a “successor partnership” as that term was defined in the lease. The exact nature of the consolidation is disputed—members of the original tenant firm characterize the agreement as a merger, while members of the consolidated firm and its successor characterize it as a joint venture. Regardless of the characterizations, however, the consolidation agreement provided that “existing assets, liabilities and obligations of RSDH and CDP as of the close of business on February 28, 1985 shall be assumed by the [consolidated] Firm.”

The Washington office of the newly consolidated firm, which called itself Rose, Schmidt, Chapman, Duff & Hasley, took up residence in the original tenant’s office space in 1985 with the full knowledge of the landlord. The consolidated firm continued to occupy the space and pay rent until mid 1987, when, with six years still left on the lease term, it announced in a letter to the landlord that the firm had been “dissolved” and would be vacating the premises. In the same letter, the consolidated firm said that its business was “being wound up by Rose, Schmidt, Hasley & DiSalle,” which it described as “formerly a part of’ the consolidated firm. For the sake of clarity, we shall call Rose, Schmidt, Hasley & DiSalle the “survivor firm.” The survivor firm paid rent on the premises through September 30,1987, at which point the space was vacated.

B. The Litigation

As might have been expected, the foregoing led to a dispute concerning who owed whom what. According to an affidavit in the record, the landlord undertook settlement negotiations with counsel representing the members of the survivor firm. When those discussions proved unfruitful, in June 1989, the landlord notified opposing counsel of its intention to file suit and requested clarification regarding a list of partners of the surviv- or firm that counsel had previously provided, for the purpose of naming the appropriate defendants. On August 2, 1989, while the landlord was waiting for a response, members of the survivor firm brought an action in state court in Pittsburgh seeking a declaration that they were not liable on the lease. The landlord removed the case to federal court. The case was never decided because it was voluntarily dismissed, in 1993, by the members of the survivor firm.

At about the same time, the landlord learned of a second action in Pennsylvania, a probate proceeding in the Orphans’ Court Division of the Court of Common Pleas in Pittsburgh, resulting from the June 1989 death of Harold R. Schmidt, who had been a name partner in both the consolidated firm and the survivor firm but not the original tenant. On August 7, 1989, the landlord, to preserve its rights in Schmidt’s estate, filed a, notice of its claim in the amount of $2,036,398 reflecting rents assertedly due under the lease.² In response, on August 11 the executrix of Schmidt’s estate, represented by the survivor firm, filed a declaratory judgment action in the Orphans’ Court to determine Schmidt’s liability to the landlord under the lease. The landlord removed that action to federal court. After her motion for remand to the Pennsylvania state court was denied, the executrix voluntarily dismissed the action in December 1989.

Meanwhile, on August 14, 1989, the landlord filed in the District of Columbia Superi- or Court one of the complaints in the consolidated cases from which this appeal arises. The complaint named thirty-two past and present members of the survivor firm, of whom twenty-six had been members of the consolidated firm, including Harold Schmidt’s estate, and of whom one had also been a member of the original tenant. It also named twelve defendants who had been members of the consolidated firm, but not the survivor firm. Subsequently, in June of 1990, the landlord filed another complaint in the District of Columbia Superior Court, naming ten defendants who had been members of both the original tenant firm and the consolidated firm as well as six additional defendants who had been members of the consolidated firm only. At the landlord’s request, the two actions were consolidated. Upon defendants’ motion, these proceedings in the District were stayed pending resolution of the federal court action brought in Pennsylvania by the members of the survivor firm.

In January of 1990, Schmidt’s executrix filed an accounting of the estate with the Pennsylvania Orphans’ Court. The accounting provided for distribution of the estate to the legatees, without any provision for the estate’s potential liability to the landlord.³ If approved by the court after audit, that distribution would preclude the landlord’s claim under the lease against the estate. The landlord, therefore, objected to the accounting and on January 17, 1990, filed a petition pursuant to 20 Pa. Cons.Stat. § 3389⁴ requesting that the Orphans’ Court (1) order the return to the estate of $600,594 in estate assets already paid out in at-risk distributions, and (2) stay the audit of the accounting until the tenants’ liability under the lease was resolved, either in the survivor firm’s declaratory judgment action then pending in federal court in Pennsylvania or in the landlord’s action pending in the District of Columbia.

After a settlement conference sponsored by the Orphans’ Court proved unsuccessful, the court announced that it would entertain the claim itself. Not wishing to try its claim under the lease in that forum, the landlord denied having ever requested from the Orphans’ Court any judgment against the estate, and furthermore filed a notice withdrawing its claim. On March 22, 1990, the court struck the withdrawal and directed that a trial be held.⁵ The landlord failed to appear at trial, and, after receiving and considering evidence from only those contesting liability under the lease, the Orphans’ Court issued an opinion dismissing the lease claim on the merits.

Specifically, the Orphans’ Court found that “[tjhere was no valid assignment of the Lease to the [consolidated firm] and, therefore, there is no liability of either the [consolidated firm] or the Schmidt Estate. The Lease was neither expressly assigned nor assumed by [the survivor firm] or the [consolidated firm] and no such assignment or assumption occurred by implication or by operation of law.” The court concluded that the consolidated firm had been a tenant-by-sufferance between March 1, 1985 and September 30, 1987 pursuant to D.C.Code § 45-220 (1981), and that it had given the requisite thirty days notice of its intention to quit the premises leased pursuant to D.C.Code § 45-1404 (1981). As a result, Harold Schmidt, who had not been member of the original tenant law firm, could not be held liable under the lease. Accordingly, the court denied the landlord’s claim against the Schmidt estate.⁶ On October 2, 1990, the Orphans’ Court, sitting en banc in a panel of three judges, affirmed the order, without an opinion.

The landlord appealed the order to the Pennsylvania Superior Court, contending that a notice of claim filed pursuant to § 3532(b)(2) failed to commence a cause of action, and that, as a consequence, the Orphans’ Court “lacked jurisdiction” to decide the merits of a claim that had never been presented for decision. It also maintained that no claim had been presented at the audit. Furthermore, the landlord argued that even if a claim had been presented, the Orphans’ Court abused its discretion in striking the attempt to withdraw it.⁷ The Superi- or Court rejected each of these contentions in an opinion dated August 13, 1991.⁸ The Supreme Court of Pennsylvania, after having granted the landlord’s petition for discretionary review and hearing oral argument, affirmed the Superior Court’s order without an opinion on February 16, 1993. One justice dissented without opinion.

After the Pennsylvania Supreme Court’s affirmance, the members of the survivor firm dismissed the declaratory judgment action then pending in federal court in Pennsylvania. As a result, in August of 1993 the District of Columbia Superior Court lifted the stay which had been placed upon the landlord’s consolidated action. Soon thereafter, the trial court granted summary judgment ⁹ dismissing the landlord’s claims against every defendant on the ground that the rejection of its claim in the probate of the Schmidt estate barred its action against all of the tenants in the District of Columbia under the doctrines of res judicata and collateral estoppel. The trial court determined that the landlord’s present claims involved the same cause of action as the Schmidt litigation, and that all of the present defendants were in privity with Schmidt’s estate. . Alternatively, the trial court determined that the issue whether the lease had been assigned or assumed under the merger agreement had already been conclusively decided against the landlord in the probate proceeding. The landlord took this timely appeal.

We apply the familiar and well-settled standards for appellate review of a grant of summary judgment. See, e.g., Drejza v. Vaccaro, 650 A.2d 1308, 1312 (D.C.1994). In order to be entitled to summary judgment, defendants must demonstrate that there was no genuine issue of material fact, and that they were entitled to judgment as a matter of law. Super.Ct.Civ.R. 56(e). The record must be reviewed in the light most favorable to the party opposing the motion, here the landlord. See Graff v. Malawer, 592 A.2d 1038, 1040 (D.C.1991).

The two concepts of res judicata and collateral estoppel, although related, operate in distinctly different manners. As redefined by Restatement usage, which we have adopted in our caselaw, res judicata operates as “claim preclusion” while collateral estoppel operates as “issue preclusion.”¹⁰ We examine in turn each of these rationales relied upon by the trial court as applied to the two major groups of appellees: those who were only members of the consolidated firm and those who were also members of the firm that originally executed the lease document.

II. The Consolidated Firm

A.

Under the settled doctrine of res judi-cata, a final judgment on the merits “embodies all of a party’s rights arising out of the transaction involved,” Stutsman v. Kaiser Foundation Health Plan of Mid-Atlantic States, Inc., 546 A.2d 367, 370 (D.C.1988), and precludes relitigation in a subsequent proceeding of all issues arising out of the same cause of action between the same parties or their privies, whether or not the issues were raised in the first proceeding. Molovinsky v. Monterey Coop., 689 A.2d 531, 533 (D.C.1997) (citations omitted). Such a judgment, we have said, “estops not only as to every ground of recovery or defense actually presented in the action, but also as to every ground which might have been presented.” Id. Pennsylvania principles of res judicata, which we apply pursuant to 28 U.S.C. § 1738 (1988),¹¹ do not differ in this respect. See In re Estate of R.L.L., 487 Pa. 223, 409 A.2d 321, 323 n. 7 (1979) (“a party is commonly forbidden to raise issues that could have been litigated but were not, because of the desirability of settling the entire controversy in a single proceeding”) (citations omitted); Hopewell Estates, Inc. v. Kent, 435 Pa.Super. 471, 646 A.2d 1192, 1194 (1994) (“[a]ll matters which might have been raised and decided in the former suit, as well as those which were actually raised therein, are res adjudicata in a subsequent proceeding between the same parties and their privies”); Carroll Tp. Auth. v. Monongahela Mun., 145 Pa.Cmwlth. 273, 603 A.2d 243, 249 (1992) (“the scope of merger or bar includes not only matters that actually were litigated but also all matters that could have been litigated but were not”) (citing Duquesne Light Co. v. Pittsburgh Railways Co., 413 Pa. 1, 194 A.2d 319, 321 (1963)).¹²

The basic purposes of res judicata are “to conserve limited judicial resources, establish certainty and respect for court judgments, and protect the party relying on the judgment from vexatious litigation. In keeping with these purposes, the doctrine must be liberally construed and applied without technical restriction.” McArdle v. Tronetti, 426 Pa.Super. 607, 627 A.2d 1219, 1222 (1993). Thus, a plaintiff has, as the trite saying goes, only one bite at the apple against a particular defendant for all grievances arising out of a cause of action. If unsuccessful, a second action is precluded. See Restatement (Seo-ond) of Judgments § 19 (1982). We likewise have noted that it is a fundamental purpose of the doctrine “to prevent the relitigation of claims that plaintiffs have already had a full and fair opportunity to litigate, thereby protecting adversaries from expensive and vexatious multiple lawsuits, conserving judicial resources, and minimizing the likelihood of inconsistent outcomes.” Smith v. Jenkins, 562 A.2d 610, 615 (D.C.1989) (citing Montana v. United States, 440 U.S. 147, 153-54, 99 S.Ct. 970, 973-74, 59 L.Ed.2d 210 (1979)). Such policy considerations may require dismissal of a second action “even though the substantive issues have not been tried, especially if the plaintiff has failed to avail himself of opportunities to pursue his remedies in the first proceeding, or has deliberately flouted orders of the court.” Restatement (Second) of Judgments § 19 cmt. a.

There can be little doubt that the landlord’s current claim insofar as it involves the Schmidt estate and those in privity with it constitutes the same cause of action and indeed involves the same issues decided in the prior litigation, namely, contractual liability for having allegedly breached the 1983 agreement. Nonetheless, the landlord maintains that it never commenced a “cause of action” in the prior litigation which would be entitled to res judicata effect because it did not file a formal complaint with the Orphans’ Court. More specifically, the landlord contends that the claim it filed pursuant to 20 Pa. Cons.Stat. § 3532(b)(2) was insufficient, as a matter of Pennsylvania law, to initiate a “cause of action” capable of resolution on the merits by the Orphans’ Court.¹³

It is plain, however, that the Orphans’ Court judge rejected this argument, treated the filing and subsequent actions as a claim, and denied the claim. On appeal from that ruling, the Pennsylvania Superior Court squarely held that the landlord did not “merely file a request that the orphans’ court division postpone distribution pending resolution of the District of Columbia action. Rather, appellant filed a claim against the Estate.” In re Estate of Schmidt, supra, 596 A.2d at 1129 (emphasis added). Accordingly, “the orphans’ court division did not abuse its discretion in concluding that appellant had presented a claim over which [it] had jurisdiction.” Id.14 The Pennsylvania Superior Court and, in turn, the Pennsylvania Supreme Court, affirmed the order of the Orphans’ Court that “the Claim is denied.” We think that under Pennsylvania law, therefore, the decision was a valid, final judgment on the merits of the claim. Appellant, while failing to follow up on its asserted claim, certainly had a “full and fair opportunity” to do so.¹⁵

The landlord also contends that decisions of Pennsylvania’s Orphans’ Courts are not entitled to res judicata effect except with respect to estate assets subject to distribution, since those courts have only limited in rem jurisdiction. See Restatement (Seo-ond) of Judgments § 30(2). To the contrary, however, the Orphans’ Court is a court of general jurisdiction. The particular court in which the probate proceeding occurred was a division of the Court of Common Pleas of Allegheny County. 42 Pa. Cons.Stat. § 951(b) (1996). The Courts of Common Pleas have unlimited original jurisdiction of all actions and proceedings. 42 Pa. Cons. Stat. § 931(a) (1996). The divisions of the common pleas courts were established essentially for purposes of administrative convenience, and each division is vested with the full jurisdiction of the whole court. In re Estate of Hall, 517 Pa. 115, 535 A.2d 47, 59 (1987); In re Estate of Cantor, 424 Pa.Super. 24, 621 A.2d 1021 (1993). 20 Pa. Cons.Stat. § 952 (1996) provides that “[i]n a court of common pleas having two or more divisions each division of the court is vested with the full jurisdiction of the whole court, but the business of the court may be allocated among the divisions of the court by or pursuant to general rules.” Moreover, 20 Pa. Cons.Stat. § 712 (1996) confers upon the Orphans’ Court division broad residual and discretionary jurisdiction over all matters that are subject to resolution by courts of common pleas generally. In re Estate of Hall, supra, 535 A.2d at 59.

Consequently, the Schmidt estate and all those in privity with it are entitled to the protection of the res judicata effect of the prior denial of the landlord’s claim. The landlord does not contend that the trial court erred in its determination that all the defendants who, like Schmidt, were only members of the consolidated or successor firm, were in privity with Schmidt’s estate, or that the claims against them involve the same cause of action as that in the prior suit.¹⁶ Accordingly, we do not further address the trial court’s dismissal of claims against those defendants on the ground of res judicata. Furthermore, because we hold that the doctrine of claim preclusion bars the current action against these defendants, we need not decide whether they may also assert issue preclusion with respect to specific factual or legal determinations by the Orphans’ Court.

B.

The dissent, focussing upon the Pennsylvania Supreme Court’s affirmance without opinion, suggests that this action strips the proceeding of any res judicata effect. It asserts that Pennsylvania law requires this result since, theoretically, the Pennsylvania Supreme Court could have affirmed on the alternative ground that it was not an abuse of discretion for the Orphans’ Court to delay distribution further notwithstanding that the claim was pending in another forum.¹⁷ We cannot agree.

The ease of Speyer, Inc. v. Goodyear Tire and Rubber Co., 222 Pa.Super. 261, 295 A.2d 143 (1972), relied upon by the dissent for its conclusion, simply illustrates a corollary to the rule of collateral estoppel; “if a judgment of a court of first instance is based on determinations of two issues, either of which standing independently would be sufficient to support the result, the judgment is not conclusive with respect to either issue standing alone.” Restatement (Second) of Judgments § 27, cmt. i. The determinations, not being “essential to the judgment,” have no issue preclusive effect in subsequent proceedings.¹⁸ However, if on appeal the “appellate court upholds one of these determinations as sufficient and refuses to consider whether or not the other is sufficient and accordingly affirms the judgment, [then] the judgment is conclusive as to the first determination” but not the second. Restatement (Second) of Judgments § 27, cmt. o.

In Speyer, plaintiff had initially sued the manufacturer of a fuel pump which had caused an explosion. The trial court entered judgment for the defendant on the alternate grounds that the manufacturer had not been negligent and that plaintiff had been contrib-utorily negligent, either of which would have independently supported the result. The appellate court affirmed without considering the issue of contributory negligence. As a consequence, when plaintiff subsequently sued Goodyear as the manufacturer of the fuel hose, it was ruled that the earlier trial court finding of contributory negligence was not entitled to issue preclusive effect. Id. 295 A.2d at 147. Speyer squarely held that “a trial court’s finding of fact which is not relied upon by an appellate court in affirming a judgment is not conclusive against one of the parties who brings a subsequent suit against a non-party, in which the fact is in issue.” Id.

Neither the Restatement nor Speyer stands for the proposition that an appellate court’s failure to reach a particular issue (or even to. specify at all the basis for affirmance) robs the judgment of claim preclusive effect.¹⁹ In Speyer the plaintiff was still precluded by res judicata from relitigating its claim against the initial defendant despite the fact that it was permitted to relitigate in a subsequent suit against a second defendant an issue previously resolved against it by the trial court (but not relied upon by the appellate court in the affirmance).²⁰

The case before us is entirely different from Speyer, in that we are dealing here with claim rather than issue preclusion and appellate silence as to the grounds for affirmance. It is one thing to deprive a trial court finding of collateral estoppel effect where it can be seen that the appellate court did not rely upon that finding in its affirmance. It seems to us quite another to suggest that a trial court judgment on the merits, sustained by three appellate courts against a jurisdictional attack, loses its claim preclusive effect where there exists the theoretical possibility that an affirmance without opinion might have been based upon some ground completely different from that of the lower courts. By that reasoning, if the trial court in Speyer had decided in the defendant’s favor on the sole ground that the defendant was not negligent and the appellate court summarily affirmed, the decision would nonetheless have no pre-clusive effect if the appellate court could have held that the plaintiff was contributorily negligent as a matter of law. This is the sort of “pure speculation” that we are admonished to avoid. Surely in the normal course of events, a clear trial court judgment which is affirmed without opinion would be viewed as an affirmance of the trial court’s decision and its essential bases.²¹

The only Pennsylvania state case we have found involving this type of situation squarely supports such an approach in the res judicata context. In Commonwealth Pennsylvania Game Com. v. Hilliard, 3 Pa.Cmwlth. 560, 284 A.2d 326 (1971), entailing the condemnation of farmland, the trial court at the pleading stage had refused to permit a challenge to an amended complaint that was the same as one that was or could have been made to the original complaint. This ruling was affirmed by the Pennsylvania Supreme Court without opinion. At a subsequent proceeding, the landowners again attempted unsuccessfully to raise the same challenge. On appeal, the Commonwealth Court ruled that res judicata had been correctly applied. “[Wjhile neither appellants nor this Court can know the reasoning on which the Supreme Court sustained the lower court’s ruling that it was too late [in responding to the amended complaint] to raise the issue of the propriety of the taking, at least it is quite clear that that was its decision and, therefore, it is res adjudicata between the parties in this case.” Id. 284 A.2d at 327.²² See also Joseph L. v. Office of Judicial Support, 516 F.Supp. 1345, 1348 (E.D.Pa.1981) (“merely because the trial court’s judgment is affirmed without opinion is of ‘no consequence’ in determining whether the doctrine of res judica-ta has application in a subsequent proceeding”).

The dissent takes the position that treating an appellate court’s summary affirmance as generally resting on the basis relied upon below requires impermissible speculation.²³ However, Safeguard Mutual Ins. Co. v. Williams, supra note [12], upon which it relies, involved quite the opposite order of events. There, the trial court in the first proceeding had issued its ruling without explanation, leaving unclear whether the decision had been based on the merits or otherwise. When defendant in a subsequent proceeding asserted collateral estop-pel on the merits issue, it was held that the doctrine did not apply because it was uncertain whether that issue had previously been resolved. In contrast, there is no ambiguity here with respect to what issues have been determined by the Orphans’ Court and the Superior Court. Nor do we think the summary affirmance creates any ambiguity as to the action affirmed.²⁴

Most importantly, the dissent’s argument essentially disregards the essence of the trial court order. The operative portion was that the claim was denied. See note [6] supra. It was that action, not a refusal to further delay distribution, that was thrice affirmed against the only challenges appellants raised. We see no basis to disregard this reality. In sum, we are confident that if the instant litigation were brought in Pennsylvania, the Pennsylvania courts would conclude that the claim is barred by res judicata.

We now turn to the issue whether the defendants who were members of the original tenant firm fell within the application of the doctrines of res judicata and, alternatively, collateral estoppel.

III. The Original Tenant Firm

The landlord argues that the trial court erred in its determination that the members of the original tenant firm, Chapman, Duff & Paul, although not actual parties to the Pennsylvania proceeding, were “fully represented” at that proceeding, and therefore in privity with the Schmidt estate. “The doctrine of res judicata applies to and is binding, not only on actual parties to the litigation, but also to those in privity with them.” Stevenson v. Silverman, 417 Pa. 187, 208 A.2d, 786, 788 (1965). Privity has been described as “mutual or successive relationships to the same right of property, or such an identification of interest of one person with another as to represent the same legal right.” Montella v. Berkheimer Associates, 690 A.2d 802, 804 (Pa.Commw.Ct.1997). Traditional categories of privies include “those who control an action although not parties to it; those whose interests are represented by a party to an action; and successors in interest.” Smith v. Jenkins, supra, 562 A.2d at 615 (quoting Lawlor v. National Screen Service, 349 U.S. 322, 329 n. 19, 75 S.Ct. 865, 869 n. 19, 99 L.Ed. 1122 (1955)). Whether preclusion is justified depends upon the situation involved, and “the issue must be determined in light of the circumstances in each case.” District of Columbia Redevelopment Land Agency v. Dowdey, 618 A.2d 153, 164 (D.C.1992).

It is the landlord’s contention that the CDP defendants, as members of the original tenant, have not demonstrated that they shared a sufficient “mutuality of interest” with the Schmidt estate in the former litigation to establish privity. It is argued that those defendants, whose liability is premised upon their being party to the original lease agreement, shared no interest with those members who, like Schmidt, joined through consolidation, and whose liability depended upon a finding that the consolidated firm had assumed liability under the lease.²⁵ Indeed, the landlord suggests that the interests of the CDP partners potentially were adverse to those of Schmidt and the other RSDH partners in the prior litigation in that a determination that the consolidated firm had not assumed liability under the lease might have tended to increase the proportional burden of the liability bore by members of the original tenant.

Appellees respond by noting that the June 1990 complaint demanded judgment against members of the original tenant firm only “to the extent of their respective interests in the partnership assets or property of [the consolidated firm] as of June 30, 1987.”²⁶ They maintain that, as á consequence, the landlord may only establish their liability on the theory that they were members of the consolidated firm which had assumed the lease. Even if we were to adopt such a crabbed reading of the current complaint,²⁷ we fail to see how this affects the relationship of the CDP partners to the Pennsylvania litigation. There is simply no evidence in the record that these defendants, in their capacity as members of the original tenant firm, had a mutuality of interest with the Schmidt estate in the Pennsylvania court’s resolution of the liability of members only of the consolidated firm, let alone that their interests were “fully represented.” Under the circumstances of this case,.we agree with the landlord that the CDP defendants may not be considered to have been in privity with the prior proceeding, and that they may not assert res judica-ta as a defense in this action.

We turn next to the question whether the CDP defendants may properly rely upon the collateral estoppel effect of the Pennsylvania judgment to preclude a finding of their liability under the lease agreement. Whereas claim preclusion applies to entire claims, issue preclusion precludes the relit-igation of issues actually litigated and necessary to the outcome of a prior case involving the party against whom estoppel is asserted, even if such issues are subsequently presented as part of a different cause of action. Moreover, while claim preclusion operates only between the parties to the prior litigation and those in privity with them, a stranger to the first action may invoke issue preclusion against a party to that action. 18 MooRE, supra note [11], § 131.13[1] (3d ed.1997). Hence the CDP defendants, while not privy to the prior dispute, are not thereby necessarily prevented from asserting defensive “non-mutual” collateral estoppel. See, e.g., Jackson v. District of Columbia, 412 A.2d 948, 952 (D.C.1980); Thompson v. Karastan Rug Mills, 228 Pa.Super. 260, 323 A.2d 341, 344 (1974).

The landlord contends that the Orphans’ Court’s resolution of the Schmidt estate’s liability under the lease should not be given issue preclusive effect because the remaining issue involved in the current dispute, whether the CDP tenants remain hable on the original lease agreement, is entirely different from the one involved in the Schmidt litigation. There, the Orphans’ Court did not reach the issue of the original tenant’s liability; it simply determined that the consolidated firm had not assumed liability under the lease.

In describing the rule of collateral estoppel we have said that “when an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.” Pipher v. Odell, 672 A.2d 1092, 1095 (D.C.1996) (quoting Restatement (Seoond) of Judgments § 27). An issue is “actually litigated” when it is (1) “properly raised, by pleadings or otherwise,” (2) “submitted for determination,” and (3) “determined.” Id. (quoting Restatement (Second) of Judgments § 27 cmt. d). Pennsylvania law is in accord. See Lebeau v. Lebeau, 258 Pa.Super. 519, 393 A.2d 480, 483-84 (1978) (“[Pjreclusion applies only to issues actually litigated and determined, and not to matters which might have been raised in the first proceeding, but were not.”).²⁸

We agree with the landlord that even had it actually litigated its claim against the Schmidt estate, the scope of issue preclusion would be limited only to those issues which were resolved by the Orphans’ Court. The Orphans’ Court held only that the consolidated firm, of which Schmidt was a member, was not liable on the lease. It did not, however, resolve the liability under the lease of the original tenants. Its finding that the RSDH partners did not assume liability under the lease would not preclude a subsequent judicial determination that the original tenants remained liable. Therefore, those defendants who were members of Chapman, Duff & Paul are not protected by the doctrine of collateral estoppel.²⁹

Because we conclude that this breach of contract action is not barred by the doctrines of claim preclusion or issue preclusion with respect to the former CDP partners, we reverse the summary judgment in their favor and remand for further proceedings. In all other respects, the decision below is affirmed.

So ordered.

1 . We affirm the trial court’s denial of summary judgment on the issue of the statute of limitations. The landlord does not contend that the lease was breached in 1985, when the consolidated firm took possession of the premises, but instead in 1987, when the landlord stopped receiving rent payments. Because the landlord filed its complaints within three years from the time it stopped receiving rent, its claims are not barred by the statute of limitations.

2 .Pennsylvania law provides that "[n]o claimant shall have any claim against real property conveyed by a personal representative in distribution at his own risk ... unless such claimant, within one year after the decedent's death, files a written notice of his claim with the clerk.” 20 Pa. Cons.Stat. § 3532(b)(2) (1996). The landlord’s notice stated only the amount, but not the basis for its claim.

3 . The executrix had already distributed most of the estate’s assets but in the absence of a court-approved accounting, that distribution was “at risk.”

4 . This statute provides in relevant part:

When any claim not proved in the orphans' court division is being litigated in any other division or court, State of Federal, having jurisdiction thereof, the court may make such provision for the distribution or satisfaction of the claim as shall be equitable.

20 Pa. Cons.Stat. § 3389 (1996).

5 . In explanation for its refusal to permit a withdrawal, the court cited, inter alia, the potential prejudice to several of Schmidt’s partners whose contingent claims for contribution or indemnity against the Estate would be jeopardized by distribution prior to resolution of the landlord’s claims against them.

6 . The operative portion of the order read: "AND NOW, this 12 day of July, 1990, it is ORDERED, ADJUDGED and DECREED that the Claim of Square 106 associates against the estate of Harold Schmidt, deceased, is denied.”

7 . The landlord made no arguments on appeal with respect to the merits of the underlying claim, and the Superior Court expressed no opinion as to the correctness of the decision in that regard. Nor did the Superior Court reach the landlord’s constitutional arguments, which were found not to have been preserved for appeal.

8 . The decision is reported as In re Estate of Schmidt, 408 Pa.Super. 353, 596 A.2d 1124 (1991), in a form that, in appellants’ words, "differs slightly” from the opinion issued by the court. No suggestion is made that the differences are material to this appeal. Accordingly, we cite to the published opinion in the Atlantic Reporter. The summary affirmance by the Pennsylvania Supreme Court is reported at 533 Pa. 86, 619 A.2d 1058 (1993).

9 . The trial court termed its action a dismissal, but since it necessarily considered matters outside the face of the complaint, the effect was a grant of summary judgment. Appellant takes no issue with this point.

10 . We do not understand Pennsylvania law with respect to these doctrines to differ from that of the District or the Restatement in any material way relevant to the disposition of this appeal. Likewise, the structure of the Pennsylvania court system seems reasonably clear from the relevant statutes. No party filed any motion for the certification of any questions of law to the Pennsylvania Supreme Court, as permitted under D.C.Code § 11—723(h)(1). We have therefore proceeded to decide the case before us.

11 . This statute requires that every court in the United States afford judicial proceedings "the same full faith and credit ... as they have by law or usage in the courts of such State, Territory or Possession from which they are taken.” 28 U.S.C. § 1738 (1988). Judgments rendered by a state court must be afforded the same preclusive effect as the courts of the rendering state would afford them. See Marrese v. American Academy of Orthopaedic Surgeons, 470 U.S. 373, 384, 105 S.Ct. 1327, 1334, 84 L.Ed.2d 274 (1985); 18 James Wm. Moore et al, Moore's Federal Practice § 130.02 (3d ed.1997).

12 . While it is true that these and other Pennsylvania cases recite a requirement that there be some "identity of issues” or "identity of the thing sued upon or for” between the two actions for res judicata to apply, we think it erroneous to read this as requiring that the issue in the second action actually have been litigated and decided in the first (as opposed to simply requiring that the issue might potentially have been raised in the first). To do so would render meaningless the language quoted above, and leave res judicata no broader than collateral estoppel. In Safeguard Mutual Ins. Co. v. Williams, 463 Pa. 567, 345 A.2d 664 (1975), the underlying issue in the initial litigation, brought by the Commonwealth Insurance Department alleging violations of the insurance statute and the resultant administrative burden on the insurance department, was plainly distinct from that involved in the subsequent litigation brought by policyholders asserting a violation of their contractual rights. In any event, as we indicate below, because the issues presented in this action are precisely those already resolved in the prior action, namely contractual liability for the 1983 breach, we would conclude that there exists a sufficient "identity of issues” for the application of res judicata.

13 . The landlord’s filing, in its entirely, read:

IN RE: ESTATE OF HAROLD R. SCHMIDT CLAIM

To the Clerk of Orphans’ Court Division:

Index and make proper entry in your official records of the claim of The Square 106 Associates in the amount of $2,036,398.00 against the estate of the above named decedent. This claim is filed under Section 732(b)(2) of the Fiduciaries Act of 1949 as amended.

The said decedent, who resided at 154 North Bellfield Apt. 20, Pittsburgh, PA 15213, died on June 10, 1989.

Written notice of this claim was given to J. Mark Munson or Rose, Schmidt, Hasley & DiSalle, counsel, August 3, 1989.

THE SQUARE 106 ASSOCIATES.

14 We simply cannot agree with the appellants' characterization of the issues actually before the Orphans’ Court. It is the Pennsylvania courts, not appellants or this court, that have the final say on what was involved in the proceedings before them. Appellants make much of the Pennsylvania Superior Court’s comment that the issue before it was not whether the form filed by appellant "commenced a cause of action” but rather whether the Orphans’ Court had jurisdiction to determine the merits of appellant's claim. In re Estate of Schmidt, supra, 596 A.2d at 1128. It is plain that the Superior Court treated the determination before it as one made on the merits. There is no shred of any suggestion that the only issue was whether it was proper for the Orphans’ Court to distribute the assets. The order that was challenged on appeal and affirmed was, by its express terms, one denying the claim, not one distributing the assets. However the filing of a probate claim may be characterized, for purposes of res judicata and considering the policies underlying the doctrine, we are unable to discern any basis for not treating the Orphans’ Court judgment, explicitly affirmed on three appeals, as final and binding with respect to the landlord’s claim.

We do not think that this conclusion is undermined, as appellants suggest, by an earlier federal district court determination by Judge Alan Bloch that the § 3532 notice of claim did not formally constitute a complaint pursuant to Pa. R. Civ. P. 1019. The district court had rejected the Estate’s argument in opposition to the landlord’s removal of its declaratory judgment action filed August 11, 1989, that the action constituted a counterclaim and was therefore nonremovable. However, that decision did not rule out the possibility that the landlord's § 3532 filing was sufficient to confer jurisdiction upon the Orphans' Court to reach the merits of the claim. Indeed, the subsequent Pennsylvania state court decisions in this case have so held.

15 . We find no merit in the landlord’s contention that precluding it from litigating its current claims would deny it due process of law. The landlord argues that it had no notice that filing a claim pursuant to 20 Pa. Cons.Stat. §§ 3532 or 3389 initiated, under Pennsylvania law, a cause of action which could result in a final and binding judgment. However, despite the refusal to permit a voluntary dismissal, the Pennsylvania courts gave the landlord a “full and fair opportunity” to present this argument and to litigate its claim. We think due process requires no more.

16 . See Restatement (Second) of Judgments § 60(1): "A judgment in an action by an injured person against a partner upon an obligation or liability incurred in the course of partnership business ... if against the injured person, terminates his claim against another partner based upon that obligation."

17 . Although a third alternative is suggested based on the Superior Court’s opinion, we are unable to discern why that third alternative would differ from an affirmance on the merits in the circumstances here. We think the dissent too readily asserts that for privity purposes, collateral estoppel and res judicata are effectively indistinguishable.

18 . While collateral estoppel applies only to those findings on issues which were "essential to the judgment,” see Restatement (Second) of Judgments § 27, res judicata precludes the relitigation between the same parties of all issues arising out of the same cause of action, even if they were not raised in the first proceeding. See Hopewell Estates, supra, 646 A.2d at 1194.

19 . Indeed, § 27 of the Second Restatement is entitled "Issue Preclusion—General Rule,” and is unhelpful in determining the applicability or scope of the altogether separate doctrine of claim preclusion.

20 . A potential source of confusion flows from dicta in Speyer, stating that "findings of a trial court which are not relied upon on appeal should not remain res judicata." Id. 295 A.2d at 146 (emphasis added). It is evident in context that the court used the term "res judicata” in its broadest sense, which can refer, inter alia, to issue preclusion. See 18 Moore, supra notell, § 131.10 l[a] (3d ed.1997) (res judicata in its broadest sense includes "claim preclusion (or true res judicata) and issue preclusion (or collateral estoppel).”). For purposes of clarity, we use the term "res judicata” in its narrow sense as referring only to claim preclusion.

21 . Of course, with respect to claim preclusion as opposed to issue preclusion, the critical element is the nature of the judgment that was affirmed, not necessarily the issues actually litigated.

22 . In the interim between these two rulings, the landowners had sought relief in the federal court, which gave similar effect to the Pennsylvania Supreme Court's affirmance. Hilliard v. Pennsylvania, 308 F.Supp. 756 (W.D.Pa.1970).

23 . More precisely, the dissent applies this principle only where a question of privity arises. Although it may be necessary in such a situation to determine whether the same cause of action is involved and whether it was decided on the merits, we cannot perceive why the effect of a summary affirmance should differ depending upon whether an original party or a privy thereof is involved. Unlike the dissent, we see no ambiguity in that action here.

24 . The comment in Speyer that an appeal creates a "clean slate,” 295 A.2d at 146, must be read in context: "The view that an appeal creates a clean state, so to speak, upon which the appellate court's grounds of decision are inscribed, has been said to be supported by the great weight of judicial and scholarly opinion.” (Emphasis added). This is quite so when the appellate court inscribes its grounds of decision, but says nothing about affirmances without opinion.

25 . The Orphans’ Court properly did not decide the issue of the original tenants’ liability. That issue had not been presented to it, since Schmidt had come in through the consolidation.

26 . Under the terms of the lease, those tenants cannot be held personally liable beyond their interesl in the lessee firm’s assets at the time of breach.

27 .Such a reading, for example, would not necessarily preclude liability based on a tracing theory-

28 . The trial court determined that collateral es-toppel applied because the landlord had had a “full and fair opportunity to litigate’’ the issue in the Orphans’ Court. This standard, while of use in determining the scope of claim preclusion, is not determinative in the context of issue preclusion. The tenants, although conceding that the trial court employed an erroneous standard, nonetheless contend that the decision should be affirmed under the proper standard.

29 . Writing in separate briefs, members of the original tenant partnership argue for affirmance on alternative grounds not addressed by the trial court. Certain members contend, inter alia, that because they each withdrew from the consolidated firm prior to its dissolution and the breach of the lease in 1987, they had no interest in the consolidated firm’s partnership assets. Members of the original tenant also contend that the landlord impliedly accepted the surrender of the premises by the original tenant by accepting rent payments from the consolidated firm.

From the record on appeal, we would have difficulty in concluding that there is no genuine issue of material fact with respect to these issues. At least in part, it is claimed that discovery is incomplete. In any event, since we are remanding the case to the trial court as to the CDP tenants, we think it appropriate in the circumstances of this case that the trial court decide in the first instance the validity of the other alternative grounds for affirmance urged by those appel-lees.