State Farm Fire & Casualty Co. v. Century Home Components, Inc.

550 P.2d 1185, 275 Or. 97, 1976 Ore. LEXIS 774
CourtOregon Supreme Court
DecidedMay 27, 1976
DocketCase 92610; Case 92501; Case 92589; Case 73-4238; Case 73-4239; Case 73-4496; Case 94488; Case 95496; Case 97005; Case 93162; Case 93314; Case 93371; Case 73-4582
StatusPublished
Cited by90 cases

This text of 550 P.2d 1185 (State Farm Fire & Casualty Co. v. Century Home Components, Inc.) 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
State Farm Fire & Casualty Co. v. Century Home Components, Inc., 550 P.2d 1185, 275 Or. 97, 1976 Ore. LEXIS 774 (Or. 1976).

Opinion

*101 HOLMAN, J.

Defendant appeals from judgments entered in 13 actions for damages resulting from a fire. These actions were among 48 cases consolidated for a single hearing in the court below on the issue of collateral estoppel. The ruling of the trial court that defendant was collaterally estopped from contesting liability in each of the 48 actions forms the basis for defendant’s appeal.

The fire giving rise to this litigation started early one Sunday morning in the summer of 1968. Defendant constructed prefabricated housing in a large shed. Plaintiffs’ property was stored in a warehouse which was located approximately 60 feet from defendant’s shed and which was connected thereto by a wooden loading dock. On the side of defendant’s shed was a wooden box, called a skip box, into which sawdust from a neighboring saw was customarily deposited. On the Saturday evening preceding the fire, defendant’s janitor had dumped a mix of linseed oil and dry sawdust into the box. No employees were present at the time the fire started. Whatever its cause and point of origin, and these are in dispute, the fire spread via the loading dock and caused substantial damage to defendant’s shed, the warehouse and its contents.

Shortly thereafter various actions, eventually total-ling over 50, were filed against defendant to recover for losses from the fire. Three of these actions proceeded separately through trial to final judgment. In each case the plaintiffs alleged essentially that defendant was negligent with respect to both the start and spread of the fire. The first case to come to trial resulted in a jury verdict for defendant. On appeal this court reversed the judgment for error in failing to compel defendant to produce a statement needed by the plaintiff for purposes of impeaching a defense witness, and remanded for a new trial. Pacific N. W. Bell v. Century Home, 261 Or 333, 491 P2d 1023, 494 P2d 884 *102 (1972). During the pendency of the foregoing appeal the second case was tried and produced another jury verdict for defendant. Sylwester v. Century Home Components, Inc., No. 92582 (Circuit Court of Oregon for Lane County). No appeal was taken from that judgment and it became final. Shortly thereafter the third case was tried and a jury verdict was returned for the plaintiff. This judgment was affirmed on appeal. Hesse v. Century Home, 267 Or 53, 514 P2d 871 (1973). The Pacific N. W. Bell case was subsequently retried, this time to the court sitting without a jury, and the court found for the plaintiff. We affirmed on appeal, Pacific N.W. Bell v. Century Home, 267 Or 46, 514 P2d 874 (1973).

Following entry of final judgment in both Hesse and Pacific N. W. Bell, the present plaintiffs filed amended and supplemental complaints, conforming their allegations to those in the foregoing cases, and asserted that the judgments therein should operate to preclude defendant from again litigating the question of liability. Defendant alleged in defense that it would be unfair to bar relitigation in view of the similarity of issues between those cases and Sylwester and of the existence of the jury verdict and judgment in defendant’s favor in Sylwester. In the consolidated hearing on the question of collateral estoppel the parties submitted the records and transcripts of all three cases. The trial court rendered its ruling in favor of plaintiffs, finding inter alia:

"* * * That the allegations of the second amended and supplemental complaint raising the issue of collateral estoppel have been established by the greater weight of the evidence, and that the affirmative allegations of the answer thereto have not been established by the evidence. * * *.”

To summarize the posture of these cases, the question of defendant’s negligence has been tried four times and three final judgments have been rendered. Defendant has procured one favorable judgment (and two jury verdicts) and the claimants have received two *103 judgments. The present plaintiffs, who were not parties to any of the previous actions, seek to utilize the prior claimants’ judgments to establish conclusively defendant’s negligence and its responsibility for any loss caused by the fire.

Our point of departure is our decision in Bahler v. Fletcher, 257 Or 1, 474 P2d 329 (1970). In Bahler we discarded the requirement of mutuality as a prerequisite to collateral estoppel because "mutuality is not a relevant basis on which to determine the finality of litigation.” 257 Or at 19. We set forth two essential conditions for the application of collateral estoppel by a non-party against one who was a party to a prior action. First, there must exist an identity of issue between the prior action and the action in which estoppel is asserted; and second, the party against whom estoppel is sought must have had a full and fair opportunity to contest the issue decided adversely to him. 257 Or at 20. We clearly recognized, however, that even when these two prerequisites are satisfied, "the unlimited use of collateral estoppel by a person who was neither a party nor in privity with a party to the original litigation may, in some instances, lead to unfair results.” 257 Or at 10. We therefore counseled the courts to "scrutinize with care any situation where collateral estoppel is asserted by a person who was neither a party nor in privity with a party to the first case, to make certain no unfairness will result to the prior litigant if the estoppel is applied.” 257 Or at 19.

Defendant does not challenge the trial court’s conclusion that the issues in Hesse and Pacific N. W. Bell were identical with the issues in the present cases and that the question of defendant’s negligence with respect to the cause and spreading of the fire was decided adversely to defendant in both actions. Nor does it deny, at least with respect to the second Pacific N. W. Bell trial, that it had a full and fair opportunity to litigate the issue of negligence. Defendant’s only contention is that the trial court erroneously con- *104 eluded that no unfairness would result from collaterally estopping defendant in the present circumstances.

The parties disagree initially on the proper scope of appellate review, and we will take this opportunity to delineate both the obligations of the parties with respect to proof of collateral estoppel and the standard of appellate review. Plaintiffs contend we are bound by the trial court’s ruling if it is supported by substantial evidence. We have frequently stated that the party asserting estoppel has the burden of proving the elements giving rise to it, e.g., Smejkal v. Rice, 273 Or 687, 692, 543 P2d 271 (1975); Holmgren v. Westport Towboat Co., 260 Or 445, 451, 490 P2d 739 (1971); Jarvis v. Indemnity Ins. Co., 227 Or 508, 512, 363 P2d 740 (1961), but this statement requires elaboration.

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Bluebook (online)
550 P.2d 1185, 275 Or. 97, 1976 Ore. LEXIS 774, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-farm-fire-casualty-co-v-century-home-components-inc-or-1976.