Faulkner v. Caledonia County Fair Assn.

Faulkner v. Caledonia County Fair Assn. (2003-433); 178 Vt. 51; 869 A.2d 103

2004 VT 123

[Filed 17-Dec-2004]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                 2004 VT 123

                                No. 2003-433


  Dorrie L. Faulkner	                         Supreme Court

                                                 On Appeal from
       v.	                                 Caledonia Superior Court


  Caledonia County Fair Association and 	 June Term, 2004
  Marc's Amusement Co., Inc.


  Mark J. Keller, J.

  Jan Peter Dembinski of Jan Peter Dembinski, PLC, Woodstock, and Herbert G.
    Ogden of Liccardi Crawford & Ogden, P.C., Rutland, for Plaintiff-Appellant.

  John Paul Faignant of Miller Faignant & Behrens, P.C., Rutland, for
    Defendants-Appellees.


  PRESENT:  Amestoy, C.J., (FN1)  Dooley, (FN2)  Johnson, Skoglund 
            and Reiber, JJ.

       ¶  1.  SKOGLUND, J.  In this personal injury action, plaintiff
  appeals the Caledonia Superior Court's August 28, 2003 decision granting
  defendants' motion to dismiss.  Plaintiff argues on appeal that this action
  is sufficiently distinct from the lawsuit she filed, and eventually won,
  for injuries sustained as a result of the same occurrence giving rise to
  her current lawsuit.  Because we agree with the trial court that the
  doctrine of claim preclusion bars plaintiff from relitigating the personal
  injury claims she pressed in her first lawsuit, we affirm.
   
       ¶  2.  The parties do not contest the relevant facts.  In 1991,
  plaintiff sustained injuries when a large metal panel struck her head while
  she was on an amusement ride at the Caledonia County Fair run by defendant
  Caledonia County Fair Association (County Fair).  In 1994, plaintiff sued
  the operator of the ride, defendant Marc's Amusement Co., Inc. (Marc's),
  for damages resulting from her head injuries.  In 1995, the U.S. District
  Court rendered a verdict in her favor for $5,000, and she successfully
  collected that amount.  


       ¶  3.  On November 12, 1999, plaintiff suffered her first grand mal
  seizure.  On April 5, 2000, her treating physician diagnosed her with
  epilepsy and determined that the 1991 head injury was the proximate cause
  of the epilepsy.  In November 2002, plaintiff sued both defendants, seeking
  damages for the epilepsy that allegedly resulted from the 1991 injury. 
  Defendants jointly filed a motion to dismiss in May 2003.
   
       ¶  4.  In the decision currently on appeal, the trial court granted
  defendants' motion to dismiss on two grounds.  First, the court agreed with
  defendants that plaintiff's epilepsy claim was barred by the doctrine of
  claim preclusion, (FN3) because plaintiff's current claim differs from her
  1994 claim only in that she currently alleges a more serious injury to her
  head.  Further, the court held that its ruling applied to both defendants
  (even though plaintiff sued only Marc's in her first action) because they
  were in privity.  Second, the trial court found that plaintiff's claim was
  time-barred under 12 V.S.A. § 512(4). (FN4)  Plaintiff then filed this
  appeal.

       ¶  5.  In reviewing a trial court's grant of a motion to dismiss, this
  Court accepts as true "all factual allegations pleaded in the complaint"
  and draws "all reasonable inferences from those facts."  Gilman v. Maine
  Mut. Fire Ins. Co., 2003 VT 55, ¶ 14, 175 Vt. 554, 830 A.2d 71 (mem.). 
  "[W]hether preclusion applies to a given set of facts is a question of law,
  which we review de novo."  In re Tariff Filing of Cent. Vt. Pub. Svc.
  Corp., 172 Vt. 14, 19, 769 A.2d 668, 673 (2001) [hereinafter In re CVPSC]. 

       ¶  6.  As a preliminary matter, we note that plaintiff does not
  challenge the trial court's conclusion that, by virtue of the indemnity
  obligation and the unity of interests between them, privity exists between
  the two defendants for claim preclusion purposes.  See In re Dunnett, 172
  Vt. 196, 203 n.*, 776 A.2d 406, 412 n.* (2001) (stating that this Court
  will not address issues on appeal that are not briefed).  Although
  plaintiff notes that in her first suit she sued Marc's and that in the
  present suit she is suing Marc's and the County Fair, she presents no
  argument or authority to suggest that the trial court's conclusion was
  incorrect.  Therefore, the trial court correctly concluded that if claim
  preclusion barred plaintiff's claim against Marc's, it also barred her
  claim against the County Fair. 

       ¶  7.  The crux of plaintiff's argument is that the trial court erred
  in applying claim preclusion because the cause of action in her current
  lawsuit is distinct from her prior lawsuit.  However, as the trial court
  correctly explained, "plaintiff is pursuing the identical case she pursued
  in 1994 except that she is alleging that the injury to her head was more
  serious."  
   
       ¶  8.  Under the doctrine of claim preclusion, a final judgment in
  previous litigation bars subsequent litigation if the parties, subject
  matter, and cause(s) of action in both matters are the same or
  substantially identical.  Pomfret Farms, L.P. v. Pomfret Assoc., 174 Vt.
  280, 284, 811 A.2d 655, 659 (2002).  The doctrine applies both to claims
  that were or should have been litigated in the prior proceeding.  In re
  CVPSC, 172 Vt. at 20, 769 A.2d  at 673.  Claim preclusion flows from the
  fundamental precept that a final judgment on the merits "puts an end to the
  cause of action, which cannot again be brought into litigation between the
  parties upon any ground whatever."  Nevada v. United States, 463 U.S. 110,
  130 (1983) (quoting Comm'r v. Sunnen, 333 U.S. 591, 597 (1948)). 

       ¶  9.  The doctrine of claim preclusion advances the efficient and
  fair administration of justice because it serves "(1) to conserve the
  resources of courts and litigants by protecting them against piecemeal or
  repetitive litigation; (2) to prevent vexatious litigation; (3) to promote
  the finality of judgments and encourage reliance on judicial decisions; and
  (4) to decrease the chances of inconsistent adjudication."  In re CVPSC,
  172 Vt. at 20, 769 A.2d  at 673.  By furthering these objectives, the
  doctrine 

    ensures "the very object for which civil courts have been
    established, which is to secure the peace and repose of society by
    the settlement of matters capable of judicial determination.  Its
    enforcement is essential to the maintenance of social order; for,
    the aid of judicial tribunals would not be invoked . . . if . . .
    conclusiveness did not attend the judgments of such tribunals."  

  Nevada, 463 U.S.  at 129 (quoting S. Pac. R.R. Co. v. United States, 168 U.S. 1, 49 (1897)); see also Russell v. Atkins, 165 Vt. 176, 179, 679 A.2d 333, 335 (1996) (recognizing that "[r]es judicata is intended to protect
  the courts and the parties from the burdens of relitigation").
   
       ¶  10.  The policies underlying the doctrine of claim preclusion are
  so fundamental to our precedent-based legal system that the U.S. Supreme
  Court has refused to recognize "public policy" and "simple justice" as
  rationales for avoiding the doctrine's strict application.  Federated Dep't
  Stores, Inc. v. Moitie, 452 U.S. 394, 401-02 (1981); see also 18 Charles
  Alan Wright et al., Federal Practice and Procedure § 4415, at 379 (2d ed.
  2002) (noting that Federated Dep't Stores "virtually extinguishes the
  prospect that a general fairness exception will be engrafted on claim
  preclusion rules").  As the Supreme Court stated, " '[s]imple justice' is
  achieved when a complex body of law developed over a period of years is
  evenhandedly applied."  Federated Dep't Stores, 452 U.S.  at 401.  The Court
  also observed that " '[p]ublic policy dictates that there be an end of
  litigation; that those who have contested an issue shall be bound by the
  result of the contest, and that matters once tried shall be considered
  forever settled as between the parties.' "  Id. (quoting Baldwin v.
  Traveling Men's Ass'n, 283 U.S. 522, 525 (1931)).  As a result, claim
  preclusion generally will not yield to the equities of a particular case: 
  "The doctrine of res judicata serves vital public interests beyond any
  individual judge's ad hoc determination of the equities in a particular
  case.  There is simply 'no principle of law or equity which sanctions the
  rejection by a federal court of the salutary principle of res judicata.' "
  Id. (quoting Heiser v. Woodruff, 327 U.S. 726, 733 (1946)).
   
       ¶  11.  With these considerations in mind, we turn to the question of
  whether plaintiff's current lawsuit articulates a new claim, or attempts to
  relitigate the claim concluded by her prior lawsuit.  In determining
  whether two causes of action are sufficiently similar for claim preclusion
  purposes, this Court has focused on whether the same evidence will support
  both of them.  See, e.g.,  State v. Dann, 167 Vt. 119, 125, 702 A.2d 105,
  109 (1997) ("For the purposes of claim preclusion, two causes of action are
  the same if they can be supported by the same evidence."); Am. Trucking
  Assn's v. Conway, 152 Vt. 363, 370, 566 A.2d 1323, 1328 (1989) ("This Court
  has previously characterized causes of action as the same for purposes of
  claim preclusion where 'the same evidence will support the action in both
  instances.' " (quoting Hill v. Grandey, 132 Vt. 460, 463, 321 A.2d 28, 31
  (1974))).  This approach tracks the first Restatement of Judgments, which
  deemed causes of action the same for claim preclusion purposes "if the
  evidence needed to sustain the second action would have sustained the first
  action."  Restatement of Judgments § 61 (1942).  


       ¶  12.  As the U.S. Supreme Court has noted, however, "[d]efinitions
  of what constitutes the 'same cause of action' have not remained static
  over time." Nevada, 463 U.S.  at 130.  Indeed, the trend has been toward a
  broader approach, embodied in the Restatement (Second) of Judgments,
  requiring a plaintiff to address in one lawsuit all injuries emanating from
  "all or any part of the transaction, or series of connected transactions,
  out of which the action arose."  Restatement (Second) of Judgments § 24(1)
  (1982) [hereinafter Restatement (Second)]; see also 18 Wright et al.,
  supra, § 4407 n.22 (observing that "[t]oo many states have adopted the
  Restatement test to provide a complete list" and collecting examples);
  Note, Claim Preclusion in Modern Latent Disease Cases: A Proposal for
  Allowing Second Suits, 103 Harv. L. Rev. 1989, 1991 (1990) (observing that
  most courts have abandoned "old tests," including whether the later case
  involves the same evidence as the earlier case, in favor of the
  Restatement's transactional approach).  The Supreme Court, in comparing the
  first and second Restatements, characterized the second Restatement's
  transaction-based definition as a "more pragmatic approach."  Nevada, 463 U.S.  at 130 n.12. 
   
       ¶  13.  Under the second Restatement, the scope of a "transaction" is
  determined by "giving weight to such considerations as whether the facts
  are related in time, space, origin, or motivation, whether they form a
  convenient trial unit, and whether their treatment as a unit conforms to
  the parties' expectations or business understanding or usage."  Restatement
  (Second) § 24(2).   In making this assessment, "no single factor is
  determinative."  Id. § 24 cmt. b.  Additionally, "even when there is not a
  substantial overlap [between proofs relevant to two actions], the second
  action may be precluded if it stems from the same transaction."  Id.  Thus,
  it follows from this flexible definition that "[w]here one act causes a
  number of harms to, or invades a number of different interests of the same
  person, there is still but one transaction."  Id. § 24 cmt. c. 

       ¶  14.  Indeed, the current Restatement's approach precludes a second
  lawsuit arising out of the same transaction as a prior lawsuit even where
  the second action will include "evidence or grounds or theories of the case
  not presented in the first action, or . . . remedies or forms of relief not
  demanded in the first action."  Id. § 25.  Moreover, "[i]t is immaterial
  that in trying the first action [plaintiff] was not in possession of enough
  information about the damages, past or prospective, or that the damages
  turned out in fact to be unexpectedly large and in excess of the judgment." 
  Id. § 25 cmt. c (emphasis added).

       ¶  15.  Adopting these principles, we conclude that plaintiff's claim
  for relief in the instant case arises out of the same transaction that gave
  rise to the prior lawsuit.  The facts underlying both cases are
  inextricably "related in time, space, origin, or motivation," Restatement
  (Second) § 24(2), because both actions spring from the same "origin"-the
  1991 accident.  As a result, there is substantial overlap between the
  proofs of both claims, with the only difference being evidence concerning
  the existence and cause of plaintiff's epilepsy.  However, this discrepancy
  does not necessarily militate in favor of finding two distinct
  transactions, because "even when there is not a substantial overlap [of
  witnesses and proofs], the second action may be precluded if it stems from
  the same transaction."  Id. § 24 cmt. b.  Indeed, viewed together,
  plaintiff's two lawsuits depict one act-the 1991 accident-that caused harm
  to plaintiff.  In such situations, "there is still but one transaction." 
  Id. § 24 cmt. c.
   
       ¶  16.  Finally, viewing the two cases as stemming from the same
  transaction does not undermine the expectations of the parties.  There is
  nothing in the record to suggest that, at the time of plaintiff's first
  lawsuit, either party expected anything other than the typical result in a
  personal injury case-namely, a verdict that would conclude the matter
  between them.  As the Restatement approach recognizes, "even when the
  injury caused by an actionable wrong extends into the future and will be
  felt beyond the date of judgment, the damages awarded by the judgment are
  nevertheless supposed to embody the money equivalent of the entire injury." 
  Id. § 25 cmt. c.  Therefore, the fact that "in trying the first action
  [plaintiff] was not in possession of enough information about the damages,
  past or prospective, or that the damages turned out in fact to be
  unexpectedly large and in excess of the judgment" is "immaterial" to the
  claim preclusion analysis.  Id. (emphasis added).  Accordingly, we hold
  that both actions arise out of the same transaction for claim preclusion
  purposes, and, as a result, that this action is barred by the judgment in
  the previous action. (FN5)   
   
       ¶  17.  This case is distinguishable from the cases upon which
  plaintiff relies that permitted subsequent actions for late-emerging latent
  diseases resulting from exposure to asbestos or other workplace chemicals. 
  See, e.g., Pustejovsky v. Rapid-American Corp., 35 S.W.3d 643 (Tex. 2000)
  (holding that plaintiff's suit against several suppliers of asbestos
  products for asbestos-related cancer twelve years after settling suit
  against a different asbestos supplier for asbestosis was not precluded by
  claim preclusion); Rogers v. Kunja Knitting Mills, U.S.A., 520 S.E.2d 815
  (S.C. Ct. App. 1999) (holding that claim preclusion did not bar plaintiff's
  second lawsuit for damage to internal organs resulting from workplace
  exposure to chemicals, despite earlier suit for dermatitis contracted from
  same exposure).  In the asbestos cases, courts permit plaintiffs to file
  second suits for asbestos-related cancer, after filing asbestosis suits,
  because cancer is a distinct injury unrelated to asbestosis, and it does
  not surface until well beyond the limitations period.  See Wilson v.
  Johns-Manville Sales Corp., 684 F.2d 111, 117 n.33 (D.C. Cir. 1982)
  (Ginsburg, J.) (noting that defendant conceded that asbestos-related cancer
  is separate and distinct from, and not a complication of, asbestosis).  As
  then Circuit Judge Ruth Bader Ginsburg wrote in Wilson, an asbestos case
  "requires [the court] to focus, not on judgments and their preclusive
  effects, but on statutes of limitations."  Id. at 118.  By contrast, the
  instant case involves a traumatic injury the consequences of which turned
  out to be more severe than they appeared at the time of plaintiff's first
  lawsuit, not two separate and distinct diseases or injuries.  Therefore,
  the asbestos and similar workplace exposure cases are inapposite.  See
  Pustejovsky, 35 S.W.2d  at 653-54 (limiting holding to asbestos-related
  diseases resulting from workplace exposure).  
   
       ¶  18.  The instant case is best viewed not as a latent disease case,
  but as a "traumatic event/latent manifestation" case, "in which the
  plaintiff has sustained both immediate and latent injuries caused by a
  noticeable, traumatic occurrence."  Albertson v. T.J. Stevenson & Co., 749 F.2d 223, 231 (5th Cir. 1984).  Several courts have held that in such
  cases, a single cause of action accrues for limitations purposes with the
  occurrence of the traumatic event.  See, e.g., Stephens v. Dixon, 536 N.W.2d 755, 758 (Mich. 1995) (holding that plaintiff's claim for
  late-emerging neck disorder accrued when plaintiff sustained injuries in
  car accident, not when she became aware of the disorder); Jones v. Trs. of
  Bethany Coll., 351 S.E.2d 183, 187 (W. Va. 1986) (holding that claim
  accrues when plaintiff sustains noticeable injury from a traumatic event,
  even though there may be a latent injury arising from the same event). 
  Indeed, two courts have confronted late-emerging epilepsy claims stemming
  from traumatic head injuries and concluded that each plaintiff's claim
  accrued at the time of the initial injuries, not when the epilepsy emerged. 
  LeBeau v. Dimig, 446 N.W.2d 800, 802-03 (Iowa 1989); Rowe v. John Deere,
  533 A.2d 375, 377-78 (N.H. 1987).  The instant case fits the "traumatic
  event/latent manifestation" profile-plaintiff's claim accrued when she
  suffered the blow to her head in 1991, and it is "immaterial" for claim
  preclusion purposes that her injuries turned out to be more severe than
  those for which she sought damages in her 1994 lawsuit.  Restatement
  (Second) § 25 cmt. c.

       ¶  19.  Finally, we reject plaintiff's argument that Article 4 of
  Chapter I of the Vermont Constitution militates against applying claim
  preclusion here because doing so would be unfair.  While the Restatement
  recognizes that the policies behind claim preclusion may be overcome "for
  an extraordinary reason," id. § 26(1)(f), such exceptions are "not lightly
  to be found but must be based on a clear and convincing showing of need,"
  id. § 26 cmt. I.  As examples, the Restatement offers cases involving the
  validity of a continuing restraint on liberty, child custody, divorce, or a
  prior litigation that "failed to yield a coherent disposition."  Id. 
  Because plaintiff alleges only that her injuries stemming from the 1991
  accident turned out to be more serious than they appeared at the time of
  the first lawsuit, she has not "clearly and convincingly shown that the
  policies favoring preclusion . . . are overcome for an extraordinary
  reason," id. § 26(1)(f).  As explained above, the U.S. Supreme Court has
  recognized that "the mischief which would follow the establishment of
  precedent for so disregarding this salutary doctrine against prolonging
  strife would be greater than the benefit which would result from relieving
  some case of individual hardship."  Federated Dep't Stores, 452 U.S.  at 402
  (quotations omitted). (FN6)   
   
       ¶  20.  We are mindful that claim preclusion may cause harsh results
  in individual cases, but on balance we conclude that applying it here best
  serves the interests of all litigants and promotes the efficient
  administration of justice, in light of the powerful policy concerns laid
  out above.  As the U.S. Supreme Court aptly recognized, the "doctrine of
  res judicata is not a mere matter of practice or procedure inherited from a
  more technical time than ours.  It is a rule of fundamental and substantial
  justice, of public policy and of private peace, which should be cordially
  regarded and enforced by the courts."  Federated Dep't Stores, 452 U.S.  at
  401 (quotations omitted).    Therefore, the trial court correctly dismissed
  the instant case.
  Affirmed.


                                       FOR THE COURT:



                                       _______________________________________
                                       Associate Justice


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                                  Footnotes


FN1.  Chief Justice Amestoy sat for oral argument but did not participate in
  this decision.

FN2.  Justice Dooley sat for oral argument but did not participate in this
  decision.

FN3.  Although the trial court used the term "res judicata," the terms "res
  judicata" and "claim preclusion" are often used interchangeably.  See,
  e.g., In re Tariff Filing of Cent. Vt. Pub. Svc. Corp., 172 Vt. 14, 20, 769 A.2d 668, 673 (2001).  We use the term "claim preclusion" throughout this
  opinion because "[t]he concept of res judicata embraces two doctrines,
  claim preclusion and issue preclusion (or collateral estoppel), that bar,
  respectively, a subsequent action or the subsequent litigation of a
  particular issue because of the adjudication of a prior action."  In re
  Quechee Lakes Corp., 154 Vt. 543, 559, 580 A.2d 957, 966 (1990) (quotations
  omitted).  Because the question before us is whether the current action is
  barred by plaintiff's prior lawsuit, this case requires us to consider the
  doctrine of claim preclusion.

FN4.  Because we hold that the doctrine of claim preclusion bars plaintiff's
  current lawsuit, we do not reach the issue of whether the suit was timely
  under 12 V.S.A. § 512(4).

FN5.  We also note that the Restatement contemplates an exception to the
  application of claim preclusion when "[t]he court in the first action has
  expressly reserved the plaintiff's right to maintain the second action." 
  Restatement (Second) § 26(1)(b).  If a party provides the court with
  "special reasons" for doing so, the court should afford the party "an
  opportunity to litigate in a second action that part of the claim which he
  justifiably omitted from the first action."  Id. § 26 cmt. b.  The record
  here does not reveal that plaintiff requested or the court decided in the
  first action to reserve plaintiff's right to pursue a second action in the
  event that her injuries turned out to be more severe.

FN6.  In this regard, it is also worth noting a distinction between the
  criteria for application of claim preclusion and those used in the context
  of the related concept of issue preclusion (or collateral estoppel). 
  "[I]ssue preclusion bars the subsequent relitigation of an issue which was
  actually litigated and decided in a prior case between the same parties
  resulting in a final judgment on the merits, where that issue was necessary
  to the resolution of the action."  Am. Trucking Ass'ns v. Conway, 152 Vt.
  363, 369, 566 A.2d 1323, 1327 (1989).  In determining whether to apply
  issue preclusion, we consider, among other elements, whether applying that
  doctrine in the later action is fair.  Berlin Convalescent Ctr. v.
  Stoneman, 159 Vt. 53, 56-57, 615 A.2d 141, 144 (1992).  As set forth above,
  the claim preclusion inquiry does not involve an assessment of the fairness
  of applying the doctrine in a subsequent action.  Therefore, we reject
  plaintiff's argument that, under Article 4 of Chapter I of the Vermont
  Constitution, it would be unfair to apply claim preclusion here.