Lawrence A. Kruckenberg v. Paul S. Harvey

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2005 WI 43 SUPREME COURT CASE NO.: COMPLETE TITLE: OF WISCONSIN 2003AP1813 Lawrence A. Kruckenberg, Plaintiff-Appellant-Petitioner, v. Paul S. Harvey, Defendant-Respondent. REVIEW OF A DECISION OF THE COURT OF APPEALS 2004 WI App 133 Reported at: 274 Wis. 2d 424, 685 N.W.2d 844 (Ct. App. 2004-Published) OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: February 1, 2005 SOURCE OF APPEAL: COURT: COUNTY: JUDGE: Circuit Green Lake William M. McMonigal April 14, 2005 JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING: ATTORNEYS: For the plaintiff-appellant-petitioner there were briefs by William H. Gergen and Gergen, Gergen & Pretto, S.C., Beaver Dam, and oral argument by William H. Gergen. For the defendant-respondent there was a brief by Jim D. Scott and Wood Law Offices, LLC, Oxford, and oral argument by Daniel G. Wood. 2005 WI 43 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2003AP1813 (L.C. No. 01 CV 112) STATE OF WISCONSIN : IN SUPREME COURT Lawrence A. Kruckenberg, FILED Plaintiff-Appellant-Petitioner, APR 14, 2005 v. Paul S. Harvey, Cornelia G. Clark Clerk of Supreme Court Defendant-Respondent. REVIEW of a decision of the Court of Appeals. Reversed and remanded. ¶1 SHIRLEY S. ABRAHAMSON, CHIEF JUSTICE. This is a review of a published decision of the court of appeals1 affirming a judgment and order of the Circuit Court for Green Lake County, William M. McMonigal, Judge. The circuit court granted summary judgment in favor of the defendant, Paul S. Harvey, dismissing plaintiff Lawrence A. Kruckenberg's action alleging trespass and conversion location 1 and of seeking the a declaratory boundary line judgment between regarding their the respective Kruckenberg v. Harvey, 2004 WI App 133, 274 Wis. 2d 424, 685 N.W.2d 844. No. properties. 2003AP1813 The circuit court's order denied reconsideration of the judgment. The court of appeals affirmed the judgment and order of the circuit court. ¶2 The issue presented is whether the doctrine of claim preclusion bars brought the by defendant was the plaintiff's plaintiff's for of dismissal on the against the cutting and taking regarding the in to of location prior lateral provide title action against the support; the The prior action ended in a judgment merits. defendant The predecessor failing defendant had dug a ditch. action. is The for trees) of plaintiff's trespass and the for and a present conversion declaratory boundary action line (the judgment between the plaintiff's and defendant's land. ¶3 We conclude that the case at bar presents a special circumstance to which the doctrine of claim preclusion will not apply, namely, when a prior action between parties or their privies does not explicitly determine the location of a boundary line between their properties, claim preclusion will not bar a later declaratory judgment action to determine the location of the boundary line.2 Accordingly, we reverse the decision of the court of appeals and remand the cause to the circuit court for proceedings not inconsistent with this decision. I 2 The trespass and conversion claim, based on the defendant's conduct after the 1982 action and on a determination of the location of the boundary line between the plaintiff's and defendant's properties, may also go forward. 2 No. ¶4 2003AP1813 For purposes of deciding how to apply the doctrine of claim preclusion to the present case, we set forth the following facts derived from the record on the motion for summary judgment. ¶5 arises The question of claim preclusion in the present case from a lawsuit brought by Donald A. Czyzewski, the plaintiff's predecessor in title, against the defendant in 1982. According to the 1982 complaint, the defendant dug a ditch along the northern boundary of his property, altering the topography and natural watershed, causing Czyzewski's soils and trees to collapse, causing the line fence to collapse,3 and causing the water level of Czyzewski's pond to subside. ¶6 Czyzewski's 1982 complaint alleged that the defendant breached a duty of lateral support and a duty to maintain a line fence and that his conduct was contrary to Wisconsin Statutes4 §§ 844.01-.21, relating to physical injury to or interference with real property; § 101.111 relating to protection of adjoining property and buildings during excavation; and chapter 90 relating to fences. For the alleged violations, Czyzewski requested: (1) restoration of the line fence, (2) restoration of the eroded portion of his property, (3) restoration of the water level, and (4) $10,000. 3 "Line fence" generally refers to a fence separating two parcels of land. 4 1981-82 version. 3 No. ¶7 2003AP1813 The defendant's answer to the 1982 complaint admitted that the defendant and Czyzewski owned adjoining parcels and that the defendant had dug the ditch along the northern boundary of his property. The defendant denied all other allegations of the complaint. ¶8 On April 6, 1983, on stipulation of the parties, the circuit court entered an order dismissing the Czyzewski suit on its merits. The defendant agreed to pay Czyzewski $1,500 and plant rye grass along the drainage ditch to prevent erosion. ¶9 Czyzewski's sale of his parcel to the plaintiff was completed after the 1982 lawsuit was dismissed, and the 2000 and plaintiff claims he did not know about the lawsuit. ¶10 The plaintiff had his land surveyed in learned that the "line fence" was not on the boundary line; the fence was 16 feet north of his property's southern boundary. In other words, the survey showed that the plaintiff's property included a strip of about 16 feet wide that was previously thought to belong to the defendant and on which the defendant had dug a ditch. ¶11 Peace between the parties was disturbed in "late winter and early spring of 2001" when the defendant decided to harvest some trees on the south side of the fence; according to the 2000 survey, the trees were on the plaintiff's property. The plaintiff asked the defendant not to cut the trees. ¶12 After the defendant removed the trees, the plaintiff, armed with his new survey, sued the defendant for trespass and conversion (cutting and taking the trees), failure to provide 4 No. lateral support (failing prevent erosion), and to a plant rye declaratory grass 2003AP1813 continually to regarding the judgment location of the boundary line between their properties. defendant asserted denied the many of doctrines counterclaimed on the the of allegations res ground judicata that of the and the The complaint, estoppel, defendant and and his predecessors in title had acquired title by adversely possessing the disputed 16 feet for the requisite period of time. ¶13 The circuit court granted summary defendant's favor and dismissed the action. judgment in the The circuit court ruled that the plaintiff could not challenge the location of the line fence as not being the doctrine of claim preclusion. boundary line because of the The circuit court found that the line fence was an issue in the 1982 lawsuit and in effect placed the boundary line at the line fence. The circuit court also ruled that the issue of lateral support was litigated in 1982 and that the doctrine of issue preclusion therefore barred this count.5 ¶14 court's A divided judgment court of of appeals dismissal, also on affirmed the the ground circuit that lawsuit was barred by the doctrine of claim preclusion.6 dissent reasoned, in part, that the 5 application of the The claim The lateral support cause of action is not at issue in this review. 6 Kruckenberg, 274 Wis. 2d 424, ¶20. 5 No. 2003AP1813 preclusion to Kruckenberg, given the facts of this case, was unfair.7 II ¶15 This court reviews a grant of summary judgment using the same methodology as the circuit court.8 A motion for summary judgment will be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." ¶16 Wis. Stat. § 802.08(2) (2001-02).9 In the present case no genuine issue of material fact exists. ¶17 The only question presented is one of law, namely whether the defendant is entitled to judgment on the ground of claim preclusion. This court determines this question of law 7 Kruckenberg, 274 Wis. 2d 424, ¶24 (Nettesheim, J., concurring in part and dissenting in part) ("I would hold that the application of the doctrine against Kruckenberg does not pass the fairness test of the inquiry."). 8 Sopha v. Owens-Corning Fiberglas Corp., 230 Wis. 2d 212, 222, 601 N.W.2d 627 (1999). 9 See Sopha, 230 Wis. 2d at 222. All subsequent references to the Wisconsin Statutes will be to the 2001-02 version unless otherwise noted. 6 No. independently of the circuit court and court of 2003AP1813 appeals, benefiting from their analyses.10 III ¶18 To decide this case we must determine the application of the doctrine of claim preclusion.11 ¶19 The doctrine of claim preclusion provides that a final judgment on the merits in one action bars parties from relitigating any claim facts, transactions, or that arises out occurrences.12 of the When same the relevant doctrine of claim preclusion is applied, a final judgment on the merits will 10 Lindas (1994) (citing 306, 310, 334 as to whether presented with v. Cady, 183 Wis. 2d 547, 552, 515 N.W.2d 458 DePratt v. West Bend Mut. Ins. Co., 113 Wis. 2d N.W.2d 883 (1983) ("On review of a determination the doctrine of res judicata applies, we are a question of law." (citation omitted)). 11 In Wisconsin, the "term claim preclusion replace[d] res judicata; the term issue preclusion replace[d] collateral Sopha, 230 Wis. 2d at 232 n.25 (citing N. States estoppel." Power Co. v. Bugher, 189 Wis. 2d 541, 550, 525 N.W.2d 723 (1995)). Although the trend has been to replace the phrases "res judicata" and "collateral estoppel" with the clearer terms "claim preclusion" and "issue preclusion" respectively, some commentators and cases still retain the older language. This mix of terminology has no doubt complicated the discussion of the preclusion doctrines. See David L. Shapiro, Civil Procedure: Preclusion in Civil Actions 9 (2001) ("'Res judicata,' said one wry observer of the field, 'is hard enough.' And it is made even harder by the failure of courts and commentators to agree on the appropriate terminology even on the proper use of the term 'res judicata' itself." (citation omitted)). 12 Sopha, 230 Wis. 2d at 233 (citing N. States Power Co., 189 Wis. 2d at 550; DePratt v. West Bend Mut. Ins. Co., 113 Wis. 2d 306, 311-12, 334 N.W.2d 883 (1983)). 7 No. 2003AP1813 ordinarily bar all matters "'which were litigated or which might have been litigated in the former proceedings.'"13 ¶20 Claim preclusion thus provides an effective and useful means to establish and fix the rights of individuals, to relieve parties of the cost and vexation of multiple lawsuits, to conserve judicial resources, to prevent inconsistent decisions, and to encourage reliance on adjudication.14 The doctrine of 13 In contrast, an element of the doctrine of issue preclusion is that the issue was actually litigated in a prior action. Sopha, 230 Wis. 2d at 233 (quoting DePratt, 113 Wis. 2d at 310, and citing Lindas, 183 Wis. 2d at 558). The parties and the court agree that the defendant is not barred by the doctrine of issue preclusion in the present case; the issue of the boundary line between the properties was not litigated in 1982. 14 Sopha, 230 Wis. 2d at 235 (quoting N. States Power Co., 189 Wis. 2d at 559); Warren Freedman, Res Judicata and Collateral Estoppel 12 (1988) (citing Allan D. Vestal, Res Judicata/Preclusion V5-V6 (1969)); Robert C. Casad & Kevin M. Clermont, Res Judicata: A Handbook on its Theory, Doctrine, and Practice 31 (2001). One of the reporters of the Restatement Judgments, Professor David L. Shapiro, has posited: (Second) If a final, valid judgment served only as the tribunal's advice on how a controversy should be resolved, leaving it to other tribunals (or even other officials) to consider the controversy anew if they and the parties wished, it would be hard even to think of the initial tribunal as a "court" in the accepted sense. And indeed, the need to recognize the finality of judgments . . . is fundamental to the status of the federal courts under Article III of the Constitution and of the courts of many states. Shapiro, supra note 11, at 14. 8 of No. 2003AP1813 claim preclusion recognizes that "endless litigation leads to chaos; that certainty in legal relations must be maintained; that after expediency, a party and the has had his preservation day of the in court, public justice, tranquillity requires that the matter be at an end."15 ¶21 In Wisconsin, the doctrine of claim preclusion has three elements: "(1) identity between the parties or their privies in the prior and present suits; (2) prior litigation resulted in a final judgment on the merits by a court with jurisdiction; and (3) identity of the causes of action in the two suits."16 See also Casad & Clermont, supra note 14, at 4 ("At a more profound level, res judicata does much more. It is essential to judicial operation, to the orderly working of the judicial branch. If disputants could just reopen their adjudicated disputes, there would be no end to litigation, nor any beginning of authority."). 15 Allan D. Vestal, Preclusion/Res Judicata Variables: Nature of the Controversy, 1965 Wash. U. L. Q. 158, 158 (quoting Schroeder v. 171.74 Acres of Land, 318 F.2d 311, 314 (8th Cir. 1963)). 16 Sopha, 230 Wis. 2d at 233-34 (citing N. States Power Co., 189 Wis. 2d at 551). Wisconsin's articulation of the elements of claim preclusion is consistent with other jurisdictions and commentators. See, e.g., Allan D. Vestal, Res Judicata/Claim Preclusion: Judgment for the Claimant, 62 NW. U. L. Rev. 357, 357-58 (1967-68) (quoting Comm'r v. Sunnen, 333 U.S. 591, 597-98 (1948)); Freedman, supra note 14, at 12-17 (listing identity of parties, identity of claim or cause of action, and finality of judgment of award as essential elements of res judicata, that is, claim preclusion). 9 No. ¶22 2003AP1813 In effect, the doctrine of claim preclusion determines whether matters undecided in a prior lawsuit fall within the bounds of that prior judgment.17 ¶23 The parties do not dispute, and we agree, that the first two elements of claim preclusion have been satisfied in the case at bar. The identities of the parties or their privies are the same in the present and the prior suits. was the successor in interest to the The plaintiff property owned by Czyzewski, and the two are in privity for the purposes of claim preclusion.18 on the merits The 1982 litigation resulted in a final judgment by a court with jurisdiction, satisfying the second element of claim preclusion.19 17 Kevin M. Clermont, Common-Law Compulsory Counterclaim Rule: Creating Effective and Elegant Res Judicata Doctrine, 79 Notre Dame L. Rev. 1745, 1745 (2004). 18 See S.S. Kresge Co. v. Garrick Realty Co., 209 Wis. 305, 310, 245 N.W. 118 (1932) ("[A]djudication is res adjudicata and binding on the plaintiff as the privy of its assignor."); Restatement (Second) of Judgments § 43 (1982) ("A judgment in an action that determines interest in real or personal property . . . [w]ith respect to the property involved in the action . . . [h]as preclusive effects upon a person who succeeds to the interest of a party to the same extent as upon the party himself."); Casad & Clermont, supra note 14, at 153 ("A transferee of an interest in property, who received the interest after the commencement of an action concerning the property between the transferor and a third party, is in privity with the transferor and so is bound or benefited by the adjudication relating to that property interest."). 19 See Werner v. Riemer, 255 Wis. 386, 403, 39 N.W.2d 457 (1949): The fact that part of the adjudication was based upon a stipulation of the parties does not affect its finality. . . . The final adjudication is conclusive, 10 No. ¶24 2003AP1813 The parties' disagreement focuses on the third element of the doctrine of claim preclusion, namely, the requirement that there be an identity of the causes of action or claims in the two suits. ¶25 forth in Wisconsin has adopted the "transactional approach" set the Restatement (Second) of Judgments to determine whether there is an identity of the claims between two suits.20 Under the judgment doctrine in an of claim action preclusion, extinguishes all a valid rights and to final remedies against a defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose.21 a "mathematically The transactional approach is not capable of precise definition,"22 and determining what factual grouping constitutes a "transaction" is not always easy. The Restatement (Second) of Judgments § 24 (2) (1982) explains that the transactional approach makes the determination pragmatically, considering such factors as whether the facts are related in time, space, origin, or motivation. Section 24 (2) provides as follows: (2) What factual "transaction", and grouping constitutes what groupings constitute a a in a subsequent action between the same parties, as to all matters which were litigated or which might have been litigated in the former proceedings. 20 DePratt, 113 Wis. 2d at 311-12. 21 Restatement (Second) of Judgments § 24(1) (1982). 22 Id. § 24(2), cmt. b. 11 No. 2003AP1813 "series", are to be determined pragmatically, 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. ¶26 The goal in the transactional approach is to see a claim in factual terms and to make a claim coterminous with the transaction, regardless of the claimant's substantive theories or forms of relief, regardless of the primary rights invaded, and regardless of the evidence needed to support the theories or rights.23 Under the transactional approach, the legal theories, remedies sought, and evidence used may be different between the first and second actions.24 The concept of a transaction claim preclusion connotes a common nucleus of operative facts.25 ¶27 reflects The transactional "the expectation approach that to parties who are given the capacity to present their 'entire controversies' shall in fact do so."26 One text states that the pragmatic approach that seems most consistent with modern procedural philosophy "looks to see if the claim asserted in the second action should have been presented 23 for decision in the earlier action, taking into Id. § 24(2), cmt. a. 24 Conn. Nat'l Bank v. Jendall, 617 A.2d 544, 547 (Me. 1992) (applying a transactional test). 25 Restatement (Second) of Judgments § 24(2), cmt. b (1982). 26 Id. § 24(2), cmt. a. 12 No. account practical considerations relating mainly 2003AP1813 to trial convenience and fairness."27 ¶28 actions At first (1982 blush and the 2001) do events not giving appear rise part to of the the two same transaction, as they are separated by time, space, origin, and motivation. The 1982 suit was prompted when the defendant dug a ditch and allegedly caused Czyzewski to claim erosion to his property and damage to the line fence. The 2001 suit was prompted when the defendant cut trees; this time the plaintiff claimed trespass on his property and sought a declaratory judgment concerning the location of the boundary line between the properties. ¶29 Because the trees were not cut until 2001, obviously neither Czyzewski nor the plaintiff could have brought a claim for tree cutting and taking (trespass and conversion) in 1982. The plaintiff reasons that the 2001 claim is therefore not part of the same transaction as the 1982 claim, and he should not be barred by the doctrine of claim preclusion. ¶30 The plaintiff makes a good point, but he overlooks that the aggregate operative facts in both the 1982 and 2001 claims are the same, namely the defendant's conduct in relation to the location of the boundary line. establish plaintiff's the and location of defendant's the The facts necessary to boundary properties were 1982. 27 Casad & Clermont, supra note 14, at 66. 13 line in between the existence in No. ¶31 2003AP1813 Czyzewski's 1982 claims and judgment depended on who owned the property south of the line fence upon which the ditch had been dug. a ditch on Czyzewski's 1982 claim was that the defendant dug the defendant's property, property by removing lateral support.28 injuring Czyzewski's In 1982, both parties were mistaken about the location of the boundary line and the ownership of the property upon which the defendant had acted when he dug the ditch. ¶32 owned the Similarly, the plaintiff's 2001 claims depend on who property south defendant cut trees. of the line fence upon which the The plaintiff's 2001 claim is that the defendant cut trees on the plaintiff's property, an action that constitutes trespass and conversion. ¶33 Even though the 1982 litigation did not determine the boundary line, the two lawsuits have such a measure of identity of claims plaintiff that would a judgment appear to in the impair second the in rights favor or of the interests established in the first judgment. ¶34 The plaintiff's 2001 action might well be precluded under the well-settled claim preclusion analysis. We need not decide that difficult question, however, because even if claim 28 "The only proof necessary [to establish a failure to provide lateral support] is of the making of the excavation and of the injury to the adjoining land in consequence. . . . The doctrine of lateral support is applicable only as between different landowners." 2 George W. Thompson, Commentaries on the Modern Law of Real Property § 415 at 610-11 (Grimes 1980 replacement). 14 No. 2003AP1813 preclusion were to apply here, we conclude that the plaintiff's 2001 lawsuit should proceed under a narrow exception to the doctrine of claim preclusion. ¶35 line The parties' current dispute over the common boundary illustrates presents simple, the and that "classic rigid application."29 claim struggle law Claim preclusion and in between the preclusion the desire is the a present need for harsh its for case clear, sensitive doctrine; it necessarily results in preclusion of some claims that should go forward and it may fail to preclude some claims that should not continue.30 ¶36 Judicial formulation of the doctrine of claim preclusion should seek to minimize the over-inclusion of the doctrine through exceptions that are narrow in scope.31 This court has previously stated that "[e]xceptions to the doctrine of claim preclusion, confined within proper limits, are 'central to the fair administration of the doctrine.'"32 ¶37 Exceptions to the doctrine of claim preclusion are rare, but in certain types of cases "the policy reasons for 29 Casad & Clermont, supra note 14, at 40. 30 Id. at 41. "Flexible or even ad hoc exceptions should work to remedy any remaining over inclusion of [claim preclusion] in particular circumstances, but the exceptions should be small in scope even if necessarily considerable in number." Id. 31 Id. 32 Sopha, 230 Wis. 2d at 236 (quoting Restatement (Second) of Judgments § 26, cmt. i). 15 No. 2003AP1813 allowing an exception override the policy reasons for applying the general rule."33 ¶38 Recognizing these truths, the Restatement (Second) of Judgments describes preclusion. The exceptions present case to the falls doctrine within the of claim "special circumstances" exception set forth in § 26(1)(f),34 which reads as follows: (1) When any of the following circumstances exists, the general rule of § 24 does not apply to extinguish the claim, and part or all of the claim subsists as a possible basis for a second action by the plaintiff against the defendant: . . . . (f) It is clearly and convincingly shown that the policies favoring preclusion of a second action are overcome for an extraordinary reason, such as the apparent invalidity of a continuing restraint or condition having a vital relation to personal liberty or the failure of the prior litigation to yield a coherent disposition of the controversy. ¶39 We apply Restatement (Second) of Judgments § 26(1)(f) in the present case. We conclude that in the present case the policies favoring preclusion are overcome for an "extraordinary reason," namely, "the failure of the prior litigation to yield a coherent disposition of the controversy."35 33 Sopha, 230 Wis. 2d at 235-36 (quoting Patzer v. Bd. of Regents, 763 F.2d 851, 856 (7th Cir. 1985)). 34 See Sopha, 230 Wis. 2d at 236-37. 35 Restatement (Second) of Judgments § 26(1)(f) (1982). 16 No. ¶40 In Sopha Wis. 2d 212, § 26(1)(f) 601 v. Owens-Corning N.W.2d 627 "special (1999), circumstances" Fiberglas this Corp., court exception, 2003AP1813 230 adopted addressing a the narrow issue of multiple injuries with long latency periods that result from exposure to asbestos.36 "blindly apply" the doctrine exceptions does not further a The court recognized that to of claim policy of preclusion claim without preclusion to render justice, but rather undermines it.37 ¶41 The exception we adopt is as follows: When an action between parties or their privies does not explicitly determine the location of a boundary line, the doctrine of claim preclusion will not bar a future declaratory judgment action to determine the proper location of the boundary line. ¶42 The narrowly drawn exception we adopt today serves important policy considerations. ¶43 First, strict application of the doctrine of claim preclusion in the present case may result in over-litigation in 36 Sopha, 230 Wis. 2d at 236-37 ("A holding that claim preclusion bars a second action would force claimants to choose between seeking recovery for non-malignant asbestos-related injuries . . . or waiting for the development of more serious malignant injuries. [The earlier claims of those who wait would likely be barred by applicable statutes of limitations.]"). 37 Id. at 235-36. "Wisconsin law does not treat [claim preclusion] as an ironclad rule which must be implacably applied whenever its literal requirements are met, regardless of any countervailing considerations." Sopha, 230 Wis. 2d at 235 (quoting Patzer v. Bd. of Regents, 763 F.2d 851, 856 (7th Cir. 1985)). 17 No. cases involving prospect that real they property will disputes.38 forever be 2003AP1813 Faced foreclosed with from the having boundary lines judicially determined in the future if they fail to litigate the issue in even the most simple lawsuit involving real property, parties will litigate the issue, even when it is apparently not in dispute. ¶44 implicate There is no shortage of everyday situations that may the location of a boundary line. The plaintiff's counsel mentioned just a few at oral argument: a pet strays onto a neighbor's property; a child throws his or her ball into the neighbor's flowerbed; trees overhang the neighbor's shed; guests at a party wander onto the neighbor's property. If any of these situations results in a final judgment on the merits without a determination privies) of would, the under boundary the line, defendant's the parties theory of (and the their present case, forever be precluded from determining the location of the boundary line.39 ¶45 Second, strict application of the doctrine of claim preclusion in the present case may discourage individuals from promptly settling lawsuits relating to real property. may fear that without adequate discovery, any Parties stipulated 38 Developments in the Law Res Judicata, 65 Harv. L. Rev. 818, 820 (1952). 39 Further, application of claims preclusion without an exception would seem to conflict with Wis. Stat. § 841.01, whereby any person, at any time, may seek a declaration of interests in real property "against any person claiming a conflicting interest . . . ." 18 No. 2003AP1813 dismissal on the merits could terminate rights or claims they had yet to even discover were potentially implicated. ¶46 Lastly, strict application of the doctrine of claim preclusion in the present case places process over truth. boundary line is important to the parties in the The present litigation and future owners of the properties and should be decided on the merits once and for all. about the boundary line will produce a Allowing litigation final judgment that definitively settles the issue and can be recorded to put the public on notice. The legal system should, in the present case, be more concerned with deciding the location of the boundary line than with strictly applying the doctrine of claim preclusion. ¶47 The parties in the 1982 action believed the boundary line was at the line fence. A survey in 2000 showed the line fence was not on the boundary line. Neither the parties to the present litigation, nor their predecessors in title, have ever litigated the location of the boundary line. The boundary line can be determined in the present case, without repeating prior litigation. ¶48 reliable seeks Claim preclusion is grounded on a desire to maintain and to predictable ensure marketable, and ordinarily will that legal real relationships. estate therefore the apply property in titles doctrine of cases. Public are claim But policy secure and preclusion the strict application of the doctrine of claim preclusion in the present case creates uncertainty. The policies favoring preclusion of 19 No. 2003AP1813 the 2001 action are overcome, because the 1982 action, in the words of Restatement (Second) of Judgments, "failed to yield a coherent parties disposition not in a of controversy"40 the state of repose but and in "has the unstable an left and intolerable condition."41 ¶49 (and We hold that barring the declaratory judgment action the location trespass of the and conversion boundary line, action) when that to determine line has not the been previously litigated, undermines the policies that are at the foundation of the doctrine of claim preclusion. The unique nature of a claim to identify the location of a boundary line warrants this narrow exception. ¶50 We therefore conclude that important policy concerns exist that favor creation of a narrowly drawn exception in the present case, parties or namely their that privies when does a not prior action explicitly between the determine the location of a boundary line between the properties, the doctrine of claim preclusion will not bar a later declaratory judgment action to determine the location of the boundary line. ¶51 Thus the present action is not barred by the doctrine of claim preclusion, and the action may proceed. IV 40 Restatement (Second) of Judgments § 26 (1)(f) (1982). 41 Id. § 26, cmt. i, illus. 9. 20 No. ¶52 Before we conclude, we must briefly 2003AP1813 address some confusion in decisions in the court of appeals about applying a fairness element in the doctrine of claim preclusion. The concept of fairness underlies the doctrines of both claim and issue preclusion.42 Fairness is an element in the doctrine of issue preclusion,43 but this court has not adopted fairness as a factor in the doctrine of claim preclusion.44 42 Marten Transp., Ltd. v. Rural Mut. Ins. Co., 198 Wis. 2d 738, 743, 543 N.W.2d 541 (Ct. App. 1995) ("The doctrines of [issue preclusion and claim preclusion] are founded upon principles of fundamental fairness."). Similar statements about fairness being a policy underlying the doctrines of claim preclusion and issue preclusion appear in court of appeals decisions. See, e.g., State ex rel. Hawazen Establishment v. Town of Linn, No. 94-3237, unpublished slip op. at 3 (Wis. Ct. App. Oct. 25, 1995) ("Second, and more importantly, [claim preclusion] is an equitable doctrine founded on principles of fundamental fairness."). 43 N. States Power Co. v. Bugher, 189 Wis. 2d 541, 551, 525 N.W.2d 723 (1995); Michelle T. v. Crozier, 173 Wis. 2d 681, 686, 495 N.W.2d 327 (1993). 44 Although the court has discussed fairness in claim preclusion cases, the discussion has not adopted fairness as an element of the doctrine. For example, in In re Custody of D.M.M., 137 Wis. 2d 375, 381-82, 404 N.W.2d 530 (1987), the court wrote that "fairness is one aspect of the application of res judicata." However, the opinion suggests that the court was discussing issue, not claim, preclusion. Fairness has also been discussed in relation to a determination of whether privity existed between parties for application of the doctrine of claim preclusion. In determining the application of the doctrine of claim preclusion, courts ask whether the nonparty has had a full and fair opportunity to determine the issue. 21 No. ¶53 2003AP1813 The theory is that the doctrine of claim preclusion rests on justice (fairness) being served by attributing finality to judgments rather than by efforts at improved results.45 allowing courts to make second A court's final judgment on the merits orders parties' legal rights and duties with respect to the particular transaction or known set of facts that gave rise to the first suit.46 Individuals cannot act or plan in the absence of certainty as to those rights and duties. Thus claim preclusion is strictly applied. For example, in Pasko v. City of Milwaukee, 2002 WI 33, ¶22, 252 Wis. 2d 1, 643 N.W.2d 72, the court was faced with whether police officers and the Milwaukee Police Association were in privity, the officers having brought the first suit, the union the second. The court concluded that the interests of the officers and the union were different and the two were not in privity, stating, "We have therefore recognized that, when deciding whether to apply claim preclusion to a nonparty's action, it is appropriate to consider whether such application will result in unfairness to the nonparty." The discussion makes clear that the Pasko court was discussing the "privity" requirement of claim preclusion. In McCourt v. Algiers, 4 Wis. 2d 607, 611, 91 N.W.2d 194 (1958), a discussion of fairness in the application of res judicata was also in the context of discussing privity. See also Hernke v. Coronet Ins. Co., 72 Wis. 2d 170, 178, 240 N.W.2d 382 (1976) (citing McCourt: "Fairness is one aspect of the application of res judicata."). These cases should not be read to graft a "fundamental fairness" element onto the doctrine of claim preclusion. 45 "Fairness further argues for the predictable and consistent application of relatively wooden preclusion rules without overly sizable or flexible exceptions. Such a scheme enables a person to rely on prior adjudication, while ensuring even-handed treatment by the doctrine." Casad & Clermont, supra note 14, at 33. 46 Vestal, Res Judicata/Preclusion V-8-9 (1969). 22 No. ¶54 view, The United stating that States Supreme "fairness" is Court not an has 2003AP1813 expressed element of this claim preclusion, as follows: The doctrine of res judicata [claim preclusion] 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." The Court of Appeals' reliance on "public policy" is similarly misplaced. This Court has long recognized 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."47 ¶55 This reasoning makes clear that an ad hoc exception to the doctrine of claim preclusion cannot be justified simply by concluding that it is too harsh to deny an apparently valid claim by balancing the values of claim preclusion against the desire for a correct outcome in a particular case.48 case exceptions to the application of the doctrine Case-byof claim preclusion based on fairness "weaken the repose and reliance 47 Federated Dep't Store v. Moitie, 452 U.S. 394, 401 (1981) (citation omitted). 48 18 Charles Alan Wright et al., Federal Procedure: Jurisdiction 2d § 4415, at 380 (2002). 23 Practice and No. values of narrow, [claim clear, preclusion] special in all cases."49 circumstances 2003AP1813 Nevertheless, exceptions to claim preclusion have been recognized; they are viewed as less likely to undermine certainty in the doctrine of claim preclusion than are case-by-case determinations based on fairness. ¶56 role in In contrast, fundamental fairness plays a significant the litigation.50 application of issue preclusion to bar re- The fundamental fairness standard in the doctrine of issue preclusion emerged in Wisconsin and federal courts out of a general preclusion.51 loosening of the formal requirements of issue Formalistic requirements have been abandoned in favor of a looser, equities-based interpretation of the doctrine 49 18 Wright et al., supra note 48, § 4415 at 364 ("But for the most part, it is better to avoid weakening claim preclusion out of sympathy for the plight of particular plaintiffs and lack of sympathy for particular defendants. The whole doctrine of claim preclusion rests on the determination that justice is better served by attributing finality to judgments that may be wrong than by second efforts to improve results. Ad hoc exception for a few individual cases may not rend the protective fabric of claim preclusion for all cases, but there must be some better justification for depriving particular defendants of the protection afforded most."). 50 Michelle T., 173 Wis. 2d at 687-88 ("Formalistic requirements . . . have gradually been abandoned in favor of a looser, equities-based interpretation of the [issue preclusion] doctrine."). See also Lindas, 183 Wis. 2d at 559 ("[C]ourts consider an array of factors in deciding whether issue preclusion is [fair and] equitable in a particular case."); Shapiro, supra note 11, at 48. 51 Michelle T., 173 Wis. 2d at 689-91. 24 No. of issue preclusion.52 2003AP1813 Wisconsin courts have adopted a flexible approach toward the application of issue preclusion.53 ¶57 The different treatment of issue preclusion and claim preclusion is based on the differences in the two doctrines.54 precluded issue terminate the under issue subsequent preclusion litigation, does whereas not the A necessarily subsequent litigation ceases when the doctrine of claim preclusion applies. When issue preclusion is applied, the rights of persons not parties to the original litigation may be implicated; nonparties 52 Michelle T., 173 Wis. 2d at 687-88 ("Today, federal and state courts balance competing goals of judicial efficiency and finality, protection against repetitious or harassing litigation, and the right to litigate one's claims before a jury when deciding whether to permit parties to collaterally estop one another."); see also Lindas, 183 Wis. 2d at 559 ("[C]ourts consider an array of factors in deciding whether issue preclusion is [fair and] equitable in a particular case."). 53 Michelle T., 173 Wis. 2d at 690. 54 For a discussion and chart comparing the rules and exceptions to claim preclusion and issue preclusion, see Casad & Clermont, supra note 14, at 43-45. 25 No. 2003AP1813 (except those in privity with a party in the prior action) are not implicated in claim preclusion.55 ¶58 As a consequence of these differences between the two doctrines, the policies of finality and repose play a weaker role in issue preclusion than in claim preclusion. of issue preclusion flexibility to limit are therefore issue often preclusion and The elements interpreted to exclude with issue preclusion when its application would be unfair.56 ¶59 We raise the differences between issue preclusion and claim preclusion and the application of fairness to the doctrine of issue preclusion because, as the defendant correctly points out, the court of appeals in this case, and in other cases, has improperly added fairness as a fourth element in the doctrine of claim preclusion. Both the majority and dissenting opinions in the present case in the court of appeals incorrectly refer to "fairness" as an opinion opined: element "However, of claim even preclusion. where 55 these The majority requirements [of For discussions of issue preclusion, see N. States Power Co., 189 Wis. 2d at 550 ("Issue preclusion refers to the effect of a judgment in foreclosing relitigation in a subsequent action of an issue of law or fact that has been actually litigated and decided in a prior action."); Michelle T., 173 Wis. 2d at 687 (issue preclusion "is a doctrine designed to limit the relitigation of issues that have been contested in a previous action between the same or different parties."); Restatement (Second) of Judgments § 27 (1982)("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."). 56 Shapiro, supra note 11, at 46-48. 26 No. claim preclusion] claim or issue are preclusion factor of fairness."57 judgment, the satisfied, must the ultimate also satisfy 2003AP1813 application the of additional The dissenting opinion explained: "In my majority opinion represents application of claim or issue preclusion. an unduly rigid I would hold that the application of the doctrine against Kruckenberg does not pass the fairness test of the inquiry."58 ¶60 Several other published decisions of the court of appeals appear to adopt fairness as the fourth element in the 57 Kruckenberg, 274 Wis. 2d 424, ¶8 (citing Steffen v. Luecht, 2000 WI App 56, ¶28, 233 Wis. 2d 475, 608 N.W.2d 713). "As we indicated previously, even when the threshold requirements for claim preclusion are satisfied, we still must determine whether the application of the doctrine is fair to Kruckenberg." Kruckenberg, 274 Wis. 2d 424, ¶20. 58 Kruckenberg, 274 Wis. 2d 424, concurring in part, dissenting in part). 27 ¶24 (Nettesheim, J., No. doctrine of claim preclusion,59 as do several 2003AP1813 unpublished decisions of the court of appeals.60 59 See, e.g., Menard v. Liteway Lighting Prods., 2004 WI App. 95, ¶29, 273 Wis. 2d 439, 685 N.W.2d 365, review granted, ("Claim preclusion does have fairness as an essential principle and must never be applied to deprive a party of the opportunity for a full and fair determination."); Steffen v. Luecht, 2000 WI App 56, ¶28, 233 Wis. 2d 475, 608 N.W.2d 713 ("Even where the threshold requirements of claim preclusion are satisfied, the ultimate application of the claim preclusion rests on an important additional factor fairness."); Haeuser v. Haeuser, 200 Wis. 2d 750, 762, 548 N.W.2d 535 (Ct. App. 1996) ("Res judicata, like divorce, is also equity based, relying on principles of fundamental fairness." (citing Desotelle v. Cont'l Cas. Co., 136 Wis. 2d 13, 21, 400 N.W.2d 524 (1986)); Stuart v. Stuart, 140 Wis. 2d 455, 461-62, 410 N.W.2d 632 (Ct. App. 1987) ("In applying the doctrine of [claim preclusion], the essential principle is fairness. . . . Here, applying the [claim preclusion] doctrine would violate the principle of fairness."). 60 See, e.g., In re Termination of Parental Rights to Genesis M., Nos. 04-2379, 04-2380, unpublished slip op. at 1 n.4 (Wis. Ct. App., Jan. 19, 2005) ("While Michelle T. references issue preclusion only, both parties here suggest that [the fairness analysis] applies equally to a consideration of applying claim preclusion."); Isermann v. Isermann, No. 03-0354, unpublished slip op. at 3 (Wis. Ct. App. Oct. 29, 2003) ("However, even where these requirements are satisfied, the ultimate application of claim or issue preclusion must also satisfy the additional factor of fairness."); Mark Schlise Revocable Trust v. Beaver, No. 94-0155, unpublished slip op. at 3 (Wis. Ct. App. Oct. 4, 1994) ("Most important of all, fairness is one aspect of the application of [claim preclusion]. Thus, the defense of [claim preclusion] cannot be raised even where it is applicable, if it is unfair." (citation omitted)); Centnarowicz v. Park Falls Credit Union, No. 88-0375, unpublished slip op. at 1 (Wis. Ct. App. Dec. 27, 1988) ("Finally, even if [claim preclusion] would bar the Centnarowiczes' suit, the trial court should have declined to impose the doctrine in the interest of fairness because they did not fully litigate their claims in the foreclosure proceedings."); Bruha v. Goodman, No. 87-1334, unpublished slip op. at 1 (Wis. Ct. App. Aug. 24, 1988) ("In applying [claim preclusion], the essential principle is fairness."). 28 No. ¶61 2003AP1813 The source of a "fairness element" in the doctrine of claim preclusion in court of appeals decisions appears to be Desotelle v. Continental N.W.2d 524 (1986). Casualty Co., 136 Wis. 2d 13, 400 In Desotelle, the court of appeals noted that to apply the doctrines of claim and issue preclusion in that case would be grossly and manifestly unfair. cites an issue preclusion case, Crowall v. Desotelle Heritage Mutual Insurance Co., 118 Wis. 2d 120, 125-26, 346 N.W.2d 327 (Ct. App. 1984), for the proposition that in claim preclusion cases the fundamental fairness element applies. ¶62 conduct The court of appeals decisions requiring a court to a "fundamental fairness" analysis in applying the doctrine of claim preclusion import the fairness concept from issue preclusion cases without articulating a rationale for the importation. analysis underlying to the Furthermore, claim the preclusion doctrine of importation of a fairness contravenes basic policies claim preclusion. Under these circumstances, the efficacy of these court of appeals decisions as precedential or persuasive authority is limited. For these reasons, we depart from stare decisis61 and disavow any language in the decisions of the court of appeals to the extent that the language requires a court to conduct a "fundamental fairness" analysis in applying the doctrine of claim preclusion or allows litigation of an otherwise barred 61 claim to continue simply See Johnson Controls v. Employers Ins. of Wausau, 2003 WI 108, ¶¶94-100, 264 Wis. 2d 60, 665 N.W.2d 257. 29 No. 2003AP1813 because in that particular case, application of the doctrine of claim preclusion might appear unfair. * * * * ¶63 We conclude that the case at bar presents a special circumstance to which the doctrine of claim preclusion will not apply, namely when a prior action between parties or their privies does not explicitly determine the location of a boundary line between their properties, claim preclusion will not bar a later declaratory judgment action to determine the location of the boundary line.62 Accordingly, we reverse the decision of the court of appeals and remand the cause to the circuit court for proceedings not inconsistent with this decision. By the Court. The decision of the court of appeals is reversed and the cause remanded. 62 The trespass and conversion claim, based on the defendant's conduct after the 1982 action and on a determination of the location of the boundary line between the plaintiff's and defendant's properties, may also go forward. 30 No. 1 2003AP1813

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