Michigan Court of Appeals; Docket # 341500; Unpublished
Judges Cavanagh, Servitto, and Cameron per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Collateral Estoppel and Res Judicata
In this unanimous per curiam opinion, the Court of Appeals upheld the trial order for Defendants Ameriprise Insurance Company (“Ameriprise”) and Thomas Penri Thomas (“Thomas”) regarding the issue of collateral estoppel in an arbitration agreement. The Court upheld the order for Defendants because it found that there was a final judgment on the issue, since there was a jury trial; there was an opportunity for Plaintiff Rita Radwan (“Radwan”) to fully litigate the issue, since Radwan negotiated away her right to appeal; and there was mutuality of estoppel.
Radwan was involved in a motor vehicle accident with Thomas. Radwan filed a third-party action against Thomas and a first-party action against Ameriprise, her no-fault insurer. When the jury trial began Radwan entered a stipulated order dismissing Ameriprise without prejudice stating that “the parties have agreed to arbitrate.” The jury rendered a special verdict finding that Thomas was negligent, but Radwan was not injured. Ten days after the jury’s verdict Radwan and Ameriprise entered a binding arbitration agreement. Later, Radwan and Thomas entered a “Stipulation and Order of Dismissal with Prejudice,” in which Radwan agreed to forgo an appeal and Thomas agreed not to pursue case evaluation sanctions. Finally, the arbitrator entered an order awarding $0 against Ameriprise finding that collateral would apply to these facts under Monat v State Farm Ins Co., 469 Mich 679 (2004). Radwan appealed and the Circuit Court upheld the order. Radwan appealed again to the Court of Appeals.
The Court of Appeals upheld the arbitrator’s award and agreed that collateral estoppel would prevent Radwan from her claim against Ameriprise. The Court first explained that there are three elements necessary for collateral estoppel: (1) that a question of fact essential to the judgment was actually litigated and determined by a valid and final judgment, (2) that the same parties had a full and fair opportunity to litigate the issue, and (3) mutuality of estoppel. Relying on Monat, the Court first found that the question of fact essential to the judgment was actually litigated because there was a jury trial between Thomas and Radwan, which both parties agreed to dismiss. The jury found that no injury had occurred and the Court found that would satisfy the first element of collateral estoppel. Further, the Court disagreed with Radwan’s attempt to distinguish this case from others because the issue of Radwan’s injuries was actually litigated and a verdict was reached by the jury. The Court next found that Radwan had a full and fair opportunity to litigate the issue because she went to a jury trial and then negotiated away her right to appeal. The jury found that no injury occurred and so the issue relevant to Ameriprise was already determined. Finally, the Court explained that Ameriprise asserted collateral estoppel defensively and a showing of mutuality was not required under Monat.
“[T]he stipulated order of dismissal did expressly mention the outcome of the trial, specifically the jury’s finding of no cause of action. Moreover, the opportunities relinquished by the parties—Radwan’s post-trial rights and Thomas’s right to seek case evaluation sanctions—both depended on the jury’s verdict in favor of Thomas. Without the verdict in Thomas’s favor, Radwan could not move for a new trial or appeal and Thomas could not seek case evaluation sanctions. . . . Because we conclude there was a final judgment, the issue turns on whether the last two elements of collateral estoppel—a full and fair opportunity to litigate the issue and mutuality of estoppel—have been met. While Radwan argues that her inability to appeal means that she did not have a full and fair opportunity to litigate the issue, the fact remains that she made the tactical decision to relinquish her opportunity to appeal in consideration for Thomas’s agreement to forgo case evaluation sanctions. . . . Ameriprise asserted collateral estoppel defensively against Radwan, and therefore, a showing of mutuality of estoppel is not required.”
Thus, the Court of Appeals found that collateral estoppel applied and it precluded Radwan’s action.