res judicata | The Law Office of Kurt H King

December 22, 2015

Rare Missouri Case Allowing Re-litigation of Civil Contempt Claims

Filed under: Custody,Divorce,Family Law,Litigation,Paternity,Support — kurthking @ 6:19 pm
Tags: collateral estoppel, contempt of court, Family Law, motion to modify, res judicata

Parties file Civil Contempt cases due to an opposing parties’ refusal to comply with the Court’s judgment. In defense to the contempt action, the violating party may claim that collateral estoppel or res judicata bars all claims that were or could have been asserted in previous litigation between the parties. Many cases uphold that defenses, but the Western District of the Missouri Court of Appeals held otherwise in a case where the violating party lacked the financial ability to comply with an order that he pay maintenance at the time his former spouse first tried to hold him in contempt of court on that basis.

By the time of second contempt action, however, the man’s finances had improved and the trial court allowed the former wife to proceed with her contempt claim for failure to pay temporary mainteance. The Court of Appeals upheld the trial court’s rejection of collateral estoppel/res judicata as a defense.

The case is Walton v. Walton, 789 S.W.2d 64, 67-68 (Mo. Ct. App. W.D. 1990).

Law Office of Kurt H. King

20 E. Franklin, Liberty, Missouri 64068; 816.781.6000

Civil Litigation including Personal Injury and Property Claims, Workers’ Compensation, Family Law & General Matters

July 10, 2014

One Contempt Case Followed By Another–Barred By Res Judicata?

Filed under: Divorce,Family Law,Paternity,Support — kurthking @ 9:49 pm
Tags: contempt of court, res judicata

Ex-spouse sues for contempt in a second case to hold their former spouse in contempt for a violation that existed at the time of a prior case between the parties. Is the second action barred by Missouri’s doctrine of res judicata since the violation had already occurred by the time of the first case?

The Eastern and Western Districts of the Missouri Court of Appeals have decided this question differently but the two cases may turn on whether the party in contempt had the ability to pay and purge the contempt at the time of the first contempt motion. In one case (Foster) the party in contempt may well have had the ability to pay for his contemptuous actions at the time of the first case, while the contemptuous party in the other case (Walton) definitely lacked that ability at first. The Western District of the Missouri Court of Appeals ruled in Walton v. Walton, 789 S.W.2d 64 (Mo. Ct. App. W.D. 1990), that the petitioner may press forwards in the second case to recover for contempt that occurred before judgment in the first case. Compare the Eastern District’s holding that the relief sought in a second contempt case is partially barred by res judicata in Foster v. Foster, 39 S.W.3d 523 (Mo. Ct. App. E.D. 2001).

In Walton, the trial court first ruled on a contempt motion in the parties’ divorce case that the husband was in contempt of court for not paying maintenance but decided not to confine him for failure to pay temporary maintenance while the divorce case was pending. The decision implies that at the time of the second contempt action (in part to recover the same unpaid maintenance and attorney fees), the husband’s ability to pay had increased to the point where he could purge the contempt. This situation seems to reoccur frequently in Missouri as courts decline to hold a guilty spouse in contempt due to financial or practical concerns. Recognizing these circumstances, the Western District affirmed the trial court’s decision to jail the husband for his failure to pay maintenance and attorney fees he now had an ability to pay.

Walton finds some support outside Missouri. After considering the practical ramifications that flow from swings in the “violating” party’s financial ability to pay, the Supreme Court of Georgia approved a trial court’s refusal to apply res judicata in such a contempt case. Beach v. Beach, 224 Ga. 701, 164 S.E.2d 114 (1968). Pointing out that such a contempt proceeding was “merely one method of enforcing [the divorce judgment],” that court observed that contempt proceedings do not change the original judgment they seek to enforce, “but only imposed terms under which he could purge himself of the charge of contempt.” Since the former wife had not yet recovered the monies originally awarded her in the divorce judgment, the trial court correctly permitted her to seek that relief again in the second contempt case. 224 Ga. at 702-703. “This principle [res judicata] is not applicable to the facts of the present case.” The Western District’s decision in Walton resembles at of the Georgia Supreme Court in Beach.

The Eastern District’s decision in Foster is less forgiving. There the Eastern District partially reversed the trial court, taking away on appeal the former wife’s recovery for her cost of health insurance (that husband had been ordered to provide at his expense) as the premiums that accrued prior to the date of the judgment on her first contempt motion, in which she claimed the same damages but then deferred to be asserted at a later date, the second contempt motion being filed 20 months later. The Eastern District simply applied standard res judicata principles to the situation in Foster without mention of the husband’s ability to pay for the damages caused by his violation of the divorce court’s judgment.

Foster comes across as rigid. It makes little room for situations where the violating party acted in contempt of the court’s order but lacks the ability to pay, and therefore cannot be jailed to force payment. Fairness should afford the damaged party opportunity to refile for contempt and recover those same damages when the violation party’s gains the ability to pay as of the time of the second case. So long as there is no double recovery, no unfair prejudice results to the violating party who did not have the ability to pay the first time around.

Perhaps the key to both cases is the violator’s ability to pay–the ex-husband in Foster having the ability to pay during the first contempt case and former wife filing multiple contempt cases without good cause, versus Walton where the husband could not pay in the first case but could at the time of the second for contempt.

And while change in finances may be one circumstance that would cause a court not to apply res judicata where there are multiple contempt motions, other changes of circumstances could have the same effect. For instance, where a party has hidden or stolen property awarded to the other spouse but this is not discovered until after the first contempt motion; or if jailing the former spouse for not paying a credit card debt would cost him his job and make him unable to pay child support; or where the court looks at the contempt as a relatively minor violation not worthy of a commitment order; or if the property the contemnor took is first said to be “stolen” until found after the first contempt case; or if the judge simply dislikes putting folks in jail for not following the letter of the judgment.

Res judicata and contempt motions are just not a good fit.

Kurt H. King

Law Office of Kurt H. King, 20 E. Franklin, Liberty, Clay County, Missouri 64068

816.781.6000

http://www.kurthking.com

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April 22, 2014

When Can You Sue Again?–Res Judicata & Collateral Estoppel

Filed under: Litigation,Missouri Personal Injury Law,Missouri Workers Compensation — kurthking @ 4:47 pm
Tags: claim splitting, collateral estoppel, res judicata

In its April 15, 2014, Xiaoyan Gu v. Da Hua Hu, Ace INA Insurance Company Canada opinion (ED100001), the Eastern District of the Missouri Court of Appeals reversed the trial judge’s summary judgment award in favor of defendant insurer.

Facts of the underlying cases: Husband and wife were passengers in a truck rented to haul grapes and carrots between California and Ontario. Defendant Ace INA Insurance Company of Canada wrote the Garage Automobile Policy which insured the Volvo dealership which rented a tractor truck to the driver (who opted not to purchase insurance coverage on the rental). However, the garage policy covered additional insureds if that person [the driver] operated any automobile in connection with the business of the dealership, and the court so found since the renting of the truck furthered the business of the dealership.

Note that this is the third trial thus far in this case: the first, a bench trial for personal injuries of the husband and for loss of consortium by his wife against the trucking companies and the driver. The court awarded husband nearly $14 million and wife $1.5 million.

The second trial, judge-tried also, was by husband only for equitable garnishment on the garage policy issued to the dealer by defendant Ace INA. On the first day of trial, the defense moved to amend its pleadings to assert the exclusion in the policy that applied when the ” automobile is being used . . . for the carrying of goods or materials for compensation.” The court ultimately ruled that such late assertion of the defense was unfair, and denied the motion for leave to add that defense. Judgment resulted in favor of husband against Ace INA Insurance Company on his garnishment action.

This brings us to the third case which is the subject of this appeal–another equitable garnishment case against Ace INA to obtain payment of the personal injury judgment but this time brought by the wife. This time around, the defense timely raised the carriage-of-goods exclusion, and the trial judge upheld that defense in granting summary judgment in favor of insurer Ace INA.

On appeal, wife argued that collateral estoppel and/or res judicata barred the insurer from raising the carriage-of-goods exclusion. The court of appeals rejected the collateral estoppel agrument because that exclusion/defense was not “fully and fairly litigated” in the first garnishment case by husband.

Next, the Eastern District focused on res judicata. For that doctrine to apply, these four “identities” must co-exist: 1) of the thing sued for; 2) of the cause of action; 3) of the persons/parties; 4) of the quality of the person for or against whom the claim is made. The fourth identity was undisputed, so the the court analyzed the first three.

The Thing Sued For: In the court’s eyes, both garnishment cases–that of husband and wife–sought the same thing–“[g]arnishment of insurance proceeds to satisfy a judgment that stems from damages caused by the same motor vehicle accident. No problem finding this element.

The Cause of Action: This element is defined as “the underlying facts combined with the law, giving a party a right to a remedy of one form or another based thereon.” Again, a finding that this element existed since “no different or new facts were required” for [wife] to establish her garnishment case.

The Parties: This element requires that the parties be the same or in privity. For privity to exist, the interests of a party and non-party in privity must have been so “closely intertwined that the non-party can fairly be considered to have had his or her day in court.” Here, this element existed due to Missouri law holding that a judgment creditor “stands in the shoes’ of the judgment debtor, and thus wife has the same rights as the driver under the garage insurance policy from Ace INA.

Since all four identities coexisted, the trial judge erred in allowing insurer Ace INA to raise this defense. The court of appeals therefore reversed and remanded for entry of judgment in favor of wife.

(Side note: Res judicata applies to claims or defenses that could have been raised previously, as well as those which were.)