Holtman v. 4-G's Plumbing & Heating - 264 Mont. 432, 872 P.2d 318 (1994)

Rule:

Collateral estoppel, sometimes referred to as issue preclusion, is a form of res judicata. While res judicata bars parties from relitigating claims in subsequent proceedings based on the same cause of action, collateral estoppel bars the reopening of an issue in a second cause of action that has been litigated and determined in a prior suit. 

Facts:

In a prior action, a homeowners' association sought an injunction to install insulation in a Roger Holtman’s condominium. Holtman filed counterclaims for, among other things, asbestos contamination. Holtman’s counterclaims were dismissed as untimely filed. In this action, Holtman filed claims against the homeowners' association and against 4-G's Plumbing and Heating, Inc. (4-G's Plumbing) that had tried to install the insulation. Holtman’s complaint included a claim for asbestos contamination. The district court granted defendants' motions for summary judgment under the doctrines of res judicata and collateral estoppel. Holtman asserted error only in the court's application of the doctrines to his asbestos contamination claim. 

Issue:

Did the district court err in holding that dismissal of Holtman’s counterclaims against the homeowners' association in a prior action meant that claims against 4-G's Plumbing were precluded?

Answer:

Yes

Conclusion:

The court held that Holtman’s claims against 4-G's Plumbing were not precluded: 4-G's Plumbing had not been a party to the prior action and the homeowners' association and 4-G's Plumbing were not in privity with each other. There was no evidentiary basis to support the assertion that the homeowners' association had the right to control 4-G's Plumbing’s work. The issues asserted against 4-G's Plumbing, for negligent installation, were not identical to the issues raised against the homeowner's association in the prior action.