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Collateral estoppel is not to be applied mechanically. Even where all of the required elements for preclusion are present, countervailing factors may call for restraint. There are five recognized exceptions to collateral estoppel, all of which are recognized by State of New Jersey case law. In particular, collateral estoppel should not be imposed where there is a clear and convincing need for a new determination of the issue: (a) because of the potential adverse impact of the determination on the public interest or the interests of persons not themselves parties in the initial action, (b) because it was not sufficiently foreseeable at the time of the initial action that the issue would arise in the context of a subsequent action, or (c) because the party sought to be precluded, as a result of the conduct of his adversary or other special circumstances, did not have an adequate opportunity or incentive to obtain a full and fair adjudication in the initial action.
On June 19, 2002, an automobile driven by plaintiff June Panniel was struck by an ambulance driven by defendant Felix Diaz, Jr., and owned by defendant Robert Wood Johnson University Hospital at Hamilton (RWJ Hospital). Coincidentally, both Panniel and RWJ Hospital had separately insured their respective vehicles with New Jersey Manufacturers Insurance Company (NJM Insurance). Panniel was injured as a result of the incident, and thereby, pursued personal injury protection (PIP) medical benefits from NJM Insurance in private arbitration, while also bringing a tort action in the Superior Court against the Diaz and RWJ Hospital. After an extensive hearing at which both the Panniel and the insurance company were represented by counsel, the PIP arbitrator concluded that Panniel's primary injuries were proximately caused by the accident, and awarded her benefits. Having substantially prevailed in the PIP arbitration, Panniel filed a motion for partial summary judgment, seeking to preclude the defendants in the tort action from relitigating the arbitrator’s finding that Panniel’s amputation was proximately caused by the motor vehicle accident. Defendants Diaz and RJW Hospital oppose the motion, principally arguing that they were not parties to the PIP arbitration, and therefore, cannot be fairly bound by any of the arbitrator's findings.
Were the defendants in the tort action precluded from relitigating the arbitrator’s finding that the plaintiff’s amputation was proximately caused by the motor vehicle accident?
The court agreed with defendants and held that, even though defendants had certain common goals with their insurer, their interests were not entirely synonymous and the case presented a clear and convincing need for a new determination as to whether amputation was or was not proximately caused by the motor vehicle accident. Thus the court held that the defendants were not estopped by the PIP outcome from relitigating the issues of proximate causation in the tort action.