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Fla. L. Weekly D1214bTop of Form
Fla. L. Weekly D1214bTop of Form
Torts
— Negligent misrepresentation — Collateral estoppel — Res judicata — Where
trial court dismissed initial action alleging fraudulent misrepresentation,
breach of fiduciary duty, and negligence on basis of failure to comply with
rule requiring substitution of parties upon death, and entered summary judgment
for defendant, finding that pleadings and record evidence demonstrated no
misrepresentations, breach of fiduciary duty, or negligence by defendant, court
should have entered summary judgment for defendant in subsequent negligent
misrepresentation action brought by plaintiff in capacity as trustee for family
trust where subsequent action relied on same facts as initial action — When
court dismissed initial action and granted summary judgment for defendant, the
matter was concluded for all purposes — Subsequent action was barred by
doctrines of collateral estoppel and res judicata, as the two actions are
identical in things sued for, operative facts, parties, and capacity of parties
— Plaintiff, as trustee in second action, was in privity with parties in first
action in which she was an individual plaintiff
— Negligent misrepresentation — Collateral estoppel — Res judicata — Where
trial court dismissed initial action alleging fraudulent misrepresentation,
breach of fiduciary duty, and negligence on basis of failure to comply with
rule requiring substitution of parties upon death, and entered summary judgment
for defendant, finding that pleadings and record evidence demonstrated no
misrepresentations, breach of fiduciary duty, or negligence by defendant, court
should have entered summary judgment for defendant in subsequent negligent
misrepresentation action brought by plaintiff in capacity as trustee for family
trust where subsequent action relied on same facts as initial action — When
court dismissed initial action and granted summary judgment for defendant, the
matter was concluded for all purposes — Subsequent action was barred by
doctrines of collateral estoppel and res judicata, as the two actions are
identical in things sued for, operative facts, parties, and capacity of parties
— Plaintiff, as trustee in second action, was in privity with parties in first
action in which she was an individual plaintiff
EDGAR B. PEARCE, III, Appellant, vs.
PATRICIA SANDLER, etc., Appellee. 3rd District. Case No. 3D15-1562. L.T. Case
No. 13-19977. Opinion filed May 31, 2017. An appeal from the Circuit Court for
Miami-Dade County, Spencer Eig, Judge. Counsel: Isaacson Isaacson Sheridan
Fountain & Leftwich, LLP and Jennifer N. Fountain (Greensboro, NC); Kula
& Associates, P.A. and Elliot B. Kula and William D. Mueller, for
appellant. Podhurst Orseck, P.A. and Joel D. Eaton, for appellee.
PATRICIA SANDLER, etc., Appellee. 3rd District. Case No. 3D15-1562. L.T. Case
No. 13-19977. Opinion filed May 31, 2017. An appeal from the Circuit Court for
Miami-Dade County, Spencer Eig, Judge. Counsel: Isaacson Isaacson Sheridan
Fountain & Leftwich, LLP and Jennifer N. Fountain (Greensboro, NC); Kula
& Associates, P.A. and Elliot B. Kula and William D. Mueller, for
appellant. Podhurst Orseck, P.A. and Joel D. Eaton, for appellee.
(Before SUAREZ, C.J., and ROTHENBERG
and FERNANDEZ, JJ.)
and FERNANDEZ, JJ.)
(SUAREZ, C.J.) Edgar “Trey” B.
Pearce, III [“Pearce”], seeks to reverse the Final Judgment and remand with
directions to enter summary judgment in his favor. Summary judgment in favor of
the Appellant, Pearce, should have been entered and this matter concluded at
that point. Additionally, the present action is also barred by the doctrines of
collateral estoppel and res judicata. Therefore, we reverse.
Pearce, III [“Pearce”], seeks to reverse the Final Judgment and remand with
directions to enter summary judgment in his favor. Summary judgment in favor of
the Appellant, Pearce, should have been entered and this matter concluded at
that point. Additionally, the present action is also barred by the doctrines of
collateral estoppel and res judicata. Therefore, we reverse.
Appellant Pearce, with his father
Edgar Pearce, owned Pearce Financial, a financial investment company. The
Sandlers (Martin and Patricia) and the Conrads (Joseph and Patricia)1 invested money in Pearce Financial,
which investments were exchanged for promissory notes. As the notes matured,
the Conrads and Sandlers continued to invest their money with Pearce Financial,
which included money generated through one of the Conrad’s trusts, the Lyons
Family CRT. Pearce Financial started to decline in 2008 and by 2009 it was
unable to pay its creditors. Pearce Financial was forced to sell its assets to
its senior secured lender; the second secured lender — Pearce — foreclosed on
the remaining assets. The Sandlers and Conrads, as unsecured lenders, got
nothing.
Edgar Pearce, owned Pearce Financial, a financial investment company. The
Sandlers (Martin and Patricia) and the Conrads (Joseph and Patricia)1 invested money in Pearce Financial,
which investments were exchanged for promissory notes. As the notes matured,
the Conrads and Sandlers continued to invest their money with Pearce Financial,
which included money generated through one of the Conrad’s trusts, the Lyons
Family CRT. Pearce Financial started to decline in 2008 and by 2009 it was
unable to pay its creditors. Pearce Financial was forced to sell its assets to
its senior secured lender; the second secured lender — Pearce — foreclosed on
the remaining assets. The Sandlers and Conrads, as unsecured lenders, got
nothing.
In 2010 the Sandlers and Conrads,
with other unsecured lenders, sued the Pearce corporate entities and Pearce and
his father Edgar individually for fraudulent misrepresentation, breach of
fiduciary duty, and negligence [the “2010 Action”]. The Sandlers and Conrads
alleged that at a dinner between the parties, Pearce materially and
intentionally misrepresented the financial condition of Pearce Financial as
well as the repayment priority of the promissory notes in order to entice the
Sandlers and Conrads to continue to invest their money with the company.
with other unsecured lenders, sued the Pearce corporate entities and Pearce and
his father Edgar individually for fraudulent misrepresentation, breach of
fiduciary duty, and negligence [the “2010 Action”]. The Sandlers and Conrads
alleged that at a dinner between the parties, Pearce materially and
intentionally misrepresented the financial condition of Pearce Financial as
well as the repayment priority of the promissory notes in order to entice the
Sandlers and Conrads to continue to invest their money with the company.
Joseph Conrad died during the
pendency of the 2010 litigation. His wife, Patricia Conrad died shortly after
him, also during the pendency of the 2010 litigation. After Joseph Conrad died,
but before Patricia Conrad’s death, the promissory notes that were held
individually by Joseph and Patricia Conrad and that were the basis of their
claims in the 2010 action, were assigned to the Conrad Family Trust. When
Patricia Conrad died, her daughter, Patricia Sandler, Appellee here, became the
trustee and she continued to pursue the same claims on those same notes as
trustee of both the Conrad Family Trust and the Lyons Family CRT [collectively,
the “Conrad Trusts”]. Patricia Sandler asserted that the notes held by the
Lyons Family CRT were always included in the claims asserted by the Conrads in
the 2010 Action.
pendency of the 2010 litigation. His wife, Patricia Conrad died shortly after
him, also during the pendency of the 2010 litigation. After Joseph Conrad died,
but before Patricia Conrad’s death, the promissory notes that were held
individually by Joseph and Patricia Conrad and that were the basis of their
claims in the 2010 action, were assigned to the Conrad Family Trust. When
Patricia Conrad died, her daughter, Patricia Sandler, Appellee here, became the
trustee and she continued to pursue the same claims on those same notes as
trustee of both the Conrad Family Trust and the Lyons Family CRT [collectively,
the “Conrad Trusts”]. Patricia Sandler asserted that the notes held by the
Lyons Family CRT were always included in the claims asserted by the Conrads in
the 2010 Action.
After discovery had been conducted
in the 2010 Action, Pearce filed motions for summary judgment against each of
the plaintiffs. On October 26, 2012, the trial court dismissed the Conrads’
claims with prejudice for failure to timely comply with Florida Rule of Civil
Procedure 1.260 requiring the substitution of parties upon death. The ruling
was not challenged on rehearing or appeal. The trial court then granted summary
judgment in favor of Pearce on all remaining claims against him. The trial
court found no genuine issues of material fact in dispute and specifically
found that the pleadings and record evidence demonstrated no misrepresentation,
no breach of fiduciary duty, and no negligence by Pearce.2 That ruling was never challenged on
rehearing or appeal.
in the 2010 Action, Pearce filed motions for summary judgment against each of
the plaintiffs. On October 26, 2012, the trial court dismissed the Conrads’
claims with prejudice for failure to timely comply with Florida Rule of Civil
Procedure 1.260 requiring the substitution of parties upon death. The ruling
was not challenged on rehearing or appeal. The trial court then granted summary
judgment in favor of Pearce on all remaining claims against him. The trial
court found no genuine issues of material fact in dispute and specifically
found that the pleadings and record evidence demonstrated no misrepresentation,
no breach of fiduciary duty, and no negligence by Pearce.2 That ruling was never challenged on
rehearing or appeal.
In 2013, Patricia Sandler, now in
her capacity as Trustee for the Conrad Trusts [“Sandler as Trustee”], brought
the current suit against Pearce for alleged negligent misrepresentation,3 relying on the same facts as in the
2010 Action and on the same notes that supported the claims in the 2010 Action.
Pearce moved for summary judgment based on the doctrines of res judicata and
collateral estoppel. Patricia Sandler argued that as Trustee of the Conrad
Trusts, she had no identity of interest with any party to the prior lawsuit
because in the 2010 Action the Conrad Trusts were not named plaintiffs, and
genuine issues of material fact remained. The trial court denied Pearce’s
motion for summary judgment based on its conclusion that Patricia Sandler as
individual in 2010 and Sandler as Trustee in 2013 were not identical parties
and thus collateral estoppel did not apply as a bar to the 2013 Action. The
cause went to jury trial. The jury found that Pearce made negligent
misrepresentations that were a legal cause of loss to Sandler as Trustee for
the Conrad Trusts. The jury found that the Conrad Trusts had contributed to
their own harm, assigning 40% negligence to the Trusts and 60% negligence to
Pearce, and awarded the amount of $210,300.00 on the verdict form to Sandler as
Trustee for compensatory damages.4 This appeal followed.
her capacity as Trustee for the Conrad Trusts [“Sandler as Trustee”], brought
the current suit against Pearce for alleged negligent misrepresentation,3 relying on the same facts as in the
2010 Action and on the same notes that supported the claims in the 2010 Action.
Pearce moved for summary judgment based on the doctrines of res judicata and
collateral estoppel. Patricia Sandler argued that as Trustee of the Conrad
Trusts, she had no identity of interest with any party to the prior lawsuit
because in the 2010 Action the Conrad Trusts were not named plaintiffs, and
genuine issues of material fact remained. The trial court denied Pearce’s
motion for summary judgment based on its conclusion that Patricia Sandler as
individual in 2010 and Sandler as Trustee in 2013 were not identical parties
and thus collateral estoppel did not apply as a bar to the 2013 Action. The
cause went to jury trial. The jury found that Pearce made negligent
misrepresentations that were a legal cause of loss to Sandler as Trustee for
the Conrad Trusts. The jury found that the Conrad Trusts had contributed to
their own harm, assigning 40% negligence to the Trusts and 60% negligence to
Pearce, and awarded the amount of $210,300.00 on the verdict form to Sandler as
Trustee for compensatory damages.4 This appeal followed.
ANALYSIS
After a thorough reading of the
record, we agree with Pearce that when the trial court dismissed the Conrad’s
claims with prejudice in the 2010 Action for failure to comply with Florida
Rule of Civil Procedure 1.260, and granted summary judgment in Pearce’s favor
specifically dismissing all claims against him, the matter was concluded for
all purposes. At that point, whatever claims that may have had existed on the
promissory notes in question ceased to exist. Therefore, no claim could exist
on those promissory notes that could be brought in the current suit by Sandler
as Trustee. In the 2013 Action, the trial court should have entered summary
judgment in favor of Pearce upon his motion on this issue alone, thereby ending
the matter before trial.
record, we agree with Pearce that when the trial court dismissed the Conrad’s
claims with prejudice in the 2010 Action for failure to comply with Florida
Rule of Civil Procedure 1.260, and granted summary judgment in Pearce’s favor
specifically dismissing all claims against him, the matter was concluded for
all purposes. At that point, whatever claims that may have had existed on the
promissory notes in question ceased to exist. Therefore, no claim could exist
on those promissory notes that could be brought in the current suit by Sandler
as Trustee. In the 2013 Action, the trial court should have entered summary
judgment in favor of Pearce upon his motion on this issue alone, thereby ending
the matter before trial.
Furthermore, the 2013 Action is also
barred by the doctrines of collateral estoppel and res judicata as the 2010 and
2013 Actions are, in fact, identical in things sued for, operative facts,
parties and capacity of the parties. “[C]ollateral estoppel, also known as
issue preclusion, applies where: (1) the identical issues were presented in a
prior proceeding; (2) there was a full and fair opportunity to litigate
the issues in the prior proceeding; (3) the issues in the prior litigation were
a critical and necessary part of the prior determination; (4) the parties in
the two proceedings were identical; and (5) the issues were actually litigated
in the prior proceeding.” Topps v. State, 865 So. 2d 1253, 1255 (Fla.
2004). Where these elements are satisfied, “[c]ollateral estoppel may be
applied to bar subsequent causes of action even where the second claim requires
proof of different essential facts than those required to be proved in the
initial suit.” Larimore v. State, 76 So. 3d 1121, 1123 (Fla. 1st DCA
2012). “Collateral estoppel precludes re-litigating an issue where the same
issue has been fully litigated by the parties or their privies, and a
final decision has been rendered by a court.” Mtge. Elec. Registration Sys.,
Inc. v. Badra, 991 So. 2d 1037, 1039 (Fla. 4th DCA 2008) [e.s.]; accord
Cook v. State, 921 So. 2d 631, 635 (Fla. 2d DCA 2005) (“A person who was
not a named party to an action will nonetheless be subject to collateral
estoppel arising from that action if that person was in privity with a party or
virtually represented a party.”).
barred by the doctrines of collateral estoppel and res judicata as the 2010 and
2013 Actions are, in fact, identical in things sued for, operative facts,
parties and capacity of the parties. “[C]ollateral estoppel, also known as
issue preclusion, applies where: (1) the identical issues were presented in a
prior proceeding; (2) there was a full and fair opportunity to litigate
the issues in the prior proceeding; (3) the issues in the prior litigation were
a critical and necessary part of the prior determination; (4) the parties in
the two proceedings were identical; and (5) the issues were actually litigated
in the prior proceeding.” Topps v. State, 865 So. 2d 1253, 1255 (Fla.
2004). Where these elements are satisfied, “[c]ollateral estoppel may be
applied to bar subsequent causes of action even where the second claim requires
proof of different essential facts than those required to be proved in the
initial suit.” Larimore v. State, 76 So. 3d 1121, 1123 (Fla. 1st DCA
2012). “Collateral estoppel precludes re-litigating an issue where the same
issue has been fully litigated by the parties or their privies, and a
final decision has been rendered by a court.” Mtge. Elec. Registration Sys.,
Inc. v. Badra, 991 So. 2d 1037, 1039 (Fla. 4th DCA 2008) [e.s.]; accord
Cook v. State, 921 So. 2d 631, 635 (Fla. 2d DCA 2005) (“A person who was
not a named party to an action will nonetheless be subject to collateral
estoppel arising from that action if that person was in privity with a party or
virtually represented a party.”).
To be in privity with one who is a
party to a lawsuit, or for one to have been virtually represented by one who is
a party to a lawsuit, one must have an interest in the action such that she
will be bound by the final judgment as if she were a party. Southeastern
Fidelity Ins. Co. v. Rice, 515 So. 2d 240 (Fla. 4th DCA 1987) (“One not a
party to a suit is in privity with one who is where his interest in the action
was such that he will be bound by the final judgment as if he were a party.”); Aerojet-General
Corp. v. Askew, 511 F.2d 710, 719 (5th Cir.), cert. denied, 423 U.S. 908,
96 S. Ct. 210, 46 L.Ed.2d 137 (1975) (“A person may be bound by a judgment even
though not a party if one of the parties to the suit is so closely aligned with
his interests as to be his virtual representative.”). See also Stogniew
v. McQueen, 656 So. 2d 917, 920 (Fla. 1995).
party to a lawsuit, or for one to have been virtually represented by one who is
a party to a lawsuit, one must have an interest in the action such that she
will be bound by the final judgment as if she were a party. Southeastern
Fidelity Ins. Co. v. Rice, 515 So. 2d 240 (Fla. 4th DCA 1987) (“One not a
party to a suit is in privity with one who is where his interest in the action
was such that he will be bound by the final judgment as if he were a party.”); Aerojet-General
Corp. v. Askew, 511 F.2d 710, 719 (5th Cir.), cert. denied, 423 U.S. 908,
96 S. Ct. 210, 46 L.Ed.2d 137 (1975) (“A person may be bound by a judgment even
though not a party if one of the parties to the suit is so closely aligned with
his interests as to be his virtual representative.”). See also Stogniew
v. McQueen, 656 So. 2d 917, 920 (Fla. 1995).
Sandler as Trustee argues that the
2013 claims are not barred by collateral estoppel because she has no identity
of interest and no privity with the parties to the 2010 Action as the trusts
she controls as trustee were not named as plaintiffs in that action. That
argument is unpersuasive. The record shows that Patricia Sandler was an
individual plaintiff in the 2010 Action, and a beneficiary of the trusts at
issue. During the pendency of that litigation, her parents died; they were also
individual plaintiffs whose claims were based on promissory notes owned by them
individually. The notes were transferred to the Conrad Trusts after their
deaths but during the litigation. The 2010 Action then continued based on the
same claims and the same notes. The fact that the notes were assigned (by
virtue of the Conrads’ deaths) to the Conrad Trusts during the pendency of the
2010 Action is of no significance. Sandler as Trustee acquired her status as
trustee of the Conrad Trusts during the pendency of the 2010 Action; she is
still a beneficiary of those trusts in 2013. Although not explicitly named as a
“trustee” in the 2010 lawsuit, Sandler as Trustee is nonetheless subject to
collateral estoppel where, as between the 2010 and 2013 Actions, she was certainly
a person in privity with a party or virtually represented by a party, and
certainly was one who had an interest in the action “such that she will be
bound by the final judgment as if she were a party.” Southeastern Fidelity
Ins. Co., 515 So. 2d at 242. “In its broadest sense, privity is defined as
‘mutual or successive relationships to the same right of property, or such an
identification of interest of one person with another as to represent the same
legal right.’ ” Id. at 242. We find this principle wholly applicable to
Patricia Sandler’s status in the 2010 and 2013 Actions.
2013 claims are not barred by collateral estoppel because she has no identity
of interest and no privity with the parties to the 2010 Action as the trusts
she controls as trustee were not named as plaintiffs in that action. That
argument is unpersuasive. The record shows that Patricia Sandler was an
individual plaintiff in the 2010 Action, and a beneficiary of the trusts at
issue. During the pendency of that litigation, her parents died; they were also
individual plaintiffs whose claims were based on promissory notes owned by them
individually. The notes were transferred to the Conrad Trusts after their
deaths but during the litigation. The 2010 Action then continued based on the
same claims and the same notes. The fact that the notes were assigned (by
virtue of the Conrads’ deaths) to the Conrad Trusts during the pendency of the
2010 Action is of no significance. Sandler as Trustee acquired her status as
trustee of the Conrad Trusts during the pendency of the 2010 Action; she is
still a beneficiary of those trusts in 2013. Although not explicitly named as a
“trustee” in the 2010 lawsuit, Sandler as Trustee is nonetheless subject to
collateral estoppel where, as between the 2010 and 2013 Actions, she was certainly
a person in privity with a party or virtually represented by a party, and
certainly was one who had an interest in the action “such that she will be
bound by the final judgment as if she were a party.” Southeastern Fidelity
Ins. Co., 515 So. 2d at 242. “In its broadest sense, privity is defined as
‘mutual or successive relationships to the same right of property, or such an
identification of interest of one person with another as to represent the same
legal right.’ ” Id. at 242. We find this principle wholly applicable to
Patricia Sandler’s status in the 2010 and 2013 Actions.
In the 2010 Action, the trial court
dismissed the Conrads’ claims for failure to comply with Florida Rule of Civil
Procedure 1.260 requirements for substitution of parties after death. The trial
court then granted summary judgment in favor of Pearce and dismissed all of the
2010 claims against him with prejudice. At that point, there was nothing
left for the Conrad Family Trust or the Lyons Family CRT to pursue. The Order
in the 2010 Action explicitly found that the pleadings and record evidence
demonstrated that no misrepresentations were made by Pearce to either the
Sandlers or the Conrads at the dinner which formed the basis for the 2010
Action. The trial court’s order granting summary judgment and dismissing with
prejudice those claims made on behalf of beneficiaries of the Conrad Trusts
operated as a final adjudication on the merits. The trial court’s order was not
appealed. With all identities required by the doctrine having been met,
collateral estoppel bars the 2013 Action.
dismissed the Conrads’ claims for failure to comply with Florida Rule of Civil
Procedure 1.260 requirements for substitution of parties after death. The trial
court then granted summary judgment in favor of Pearce and dismissed all of the
2010 claims against him with prejudice. At that point, there was nothing
left for the Conrad Family Trust or the Lyons Family CRT to pursue. The Order
in the 2010 Action explicitly found that the pleadings and record evidence
demonstrated that no misrepresentations were made by Pearce to either the
Sandlers or the Conrads at the dinner which formed the basis for the 2010
Action. The trial court’s order granting summary judgment and dismissing with
prejudice those claims made on behalf of beneficiaries of the Conrad Trusts
operated as a final adjudication on the merits. The trial court’s order was not
appealed. With all identities required by the doctrine having been met,
collateral estoppel bars the 2013 Action.
The doctrine of res judicata
similarly bars Sandler as Trustee’s 2013 lawsuit against Pearce. To
successfully invoke a res judicata defense, a party must satisfy two
prerequisites. First, a judgment on the merits must have been rendered in a
former suit. See Ludovici v. McKiness, 545 So. 2d 335, 337 (Fla.
3d DCA 1989); e.g., Tyson v. Viacom, Inc., 890 So. 2d 1205, 1209 (Fla.
4th DCA 2005) (en banc). Second, four identities must exist between the former
suit and the suit in which res judicata is to be applied: “ ‘(1) identity in
the thing sued for; (2) identity of the cause of action; (3) identity of the
persons and parties to the actions; and (4) identity of the quality or capacity
of the persons for or against whom the claim is made.’ ” Id. (citations
omitted); Youngblood v. Taylor, 89 So. 2d 503, 505 (Fla. 1956). In the
2013 Action, all four identities are present. The policy “underlying res
judicata is that if a matter has already been decided, the petitioner has
already had his or her day in court, and for purposes of judicial economy, that
matter generally will not be reexamined again in any court (except, of course,
for appeals by right).” Zikofsky v. Mktg. 10, Inc., 904 So. 2d 520, 523
(Fla. 4th DCA 2005). Based on principles of res judicata, a judgment on the
merits will thus bar a subsequent action between the same parties on the same
cause of action. Importantly, the doctrine of res judicata not only bars issues
that were raised, but it also precludes consideration of issues that could have
been raised but were not raised in the first case. See Kimbrell v.
Paige, 448 So. 2d 1009, 1012 (Fla. 1984); Tyson v. Viacom, 890 So.
2d 1205, 1210 (Fla. 4th DCA 2005) (“The doctrine of splitting a cause of action
is related to res judicata in that it requires that all damages sustained or
accruing to one as a result of a single wrongful act must be claimed and
recovered in one action or not at all.”); Youngblood, 89 So. 2d at 505.
Applying that principle here, Pearce’s alleged intentional or fraudulent
misrepresentation was fully litigated in the 2010 Action and he was found not
liable. Sandler as Trustee’s 2013 claim against Pearce for negligent
misrepresentation based on the identical subject matter and factual
circumstances is thus precluded from consideration as an issue that could have
been raised in 2010, but was not.
similarly bars Sandler as Trustee’s 2013 lawsuit against Pearce. To
successfully invoke a res judicata defense, a party must satisfy two
prerequisites. First, a judgment on the merits must have been rendered in a
former suit. See Ludovici v. McKiness, 545 So. 2d 335, 337 (Fla.
3d DCA 1989); e.g., Tyson v. Viacom, Inc., 890 So. 2d 1205, 1209 (Fla.
4th DCA 2005) (en banc). Second, four identities must exist between the former
suit and the suit in which res judicata is to be applied: “ ‘(1) identity in
the thing sued for; (2) identity of the cause of action; (3) identity of the
persons and parties to the actions; and (4) identity of the quality or capacity
of the persons for or against whom the claim is made.’ ” Id. (citations
omitted); Youngblood v. Taylor, 89 So. 2d 503, 505 (Fla. 1956). In the
2013 Action, all four identities are present. The policy “underlying res
judicata is that if a matter has already been decided, the petitioner has
already had his or her day in court, and for purposes of judicial economy, that
matter generally will not be reexamined again in any court (except, of course,
for appeals by right).” Zikofsky v. Mktg. 10, Inc., 904 So. 2d 520, 523
(Fla. 4th DCA 2005). Based on principles of res judicata, a judgment on the
merits will thus bar a subsequent action between the same parties on the same
cause of action. Importantly, the doctrine of res judicata not only bars issues
that were raised, but it also precludes consideration of issues that could have
been raised but were not raised in the first case. See Kimbrell v.
Paige, 448 So. 2d 1009, 1012 (Fla. 1984); Tyson v. Viacom, 890 So.
2d 1205, 1210 (Fla. 4th DCA 2005) (“The doctrine of splitting a cause of action
is related to res judicata in that it requires that all damages sustained or
accruing to one as a result of a single wrongful act must be claimed and
recovered in one action or not at all.”); Youngblood, 89 So. 2d at 505.
Applying that principle here, Pearce’s alleged intentional or fraudulent
misrepresentation was fully litigated in the 2010 Action and he was found not
liable. Sandler as Trustee’s 2013 claim against Pearce for negligent
misrepresentation based on the identical subject matter and factual
circumstances is thus precluded from consideration as an issue that could have
been raised in 2010, but was not.
Whether we view Patricia Sandler’s
interest as an individual in 2010 or as trustee of the Conrad Trusts in 2013,
the real party in interest on each side remains the same. The same issues are
being litigated on the same notes, based on identical facts. See e.g.,
Olympian West Condominium Association, Inc. v. Kramer, 427 So. 2d 1039
(Fla. 3d DCA), rev. denied, 438 So. 2d 833 (Fla. 1983) (holding that the prior
dismissal with prejudice of these named individuals bars the present action
against them under familiar principles of res judicata, notwithstanding that in
this action they are designated as partners in a partnership). We conclude that
the 2013 Action is properly barred by collateral estoppel and res judicata.
interest as an individual in 2010 or as trustee of the Conrad Trusts in 2013,
the real party in interest on each side remains the same. The same issues are
being litigated on the same notes, based on identical facts. See e.g.,
Olympian West Condominium Association, Inc. v. Kramer, 427 So. 2d 1039
(Fla. 3d DCA), rev. denied, 438 So. 2d 833 (Fla. 1983) (holding that the prior
dismissal with prejudice of these named individuals bars the present action
against them under familiar principles of res judicata, notwithstanding that in
this action they are designated as partners in a partnership). We conclude that
the 2013 Action is properly barred by collateral estoppel and res judicata.
For each and every reason stated
above, we reverse the Final Judgment and remand, and direct the trial court to
enter summary final judgment in favor of Pearce.
above, we reverse the Final Judgment and remand, and direct the trial court to
enter summary final judgment in favor of Pearce.
__________________
1Patricia
Sandler, Appellee here, is Joseph and Patricia Conrad’s daughter.
Sandler, Appellee here, is Joseph and Patricia Conrad’s daughter.
2The trial
court’s Order Granting Pearce’s Motions for Summary Judgment Against Martin and
Patricia Sandler reads, in pertinent part,
court’s Order Granting Pearce’s Motions for Summary Judgment Against Martin and
Patricia Sandler reads, in pertinent part,
3. As to
Count III of the Amended Complaint (Fraudulent Misrepresentation), there are no
genuine issues of material fact in dispute. The pleadings and record evidence
in this case demonstrate that no misrepresentations were made by Trey Pearce to
Plaintiffs Martin and Patricia Sandler. Accordingly, Defendant Trey Pearce is
entitled to summary judgment on Count III of the Amended Complaint (Fraudulent
Misrepresentation) as a matter of law. . . .
Count III of the Amended Complaint (Fraudulent Misrepresentation), there are no
genuine issues of material fact in dispute. The pleadings and record evidence
in this case demonstrate that no misrepresentations were made by Trey Pearce to
Plaintiffs Martin and Patricia Sandler. Accordingly, Defendant Trey Pearce is
entitled to summary judgment on Count III of the Amended Complaint (Fraudulent
Misrepresentation) as a matter of law. . . .
4. As to
Count II of the Amended Complaint (Breach of Fiduciary Duty), there are no
genuine issues of material fact in dispute. The pleadings and record evidence
in this case demonstrate that the Sandlers were holders of a promissory note
payable by Defendant Pearce Capital Corp., and that this promissory note was
the product of an arms [sic] length transaction by and between the Sandlers and
Pearce Capital Corp. . . . no fiduciary relationship existed between Plaintiffs
Martin and Patricia Sandler and Defendant Trey Pearce. . . .
Count II of the Amended Complaint (Breach of Fiduciary Duty), there are no
genuine issues of material fact in dispute. The pleadings and record evidence
in this case demonstrate that the Sandlers were holders of a promissory note
payable by Defendant Pearce Capital Corp., and that this promissory note was
the product of an arms [sic] length transaction by and between the Sandlers and
Pearce Capital Corp. . . . no fiduciary relationship existed between Plaintiffs
Martin and Patricia Sandler and Defendant Trey Pearce. . . .
5). As to
Count V of the Amended Complaint (Negligence), there are no genuine issues of
material fact in dispute. The pleadings and record evidence in this case
demonstrate that there was no duty owed by Trey Pearce, individually, to
Plaintiffs Martin and Patricia Sandler. . . .
Count V of the Amended Complaint (Negligence), there are no genuine issues of
material fact in dispute. The pleadings and record evidence in this case
demonstrate that there was no duty owed by Trey Pearce, individually, to
Plaintiffs Martin and Patricia Sandler. . . .
3The
Plaintiffs in the 2010 Action sued Pearce for intentional misrepresentation.
Plaintiffs in the 2010 Action sued Pearce for intentional misrepresentation.
4Sandler as
Trustee moved for entry of a final judgment. In her proposed Order, Sandler as
Trustee recited that the jury had found that the gross amount of damages was
$350,500.00, and that Pearce was responsible 60% percent of that amount, or
$210,300. Pearce countered that the proposed Order was inconsistent with the
verdict and requested a hearing. The trial court agreed with Sandler as
Trustee, and recast the jury’s verdict, over Pearce’s objection. Pearce moved
for Rehearing to Alter or Amend a Judgment. The trial court, following a
hearing, granted in part and denied in part Pearce’s motion, finding that any
reference to the jury finding damages in the amount of $350,000.00 be removed
from the judgment; however, judgment was entered against Pearce in the amount
of $210,300.00. Pearce appeals from the trial court’s post-judgment order, but
for reasons set forth in the body of the opinion above, we need not reach this
aspect of Pearce’s appeal.
Trustee moved for entry of a final judgment. In her proposed Order, Sandler as
Trustee recited that the jury had found that the gross amount of damages was
$350,500.00, and that Pearce was responsible 60% percent of that amount, or
$210,300. Pearce countered that the proposed Order was inconsistent with the
verdict and requested a hearing. The trial court agreed with Sandler as
Trustee, and recast the jury’s verdict, over Pearce’s objection. Pearce moved
for Rehearing to Alter or Amend a Judgment. The trial court, following a
hearing, granted in part and denied in part Pearce’s motion, finding that any
reference to the jury finding damages in the amount of $350,000.00 be removed
from the judgment; however, judgment was entered against Pearce in the amount
of $210,300.00. Pearce appeals from the trial court’s post-judgment order, but
for reasons set forth in the body of the opinion above, we need not reach this
aspect of Pearce’s appeal.
* * *