Pearce III v. Sandler
219 So. 3d 961
| Fla. Dist. Ct. App. | 2017Background
- Pearce and his father owned Pearce Financial; the Sandlers and Conrads invested by purchasing promissory notes.
- Pearce Financial collapsed (2008–2009); secured lenders recovered, unsecured noteholders (Sandlers/Conrads) received nothing.
- In 2010 the Sandlers and Conrads sued Pearce (fraudulent misrepresentation, breach of fiduciary duty, negligence). Discovery occurred; Pearce moved for summary judgment.
- The trial court dismissed the Conrads’ claims with prejudice for failure to substitute parties after deaths and then granted summary judgment in Pearce’s favor on all claims; those rulings were not appealed.
- In 2013 Patricia Sandler (now trustee of Conrad Trusts) sued Pearce for negligent misrepresentation based on the same notes/facts. The trial court denied Pearce’s pretrial res judicata/collateral estoppel motion, the jury awarded damages to Sandler as Trustee, and Pearce appealed.
- The appellate court held the 2013 action was barred by the prior dismissal/summary judgment and reversed, directing entry of summary judgment for Pearce.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2013 negligent-misrepresentation claim is barred because the 2010 action was resolved with dismissal/summary judgment | Sandler: as trustee she was not identical to the 2010 parties; trusts were not named in 2010 so no preclusion | Pearce: 2010 final adjudication on same notes/facts disposed of claims; res judicata/collateral estoppel bar relitigation | Held: Barred — summary judgment should have been entered for Pearce because prior dismissal and summary judgment resolved the claims |
| Whether collateral estoppel/issue preclusion applies | Sandler: lacked identity of interest/privity with 2010 parties (trusts not named) | Pearce: Sandler was in privity/virtually represented; same issues were litigated and decided | Held: Collateral estoppel applies — identical issues, full opportunity to litigate, and privity/identity of interest existed |
| Whether res judicata (claim preclusion) applies | Sandler: claim as trustee is different capacity and thus not precluded | Pearce: four identities (thing sued for; cause; parties; capacity) are met; claim could have been raised in 2010 | Held: Res judicata applies — same cause and parties/capacity; new suit precluded |
| Whether any factual distinctions (assignment of notes during litigation; change in trustee) avoid preclusion | Sandler: assignment and trustee status changed during pendency and later, so 2013 claim is distinguishable | Pearce: assignments/deaths during litigation do not revive or alter the final judgment effect; real party in interest unchanged | Held: Changes in form/nomination (deaths, assignments, trustee designation) do not avoid preclusion; real party in interest remained the same |
Key Cases Cited
- Topps v. State, 865 So. 2d 1253 (Fla. 2004) (elements for collateral estoppel/issue preclusion)
- Larimore v. State, 76 So. 3d 1121 (Fla. 1st DCA 2012) (collateral estoppel may bar subsequent causes of action with different essential facts)
- Mtge. Elec. Registration Sys., Inc. v. Badra, 991 So. 2d 1037 (Fla. 4th DCA 2008) (preclusion binds parties and privies after final decision)
- Cook v. State, 921 So. 2d 631 (Fla. 2d DCA 2005) (nonparty may be subject to collateral estoppel if in privity or virtually represented)
- Southeastern Fidelity Ins. Co. v. Rice, 515 So. 2d 240 (Fla. 4th DCA 1987) (privity defined by binding interest in the action)
- Aerojet-General Corp. v. Askew, 511 F.2d 710 (5th Cir. 1975) (virtual representation may bind nonparties closely aligned with a party)
- Stogniew v. McQueen, 656 So. 2d 917 (Fla. 1995) (privity and binding effect of judgments)
- Ludovici v. McKiness, 545 So. 2d 335 (Fla. 3d DCA 1989) (judgment on the merits prerequisite for res judicata)
- Tyson v. Viacom, Inc., 890 So. 2d 1205 (Fla. 4th DCA 2005) (res judicata identities and claim preclusion principles)
- Youngblood v. Taylor, 89 So. 2d 503 (Fla. 1956) (identity of parties and causes required for res judicata)
- Zikofsky v. Mktg. 10, Inc., 904 So. 2d 520 (Fla. 4th DCA 2005) (policy and effect of res judicata — finality and judicial economy)
- Kimbrell v. Paige, 448 So. 2d 1009 (Fla. 1984) (res judicata bars issues that could have been raised previously)
- Olympian West Condominium Ass’n, Inc. v. Kramer, 427 So. 2d 1039 (Fla. 3d DCA 1983) (prior dismissal with prejudice bars later actions despite different labels/capacities)