OPINION BY
In this unusual case where a judgment debtor seeks an equitable setting aside of a sheriffs sale deed, Monroe Court Homeowner’s Association (Association), with its president and several members (collectively, Plaintiffs), appeal from the order of thе Court of Common Pleas of Philadelphia County (2002 trial court) sustaining South-wark Realty Company’s (Realty) and Craig Smith’s preliminary objections. 1 We reverse and remand.
The Association is a non-profit corporation organized by a group of condominium owners for the purpose of owning a courtyard adjacent to their units. The Association is administered by a Board of Directors (Directors) elected annually. They are responsible for notifying members of fees necessary for the maintenance of the courtyard. Smith is а shareholder of the Association and served as a director.
Beginning in 1992, the Association delegated to Realty the responsibility of managing the courtyard. Smith, in addition to his role in the Association, is the principal shareholder in Realty. Smith’s roles with both thе Association and Realty are at the core of the current controversy.
Taxes accrued from calendar years 1991-1996, until Realty advanced the money to pay the taxes in 1997. Smith, as Realty’s principal owner, sought reimbursement. In June 1999, Realty initiаted an action against the Association in Philadelphia Municipal Court for this purpose.
The Association failed to defend, and a default judgment was entered in October 1999. No attempt was made to appeal or open the default judgment.
When the Association failed to pay the judgment, Realty filed a writ of execution. In May 2001, the courtyard was sold at a sheriffs sale to Realty.
In November 2001, several Association shareholders brought an action in equity against Realty and Smith to set asidе the sheriffs sale. Plaintiffs alleged the Association President and unnamed “others” gave constant assurances that “everything was under control” and that “they were in no imminent danger of losing their property interests in THE COURTYARD R.R. at 88a. Plaintiffs then averred:
30. This termination of thеir property rights, including the use and enjoyment of THE COURTYARD has been the result of fraud, misrepresentation, gross dereliction of duty and breach of fiduciary obligation by the Officers and Directors of the ASSOCIATION, including Craig Smith, and has resulted in the loss of valuable property rights previously enjoyed by Plaintiffs.
R.R. at 88a.
Realty and Smith sought summary judgment, arguing Plaintiffs’ action was barred by (i) laches, (ii) res judicata, (iii) collateral estoppel, and (iv) improper parties. The 2001 trial court 2 held laches,,res judicata, and collateral estopрel “do not apply to Plaintiffs’ claim.” R.R. at 99a. The 2001 trial court explained why it rejected res judicata and collateral estoppel:
[F]or either doctrine to apply, the issues presented in both cases must be identical ... In the instant matter, it is clear this requirement is not met. While it may be said that there was an adjudication as to [the Association’s] liability to [Realty] for amounts owed, the earlier action did not address the Defendants’ alleged failure to comply with the notice requirements for the sale of the Courtyard or Smith’s alleged fraud and breach of fiduciary duty. Thus, while the Plaintiffs’ right to challenge the amounts claimed by Defendants may be limited, they may contest the manner in which the Courtyard was sold.
2001 Trial Court Op. at 3. The 2001 trial court then granted summary judgment on the basis of an improper party plaintiff. In particular, a direct action by members of the Association, as individuals, against Realty and Smith was held improper, as the appropriate vehicle for the members’ claims was a derivative action under 15 Pa.C.S. § 5782(a).
In July 2002, with the Association now a party, Plaintiffs brought a new suit raising the same claims as the 2001 litigation. Realty and Smith filed preliminary objections raising (i) res judicata flowing from the default judgment, (ii) failure to join indispensable parties, and (iii) lack of sрecificity.
The 2002 trial court 3 granted a demurrer and dismissed Plaintiffs’ new complaint with prejudice, holding:
The present complaint moves for the Court to set aside the Sheriffs Sale of the Courtyard and restore title to [the Association] without addressing the underlying judgment. However thе sale was a consequence of [the Association’s] failure to satisfy or otherwise address the 1999 default judgment. [The Association] was given full and fair opportunity to litigate that issue and is now collaterally estopped from re-litigating the facts and legal basis of [Realty’s] claim. The plaintiffs in the present action are bound by privity to the 1999 judgment and as the judgment was valid, [the Association] cannot re-try the case now.
2002 Trial Court Op. at 5. The 2002 trial court also referenced the possible merits of a petition to open the default judgment. Plaintiffs seek review of the 2002 trial court’s order. 4
Plaintiffs present three arguments for our review. First, they argue the 2002 trial court erred in holding their claim is barred by collateral estoppel. Second, they assert thе 2001 trial court decision holding res judicata and collateral estoppel inapplicable precluded the 2002 trial court from reaching a contrary conclusion. Finally, Plaintiffs’ assert the 2002 trial court exceeded its scope of rеview on preliminary objections by making factual determinations contrary to pled facts.
“[T]he generic term res judicata encompasses two separate doctrines: ‘technical’ or ‘strict’ res judicata, also known as claim prеclusion; and collateral estoppel, also known as ‘broad’ res judicata or issue preclusion.”
Christopher v. Council of Plymouth Township,
Plaintiffs argue the 2002 trial court erred in holding their cause of action was barred by collateral estoppel. Collateral estoрpel, or issue preclusion, is designed to
In
Muhammad v. Strassburger, McKenna, Messer, Shilobod, & Gutnick,
In order to grant a demurrer pursuant to [collateral estoppel], the objecting party must show that ‘the fact or facts at issue in both instances were identical; [and] that these facts were essential to the first judgment and were actually litigated in the first cause.’ We have also required that the party against whom a plea of collateral estoppel is asserted must have had a full and fair opportunity to litigate the issue in question in a prior action.
Our Supreme Court embraces the Restatement (Second) of Judgments § 27 (1982) definition of issue preclusion.
5
Pennsylvania State Univ. v. County of Centre,
Issues nоt actually litigated. A judgment is not conclusive in a subsequent action as to issues which might have been but were not litigated and determined in the prior action ....
In the case of a judgment entered by confession, consent, or default, none of the issues is actually litigated. Therefore, the rule of this Section does not apply with respect to any issue in a subsequent action. The judgment may be conclusive, however, with respect to one or more issues, if the parties have entered an agreement manifesting such an intention.
Id. (emphasis added).
Although the application of collateral estoppel to default judgments is an issue of first impression for this Court,
6
the United States Court of Appeals for the Third Circuit addressed it in
Fleet Consumer Discount Co. v. Graves (In re Graves),
Strict res judicata, also known as claim preclusion, provides that where there is a final judgment on the merits, future litigation between the parties on the same cause of action is prohibited.
Myers v. Workers Comp. Appeal Bd. (Univ. of Pennsylvania),
The 2002 trial court did not decide whether strict res judicata precludes Plaintiffs’ claim; accordingly there is no ruling on this issue for our review. We note, however, as did the 2001 trial court, that Plaintiffs’ current case addresses collection, whereas the case resulting in the default judgment addressed liability.
Although the case will return to the trial court fоr further proceedings, it is not clear whether equitable jurisdiction exists here. “[A] court of equity lacks jurisdiction to entertain a cause of action for which there exists a full, complete and adequate remedy at law.”
Tulio v. State Horse Racing Com.,
Pa. R.C.P. No. 3132 provides in pertinent part: “Upon petition of any party in interest before delivery ... of the sheriffs deed to real property, the court may, upon proper cause shown, set aside the sale and order a resale or enter any other order which may be just and proper under the circumstances.” The Superior Court held an action under Pa. R.C.P. No. 3132 constitutes an adequate remedy at law and may bar an equity action.
Scott v. Adal Corp.,
Plaintiffs may have an adequate remedy at law in the
form of
a petitiоn to set aside the sheriffs sale pursuant to Pa. R.C.P. No. 3132. Although the delivery of an acknowledged deed usually forecloses a party’s ability to petition to set aside the sale, an exception exists for sales tainted by the existence of fraud.
Derr v. New York Joint Stock Land Bank,
Plаintiffs argue equity jurisdiction is appropriate since the basis of their cause of action is fraud. It is true a court in equity has jurisdiction in cases of fraud, but equity is not available when statutory remedies exist unless the alleged fraudulent conduct is cited as the cause of the failure to pursue a statutory remedy.
See Chartiers Valley Sch. Dist. v. Virginia
With the foregoing discussion in mind, the requirement that averments of fraud be pled with particularity assumes special significance. Pa. R.C.P. No. 1019(b). Plaintiffs’ complaint fails to specify who made the allegedly fraudulent statements, when they were made, or how they impacted the remedy at law. Realty’s and Smith’s preliminary objection questioning specificity was not addressed by the 2002 trial court.
Accordingly, we reverse the trial court with regard to the demurrer based оn collateral estoppel, and we remand for consideration of the remaining preliminary objections: res judicata flowing from the default judgment; failure to join indispensable parties; and, specificity.
ORDER
AND NOW, this 8th day of July, 2003, the order of the Court of Cоmmon Pleas of Philadelphia County sustaining the preliminary objection in the nature of demurrer and dismissing the complaint is REVERSED, and this case is remanded for further proceedings consistent with this opinion.
Jurisdiction relinquished.
Notes
. This case was transferred by order of the Superior Court on January 23, 2003.
. The Honorable John W. Herron presiding, May 15, 2002.
. The Honorable Matthew Carrafiello presiding, December 27, 2002.
. Our review of an order of the trial court sustaining preliminary objections in the nature of a demurrer is limited to determining whether the trial court abused its discretion or committed an error оf law. The court must accept as true all well-pleaded allegations of material fact in the complaint as well as any inferences reasonably deducible therefrom, and any doubt should be resolved in favor of overruling the demurrer.
In re Appeal of Gomez,
. Thе Restatement (Second) of Judgments § 27 (1982) provides "when an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the pаrties, whether on the same or a different claim.”
. This Court cited comment e of the Restatement in holding collateral estoppel inapplicable when an underlying judgment is entered by consent.
GPU Indus. Intervenors v. Pennsylvania Pub. Util. Comm'n,
."Although decisions of federal courts on issues of state law are not binding on a state court’s, state courts may look to federal court decisions for guidance in interpreting state law.”
Marriott Corp. v. Alexander,