Paul E. NELSON d/b/a Nelson Construction Company, Plaintiff and Appellant, v. HAWKEYE SECURITY INSURANCE COMPANY, Defendant and Appellee.
No. 14699.
Supreme Court of South Dakota.
Argued April 10, 1985. Decided June 12, 1985.
379
Ellsworth E. Evans, Sioux Falls, for defendant and appellee.
FOSHEIM, Chief Justice.
Paul E. Nelson, d/b/a Paul E. Nelson Construction (Nelson) appeals from a summary judgment granted in favor of Hawkeye Security Insurance Company (Hawkeye). We affirm.
The facts are undisputed. Nelson is a Brookings County building and plumbing contractor. Hawkeye is his insurer. On January 3, 1981, Sandy L. Schultz (Schultz), a Kingsbury County hog producer, sued Nelsоn for negligence, breach of express and implied warranties, and strict liability in the construction of a hog farrowing, gestation and nursery facility. (Schultz v. Nеlson). Schultz alleged that because Nelson had failed to properly vent portable heaters used during the pouring and hardening of the conсrete floor and foundation, the floor crumbled and deteriorated. Schultz further alleged that the structure was “unsuitable for use in connection with a hog farrowing, gestation and nursery facility.” Nelson promptly tendered the defense of this suit to Hawkeye. Hawkeye
On January 27, 1981, Nelson moved for a more definite statement of Schultz‘s damages. Schultz produced a Bill of Particulars on January 28, 1981. This document included $232,260 for “estimated loss of production.”
Nelson then instituted a declaratory judgment against Hawkeye (Nelson v. Hawkeye I) on Fеbruary 10, 1981. Trial was held on June 2, 1981. Neither Hawkeye or Nelson called Schultz as a witness or took discovery testimony to determine the precise nature of the damage claim in Schultz v. Nelson. From this record, the trial court held that there was no coverage and that Hawkeye had no duty to defend, relying on two exclusions in Nelson‘s policy.1 The court‘s judgment was docketed on August 18, 1981 and Nelson‘s attorney received the Notice of Entry of Judgment on August 20, 1981. The Sсhultz v. Nelson action was then still pending.
On March 19, 1982, seven months after the Nelson v. Hawkeye I Judgment, Schultz filed an Amended Bill of Particulars, which detailed the elements of the loss of production claim. The more detailed loss of production claim included a $11,480 item for death loss of pigs, allegedly causеd by Nelson‘s negligence. A death loss admittedly would be a covered claim under the policy. Nelson and his attorney nevertheless settled Schultz v. Nelsоn three weeks later.
On May 23, 1983 (one year and nine months after the Notice of Entry of Judgment in Nelson v. Hawkeye I, and fourteen months after filing the Amended Bill of Pаrticulars in Schultz v. Nelson) Nelson commenced the present action against Hawkeye. (Nelson v. Hawkeye II). This action seeks reimbursement of cоunsel fees incurred in Schultz v. Nelson and a judgment for the $11,480 death loss of the pigs. On May 25, 1984, summary judgment was granted in favor of Hawkeye. The Court concluded the judgment in Nelson v. Hawkeye I was res judicata. The Court also determined that Nelson had no basis for an independent action to relieve him from the Nelson v. Hawkeye I judgment pursuant to the last sentence of
Res judicata and collateral estoppel are distinguished. See Schell v. Walker, 305 N.W.2d 920, 922 (S.D. 1981); see also, Melbourn v. Benham, 292 N.W.2d 335, 337 (S.D. 1980); Gottschalk v. South Dakota Real Estate Commission, 264 N.W.2d 905 (S.D. 1978). Res judicatа is founded upon two premises: “A person should not be twice vexed for the same cause and public policy is best served when litigation has a repose.” Black Hills Jewelry Mfg. v. Felco Jewel Ind., 336 N.W.2d 153, 157 (S.D. 1983). While res judicata and
For purposes of res judicata, a cause of action is comprised of facts which establish or give rise to the right a party seeks to еnforce. Schell supra; Golden v. Oahe Enterprises, Inc., 90 S.D. 263, 240 N.W.2d 102 (1976); Carr v. Preslar, 73 S.D. 610, 47 N.W.2d 497 (1951); Jerome v. Rust, 23 S.D. 409, 122 N.W. 344 (1909). We have often applied the test expressed in Hanson v. Hunt Oil Co., 505 F.2d 1237, 1240 (8th Cir. 1974), to determine whether two causes of action are the same. See, Black Hills Jewelry Mfg., supra; Schell, supra; Golden v. Oahe Enterprises Inc., supra; Melbourn v. Benham, supra. That test is “whether the wrong for which redress is sought is the same in both actions.” Hanson, supra at 1240. A judgment on the merits is one which is based on legal rights rather than matters of procedure and jurisdiction. Chicago and North Western Railway Co. v. Gillis, 80 S.D. 617, 129 N.W.2d 532 (1964).
In Nelson v. Hawkeye I and II the parties were identical. Schell, supra. In both actions, Nelson sought a declaration that Hawkeye had a duty to defend and to pay. It appears Hawkeye investigated the claim, but either failed to discover or reveal3 the death loss. Nelson likewise did not call Schultz as a witness. Had he done so, the death loss would have been readily ascertainable. The death loss consequently was an existing fact which was either known or should have been known and litigated in the first declaratory judgment action. That a party сould have raised an issue but failed to do so will not prevent the application of res judicata. Black Hills Jewelry Mfg., supra; Matter of Estate of Nelson, 330 N.W.2d 151 (S.D. 1983); Schell, supra, Adam v. Adam, 254 N.W.2d 123, 129 (S.D. 1977). From the record on appeal we must conclude the trial court properly applied the doctrine of res judicata.
The judgment of the trial court is affirmed.
WOLLMAN and MORGAN, JJ., and WUEST, Circuit Judge, Acting as a Supreme Court Justice, cоncur.
HENDERSON, J., concurs specially.
HENDERSON, Justice (specially concurring).
Essentially, plaintiff slept on his rights and now seeks to bring an independent action to attack a judgment entered twenty-one months earlier which was аdverse to him. Nelson failed to develop testimony and evidence at the first trial detailing his alleged damages. Now, in an independent equitable action, he seeks to do so by developing new evidentiary facts. Nelson wants to go into the pig loss but he had an opportunity to do this in prior litigation and did not do so.
When a party fails to fully develop all of the issues and evidence available in a case, he is not justified in later trying the omitted issuеs or facts in a second action based upon the same claim. Cory v. Commissioner of Internal Revenue, 159 F.2d 391, 392 (3rd Cir. 1947).
A party, having suffered an adverse determination and having litigated the ultimate issue, cannot thereafter produce new evidentiary facts to obtain a different determination. He has had his day in court. See 18 Wright, Miller & Cooper, Fеderal Practice and Procedure: Jurisdiction § 4416, at 141 n. 20 (1981).