Richardson v. Miller

United States Court of Appeals

Eleventh Circuit.

No. 94-3160.

Darryl RICHARDSON, Plaintiff-Appellant,

v.

C.E. MILLER, d.b.a. C.E. Miller Freight & Seafood; Raymond F.
Sims, Defendants-Appellees.

Dec. 16, 1996.

Appeal from the United States District Court for the Northern
District of Florida. (No. 91-40210-MMP), Maurice M. Paul, Judge.

Before KRAVITCH and COX, Circuit Judges, and CLARK, Senior Circuit
Judge.

CLARK, Senior Circuit Judge:

Plaintiff-appellant Darryl Richardson is a resident of the

State of Georgia. Defendants C.E. Miller d/b/a C.E. Miller Freight

and Seafood ("Miller") and Raymond F. Sims ("Sims") are domiciled

in the State of Florida. Richardson and Tommy Lee Hester were

employed by Saturday Moving and Storage ("Saturday Moving") of

Savannah, Georgia, to deliver personal property owned by William

and Paula Martin to West Virginia and by Linda Peckham-Birney and

Richard Birney to Massachusetts. Sims was employed by Miller to

deliver seafood to New York and was driving Miller's eighteen wheel

tractor-trailer.

On November 30, 1988, Richardson and Tommy Lee Hester were

driving "U-Haul type vehicles" on I-95 in South Carolina.

Richardson and Hester pulled off the highway onto the emergency

lane to repair the faulty turn signals on Hester's vehicle. After

the repairs were completed, Hester and Richardson started their

vehicles and began moving north in the emergency lane, displaying
their left turn signals. As they began to move into the right lane

of the highway, their vehicles were struck by Miller's vehicle

driven by Sims, the contents of their vehicles were destroyed, and

Richardson was injured.

The owners of the destroyed property filed actions against

Sims, Richardson, Hester, and Saturday Moving in the South Carolina

state court1. The law firm of Duffy and Feemster filed an answer

on behalf of Saturday Moving, Richardson, and Hester but was later

replaced as counsel by attorney Walter Bilbro. On the day of

trial, Saturday Moving filed for bankruptcy. Bilbro was ill and

not present during the trial. Richardson stated that he went to

court expecting to be represented by counsel, but was told that

Bilbro wanted to speak with him by telephone. Richardson said that

Bilbro told him by telephone that he would not represent him at

trial. Richardson said that he had no opportunity to seek the

advice of other counsel. Bilbro stated by affidavit that, before

the trial, he agreed with the plaintiffs' counsel and the Special

Referee "in an effort not to delay or continue the hearing in this

matter" that Richardson would testify and be present, the

plaintiffs would not proceed against him to collect any judgment,

and "it would be stipulated that the findings or rulings made by

the Special Referee would not effect (sic)" Richardson's state

court action against Miller2. Neither Miller nor Sims were parties

1
The property owners' actions were Martin v. Sims, No. 89-
CP-15-711 (Colleton Co. C.P.) and Peckham-Birney v. Sims, No. 89-
CP-15-71 (Colleton Co. C.P.).
2
Bilbro also said that he and the plaintiffs' counsel agreed
to drop Saturday Moving "as a party in order to not violate the
automatic stay imposed by the filing of the bankruptcy and in
to these agreements. Thus, the agreements between the plaintiffs

and Richardson have no effect upon the case under review by this

court.

On December 21, 1990, the Special Referee entered judgment for

the Martins for $40,777.40, and for the Birneys for $6,901.95

against Richardson, Sims, Hester, and Saturday Moving. The Special

Referee found Richardson negligent for failing to yield the

right-of-way and that his negligence was a proximate cause of the

accident. The Special Referee also found Sims negligent for

exceeding the posted speed limit and failing to keep a proper

lookout, his negligence also being a contributing proximate cause

of the accident. Richardson, through Bilbro, moved for

reconsideration because the judgment failed to recite that it would

not affect Richardson's pending litigation.3 Bilbro then withdrew

from the case, and attorney Randall A. Schmidt substituted as

Richardson's counsel. The Special Referee denied reconsideration,

finding that there was ample evidence to support the conclusion

that Richardson was negligent and, therefore, jointly and severally

liable. He also found that there was no agreement that would have

prevented a ruling against Richardson, and no error in trying the

order not to delay or continue the hearing." R1-46 at 2,
Affidavit at 2. Richardson's action for his injuries, Richardson
v. Miller, No. 90-CP-15-254 (Colleton Co. C.P.), was voluntarily
dismissed, pursuant to S.C.R. Civ.P. 41(a), on February 28, 1991.

3
The motion for reconsideration also argued that the
judgment failed to recite that Saturday Moving had been dropped
from both suits as a party in order not to violate the bankruptcy
automatic stay.
cases as to all defendants without Bilbro.4 The Special Master

made no findings on the judgment's effect on Richardson's pending

litigation.5

Miller and Sims allege that the action is barred by

Richardson's contributory negligence and res judicata or collateral

estoppel because the same issues were fully litigated in the South

Carolina state action.

The district court dismissed the action, finding that res

judicata and collateral estoppel applied. The court found that,

under South Carolina's expansion of the collateral estoppel

doctrine, it applied because, although the South Carolina action

was against Sims and not Miller, Richardson had entered a

beneficial agreement and had failed to raise all available claims

against co-defendants in the state court proceeding. The court

also concluded that res judicata also prevented Richardson from

maintaining the action because, although the parties were not the

same, there was privity between Miller and Sims due to their

employment relationship.6

4
Sims appealed the judgment, but dismissed his appeal after
he settled with the Martins in June 1992, and a satisfaction of
judgment was entered on his behalf. (R1-45, Exhs. C, D, and E).
The case was dismissed against Hester on settlement in February
1992. (R1-45, Exh. F). Richardson never appealed or
cross-appealed the judgment.
5
The Special Master also made no findings on whether
Saturday Moving had been dropped as a party to the actions by the
agreement.
6
The district court may have erred on the res judicata
ruling. In Mackey v. Frazier, 234 S.C. 81, 82, 106 S.E.2d 895,
899-900 (1959), the court held that, even though an employer
could be held liable for an employee's negligence under
respondeat superior and the doctrine of estoppel may apply, "the
parties are not the same and there is no such privity between
 This court reviews a district court's conclusions on res

judicata and collateral estoppel de novo7 and the legal conclusion

that an issue was actually litigated in a prior action under the

clearly erroneous standard.8 Under the federal full faith and

credit statute, 28 U.S.C. § 1738, federal courts give preclusive

effect to a state-court judgment whenever the courts of the state

from which the judgment emerged would do the same. 9 Therefore,

this court must look to the preclusion law of South Carolina.

The South Carolina courts have adopted and confirmed the use

of the American Law Institute's application of issue preclusion as

the law of the state.10 Therefore, in South Carolina, res judicata

applies when:

(1) there is a final judgment on the merits in a prior action,
and

(2) the second action is based on the same claim as the issues
actually litigated or which might have been litigated in the
first action.11

Further, "the doctrine of nonmutual collateral estoppel" applies in

them as is necessary for the application of" "res judicata."
7
Manning v. City of Auburn, 953 F.2d 1355, 1358 (11th
Cir.1992).
8
Vazquez v. Metropolitan Dade County, 968 F.2d 1101, 1106
(1992).
9
Farred v. Hicks, 915 F.2d 1530, 1533 (11th Cir.1990).
10
See Beall v. Doe, 281 S.C. 363, 370-371, 315 S.E.2d 186,
190-191 (S.C.Ct.App.1984), citing Restatement (Second) of
Judgments § 29 at 291-92 (1982); South Carolina Property and
Casualty Insurance Guaranty Association v. Wal-Mart Stores, Inc.,
304 S.C. 210, 213, 403 S.E.2d 625, 627 (S.C.1991).
11
Liberty Mutual Insurance Company v. Employers Insurance of
Wausau, 284 S.C. 234, 325 S.Ed 566, 568 (S.C.Ct.App.1985),
quoting Stewart, Res Judicata and Collateral Estoppel in South
Carolina, 282 S.C.L.Rev. 451, 452 (1977).
South Carolina when:

(1) there is a final judgment on the merits in a prior action,
and

(2) the second action is based on a different claim, but is
based on an issue that was actually litigated and directly
determined in a prior action, if

(3) the party had a full and fair opportunity to litigate the
issue in the first action and there are no circumstances that
justify affording him a second opportunity to retry the
issue.12

The South Carolina courts have expanded the requirement for

privity in applying estoppel by judgment, based on "the wholesome

principle which allows every litigant one opportunity to try his

case on the merits, but limits him, in the interest of the public

to one such opportunity."13 They have held that, in the context of

collateral estoppel, "privity" does not embrace relationships

between persons or entities, but relationships between the person

and the subject matter of the litigation.14

A party is precluded from relitigating an issue under the

doctrine of collateral estoppel unless he lacked a full and fair

opportunity to litigate the issue in the first action or other

circumstances justify affording him an opportunity to relitigate

the issue.15 In determining whether a full and fair opportunity to

12
Id.; Irby v. Richardson, 278 S.C. 484, 485, 298 S.E.2d
452, 454 (1982); Roberts v. Recovery Bureau, Inc., 316 S.C. 492,
450 S.E.2d 616, 619 (1994).
13
Graham v. State Farm Fire and Casualty Insurance Company,
277 S.C. 389, 287 S.E.2d 495, 496 (1982).
14
Roberts v. Recovery Bureau, Inc., 450 S.E.2d at 619,
citing Richburg v. Baughman, 290 S.C. 431, 351 S.E.2d 164 (1986).

15
Restatement (Second) of Judgments § 29 (1982).
litigate was present, one factor to be considered is "other

compelling circumstances."16 To our knowledge South Carolina has

not considered whether adequate representation of a party is a

factor to be considered in determining whether a party had a full

and fair opportunity to contest a decision said to be controlled by

collateral estoppel.

Other courts have considered this issue. In deciding whether

a debt in bankruptcy was nondischargeable based on a state court

consent decree, the Seventh Circuit, in Klingman v. Levinson17,

noted that one requirement for the application of collateral

estoppel is whether "the party against whom collateral estoppel is

invoked must be fully represented in the prior action."18

In Conte v. Justice19, the court considered whether collateral

estoppel should apply to a driver and passenger who were injured in

an automobile accident, when the other driver's liability had been

previously litigated. In deciding whether a party had a full and

fair opportunity to contest the decision said to be controlling,

the court reviewed the experience and competence of counsel.20 The

court noted that there are situations where an insurance company's

lawyer may fail to provide a defendant adequate representation.21
The court stated that it was conceivable that an insurance company

16
Restatement (Second) of Judgments § 29(8).
17
831 F.2d 1292 (7th Cir.1987).
18
Id. at 1295.
19
802 F.Supp. 997 (S.D.N.Y.1992).
20
Id. at 1003.
21
Id.
might not have made a substantial investment of time and effort in

defending an action if the plaintiff suffered relatively minor

injuries or the claim involved a relatively small sum of money.22

This is analogous to the situation presented here. It is

undisputed that attorney Bilbro was employed by Saturday Moving and

Storage to defend the company in the litigation in South Carolina

as well as the driver Richardson. The day before trial Saturday

Moving filed bankruptcy proceedings in Savannah, Georgia. The

trial proceeded without Saturday Moving as a party because of the

automatic stay. Bilbro did not appear at trial because of illness.

Richardson lacked the opportunity to retain new counsel and

appeared at trial without counsel. Therefore, it appears that

Richardson may not have been provided a full and fair opportunity

to contest the decision in the prior action.

While we join the other Circuits who have considered the

problem of applying the doctrine of collateral estoppel when the

party being estopped lacked counsel and was not provided a full and

fair opportunity to contest the prior action, we elect to remand

this case for a further hearing before the district court rather

than merely directing that the case be tried.

We are not at all satisfied that if Bilbro had been at the

trial representing Richardson, the outcome could have been any

different. Bilbro says this in an affidavit supporting

Richardson's action in this case:

4. That counsel for the Plaintiff and the Special Referee

22
Id., citing Schwartz v. Public Administrator of the County
of Bronx, 24 N.Y.2d 65, 73-74, 298 N.Y.S.2d 955, 962, 246 N.E.2d
725, 730 (N.Y.Ct.App.1969).
 agreed in an effort not to delay or continue the hearing in
this matter and that Daryl Richardson would testify and be
present; however, since he was essentially financially
destitute, the Plaintiffs would not proceed against him to
collect any judgment and that it would be stipulated that the
findings or rulings made by the Special Referee would not
effect (sic) the case in which he is the Plaintiff entitled
"Daryl Richardson, Plaintiff, vs. C.F. Miller, dba C.F.
Miller's Freight and Seafood and Richard F. Sims, Defendants,"
which is filed in the Colleton County Court of Common Pleas,
Case Number 90-CP-15-254.23

While we have reviewed all of the file in the district court,

that file does not have all of the significant portions of the

proceedings in the South Carolina court. From Bilbro's affidavit

and bits and pieces of the South Carolina file that is in the

district court we can assume the following might be true: (1) Sims

and Miller were never parties to any stipulation that Richardson

would not be bound by the South Carolina court's findings and

judgment; (2) that the trial largely consisted of the trial

court's findings based upon pretrial depositions rather than

evidence being presented to the court, and thus Richardson may not

have been called upon to testify; (3) that the absence of

Richardson's counsel may not have prejudiced the outcome as far as

Richardson was concerned.

Our remand to the district court is for a determination of

whether Richardson is entitled to relitigate an issue already

determined against him because he did not have a full and fair

opportunity to contest the issues in the South Carolina court

caused by his lack of counsel at that trial. We hold that a

showing of lack of counsel makes out a prima facie case of lack of

such an opportunity. The burden of proof is shifted to the

23
R1-46, Exh. 2 (affidavit of Bilbro).
defendants to show there was no prejudice that could have affected

the outcome.

REVERSED and REMANDED.

COX, Circuit Judge, dissenting:

The issue on this appeal is whether the doctrine of collateral

estoppel applies to bar Richardson from relitigating a South

Carolina state court's finding that Richardson's negligence

proximately caused an accident. Richardson argues that because he

was not represented by counsel during the state hearing, he did not

then have a full and fair opportunity to litigate the negligence

issue. Consequently, Richardson contends that South Carolina's

earlier finding of negligence cannot undergird the defensive use by

Miller and Sims of collateral estoppel in this federal action.

Miller and Sims maintain that the South Carolina rules on

collateral estoppel do allow them to use defensively the state

court's finding that Richardson was negligent.

The United States Constitution, Article IV, mandates that full

faith and credit be given to the "judicial proceedings of every

other state ..." See also 28 U.S.C. § 1738. Consequently, it is

well-settled that:

[A] federal court must give to a state-court judgment the same
preclusive effect as would be given that judgment under the
law of the State in which the judgment was rendered.

Migra v. Warren City School Dist. Bd. Of Educ., 465 U.S. 75, 81,

104 S.Ct. 892, 896, 79 L.Ed.2d 56 (1984). For this reason, all

parties are correct to conclude that the determination of this case

turns on an analysis of South Carolina law.

In Beall v. Doe, 281 S.C. 363, 315 S.E.2d 186 (1984), the
South Carolina Supreme Court embraced the Restatement (Second) of

Judgments' rule of collateral estoppel or issue preclusion. This

rule requires that the party against whom defensive collateral

estoppel is asserted must have had a full and fair opportunity to

litigate the issue in the first action. Id. 315 S.E.2d at 190.

This is the crux of Richardson's argument. He contends,

specifically, that because his employer, Saturday Moving, filed for

bankruptcy on the day of the trial, because the attorney

representing Saturday and Richardson failed to appear, and because

he did not have the time to find another attorney, he did not have

a full and fair opportunity to litigate the negligence issues. In

essence, then, Richardson asks this court to recognize an

absence-of-lawyer or ineffective assistance of trial counsel

exception under the South Carolina rules on collateral estoppel.

Richardson can cite no case law to support his contention that

the absence of a party's lawyer at trial is a factor to be

considered in determining whether that party had a full and fair

opportunity to contest a decision. South Carolina has never

articulated such an exception.

Moreover, the district court noted that Richardson's attorney,

Bilbro, did continue to represent Richardson even though Bilbro was

not at trial. Richardson apparently obtained the benefit of an

agreement that no judgment would be collected from him.

I concur with the district court's conclusion that Richardson

had a full and fair opportunity to litigate the issue of his

negligence and its proximate results, even if he did not take full

advantage of that opportunity. I would affirm the district court's
judgment.