by James P. Scheidler, Esq., Katherine M. Haire, Esq.

On June 21, 2023, the Indiana Supreme Court, in the case of Kathryn Davidson v. State of Indiana, et. al, 22S-CT-318, ruled that an Indiana woman who was paralyzed from an accident and obtained a judgement for over $3.2 million against a trucking company was precluded from later suing private and governmental construction defendants for their alleged roles in the same accident under Indiana’s Comparative Fault Act.

In 2018, a Plaintiff, who was a passenger in a semi-truck being operated by her boyfriend, who at the time was acting within the scope of his employment with a trucking company.  The truck driver fell asleep, lost control, and collided with an overpass-bridge pier located in a construction zone within the Interstate 69 construction project in Monroe County, Indiana.  As a result of this collision, Plaintiff was ejected from the truck, sustained serious and permanent injuries, and is now a quadriplegic. 

After the State of Indiana denied Plaintiff’s tort-claim notice, wherein she claimed the Indiana Department of Transportation and various other construction project participants caused the accident, Plaintiff elected to file a lawsuit in her home county, Lake County, Indiana, against the tortfeasor truck driver and trucking company only.  A 2019 bench trial in that case resulted in a judgment entered against the trucking company for $3.24 million.

Seven months later, after Plaintiff did not collect the full verdict amount from the Lake County judgment due to applicable insurance coverage, Plaintiff filed a second lawsuit against six (6) Defendants[1] involved in the construction project – this time in Monroe County, Indiana where the accident occurred, alleging negligence against these defendants and seeking to recover damages from the same 2018 accident.  The defendants all filed various dispositive motions under Trial Rule 12(B)(6) (failure to state a claim) and Trial Rule 12(C) (judgement on the pleadings) on the basis of collateral estoppel.  In part, Defendants claimed the issue preclusion prong of collateral estoppel bars relitigating the same fact or issue (i.e., fault for the accident).  Despite an unsuccessful effort by Plaintiff’s counsel to have the Lake County judgment “reversed” and re-framed as a disposition by settlement, the Monroe County Court dismissed the lawsuit with prejudice, finding liability for the accident had already been fully adjudicated by the Lake County Court pursuant to Indiana’s Comparative Fault Act. 

Plaintiff appealed, and the Indiana Court of Appeals reversed, holding application of defensive collateral estoppel would have been proper if Plaintiff litigated and lost her Lake County case, which did not occur.  The Court of Appeals opinion also provided that collateral estoppel does not extend to matters that were not expressly adjudicated, finding the negligence and liability alleged by Plaintiff against the construction defendants at issue in the 2nd lawsuit had not been at issue in the first lawsuit. 

Notably, the Indiana Supreme Court agrees to hear only about 10% of all civil cases in which transfer is sought; here, the Supreme Court granted transfer.  After hearing oral arguments in November 2022, the Indiana Supreme Court vacated the Court of Appeals opinion and affirmed the Monroe County trial court’s dismissal of Plaintiff’s second lawsuit with prejudice.  The Supreme Court found that Plaintiff’s first lawsuit conclusively determined the trucking company was at fault for causing the Plaintiff’s injuries in accordance with Indiana’s Comparative Fault Act:

By establishing a system that apportions all liability and damages in the same lawsuit, the Act functionally requires plaintiffs to name all defendants in a single suit.  Otherwise, serial suits against different tortfeasors in connection with the same injury could lead to inconsistent judgments.  For example, a Monroe County judgment apportioning any fault to [Plaintiff] or the six defendants here would be at odds with Lake County’s assignment of all fault to [the trucking company]. The Act does not countenance such inconsistencies.

On the issue noted by the Court of Appeals – that defensive collateral estoppel generally requires a litigant to have previously litigated and lost an issue - the Supreme Court clarified that “when a plaintiff fails to name a potential defendant in an action under the [Comparative Fault] Act, as [Plaintiff] failed to do in Lake County, the plaintiff ‘loses’ against the unnamed defendant by failing to obtain an allocation of fault against that defendant.”  Also, because Plaintiff had a full and fair opportunity to litigate her claims against all defendants in one lawsuit but chose not to, the Indiana Supreme Court found there was no unfairness in applying collateral estoppel to bar Plaintiff’s second lawsuit, despite her asserting negligence against different defendants.

Going forward, the Davidson decision now provides practitioners with how the affirmative defense of collateral estoppel – as to the prong of “issue preclusion” – shall apply in cases where Indiana’s Comparative Fault Act is in play.  Specifically, collateral estoppel’s “issue preclusion” is applicable to a Plaintiff’s “second bite at the apple” irrespective of: 1) whether the Plaintiff was successful in litigating the issue; and 2) whether the parties in the second lawsuit were named-defendants in the first lawsuit.

If you would like a complete copy of the opinion or if you have any other questions related to matters of defense of General Liability or Excess Surplus Risks, please call one of Reminger’s practice group members.  

[1] Reminger Co., L.P.A’s James Scheidler and Nicholas Brunette obtained a dismissal with prejudice on behalf of a construction company defendant in the case from the Monroe County Court.  Jim and Nick then called upon Reminger’s Katherine Haire to be involved for the briefing process before the Court of Appeals and Indiana Supreme Court.   

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