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01/27/88 S & S Automotive, v. Checker Taxi Company

January 27, 1988

S & S AUTOMOTIVE, PLAINTIFF-APPELLANT

v.

CHECKER TAXI COMPANY, DEFENDANT-APPELLEE. -- DONALD DELEONARDIS, PLAINTIFF-APPELLANT,

v.

CHECKER TAXI



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, THIRD DIVISION

COMPANY, Defendant-Appellee

520 N.E.2d 929, 166 Ill. App. 3d 6, 117 Ill. Dec. 578 1988.IL.82

Appeal from the Circuit Court of Cook County; the Hon. Mary Hooten, Judge, presiding.

APPELLATE Judges:

JUSTICE McNAMARA delivered the opinion of the court. WHITE, P.J., and FREEMAN, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MCNAMARA

This appeal involves the collateral estoppel effect of a default judgment against codefendants.

In an earlier suit, American County Insurance Company brought a declaratory judgment action against Donald DeLeonardis and S & S Automotive, and named its insured, Checker Taxi Company, as a defendant. Checker filed an appearance, but did not file an answer. DeLeonardis and S & S did not appear. The trial court entered a default judgment in favor of American Insurance, finding that Checker did not have coverage under its insurance policy. Based only on the unanswered complaint, the court found further that the taxi driver, Abdul Shaikh, was not an agent of Checker.

In the present action, plaintiffs DeLeonardis and S & S each sued Checker alleging that the cab driver was Checker's agent and that Checker was liable for his negligence under the theory of respondeat superior. Upon Checker's motion, the trial court entered an order estopping plaintiffs from proving agency based upon the earlier default judgment. The court further ordered that, due to plaintiffs' inability to prove an agency relationship, plaintiffs had no right of recovery by or through Shaikh under the theory of respondeat superior.

On appeal, plaintiffs contend that collateral estoppel cannot be used to determine issues between the previous co-defendants and that as a matter of law a cab company cannot deny the agency of drivers of its cabs. Plaintiffs point out that for practical reasons, they would default in the earlier suit because it concerned only whether Checker's insurer would cover the incident. Plaintiffs had no reason to be concerned as to whether Checker or its insurer would pay the damages which plaintiffs seek to prove in the present action.

We find that collateral estoppel does not apply here because the agency issue was not actually litigated prior to the entry of the default judgment.

The doctrine of collateral estoppel bars the relitigation of particular issues decided in another action between the same parties on a different cause of action. (Housing Authority v. YMCA (1984), 101 Ill. 2d 246, 461 N.E.2d 959.) Significantly, the judgment in the first suit operates as an estoppel only as to the point or question actually litigated and determined and not as to other matters which might have been litigated and determined. (Housing Authority v. YMCA (1984), 101 Ill. 2d 246, 461 N.E.2d 959, citing Grip-Pak, Inc. v. Illinois Tool Works, Inc. (7th Cir. 1982), 694 F.2d 466, 469, cert. denied (1983), 461 U.S. 958, 77 L. Ed. 2d 1317, 103 S. Ct. 2431.) This estoppel effect differs considerably from the employed under the doctrine of res judicata, where a final judgment constitutes a bar to a subsequent action involving the same cause of action and is conclusive as to every matter raised and every matter which might have been raised. Housing Authority v. YMCA (1984), 101 Ill. 2d 246, 461 N.E.2d 959; Benton v. Smith (1987), 157 Ill. App. 3d 847, 510 N.E.2d 952.

The present case involves the same parties but a different cause of action than the earlier declaratory judgment action to determine insurance coverage. The estoppel, however, applies only to issues actually litigated in the declaratory judgment action. The issue of whether the cab driver was an agent of Checker was not actually litigated.

In order for an earlier judgment to be conclusive on a certain issue, the party asserting the preclusion bears the heavy burden of showing with clarity and certainty that the identical issue was decided. (Benton v. Smith (1987), 157 Ill. App. 3d 847, 510 N.E.2d 952.) A judgment is conclusive in a subsequent action between the same parties on any issue actually litigated and determined if its determination was ...


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