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Whitacre Partnership v. Biosignia2/6/2004
in New Hampshire never mentioned "privity" or "privies" and referred throughout the opinion to the application of the doctrine against a "party" or "parties." We think plaintiff makes too much of this observation. In New Hampshire, the United States Supreme Court did not discuss privity because it had no need to do so. In that case, the parties before the Court, the states of New Hampshire and Maine, had also been parties to the previous action in which the prior inconsistent statement was made. New Hampshire, 532 U.S. at 747-48, 149 L.Ed. 2d at 975-76. The Court was not called upon to consider whether the privity concept applied to judicial estoppel, and did not expressly limit judicial estoppel to "parties" as opposed to "privies."
In the present case, by contrast, we are faced with a corporation seeking to estop a partnership from contradicting prior representations made by the partnership's general partners in a Chapter 7 bankruptcy proceeding. Since Whitacre Partnership itself was not a party to the bankruptcy proceeding, there is no mutuality of estoppel, and we are forced to decide whether a privity relationship may sustain the application of judicial estoppel.
This Court has consistently applied the privity concept to a variety of estoppel doctrines. See, e.g., McInnis, 318 N.C. at 428, 349 S.E.2d at 556 (res judicata and collateral estoppel apply to the "same parties or those in privity with them"); Mansour v. Rabil, 277 N.C. 364, 377, 177 S.E.2d 849, 857 (1970) (under doctrine of election, heirs and devisees of one who accepts benefits under a will are estopped to contest that will); Smith v. Smith, 265 N.C. 18, 28, 143 S.E.2d 300, 307 (1965) (estoppel of record binds parties and their privies); Long v. Trantham, 226 N.C. 510, 514, 39 S.E.2d 384, 387 (1946) (equitable estoppel binds parties and their privies); see also In re Estate of Anderson, 148 N.C. App. 501, 505, 559 S.E.2d 222, 225 (2002) (privity concept extended to quasi-estoppel). See generally 11A Strong's North Carolina Index 4th Estoppel § 2 (2001) ("Where a party would be estopped, persons in privity with that party, including heirs and devisees, are estopped."). "In general, `privity involves a person so identified in interest with another that he represents the same legal right.'" Tucker, 344 N.C. at 417, 474 S.E.2d at 130 (quoting 47 Am. Jur. 2d Judgments § 663 (1995)). Although the meaning of "privity" has proven to be elusive, and "there is no definition of the word . . . which can be applied in all cases," the prevailing definition in our cases, at least in the context of res judicata and collateral estoppel, is that privity "denotes a mutual or successive relationship to the same rights of property." Id. at 416-17, 474 S.E.2d at 130 (quoting Hales, 337 N.C. at 333-34, 445 S.E.2d at 594 (citations omitted)). In determining whether such a privity relation exists, "`courts will look beyond the nominal party whose name appears on the record as plaintiff and consider the legal questions raised as they may affect the real party or parties in interest.'" Summers, 351 N.C. at 623-24, 528 S.E.2d at 21 (quoting Davenport v. Patrick, 227 N.C. 686, 688, 44 S.E.2d 203, 205 (1947)).
In deciding whether judicial estoppel applies not only to parties, but also to their privies, it is instructive to consider the rationale for applying the privity concept in the collateral estoppel context. Due process requires that persons be given a fair opportunity to litigate their legal rights. U.S. Const. amends. V, XIV; Windsor v. McVeigh, 93 U.S. 274, 277, 23 L.Ed. 914, 915-16 (1876). This right to be heard may prohibit the application of a preclusion doctrine to estop a party who never had a chance to present arguments and evidence
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