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Nelson v. American Family Insurance Group

8/29/2002

a full and fair opportunity to be heard on the adjudicated issue." Willems v. Comm'r of Pub. Safety, 333 N.W.2d 619, 621 (Minn. 1983) (citation omitted). Courts do not apply collateral estoppel rigidly and focus instead on whether an injustice would be worked upon the party upon whom the estoppel is urged. Johnson v. Consol. Freightways, Inc., 420 N.W.2d 608, 613-14 (Minn. 1988).


American Family asserts that the issues resolved in the South Dakota action are identical to the issues raised in this litigation because the issue of income loss was identical. Nelson argues that the main issue here is different even though she would be prevented from relitigating the amount of income loss. More specifically, Nelson argues that the issue presented here is whether American Family was obligated to pay no-fault benefits under Nelson's insurance policy—an issue not addressed in the prior litigation.


Although similarities do exist on a superficial level, the actual legal issues raised in the two cases are not identical. The litigation in South Dakota was a tort action for personal injuries while the instant action is a breach of contract claim for payment of no-fault insurance benefits. The damages in the tort action and the amount of benefits at issue in this case are identical, but the actual legal issue decided in South Dakota was whether the defendant in that action was negligent; the legal issue here is whether American Family is required to pay no-fault benefits. Therefore, we conclude that Nelson is not collaterally estopped from asserting her claim because the issues in the South Dakota litigation were not the same as the issues presented here.


B. Res Judicata


The doctrine of res judicata (claim preclusion) bars a claim when litigation on a prior claim involved the same cause of action, there was a judgment on the merits, and the claim involved the same parties or their privies. Veline v. Dahlquist, 64 Minn. 119, 121, 66 N.W. 141, 142 (1896) (citations omitted), cited with approval in Beutz v. A.O. Harvestore Prods., Inc., 431 N.W.2d 528, 531 (Minn. 1988), and Youngstown Mines Corp. v. Prout, 266 Minn. 450, 466, 124 N.W.2d 328, 340 (1963). In addition, the party against whom res judicata is applied must have had a full and fair opportunity to litigate the matter in the prior proceeding. See Dorso Trailer Sales, Inc. v. Am. Body and Trailer, Inc., 482 N.W.2d 771, 774 (Minn. 1992). If those requirements are met, res judicata bars not only claims as to matters actually litigated, but also as to every matter that might have been litigated in the prior proceeding. Care Inst., Inc.--Roseville v. County of Ramsey, 612 N.W.2d 443, 447 (Minn. 2000); Veline, 64 Minn. at 121, 66 N.W. at 142 (citations omitted), cited with approval in Beutz, 431 N.W.2d at 531, and Youngstown Mines Corp., 266 Minn. at 466, 124 N.W.2d at 340.


Nelson's South Dakota cause of action was a personal injury tort action brought to recover damages arising out of personal injuries and the negligence of the defendant. Nelson's cause of action in this case is for breach of contract to recover mandatory no-fault insurance benefits under an insurance policy. Accordingly, we conclude that Nelson is not barred by res judicata from asserting her cause of action because the cause of action in the prior litigation is not identical to the cause of action in this litigation.


C. Accord and Satisfaction


We have stated that accord is "a contract in which a debtor offers a sum of money, or some other stated performance, in exchange for which a creditor promises to accept the performance in lieu of the original debt." Webb Bus. Promotions, Inc. v. Am. Elecs. & Entm't Corp., 617 N.W.

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