Collateral estoppel barred the re-litigation of the issues between co-defendants (LFD and GE Capital) in the adversary case. The doctrine of collateral estoppel is premised on the basic concept of fairness. It protects parties from relitigating identical issues and promotes efficiency by impeding unnecessary litigation. Due process dictates that collateral estoppel cannot be used against a person who did not have a fair opportunity to litigate an issue decided in a previous proceeding. Therefore, two formal requirements must be met to invoke the doctrine of collateral estoppel. First, there must have been a full and fair opportunity to litigate the decision that now controls. Second, the issue in the prior action must be identical to and decisive of the issue in the instant action.
The issues in the between LFD and GE Capital in adversary proceeding were the identical and dependent upon the issues already raised and decided in an ancillary proceeding. LFD had a full and fair opportunity to litigate the issues already decided in the previous proceeding. Thus, the Court granted GE Capital’s motion for summary judgment as to count one of LFD’s complaint based upon collateral estoppel.Download PDF In re Ames Depart Stores, Inc.