The Michigan Court of Appeals held in Sure Work, LLC v Jeffrey Crawford, Docket No. 339280 (July 2018), that collateral estoppel does not bar a complaint that is based on facts in a prior related lawsuit if the prior related lawsuit was resolved through a consent judgment, as opposed to being adjudicated by a trier of fact.
In Sure Work, a homeowner filed a complaint with the Michigan’s Department of Licensing and Regulatory Affairs alleging that a contractor had violated certain rules when remodeling the homeowner’s house. The contractor settled with LARA by entering a consent judgment. The contractor also filed an action against the homeowner in court alleging breach of contract and requesting the balance owed for the work performed.
The homeowner argued to the trial court that the contractor’s claim was barred by collateral estoppel because the contractor had stipulated to failing to comply with relevant building codes in the consent order it entered with LARA. Because completion of the renovations in a workmanlike manner was a prerequisite for the contractor’s breach of contract claim, the trial court agreed with the homeowner and granted him summary disposition.
The Court of Appeals reversed the trial court’s decision and held that collateral estoppel did not apply to the contractor’s consent judgment with LARA. By entering the consent judgment with LARA, the contractor did not “actually and necessarily” litigate any issues because no issues were “submitted to” or “determined by” a trier of fact.
https://law.justia.com/cases/michigan/court-of-appeals-unpublished/2018/339280.html
This article was written by Ryan Hansen, Law Clerk
