author: FOX, Justice.

text:
    Stanley E. THOMAS, Appellant (Defendant), v. JLC WYOMING, LLC, a Wyoming limited liability company, Appellee (Plaintiff).
    S-18-0118
    Supreme Court of Wyoming.
    January 31, 2019
    Representing Appellant: Lucas E. Buckley and Tyler J. Garrett, Hathaway & Kunz, LLP, Cheyenne, Wyoming. Argument by Mr. Garrett.
    Representing Appellee: Kim D. Cannon, Hayden F. Heaphy, Jr., and Benjamin N. Reiter, Davis & Cannon, LLP, Sheridan, Wyoming. Argument by Mr. Reiter.
    Before DAVIS, C.J., and FOX, KAUTZ, BOOMGAARDEN, and GRAY, JJ.
   FOX, Justice.

[¶1] Fourth Quarter Properties 86 (FQP), a Georgia LLC, and its sole member, Stanley E. Thomas, obtained a $30-million loan from MetLife Insurance (MLIC), with the Little Jennie Ranch in Sublette County as collateral. Mr. Thomas signed for the loan and mortgage on behalf of himself and on behalf of FQP. When they could no longer make the payments, MLIC obtained a judgment against FQP and Mr. Thomas for the outstanding balance, plus interest (the "Wyoming Judgment"). On the eve of the foreclosure sale, however, FQP filed for bankruptcy protection in Georgia. In the bankruptcy case, FQP agreed to repay MLIC a reduced amount for the outstanding Wyoming Judgment, and MLIC agreed to allow FQP more time to sell the ranch. When FQP was unable to sell the ranch, MLIC proceeded with the foreclosure sale and ultimately purchased the ranch at the sale. MLIC then sold its rights to the ranch and the remaining balance on the Wyoming Judgment to JLC, the appellee in this case. In the district court, JLC obtained a deficiency judgment against Mr. Thomas for the unpaid amount of the Wyoming Judgment, approximately $10-million.

The issue on appeal is whether Mr. Thomas, who was not a party to FQP's bankruptcy case, was entitled to the reduced amount FQP negotiated with MLIC in the bankruptcy case. We conclude that he was not. However, we also conclude that the district court failed to properly credit Mr. Thomas for prior payments he and FQP made against the Wyoming Judgment and, thus, we affirm in part, reverse in part, and remand for further proceedings.

ISSUES

[¶2] We rephrase the issues as:

1. Did the bankruptcy court's Consent and Confirmation Orders in the FQP bankruptcy alter Mr. Thomas's liability for the Wyoming Judgment?
2. Was JLC's motion for a deficiency judgment barred by res judicata based on the bankruptcy court's Consent and Confirmation Orders?
3. Did the district court err when it did not credit Mr. Thomas with the $3-million February 2014 payment against the Wyoming Judgment?

FACTS

[¶3] On December 18, 2006, Mr. Thomas, individually, and as the sole member of his company, FQP, obtained a loan from MLIC for $30-million. Mr. Thomas, individually and as the sole member of FQP, signed a promissory note and granted MLIC a mortgage on the Little Jennie Ranch in northern Sublette County.

[¶4] After Mr. Thomas and FQP defaulted on the loan, MLIC sought to foreclose on the Little Jennie Ranch. On November 15, 2013, the district court granted MLIC summary judgment for a total of $31,948,180.15 against Mr. Thomas and FQP "jointly and severally," which was to accrue interest at $9,144.17 per day until they paid the judgment in full. MLIC vacated the foreclosure sale set for February 14, 2014, and instead entered into another agreement with Mr. Thomas and FQP that required them to make three payments of $3-million on or before January 15, 2015, and monthly payments of $237,230.77. Mr. Thomas and FQP made two of these $3-million payments, including one in February 2014. MLIC filed a Notice of Partial Satisfaction of Judgment that reflected the February 2014 payment. When Mr. Thomas and FQP failed to meet their remaining obligations under the new agreement, however, MLIC scheduled another foreclosure sale for January 23, 2015.

[¶5] On January 22, 2015, FQP filed for Chapter 11 bankruptcy protection in Georgia, and the automatic stay requirements of 11 U.S.C. § 362 prevented the foreclosure sale. In response, MLIC filed a claim in bankruptcy court for $27,925,194.25 as the outstanding balance on the Wyoming Judgment. This amount credited Mr. Thomas and FQP with only one of the two $3-million payments they had made. FQP argued that based on its calculations, it only owed $24,232,222.67.

[¶6] Eventually, MLIC and FQP agreed to allow MLIC a secured claim of $26,817,815.96. On December 2, 2015, the bankruptcy court entered a Consent Order reflecting this amount and gave FQP until October 31, 2016, to sell the Little Jennie Ranch, after which the automatic stay would expire. The only provision of the Consent Order that mentioned Mr. Thomas was Paragraph 22, which required that he and FQP vacate the property on October 31, 2016.

[¶7] On March 15, 2016, at the conclusion of the bankruptcy process, the bankruptcy court entered a Confirmation Order confirming FQP's Plan of Reorganization, with some modifications based on MLIC's objections to FQP's proposed plan. In the Confirmation Order, MLIC reserved its rights against Mr. Thomas under the Wyoming Judgment:

3.2.3 Treatment of Claims in Class 2 . The Allowed Secured Claims of [MLIC] in the stipulated amount of $26,817,815.96 as of the Petition Date, plus interest at the non-default rate of 5% per annum accrued from the Petition Date to the Closing Date, plus post-petition reasonable attorney's fees and costs ..., collateralized by a security interest in the Real Property is included in Class 2 [the Little Jennie Ranch] and shall be paid in full on the Effective Date from the Net Proceeds from the sale of the Real Property. ... No Provision of this Plan shall impair the credit bid rights of ... [MLIC] [.] Except as provided in Section 4.2.9 of the Plan, and in this Order, the Plan shall not be deemed or construed to impair the rights, powers, or remedies available to the Class 2 claimant [MLIC], whether under the Class 2 claimant's loan, transaction documents, or Pre-Petition Wyoming Judgment, at law, or in equity, against any non-debtor (including, without limitation, any co-maker of any note, any guarantor, or any other co-obligor of the Debtor) with respect to the indebtedness giving rise to the Allowed Class 2 Claim.

(Emphasis added.)

[¶8] Section 4.2.9, known as a "Channeling Injunction," provided:

4.2.9 Channeling Injunction Prohibiting Collection Action Against Guarantors and Affiliates and Prohibiting dissipation of assets by Guarantor During Plan Consummation . Commencing as of the Confirmation Date and ... until further order of the Bankruptcy Court, all Holders of Allowed Guarantor Claims in Class 2 [i.e., MLIC] that are designated to be paid in full on the Effective Date from the Net Proceeds of the sale of the Real Property [i.e., the Little Jennie Ranch], shall look solely to the provisions of this Plan for payment of their Allowed Guarantor Claims, and are hereby restrained and enjoined from pursuing or continuing collection of any Allowed Guarantor Claim against Guarantor [i.e., Mr. Thomas] or any Affiliate. Until all such Allowed Guarantor Claims provided for under this Plan which have been guaranteed by Guarantor are paid in full, or until further order of the Bankruptcy Court, Guarantor is hereby restrained and enjoined from transferring any interest in real or personal property not in the ordinary course of business ... or otherwise ... that impairs the post-judgment remedies of ... [MLIC]. In furtherance of such injunction, ... [MLIC] shall, with respect to Guarantor or Affiliate, make any demand ... commence or continue any ... judicial ... foreclosure ... of any real or personal property of Guarantor.

[¶9] The basis for this Channeling Injunction was the bankruptcy court's finding that FQP and Mr. Thomas "share an identity of interest, such that a suit against [Mr. Thomas] ... is, in essence, a suit against [FQP] and would impair their ability to fund operating shortfalls, thereby jeopardizing consummation." In essence, it prevented MLIC from attempting to satisfy its Wyoming Judgment against Mr. Thomas until "further order of the Bankruptcy Court," because such an attempt could interfere with FQP's ability to satisfy its obligations under the Plan.

[¶10] FQP and Mr. Thomas were unable to sell the ranch before October 31, 2016. In November 2016, the bankruptcy court lifted the stay and, on January 6, 2017, the ranch was sold at a foreclosure auction, and MLIC was the highest bidder with its $26,857,929.42 judgment bid. On January 18, 2017, the district court entered an order confirming the foreclosure sale and MLIC's winning bid. In March 2017, MLIC assigned its rights to the ranch and the Wyoming Judgment to JLC, the appellee in this case.

[¶11] On October 12, 2017, JLC filed a motion for a deficiency judgment against Mr. Thomas for the outstanding balance on the Wyoming Judgment, plus interest. As of August 31, 2017, this amount was $10,111,714.21. JLC filed an affidavit from its financial advisor that listed the Wyoming Judgment amount, added costs and attorney fees the district court awarded in its summary judgment order, and then credited Mr. Thomas with only one $3-million payment and other payments Mr. Thomas and FQP had made against the Wyoming Judgment since 2013. It also credited Mr. Thomas with MLIC's $26,857,929.42 credit bid for the ranch.

[¶12] Mr. Thomas argued that the bankruptcy court's Consent and Confirmation Orders constituted a novation of the original loan agreement and that he only owed the reduced amount in FQP's bankruptcy court Consent Order-which MLIC used as its credit bid. Thus, he maintained that the outstanding balance was only $993,810.26, which was the accumulated interest from October 31, 2016. He also asserted that res judicata precluded JLC's deficiency judgment for much the same reason. The following table illustrates the difference between the parties' calculations following the Wyoming Judgment and FQP's bankruptcy case:

MLIC/JLC Mr. Thomas Explanation 1/22/2015: Balance $31,377,481.94 $26,817,515.96 MLIC/JLC used when FQP filed for amount from bankruptcy Wyoming Judgment Mr. Thomas used amount FQP obtained in Consent Order Interest from $6,538,081.55 $2,622,973.48 MLIC/JLC used 1/22/15 (date of 11% rate from bankruptcy filing) Wyoming Judgment through 1/6/2017 (date of foreclosure Mr. Thomas used sale) 5% rate from Consent Order Interest from date $674,080.14 $31,250.24 MLIC/JLC used of foreclosure sale 11% rate from through August 31, Wyoming Judgment 2017 (date JLC used in its motion for the deficiency Mr. Thomas used judgment) 5% rate from Consent Order Interest Payments $1,620,000 $1,620,000 Same Foreclosure Bid $26,857,929.42 $26,857,929.42 Same Balance $10,111,714.21 $993,810.26

[¶13] The district court agreed with JLC and entered a deficiency judgment against Mr. Thomas for $10,111,714.21, with interest accruing at 11%-the default rate under the original note. It concluded that the Consent and Confirmation Orders did not "affect [Mr.] Thomas' liability," and that res judicata did not apply because Mr. Thomas was not a party to FQP's bankruptcy case. This appeal followed.

DISCUSSION

[¶14] Mr. Thomas argues that he is entitled to the reduced balance on the Wyoming Judgment that FQP obtained in its bankruptcy. He contends that he was an intended beneficiary of the Consent and Confirmation Orders due to his intimate involvement in FQP's bankruptcy case and certain provisions in those orders. He also asserts that the Consent and Confirmation Orders novated the original note and, in the alternative, res judicata barred JLC's motion for a deficiency judgment. Finally, he maintains that, even if we disagree with his other arguments, the district court erred when it did not properly credit him with the $3-million February 2014 payment MLIC received.

I. Standard of Review

[¶15] Mr. Thomas appeals the district court's order granting JLC's motion for a deficiency judgment against him. We have never addressed the appropriate standard of review for a deficiency judgment. See Walker v. McAnnany , 802 P.2d 876 (Wyo. 1990) (considering the appeal of a deficiency judgment without stating a standard of review). We have applied our normal standard for reviewing summary judgment orders in cases where a party filed a complaint for a deficiency judgment and then filed a motion for summary judgment. See Kilmer v. Citicorp Mortg., Inc. , 860 P.2d 1165, 1166 (Wyo. 1993) ; Hess v. Thomas , 851 P.2d 10, 11 (Wyo. 1993). In this case, however, JLC filed its motion for a deficiency judgment within the same foreclosure case MLIC started in 2013 and did not file a subsequent summary judgment motion.

[¶16] The district court ordered on summary judgment that MLIC was entitled to a deficiency judgment for the difference between the proceeds of the sale of the ranch and MLIC's judgment. The foreclosure statutes require that a mortgagor (Mr. Thomas) "is liable for any deficiency." Wyo. Stat. Ann. § 34-4-113(c) (LexisNexis 2017). MLIC used the amount it negotiated with FQP in the bankruptcy case as its credit bid at the foreclosure sale. Mr. Thomas's argument, below and on appeal, is that there was no deficiency because he was entitled to the same amount FQP negotiated through the bankruptcy process.

[¶17] Mr. Thomas asserts that we should apply our summary judgment standards to the issues in this case. Both parties agree that this involves the interpretation of the Consent and Confirmation Orders, which are interpreted like a contract. We review issues of contract interpretation de novo. E.g. , Pope v. Rosenberg , 2015 WY 142, ¶ 21, 361 P.3d 824, 830-31 (Wyo. 2015) (citation omitted). Either approach results in de novo review, and we agree that is the applicable standard under the circumstances of this case.

II. The bankruptcy court's Consent and Confirmation Orders in the FQP bankruptcy did not alter Mr. Thomas's liability for the Wyoming Judgment.

[¶18] The two operative documents are the bankruptcy court's Consent Order and the Confirmation Order. A Consent Order is like a consent decree. See City of Covington v. Covington Landing Ltd. P'ship , 71 F.3d 1221, 1227 (6th Cir. 1995). " 'A consent decree [judgment] ... is an agreement that the parties desire and expect will be reflected in, and be enforceable as, a judicial decree that is subject to the rules generally applicable to other judgments and decrees.' " Day v. Davidson , 951 P.2d 378, 382 (Wyo. 1997) (quoting Rufo v. Inmates of Suffolk Cty. Jail , 502 U.S. 367, 378, 112 S.Ct. 748, 757, 116 L.Ed.2d 867, 883 (1992) ) (alteration in original).

[¶19] We interpret consent decrees, and by extension consent orders, like a contract. See In re CDR , 2015 WY 79, ¶ 24, 351 P.3d 264, 269-70 (Wyo. 2015) ; see also In re Reflections , 1995 WL 295502, at *2 (4th Cir. 1995) ("A consent order ... is the product of a settlement-a contract-between the parties."). Similarly, a Confirmation Order is an order by the bankruptcy court that formally approves a debtor's "Plan of Reorganization," and, occasionally, amends certain provisions of the proposed plan. See generally Markstein v. Countryside I, L.L.C. , 2003 WY 122, ¶ 21, 77 P.3d 389, 396 (Wyo. 2003) ; Nauman v. CIT Group/Equipment Financing, Inc. , 816 P.2d 883, 885 (Wyo. 1991). We also interpret it as a contract. In re Dow Corning Corp. , 456 F.3d 668, 676 (6th Cir. 2006) (citations omitted). "[W]e interpret [the] contract as a whole, reading each provision in light of all the others to find their plain meaning." James v. Taco John's Int'l, Inc. , 2018 WY 96, ¶ 12, 425 P.3d 572, 578 (Wyo. 2018) (alteration in original). We interpret the contract in a manner that gives each part meaning, and "avoid" interpreting it in a way that leaves some part "meaningless" or "inconsistent" with any other provision. Id. (citation omitted).

[¶20] Mr. Thomas argues that he is subject to the Consent and Confirmation Orders, even though only MLIC and FQP were parties to these documents in the bankruptcy case. Nevertheless, he contends that the Confirmation and Consent Orders "show[ ] an express intent of the parties-including [Mr.] Thomas-as well as the Bankruptcy Court, to bind [Mr.] Thomas and MLIC (and its assignee JLC) to the terms of those orders[.]"

[¶21] Mr. Thomas is not entitled to the benefits FQP obtained through the bankruptcy process for the simple reason that Mr. Thomas was not a party to that case. Before FQP's bankruptcy filing, MLIC held a judgment against Mr. Thomas and FQP, "jointly and severally." See GreenHunter Energy, Inc. v. Western Ecosystems Technology, Inc. , 2014 WY 144, ¶ 12, 337 P.3d 454, 459 (Wyo. 2014) ("Certain legally recognized entities, such as corporations and limited liability companies, are separate and distinct from their owners.") (citations omitted). It was FQP and not Mr. Thomas who filed bankruptcy and stopped the pending foreclosure sale. The Plan of Reorganization that FQP submitted, and that the bankruptcy court formalized through the Confirmation Order, dealt with FQP's bankruptcy status, not Mr. Thomas's.

[¶22] The Consent Order that FQP and MLIC negotiated and signed dealt only with FQP's and MLIC's relationship as it concerned the Little Jennie Ranch. Only FQP and MLIC were parties to this contract. The Consent Order was signed only by FQP's bankruptcy attorney on behalf of FQP. In addition to establishing the amount FQP owed on the Wyoming Judgment as $26,817,815.96, the contract gave FQP until October 31, 2016, to either pay off the outstanding balance or sell the Little Jennie Ranch to satisfy the debt. Mr. Thomas did not sign the contract. Generally, only those who are a party to a contract can obtain the benefits of it. See generally Rogers v. Wright , 2016 WY 10, ¶ 44, 366 P.3d 1264, 1278 (Wyo. 2016). The only mention of Mr. Thomas is in Paragraph 22, which required that he vacate the property "[u]pon termination of the automatic stay," which was set at October 31, 2016. This provision was necessary, not because Mr. Thomas was a party to the Consent Order, but because he was the sole member of FQP. The requirement that he vacate once the bankruptcy court lifted the automatic stay does not make him a party to the contract.

[¶23] As a result of the bankruptcy case, FQP had more time to try to market and sell the Little Jennie Ranch. As it concerned Mr. Thomas, this additional time may have been a benefit to him. That does not, however, make him a party to the bankruptcy case because the bankruptcy court had no authority to reduce or alter Mr. Thomas's personal liability under the Wyoming Judgment. See In re Western Real Estate Fund, Inc. , 922 F.2d 592, 601 (10th Cir. 1990) ("Neither the confirmation of a plan nor the creditor's recovery (of partial satisfaction ) thereunder bars litigation against third parties for the remainder of the discharged debt.") (citing In re Jet Florida Sys., Inc. , 883 F.2d 970, 972-73 (11th Cir. 1989) ; In re Sandy Ridge Dev. Corp. , 881 F.2d 1346, 1350-51 (5th Cir. 1989) ; United States v. Stribling Flying Serv., Inc. , 734 F.2d 221, 223 (5th Cir. 1984) ) (emphasis added) (some citations omitted).

[¶24] The bankruptcy code specifically precludes a bankruptcy court from altering the liability of a non-debtor to the bankruptcy proceeding. See 11 U.S.C. § 524(e).

[A] bankruptcy discharge arises by operation of federal bankruptcy law, not by contractual consent of the creditors and ... [a] creditor's approval of the plan cannot be deemed an act of assent having significance beyond the confines of the bankruptcy proceedings[.] Thus, the receipt of payment under the plan does not operate to release non-debtor parties from their obligations to the extent of non-payment. ... [W]hile the Bankruptcy Code expressly alters the contractual obligations of the bankrupt, it does not contemplate the same effect on the obligations and liabilities of third parties to a creditor.

First Fidelity Bank v. McAteer , 985 F.2d 114, 118 (3d Cir. 1993) (internal citation omitted). See Ralph Brubaker, Bankruptcy Injunctions and Complex Litigation: A Critical Reappraisal of Non-Debtor Releases in Chapter 11 Reorganizations , 1997 U. Ill. L. Rev. 959, 971-72 (1997) (" Section 524(e) is necessary, as a matter of mere mechanics, to prevent the debtor's discharge from automatically discharging co-debtors and guarantors, through the operation of common-law suretyship rules that release secondary obligors upon release of the primary obligor.") (citing Hill v. Harding , 130 U.S. 699, 703-04, 9 S.Ct. 725, 726, 32 L.Ed. 1083 (1889) ) (some citations omitted).

[¶25] We addressed a similar issue in Nauman . There, the debtor-company obtained a loan from the creditor. 816 P.2d at 883-84. The Naumans were the sole shareholders of the debtor-company and signed a personal guaranty for the debt to the creditor. Id. at 884. The debt was secured by property in Sweetwater County. Id. A year later, the debtor-company filed for bankruptcy protection. Id. The debtor-company's plan of reorganization called for the creditor to receive 30% less than was owed on the note, in exchange for accelerated payments. Id. The creditor objected to the plan, but the debtor-company and the bankruptcy court utilized the "cram down" provision of the bankruptcy code, which effectively forced the creditor to accept the reduced, accelerated payments. Id.

[¶26] After the bankruptcy case, the creditor sued the Naumans, as the guarantors, for the balance of the note. Id. The Naumans argued that the creditor could not collect on the guaranty because the creditor "voluntarily agreed to accept the accelerated payment." Id. This Court disagreed: "The fact that [the creditor] voluntarily elected to accept an accelerated payment does not determine whether the Naumans' liability as guarantors survived the confirmation of the bankruptcy plan." Id.

[¶27] In addition, 11 U.S.C. § 524(e) expressly states that the "discharge of a debt of the debtor does not affect the liability of any other entity on, or the property of any other entity for, such debt." The Naumans also argued that this provision did not apply because the debtor was not "discharged" from the debt under the plan of reorganization; rather, the debtor secured a reduced payment under Chapter 11. See id. at 885. This Court again disagreed because "the effect of a confirmation of the reorganization plan was to accomplish a discharge." Id. (citing 11 U.S.C. § 1141 ). Moreover, "[a] bankruptcy court has no power to discharge the liabilities of a bankrupt's guarantor, even if the creditors consent as part of the reorganization plan." Id. (citation omitted).

[¶28] Mr. Thomas contends that Nauman does not apply because the creditor in Nauman was forced to accept the plan while MLIC voluntarily accepted FQP's plan under the Consent Order. He also argues that Nauman dealt with a discharge while FQP was a Chapter 11 liquidation of assets. We do not find either argument persuasive.

[¶29] First, in Nauman , we expressly recognized that whether a creditor voluntarily accepts a plan is irrelevant as it concerns a non-debtor's liability on a debt. See Nauman , 816 P.2d at 884. Second, the debtor-company in Nauman did not receive a discharge of its debt but rather received a confirmation of its plan of reorganization that reduced its obligation for the debt under 11 U.S.C. § 1141. Id. That is like the situation here where FQP did not discharge its debt to MLIC but reduced its obligation under Chapter 11. The underlying rationale for the holding in Nauman , in addition to the plain language of the bankruptcy code, is that a bankruptcy court does not have the authority to alter a nondebtor's obligations. See Nauman , 816 P.2d at 885. Mr. Thomas does not offer any authority to the contrary.

[¶30] Nevertheless, Mr. Thomas makes several arguments why he must receive the reduced amount FQP secured through the bankruptcy process. Mr. Thomas argues that he is entitled to the reduced amount because he was "personally involved in the negotiations" that led to the Consent Order. He relies on Paragraph 22 of the Consent Order, which required that he vacate the property at the expiration of the automatic stay, to support his contention that, because this "bound" him, he is entitled to all of its benefits. However, this does not alter the fact that Mr. Thomas was not a party to the Consent Order. The requirement that he vacate the property once the automatic stay was lifted was only a recognition that he was the only member of FQP, an entity which did not occupy and could not vacate the property.

[¶31] He also relies on the Confirmation Order and FQP's Plan of Reorganization to support his argument. He points to Section 8.4 of the Confirmation Order which provided:

8.4 Terms Binding/Novation .... [T]his Plan[ ] shall be binding upon [FQP] ... the Guarantor [Mr. Thomas], and all other Persons that are affected in any manner by this Plan, and this Plan shall novate and replace all Pre-petition agreements between the Debtor and such parties, ex[cept] as otherwise provided in this Plan ... or as provided in that certain consent order ... between [FQP] and [MLIC].

(Emphasis added.)

[¶32] Mr. Thomas argues that Section 8.4 novated, or replaced, the original contract that he signed in 2006. A novation is a new contract that replaces an existing contract when all parties to the original contract agree to the terms of the new contract. Lewis v. Platt , 837 P.2d 91, 92 (Wyo. 1992). Section 8.4 did not affect Mr. Thomas's obligations under the original note or the Wyoming Judgment. For one thing, the Consent Order, which is the document that reduced the amount FQP owed under the Wyoming Judgment, is expressly exempted from Section 8.4's novation language: "this Plan shall novate and replace ... ex[cept] as otherwise provided ... in that certain consent order ... between [FQP] and [MLIC]." For another, as noted above, Mr. Thomas was not a party to the Consent Order, and the bankruptcy court did not have the authority to alter his obligation under the note. Finally, under Section 3.2.3 of the Confirmation Order, MLIC expressly preserved its rights against Mr. Thomas under the Wyoming Judgment:

3.2.3 Treatment of Claims in Class 2. ... Except as provided in Section 4.2.9 of the Plan, and in this Order, the Plan shall not be deemed or construed to impair the rights , powers, or remedies available to the Class 2 claimant [MLIC] , whether under the Class 2 claimant's loan, transaction documents, or Pre-Petition Wyoming Judgment , at law, or in equity, against any non-debtor (including, without limitation, any co-maker of any note , any guarantor, or any other co-obligor of the Debtor) with respect to the indebtedness giving rise to the Allowed Class 2 Claim.

(Emphasis added.) "We follow the well-known rule that general provisions in a contract yield to specific provisions[.]" Scherer, II v. Laramie Regional Airport Bd. , 2010 WY 105, ¶ 11, 236 P.3d 996, 1003 (Wyo. 2010). The bankruptcy court's Confirmation Order reaffirmed this: "[T]he Plan preserves the post-judgment remedies of Holders [MLIC] of Allowed Guarantor Claims [Mr. Thomas]."

[¶33] Mr. Thomas next relies on Section 4.2.9, which is the Channeling Injunction referenced in Section 3.2.3 of the Confirmation Order. In bankruptcy, a channeling injunction is a device that constricts another party's actions, be it a creditor or non-debtor, that may negatively impact the debtor's ability to fulfill its obligations under the plan. See A.H. Robins Co., Inc. v. Piccinin , 788 F.2d 994, 1003 (4th Cir. 1986) ; see also 11 U.S.C. § 105.

[¶34] In FQP's Plan of Reorganization and the bankruptcy court's Confirmation Order, the bankruptcy court found that, because FQP and Mr. Thomas "share an identity of interest," a suit against Mr. Thomas is a suit against FQP. Thus, the injunction was necessary to prevent MLIC's collection efforts against Mr. Thomas individually that could negatively affect FQP's ability to fulfill its obligations under the Plan, "until further order of the Bankruptcy Court." That is what Section 4.2.9 did in this case. Contrary to Mr. Thomas's argument, the injunction did not affect MLIC's ability to seek a deficiency judgment against Mr. Thomas. In fact, the injunction specifically provides that the "Plan preserves the post-judgment remedies of Holders of Allowed Guarantor Claims" (i.e., MLIC). This type of injunction does not allow a non-debtor, such as Mr. Thomas, to "cleanse [himself] of ... [a debt] without enduring the rigors of bankruptcy." In re Combustion Engineering, Inc. , 391 F.3d 190, 237 (3d Cir. 2004) ; see also 11 U.S.C. § 524(e).

[W]hile a temporary stay prohibiting a creditor's suit against a nondebtor ... during the bankruptcy proceeding may be permissible to facilitate the reorganization process in accord with the broad approach to nondebtor stays under section 105(a)..., the stay may not be extended post-confirmation in the form of a permanent injunction that effectively relieves the nondebtor from its own liability to the creditor. ... [S]uch a permanent injunction improperly insulate[s] nondebtors in violation of section 524(e) [.]

In re Western Real Estate Fund , 922 F.2d at 601-02.

[¶35] The Channeling Injunction precluded MLIC's collection efforts against FQP and Mr. Thomas until "further order of the Bankruptcy Court." That "further order" came when the bankruptcy court lifted the automatic stay and, thus, the Channeling Injunction, which then permitted collection efforts against Mr. Thomas individually. The provision that "[t]he plan preserves the post-judgment remedies of Holders [MLIC] of Allowed Guarantor Claims [Mr. Thomas]" confirms this intention.

[¶36] Mr. Thomas did not avail himself of the bankruptcy process, FQP did. FQP reduced its obligations under the Wyoming Judgment. Mr. Thomas received an incidental benefit from that process by affording him additional time to occupy and attempt to sell the ranch. Nothing in the Consent and Confirmation Orders, however, altered Mr. Thomas's obligation under the Wyoming Judgment. Moreover, the bankruptcy court was without authority to make any such alteration.

III. Res judicata did not preclude JLC's motion for a deficiency judgment against Mr. Thomas.

[¶37] Mr. Thomas maintains that, even if we conclude that the Consent and Confirmation Orders did not alter his obligation under the Wyoming Judgment, the doctrine of res judicata "bar[s] JLC's deficiency claim ... [because] the claim had been previously decided on its merits in a directly-related bankruptcy case." Mr. Thomas's argument resembles the argument discussed above: that FQP's negotiation of a reduced amount also altered the amount Mr. Thomas owed. The district court concluded that res judicata did not apply because Mr. Thomas was not a party to the bankruptcy case.

[¶38] "Res judicata, also called claim preclusion, bars relitigation of previously litigated claims or causes of action." Tozzi v. Moffett , 2018 WY 133, ¶ 16, 430 P.3d 754, 760 (Wyo. 2018) (citation omitted). For it to apply, there must be "(1) identity in parties; (2) identity in subject matter; (3) the issues are the same and relate to the subject matter; and (4) the capacities of the persons are identical in reference to both the subject matter and the issues between them." Id.

[¶39] Mr. Thomas was not a party in FQP's bankruptcy case. Contrary to Mr. Thomas's contention at oral argument, this case is not like Grynberg v. L & R Exploration Venture , 2011 WY 134, 261 P.3d 731 (Wyo. 2011). In Grynberg , Mr. Grynberg owned Grynberg Petroleum together with his wife, Ms. Grynberg. Id. at ¶ 3, 261 P.3d at 733. Through various suits across multiple jurisdictions, Mr. Grynberg litigated the amount of money his company owed to L & R Exploration. Id. at ¶¶ 6-15, 261 P.3d at 734-35. Ultimately, a New York court found against him. Id. at ¶ 11, 261 P.3d at 735. Later, Ms. Grynberg filed suit in Wyoming against L & R Exploration, where she argued that Mr. Grynberg did not owe L & R anything. Id. at ¶ 13, 261 P.3d at 735. The district court granted L & R summary judgment because Ms. Grynberg's complaint was barred by res judicata based on the prior case. Id. at ¶ 14, 261 P.3d at 735. On appeal, this Court held that "[i]n all of the proceedings ... the issues to be determined were what amounts Mr. Grynberg owed to L & R[.]" Id. at ¶ 27, 261 P.3d at 738. As to whether Ms. Grynberg was a "party" to those prior proceedings, this Court concluded, "[W]hether or not [Ms.] Grynberg is the owner of Grynberg Petroleum or was a party to the joint venture agreement [between Grynberg Petroleum and L & R]" was not relevant because "an order was entered ... finding that Mr. Grynberg owed L & R monies[.]" Id. The Court held res judicata barred her action because "[Ms.] Grynberg is the assignee of Mr. Grynberg's interest in L & R and has no greater rights against L & R than he had." Id.

[¶40] Mr. Thomas relies on Grynberg for the proposition that, JLC, like Ms. Grynberg, could not relitigate what its assignor, MLIC, had already litigated in the bankruptcy case-what FQP owed on the Wyoming Judgment. Grynberg , however, is not analogous to Mr. Thomas's situation. In Grynberg , Mr. Grynberg fully litigated the issue whether he owed money to L & R. Ms. Grynberg "stepped into" Mr. Grynberg's shoes when she became his assignee and, thus, could not relitigate those same issues. In this case, however, Mr. Thomas has not stepped into FQP's shoes. Mr. Thomas is a stranger to the Consent Order, and he is "jointly and severally" liable under the Wyoming Judgment. In addition, MLIC expressly reserved its rights under the Wyoming Judgment against Mr. Thomas in Section 3.2.3 of the Confirmation Order. Under these circumstances, res judicata does not bar JLC's motion for a deficiency judgment against Mr. Thomas.

IV. The district court's deficiency judgment did not credit Mr. Thomas for all payments.

[¶41] Finally, Mr. Thomas asserts that the district court's deficiency judgment is erroneous because it failed to credit him with the $3-million February 2014 payment. We agree. The omitted payment is reflected in the record by MLIC's Notice of Partial Satisfaction of Judgment. In its motion for a deficiency judgment, JLC did not include this payment in its calculations. In Mr. Thomas's response, he specifically listed the $3-million February 2014 payment, although he did not attach the Notice of Partial Satisfaction of Judgment to his response.

[¶42] On appeal, JLC argues that Mr. Thomas did not present this argument to the district court in response to JLC's motion for a deficiency judgment and, thus, waived it on appeal. JLC does not dispute that Mr. Thomas made the payment. Because Mr. Thomas cited the payment in his response to JLC's deficiency motion, the record clearly reflects the payment, and JLC does not dispute that Mr. Thomas/FQP made the payment, we reverse that aspect of the district court's order and remand for it to properly credit Mr. Thomas with the $3-million February 2014 payment.

CONCLUSION

[¶43] The district court did not err when it concluded that the Consent and Confirmation Orders did not alter Mr. Thomas's obligations under the Wyoming Judgment, and that res judicata does not bar JLC's motion for a deficiency judgment. However, the district court did not credit Mr. Thomas with all payments. We therefore affirm in part, reverse in part, and remand this case to the district court to enter an amended order that properly credits Mr. Thomas with the $3-million February 2014 payment.

      MetLife assigned its rights under the note to its affiliates: MLIC Asset Holdings, LLC and MLIC CB Holdings, LLC. We will refer to these entities collectively as "MLIC."

      MLIC's credit bid was approximately $40,000 more than the Stipulated Amount due as reflected in the Consent Order and Confirmation Order ($26,817,815.96), a fact apparently due to accrued costs and interest through the date of sale.

      A deficiency judgment is simply a continuation, or end, of the foreclosure process.
      When a deficiency judgment is entered in a foreclosure action, it is a final adjudication of the defendant's common-law liability for the debt. There is in reality but one judgment, the judgment of foreclosure. The so-called deficiency judgment is merely a completion of the judgment upon the coming in and confirmation of the report of sale.
      Bank Mut. v. S.J. Boyer Const., Inc. , 326 Wis.2d 521, 785 N.W.2d 462, 473 (2010) (citation omitted).

      Mr. Thomas has not raised any issue concerning MLIC's use of the amount that the bankruptcy court ordered FQP to pay as its credit bid in the foreclosure auction. Moreover, the bankruptcy court's Confirmation Order permitted MLIC to do so.

      The Confirmation Order required that its terms be interpreted according to Georgia law. In the district court's order granting JLC's motion for a deficiency judgment, it does not appear that the court complied with this provision. Neither party, however, raised this issue below, and they do not raise it on appeal. Moreover, Georgia law on contract interpretation is similar to our own. See Cahill v. United States , 303 Ga. 148, 810 S.E.2d 480, 482 (2018).

      Mr. Thomas does not assert that the bankruptcy court had some sort of supplemental, "related to" jurisdiction over the Wyoming proceedings. See Celotex Corp. v. Edwards , 514 U.S. 300, 307 n.5, 115 S.Ct. 1493, 1498 n.5, 131 L.Ed.2d 403 (1995).

      Mr. Thomas contends that § 524 does not apply because FQP did not receive a "discharge," rather it received a liquidation under 11 U.S.C. § 1141(d)(3)(A). While the Plan states that FQP did not receive a "discharge," this Court recognized in Nauman that § 524(e) still applies in situations where the debtor receives a confirmation of its plan of reorganization under 11 U.S.C. § 1141. Nauman , 816 P.2d at 885 ; see also 11 U.S.C. § 103(a) (applying the provisions of Chapter 5 to Chapter 11 reorganizations). Moreover, to accept Mr. Thomas's argument would effectively grant him a "discharge" of his debt under the Wyoming Judgment, while his company was precluded from receiving one under § 1141(d)(3)(A) and its plan of reorganization. See Paul R. Glassman, Third-Party Injunctions in Partnership Bankruptcy Cases , 49 Bus. Law. 1081, 1119 (1994). Nowhere in the bankruptcy code is this type of incongruence permitted merely because the company-debtor is liquidated, and Mr. Thomas has not presented any contrary authority.

      "Under the 'cram down' provision [of 11 U.S.C. § 1129 ], a dissenting claimant is forced to accept the reorganization plan so long as the minimum standards provided in the statutes are met." Nauman , 816 P.2d at 884 (citation omitted).

      FQP's original Plan of Reorganization did not include the highlighted language from Section 3.2.3. That language was added in the bankruptcy court's Confirmation Order after MLIC objected to FQP's original plan.

      This is different than a channeling injunction under 11 U.S.C. § 524(g) which "channels" future asbestos claims away from the debtor and to a trust that is set up to compensate those future claims for damages caused by asbestos.

      Res judicata's close cousin, collateral estoppel, precludes the relitigation of previously litigated issues. Tozzi , ¶ 17, 430 P.3d at 760.

      Apparently, Mr. Grynberg had assigned his rights in the company to Ms. Grynberg. Grynberg , ¶ 9, 261 P.3d at 734.


source: Caselaw Access Project

author: GRAY, Justice.

license: Public Domain

text:
    Ariel CASIANO, Appellant (Petitioner), v. STATE of Wyoming, EX REL., WYOMING DEPARTMENT OF TRANSPORTATION, Appellee (Respondent).
    S-18-0158
    Supreme Court of Wyoming.
    February 1, 2019
    Representing Appellant: R. Michael Vang, R. Michael Vang P.C., Laramie, Wyoming.
    Representing Appellee: Peter K. Michael, Attorney General; Misha Westby, Deputy Attorney General; Michael T. Kahler, Senior Assistant Attorney General; Amy A. Pauli, Senior Assistant Attorney General.
    Before DAVIS, C.J., and FOX, KAUTZ, BOOMGAARDEN, and GRAY, JJ.
   GRAY, Justice.

[¶1] Appellant Ariel Casiano challenges the Office of Administrative Hearings (OAH) decision to uphold the suspension of his driver's license. In the companion criminal case, the prosecution asserted that a gap in the chain of custody of Mr. Casiano's blood samples rendered blood alcohol content (BAC) test results inadmissible. The municipal court dismissed the criminal charges without prejudice and without reference to the chain of custody issue. The question presented here is whether collateral estoppel bars the OAH from considering Mr. Casiano's BAC test results in the license suspension proceeding. We conclude that collateral estoppel does not apply and affirm.

ISSUE

[¶2] Mr. Casiano asserts one issue which we rephrase:

Does the prosecutor's assertion in the criminal driving while under the influence (DWUI) case, that Mr. Casiano's BAC test results were inadmissible, collaterally estop the OAH from considering those same test results in the license suspension proceeding?

FACTS

[¶3] The facts in this case are undisputed. On September 29, 2016, Cheyenne Police Officer Hall arrested Mr. Casiano for driving while under the influence of alcohol. Officer Hall obtained a search warrant for a blood draw pursuant to Wyo. Stat. Ann. § 31-6-102(d) (LexisNexis 2017). Shortly after midnight, blood was drawn, but it was not delivered to the public health testing lab until eighteen days later on October 17, 2016. Subsequent testing indicated Mr. Casiano's BAC was 0.10%.

[¶4] Criminal charges were filed in municipal court for DWUI in violation of Wyo. Stat. Ann. § 31-5-233(b) (LexisNexis 2017). On January 4, 2017, the city prosecutor moved to dismiss the criminal case. The prosecutor contended "there is insufficient evidence to establish a proper chain of custody for the time the blood samples were drawn on September 30th, 2016, to the time the blood samples were hand delivered to the Wyoming Department of Health's Chemical Testing Program (WCTP), on October 17th, 2016." According to the prosecutor, "[t]he [e]ighteen (18) day gap in the chain of custody of the Defendant's blood draw is unacceptable and renders the blood draw results inadmissible evidence ...." The municipal court dismissed the DWUI charge without prejudice and without reference to the chain of custody.

[¶5] Following the municipal court's dismissal, the Wyoming Department of Transportation (WYDOT or Department) held an administrative license suspension proceeding mandated by Wyo. Stat. Ann. § 31-6-102(f). WYDOT suspended Mr. Casiano's driver's license for 90 days. Mr. Casiano sought administrative review. Mr. Casiano relied on the prosecutor's pleading in municipal court. He maintained that collateral estoppel barred use of the BAC test results in the WYDOT suspension proceeding and that those results were inadmissible because the break in the chain of custody violated the Department of Health's testing standards. The OAH upheld the suspension, reasoning that there "is no privity between the Cheyenne Municipal prosecutor and the Department" and that "no evidence was provided to establish the 18-day gap [in delivery of the blood sample to the Department of Health] resulted in a chain of custody issue." Mr. Casiano appealed the ruling to the district court. The district court affirmed the suspension. Mr. Casiano timely appeals.

STANDARD OF REVIEW

[¶6] "When we consider an appeal from a district court's review of an administrative agency's decision, we are not bound by the conclusions of the district court." Lietz v. State ex rel. Dept. of Family Services , 2018 WY 127, ¶ 10, 430 P.3d 310, 313 (Wyo. 2018) (citing Reynolds v. West Park Hospital District , 2010 WY 69, ¶ 6, 231 P.3d 1275, 1277 (Wyo. 2010) ; Guier v. Teton Cty. Hosp. Dist. , 2011 WY 31, ¶¶ 12-13, 248 P.3d 623, 629-30 (Wyo. 2011) ). We consider appeals from a district court's review of an administrative action as if the case had come directly from the administrative agency. Guier , ¶ 12, 248 P.3d at 629 ; Bowen v. State , 2011 WY 1, ¶ 7, 245 P.3d 827, 829 (Wyo. 2011) ; State ex rel. Wyoming Workers' Comp. Div. v. Brewbaker , 972 P.2d 962, 964 (Wyo. 1999).

[¶7] The Wyoming Administrative Procedure Act sets forth the scope of review for administrative decisions:

(c) To the extent necessary to make a decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. In making the following determinations, the court shall review the whole record or those parts of it cited by a party and due account shall be taken of the rule of prejudicial error. The reviewing court shall:
(i) Compel agency action unlawfully withheld or unreasonably delayed; and
(ii) Hold unlawful and set aside agency action, findings and conclusions found to be:
(A) Arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law;
(B) Contrary to constitutional right, power, privilege or immunity;
(C) In excess of statutory jurisdiction, authority or limitations or lacking statutory right;
(D) Without observance of procedure required by law; or
(E) Unsupported by substantial evidence in a case reviewed on the record of an agency hearing provided by statute.

Wyo. Stat. Ann. § 16-3-114(c) (LexisNexis 2017).

[¶8] This appeal involves only questions of law. Our standard of review of an agency's conclusions of law is de novo . "[W]e will affirm an agency's legal conclusion only if it is in accordance with the law." Lietz , ¶ 11, 430 P.3d at 314 (quoting Guier , ¶ 13, 248 P.3d at 630 ). "We do not afford any deference to the agency's determination, and we will correct any error made by the agency in either interpreting or applying the law." Bowen , ¶ 7, 245 P.3d at 829 (quoting Jacobs v. State ex rel. Wyo. Workers' Safety & Comp. Div. , 2009 WY 118, ¶ 11, 216 P.3d 1128, 1132 (Wyo. 2009) ).

DISCUSSION

Does the prosecutor's assertion in the criminal DWUI case, that Mr. Casiano's BAC test results were inadmissible, collaterally estop the OAH from considering those same test results in the license suspension proceeding?

[¶9] Mr. Casiano seeks review of the OAH's decision to uphold the suspension of his driver's license. Mr. Casiano contends that the OAH was collaterally estopped from considering BAC test results, because the companion criminal case was dismissed, and the pleadings supporting the dismissal were based on an 18-day gap in the chain of custody of the blood sample. The district court determined that collateral estoppel did not apply in the administrative proceeding because the municipal court did not decide the merits of admissibility of the BAC test results, there was no privity between the city prosecutor and WYDOT, and WYDOT did not have a full and fair opportunity to litigate the issue in municipal court. Although we give no deference to the district court's decision, we will affirm the OAH decision for essentially the same reasons.

[¶10] Like res judicata, which bars relitigating claims, collateral estoppel bars relitigating issues. Whaley v. Flitner Ltd. P'ship , 2017 WY 59, ¶ 27, 395 P.3d 653, 662 (Wyo. 2017) ; Rathbun v. State , 2011 WY 116, ¶¶ 9-10, 257 P.3d 29, 33 (Wyo. 2011). Four elements must be present for collateral estoppel to apply: (1) the issue decided in the prior proceeding must be identical to the issue presented in the present action; (2) the prior proceeding must have resulted in a judgment on the merits; (3) the party against whom collateral estoppel is asserted must have been a party to or in privity with a party to the prior adjudication; and (4) the party against whom collateral estoppel is asserted must have had a "full and fair opportunity to litigate the issue in the prior proceeding." Robert L. Kroenlein Trust v. Kirchhefer , 2015 WY 127, ¶ 40, 357 P.3d 1118, 1134 (Wyo. 2015) ; see also Bowen , ¶ 10, 245 P.3d at 830.

[¶11] Mr. Casiano argues all four conditions are met and collateral estoppel applies. The first element requires the issue decided in the first proceeding be identical to the issue in the current proceeding. The State concedes that the issue, the admissibility of the BAC test, is identical in both the criminal and the administrative proceedings. However, the State contends the issue was not decided in the criminal proceeding. The State further maintains that the other three collateral estoppel requirements have not been met.

[¶12] The first element of collateral estoppel requires "the issue decided in the prior adjudication [be] identical [to] the issue presented in the present action." Bowen , ¶ 10, 245 P.3d at 830 ; see also Kroenlein Trust , ¶ 40, 357 P.3d at 1134 ; R.C.R., Inc. v. Deline , 2008 WY 96, ¶ 17, 190 P.3d 140, 153 (Wyo. 2008). We agree that the issue, admissibility of the BAC test result, is identical in both the criminal and administrative cases.

[¶13] Next, the issue must have been "actually litigated" in the prior adjudication for collateral estoppel to apply. 46 Am. Jur. 2d Judgments § 472, Westlaw (database updated January 2019). An issue is actually litigated, "if it is properly raised in the pleadings or otherwise submitted for determination and [is] in fact determined." Id. § 473. In Bowen v. State , we considered whether a defendant was collaterally estopped from litigating the admissibility of his breath test results in his license suspension proceeding after the circuit court had decided the issue against him in an earlier criminal proceeding. Id. ¶ 2, 245 P.3d at 828. We found that the issue had been litigated because "the circuit court's determination that the trooper was properly trained and that the breath test was admissible was a final determination of that issue." Id. ¶ 11, 245 P.3d at 830-31. Here, the city attorney submitted that the gap in the chain of custody "render[ed] the blood draw results inadmissible evidence." The municipal court dismissed the case without a hearing and the question of the admissibility of the evidence was never decided. Accordingly, the issue, while identical, was not decided in the prior proceeding, and the first element of collateral estoppel cannot be established.

[¶14] The question of whether the issue was "actually litigated" is closely related to the second requirement of collateral estoppel that the prior adjudication resulted in a judgment on the merits. Kroenlein Trust , ¶ 40, 357 P.3d at 1134. The municipal court did not issue a judgment on the merits; instead, it dismissed the case without prejudice. "[A] dismissal without prejudice has no preclusive effect." Rawlinson v. Wallerich , 2006 WY 52, ¶ 10, 132 P.3d 204, 207 (Wyo. 2006) (holding that where the action was voluntarily dismissed without prejudice, the claim was not adjudicated and the doctrine of res judicata does not apply). The second element of collateral estoppel is not satisfied.

[¶15] The third requirement, privity between the parties against whom collateral estoppel is asserted, is also absent here. Privity "signifies that the relationship between two persons is such that a judgment involving one of them is conclusive upon the other, although the other was not a party to the suit." Grynberg v. L & R Exploration Venture , 2011 WY 134, ¶ 23, 261 P.3d 731, 737 (Wyo. 2011). However, "[p]rivity is not established ... from the mere fact that persons may happen to be interested in the same question or in proving or disproving the same state of facts." Elliott v. State , 2011 WY 32, ¶ 8, 247 P.3d 501, 504 (Wyo. 2011) (quoting 47 Am. Jur. 2d Judgments § 589 ). Examples of "legal relationships that bind a nonparty to an earlier judgment are preceding and succeeding owners of property, bailors and bailees, assignors and assignees and nonparties who are adequately represented by someone with the same interests who was a party." Grynberg , ¶ 23, 261 P.3d at 737. Mr. Casiano asserts that because "the City of Cheyenne derives its powers directly from the State" there is privity between the city attorney and WYDOT.

[¶16] It is undeniable that there is a connection between the State of Wyoming, the City of Cheyenne (the City or Cheyenne), and WYDOT. However, that connection is not determinative of privity. In cases where governmental entities are parties in successive actions, if a

second action involves an agency or official whose functions and responsibilities are so distinct from those of the agency or official in the first action that applying [issue] preclusion would interfere with the proper allocation of authority between them, the earlier judgment should not be given preclusive effect in the second action.

Restatement (Second) of Judgments § 36, cmt. f, Westlaw (database updated October 2018).

[¶17] Administrative and criminal proceedings have distinct purposes:

The purpose of [ ] administrative proceedings ... is to police licensing requirements within the state, while the state's attorney's interest in the criminal proceeding is in having guilt or innocence determined under the applicable criminal law and in seeing that proper punishment is meted out in the event that the criminal law has been violated. The state's attorney represents the broader public interest in the effective administration of criminal justice.

Cook v. State , 921 So.2d 631, 639 (Fla. 2005). The Minnesota Supreme Court considered this distinction. A defendant claimed that an administrative finding, that there was no probable cause to stop him, was binding on the state in his criminal prosecution for DWUI. State v. Lemmer , 736 N.W.2d 650, 653 (Minn. 2007). The court explained, "[the Minnesota counterpart to WYDOT] was established for the purpose of regulating drivers' licensing and safety responsibility. ... That purpose is separate and distinct from the prosecution of crimes, which is the function that the state is serving in the DWI prosecution." Id. at 661. The court found that these responsibilities were "so distinct" that "applying collateral estoppel would interfere with the proper allocation of authority between [the Minnesota counterpart to WYDOT] and the state." Id . at 662 (citing Restatement (Second) Judgments § 36, cmt. f). Accordingly, the court concluded there was no privity between the Minnesota agency regulating drivers' licenses and the state in the criminal DWUI prosecution. Id . at 663.

[¶18] Similarly, in Elliott , we recognized that the interests of the State in criminal prosecutions and WYDOT in a license suspension or revocation proceeding are so distinct that they preclude privity. Id. ¶ 8, 247 P.3d at 504 ("WYDOT is only granted the authority to suspend a driver's license after an arrest and ... defend that suspension in an administrative context" while "county and district attorneys are responsible for ... representing the State of Wyoming in all criminal matters.") (emphasis omitted). In that case, we considered whether an OAH finding that there was no probable cause to arrest a defendant for DWUI collaterally estopped the State from prosecuting him for DWUI in circuit court. Id. ¶ 4, 247 P.3d at 503. We held that collateral estoppel did not apply, in part, because "[n]o privity exists between WYDOT and the county and district attorneys ." Id. ¶ 8, 247 P.3d at 504 (emphasis added). Our holding in Elliott could have been more clearly worded. County and district attorneys are not parties to litigation in criminal prosecutions. County and district attorneys represent the State, the actual party to the litigation. Wyo. Stat. Ann. § 18-3-302(a) - (c) (LexisNexis 2017) (county attorneys fulfill duties of district attorneys in counties where there is no district attorney and may "appear ... in behalf of the people of the state ... in any action or proceeding, whether civil or criminal"); Wyo. Stat. Ann. § 9-1-804(a) (LexisNexis 2017) (district attorneys "[a]ct as prosecutor for the state"). The question, actually resolved in Elliott , was not whether the county or district attorney had privity with WYDOT, but whether the State had privity with WYDOT. Id. ¶ 8, 247 P.3d at 504. The answer reached in Elliott is that no privity exists. Id .

[¶19] Here, the question is whether there is privity between the City of Cheyenne and WYDOT. In Cheyenne, city attorneys have the authority to prosecute violations of city ordinances. Cheyenne, Wyo., Municipal Code ch. 2.08.040 (2018). Cheyenne has incorporated Wyo. Stat. Ann. § 31-5-233 (the statute prohibiting driving while under the influence of alcohol) in its city ordinances. Cheyenne, Wyo., Municipal Code ch. 10.08.010(A). Accordingly, the city attorney in this case acted on behalf of his client and the party to this prosecution, the City of Cheyenne. For the same reasons articulated in Elliott and Lemmer , we conclude that the roles of WYDOT (which has the authority to suspend licenses in administrative proceedings) and the City (which has the authority to prosecute violations of its ordinances) are distinct. Privity does not exist between the City of Cheyenne and WYDOT.

[¶20] Mr. Casiano also argues that our decision in Bowen , 245 P.3d 827 requires the conclusion that privity exists, and collateral estoppel applies here. In Bowen , we concluded that the defendant was collaterally estopped from relitigating the admissibility of breath test results in his administrative license suspension hearing when the circuit court had decided the issue in the companion criminal proceeding. Id. ¶ 11, 245 P.3d at 830-31. Privity existed in Bowen because the party against whom collateral estoppel was applied, the defendant, was identical in both proceedings. Id . By contrast, here, as in Elliott , there is no privity between the party against whom collateral estoppel is asserted (WYDOT), and the party to the previous litigation (the City). The third element of collateral estoppel has not been met.

[¶21] The final requirement for the application of collateral estoppel is that the party against whom collateral estoppel is asserted must have had a "full and fair opportunity to litigate the issue in the prior proceeding." Kroenlein Trust , ¶ 40, 357 P.3d at 1134. As we recognized above, supra ¶13, the issue of the validity of the BAC test results was not litigated in the prior proceeding. WYDOT was not a party and did not have privity with the City in the prior proceeding. WYDOT had no opportunity to litigate the admissibility of the BAC test results in the criminal matter and the fourth requirement of collateral estoppel is also unsatisfied.

CONCLUSION

[¶22] Collateral estoppel does not bar the OAH from considering the BAC test in the administrative license revocation proceeding. We affirm.

      Collateral estoppel is also referred to as "issue preclusion." See, e.g. , Restatement (Second) of Judgments ch. 1, Relation Between Law of Res Judicata and Law of Procedure, Westlaw (database updated October 2018).


text:
    Nikolas CROSBY-GARBOTZ, Petitioner, v. Hon. Howard P. FELL, Judge Pro Tempore of the Superior Court of the State of Arizona IN AND FOR the COUNTY OF PIMA, Respondent Judge,
    State of Arizona, Real Party in Interest.
    No. CR-18-0050-PR
    Supreme Court of Arizona.
    Filed February 5, 2019
    Richard L. Lougee, Tucson, and Bradley A. TenBrook, Markus W. Risinger (argued), Woodnick Law, PLLC, Phoenix, Attorneys for Nikolas Crosby-Garbotz
    Barbara LaWall, Pima County Attorney, Jacob R. Lines (argued), Deputy County Attorney, Tucson, Attorneys for State of Arizona
    Amy Knight, Kuykendall & Associates, Tucson, and Carol Lamoureux, Hernandez & Hamilton, PC, Tucson, Attorneys for Amicus Curiae Arizona Attorneys for Criminal Justice
    Timothy J. Agan, Lindsay Herf, Arizona Justice Project, Phoenix, Attorneys for Amicus Curiae Arizona Justice Project
    CHIEF JUSTICE BALES authored the opinion of the Court, in which VICE CHIEF JUSTICE BRUTINEL and JUSTICES PELANDER and BOLICK joined. JUSTICE TIMMER, joined by JUSTICES GOULD and LOPEZ, dissented.
   CHIEF JUSTICE BALES, opinion of the Court:

¶1 Issue preclusion, also known as collateral estoppel, precludes relitigating an issue of fact in a later case when, in a previous case, the same issue was "actually litigated, a final judgment was entered, and the party against whom the doctrine is to be invoked had a full and fair opportunity to litigate." Chaney Bldg. Co. v. City of Tucson , 148 Ariz. 571, 573, 716 P.2d 28, 30 (1986). We hold that issue preclusion may apply in a criminal proceeding when an issue of fact was previously adjudicated in a dependency proceeding and the other elements of preclusion are met. We find that those elements are met in this case.

I.

¶2 On July 5, 2016, Nikolas Crosby-Garbotz ("Crosby") stayed home with his five-month-old baby (here referred to as "C.C.") while Lacy Crosby ("Mother") went to work. C.C. became fussy and later had a seizure and appeared dazed and went limp. Crosby called 911. C.C. was taken to the hospital, where she was diagnosed with subdural hematoma, bilateral retinal hemorrhaging, and retinoschisis. She did not have a skull fracture or trauma to her neck or upper body.

¶3 Days later, the State, through the Department of Child Safety ("DCS"), took temporary custody of C.C., and on July 13, 2016, DCS filed a dependency petition alleging that C.C. was dependent as to Crosby because he abusively shook her to the point of causing bleeding in her brain and eyes. DCS also alleged C.C. was dependent as to Mother because she was unable to protect C.C. from Crosby.

¶4 On November 10, 2016, the dependency trial began and lasted for eleven nonconsecutive days, with the juvenile court taking the matter under advisement on February 16, 2017. While the dependency hearing was ongoing, a grand jury on December 15, 2016, returned an indictment against Crosby alleging child abuse under A.R.S. §§ 13-3623(A) and 13-3601. Specifically, the State charged Crosby with one count of child abuse alleging that:

on or about the 5th day of July, 2016, NIKOLAS CROSBY-GARBOTZ committed child abuse by intentionally or knowingly causing physical injury to C.C., a child less than fifteen years of age, under circumstances likely to produce death or serious physical injury, to wit: BY CAUSING BRAIN DAMAGE AND RETINAL BLEEDING AND RETINOSCHISIS, in violation of A.R.S. § 13-3623(A)(1), 13-3601.

¶5 From July 2016 through March 2017, C.C. was not in Crosby's or Mother's care due to the pending dependency petition. On March 8, 2017, the juvenile court issued its ruling, dismissed the dependency petition as to both parents, and returned C.C. to Mother and Crosby's care. The judge ruled that DCS had not met its burden of proof in establishing a dependency, expressly finding that "the Department has not met its burden of proving by a preponderance of the evidence that Mr. Crosby inflicted physical injury, impairment of bodily function, or disfigurement to [C.C.]" and "the Court has found that it is more likely than not that [Crosby] did not injure [C.C.]." The State did not appeal the dependency judgment.

¶6 In May 2017, Crosby moved to remand for a redetermination of probable cause in the criminal proceeding, which the trial court denied. Crosby then moved to dismiss, arguing that issue preclusion prevented the State from relitigating whether he had abused C.C. on July 5, 2016. After an evidentiary hearing, the trial judge denied the motion. Crosby sought special action relief from the court of appeals, which accepted jurisdiction but denied relief. Crosby-Garbotz v. Fell , 244 Ariz. 339, 340 ¶ 1, 342 ¶ 8, 418 P.3d 1112, 1113, 1115 (App. 2017).

¶7 Although the court of appeals noted that most elements of issue preclusion appeared to have been met, id. at 344 ¶¶ 15-17, 418 P.3d at 1117, it declined to apply preclusion, id. at 345 ¶ 18, 418 P.3d at 1118. Relying on cases from other jurisdictions, the court held in blanket fashion that preclusion should not apply in these circumstances because the state might forego dependency proceedings if it were precluded from relitigating issues in a later criminal proceeding, or it might instead present its criminal case in the dependency proceeding which "could unnecessarily complicate and delay the adjudication, placing an undue burden on the juvenile court system." Id. at 347 ¶ 28, 418 P.3d at 1120. The court also believed that "the distinction between juvenile and criminal proceedings would be impermissibly blurred." Id. Finally, the court refused to adopt a case-by-case approach to applying issue preclusion in this context. Id. ¶ 29.

¶8 We granted review because this case presents recurring issues of statewide importance. We have jurisdiction under article 6, section 5(3) of the Arizona Constitution.

II.

¶9 "Application of issue preclusion is an issue of law, which we review de novo."

Picaso v. Tucson Unified Sch. Dist. , 217 Ariz. 178, 180 ¶ 6, 171 P.3d 1219, 1221 (2007).

¶10 Issue preclusion serves to "protect[ ] litigants from the burden of relitigating an identical issue" and to "promot[e] judicial economy by preventing needless litigation." Parklane Hosiery Co. v. Shore , 439 U.S. 322, 326, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979). As our courts have noted, the doctrine seeks to avoid the basic unfairness associated with duplicative, harassing litigation. See Circle K Corp. v. Indus. Comm'n , 179 Ariz. 422, 426, 880 P.2d 642, 646 (App. 1993).

¶11 Arizona has long recognized that "when the second case is upon a different cause of action, the prior judgment or decree operates as an estoppel only as to matters actually in issue, or points controverted, upon the determination of which the judgment or decree was rendered." MacRae v. Betts , 40 Ariz. 454, 458, 14 P.2d 253 (1932) (citing Balt. S.S. Co. v. Phillips , 274 U.S. 316, 319, 47 S.Ct. 600, 71 L.Ed. 1069 (1927) ). This common law doctrine, now termed issue preclusion, applies when a fact "was actually litigated in a previous suit, a final judgment was entered, and the party against whom the doctrine is to be invoked had a full opportunity to litigate the matter and actually did litigate it" and the fact "was essential to the prior judgment." Chaney Bldg. Co. , 148 Ariz. at 573, 716 P.2d at 30 ; see also Restatement (Second) of Judgments § 27 (Am. Law Inst. 1982). In criminal cases, we also continue to require mutuality of parties or their privities as an additional element of issue preclusion, see State v. Edwards , 136 Ariz. 177, 188, 665 P.2d 59, 70 (1983), which is consistent with the Restatement's more general issue preclusion rule which applies in a "subsequent action between the parties," see Restatement § 27. When one of these elements is not met, preclusion does not apply. See Kopp v. Physician Grp. of Ariz., Inc. , 244 Ariz. 439, 442 ¶¶ 14-15, 421 P.3d 149, 152 (2018) (affirming Chaney and refusing to give preclusive effect to stipulated dismissals with prejudice because no issues were "actually litigated").

¶12 No previous decision by this Court, however, has considered whether a finding in a dependency adjudication may have preclusive effect in a criminal prosecution. On this issue, the State and Crosby disagree on the application of two issue preclusion cases. In Ferris v. Hawkins , the court of appeals declined to apply issue preclusion from one administrative proceeding to a later, different administrative proceeding, finding the two proceedings involved distinct legal rights and remedies. 135 Ariz. 329, 332, 660 P.2d 1256, 1259 (App. 1983). Fitzgerald v. Superior Court In and For County of Maricopa involved a civil forfeiture proceeding in which the trial court found that the defendant had not possessed or used the items in question for any criminal activity, and the court of appeals held that issue preclusion barred the state's relitigating those issues in a later prosecution. 173 Ariz. 539, 548, 845 P.2d 465, 474 (App. 1992).

¶13 Neither case is dispositive here. Fitzgerald involved a "quasi-criminal" forfeiture proceeding and a later criminal proceeding. 173 Ariz. at 545-46, 845 P.2d at 471-72. Ferris addressed successive administrative proceedings in which the state may not have had adequate opportunity and incentive to fully litigate the issue in question in the first proceeding. 135 Ariz. at 332 n.3, 660 P.2d at 1259 n.3. Neither case determined whether a finding in a non-criminal dependency adjudication could ever have preclusive effect in a criminal case; nor did either case adopt a categorical rule applying or rejecting preclusion in the circumstances presented here.

¶14 In contrast to Fitzgerald and Ferris , here the court of appeals relied on public policy to adopt a categorical rule barring issue preclusion. The court recognized that the California Court of Appeals reached a different conclusion in Lockwood v. Superior Court , 160 Cal.App.3d 667, 206 Cal.Rptr. 785 (1984), but noted that another California appellate panel had refused to follow Lockwood as inconsistent with intervening California Supreme Court precedent. Crosby-Garbotz , 244 Ariz. at 345 ¶¶ 19-21, 28, 418 P.3d at 1118. The court also pointed to opinions from other jurisdictions that either rejected Lockwood or reached a different result. Id. at 345-47 ¶¶ 22-27, 418 P.3d at 1118-20.

¶15 As the court of appeals observed, Lockwood "is not meaningfully distinguishable from the case before us." Id. at 345 ¶ 19, 418 P.3d at 1118. There, the state brought a dependency petition against both parents alleging abuse, and later filed criminal charges. Lockwood , 206 Cal.Rptr. at 786. After the juvenile court found no abuse and dismissed the dependency petition, the parents unsuccessfully sought to invoke issue preclusion to dismiss the criminal charges. Id. Reversing the trial court's ruling, the California Court of Appeal noted that although the dependency and criminal proceedings involved different purposes, such differences were "perhaps relevant to res judicata in the broad sense" but "not necessarily dispositive of the collateral estoppel question." Id. at 787. Noting that the issue-whether the parents had abused their child on a specific occasion-was the same in both proceedings, and the juvenile court had "expressly found no such abuse," the court of appeal found all elements of issue preclusion established and directed the trial court to dismiss the criminal charges. Id. at 787-88. That same year, Maryland's highest court also applied issue preclusion in similar circumstances, concluding that the state should not be given a second chance to prove alleged wrongful conduct and cause the defendant "to 'run the gantlet' a second time." Bowling v. State , 298 Md. 396, 470 A.2d 797, 801 (1984) (quoting Ashe v. Swenson , 397 U.S. 436, 446, 90 S.Ct. 1189, 25 L.Ed.2d 469 (1970) ).

¶16 Other jurisdictions, however, have refused to apply issue preclusion in the dependency-to-criminal context. In so holding, courts have noted various policy reasons, including a concern that the state, in dependency proceedings, does not perform the "extensive preparation typically required for felony trials," State v. Cleveland , 58 Wash.App. 634, 794 P.2d 546, 551 (1990), and the fact that the dependency and criminal proceedings serve "disparate" purposes, People v. Gates , 434 Mich. 146, 452 N.W.2d 627, 633 (1990), as the juvenile proceeding is meant to protect children whereas the criminal proceeding's "ultimate litigated issue" is the accused's guilt, People v. Moreno , 319 Ill.App.3d 445, 253 Ill.Dec. 173, 744 N.E.2d 906, 912 (2001).

¶17 We are not persuaded that these policy concerns justify an absolute bar on applying issue preclusion. Although criminal charges put at stake an accused's liberty, dependency proceedings affect liberty interests as well-the fundamental right of parents regarding their children's upbringing, see A.R.S. § 1-601(A) ; Kent K. v. Bobby M. , 210 Ariz. 279, 284 ¶ 24, 110 P.3d 1013, 1018 (2005) (citing Santosky v. Kramer , 455 U.S. 745, 753, 102 S.Ct. 1388, 71 L.Ed.2d 599 (1982) ), and a child's best interest, including "an interest in a 'normal family home,' " see Kent K. , 210 Ariz. at 286 ¶ 34, 110 P.3d at 1020 (quoting Santosky , 455 U.S. at 759, 102 S.Ct. 1388 ). Thus, we reject the suggestion that the state does not take dependency proceedings as seriously as criminal prosecutions, and we likewise reject the notion that the state will forego dependency proceedings if issue preclusion may apply. See Crosby-Garbotz , 244 Ariz. at 347 ¶ 28, 418 P.3d at 1120 ; Cleveland , 794 P.2d at 551. Furthermore, the concern that the state "might be compelled to present its entire criminal case in the dependency proceeding," Crosby-Garbotz , 244 Ariz. at 347 ¶ 28, 418 P.3d at 1120, is unavailing. If the state alleges that a child is dependent, it must present sufficient evidence to establish the necessary facts by a preponderance of the evidence. See A.R.S. § 8-844(C). If the state has such a case, it bears the burden of proving it. If the state cannot prove a dispositive fact under the preponderance standard, it is unlikely to be able to do so, absent new or additional evidence, in a subsequent criminal proceeding under the more-demanding standard of beyond a reasonable doubt.

¶18 Finally, the State argues that public policy counsels against applying issue preclusion because "[t]he public has a strong interest in the enforcement of our criminal laws." But the public also has a strong interest in the enforcement of the laws regarding the protection of dependent children. So too do parents have a strong interest in the care and upbringing of their children, and defendants have a strong interest in fundamental fairness.

¶19 The purposes of dependency and criminal proceedings are admittedly different. But issue preclusion and claim preclusion are also different, and sometimes mistakenly conflated. See Circle K Corp. , 179 Ariz. at 425-26, 880 P.2d at 645-46 ; cf. Hawkins v. Ariz. Dep't of Econ. Sec. , 183 Ariz. 100, 103, 900 P.2d 1236, 1239 (App. 1995) (noting that although issue and claim preclusion "have similar purposes, they are nevertheless different"). That two types of cases have different purposes does not affect the application of issue preclusion, but rather informs the application of claim preclusion. See Lockwood , 206 Cal.Rptr. at 787. Under claim preclusion, a final judgment may preclude later litigation of other causes of action based on the transaction or series of transactions out of which an action arises, considering "whether the facts are related in time, space, origin, or motivation." Restatement § 24. However, issue preclusion is narrower, and applies only to determinations that were essential to the judgment. See id. § 27. Furthermore, unlike claim preclusion, issue preclusion requires that the issue be "actually litigated" in the previous judgment. 4501 Northpoint LP v. Maricopa Cty. , 212 Ariz. 98, 102-03 ¶¶ 25-26, 128 P.3d 215, 219-20 (2006).

¶20 Applying preclusion from dependency to criminal proceedings is consistent with preclusion principles. See Allan D. Vestal, Issue Preclusion and Criminal Prosecutions , 65 Iowa L. Rev. 281, 340 (1980) (stating that if burden of proof in prior civil action was lower than required in criminal case and state cannot meet lower burden, preclusion should bar attempt by state in criminal case to assert issue found against it in civil litigation). First, this Court has noted that "[c]ollateral estoppel in criminal cases is not favored and is applied sparingly." State v. Goudeau , 239 Ariz. 421, 455 ¶ 134 n.8, 372 P.3d 945, 979 n.8 (2016) (alteration in original) (quoting State v. Rodriguez , 198 Ariz. 139, 141 ¶ 6, 7 P.3d 148, 150 (App. 2000) ). This language, which admittedly described federal rather than state law, suggests that preclusion is available in criminal cases as well as civil ones. Second, absolutely barring preclusion in criminal cases is neither supported by our precedent, see, e.g. , State v. Little , 87 Ariz. 295, 304-07, 350 P.2d 756 (1960) (adopting issue preclusion in criminal cases), nor finds favor in the Restatement, see Restatement § 28, cmt. g (noting that relief from preclusion "must be the rare exception" permitted "only when the need for a redetermination of the issue is a compelling one").

¶21 The elements of issue preclusion serve to alleviate many of the concerns raised by the court of appeals and the State. If the State did not have a full and fair opportunity to litigate an issue, then preclusion will not apply. See Chaney Bldg. Co. , 148 Ariz. at 573, 716 P.2d at 30. Issue preclusion may not apply, for instance, if a subsequent prosecution is based upon additional, material evidence of abuse that was not considered in the dependency proceeding, or if the State were unable to secure an expert witness in the dependency proceeding. Additionally, preclusion does not apply where circumstances are different, based on new evidence or events giving rise to subsequent prosecution. Cf. Bennigno R. v. Ariz. Dep't of Econ. Sec. , 233 Ariz. 345, 349 ¶ 17, 312 P.3d 861, 865 (App. 2013) (no issue preclusion of best-interest inquiry in second proceeding where new evidence was presented nearly a year after judge found severance would not be in child's best interest). The party seeking to invoke preclusion must establish all its elements, and relitigation will be barred in only exceptional criminal cases.

¶22 The dissent's observation that dependency and criminal proceedings are distinct and serve different purposes, ¶¶ 28, 34, does not support a blanket rejection of issue preclusion (though, as noted above, ¶ 19, it is relevant to claim preclusion). Moreover, the Restatement illustration cited by the dissent, ¶ 31, is inapposite, as it reflects the rule that one court's determination of an issue will not bar relitigation before another court having "special competency" to decide the issue. See Restatement § 28, cmt. d. The juvenile and criminal divisions of the superior court are each competent to determine if a child was abused. Applying preclusion also does not contradict the legislature's intent; indeed the dissent does not identify any statement of legislative intent but instead imputes intent based on its belief that preclusion should not apply. Nor do we obstruct the executive's authority to initiate prosecutions. Our opinion does not prevent the state from pursuing parallel or successive proceedings; it only prevents the state from relitigating a factual issue that it had a full and fair opportunity to litigate, which it could not prove by a preponderance of evidence, and where the related judgment has become final, i.e. any appeals have been exhausted. This no more infringes on executive prerogatives than does a judge dismissing a criminal case when the prosecution fails to present sufficient evidence on an element of a crime. See Ariz. R. Crim. P. 20.

III.

¶23 Having determined that issue preclusion may apply from dependency to subsequent criminal proceedings, we turn to its application here. At oral argument, the State conceded that there was a full and fair opportunity to litigate the issue at hand before the juvenile court, the issue was essential to that court's judgment, the issue was actually litigated, and the judgment was final and valid. These concessions are supported by the record.

¶24 The State argues that because DCS and the County Attorney are not the same party, there is no mutuality of parties, and issue preclusion cannot apply. The court of appeals did not address this argument. See Crosby-Garbotz , 244 Ariz. at 345 ¶ 18, 418 P.3d at 1118. We conclude that there was mutuality of parties. The State, acting through DCS and the County Attorney, has brought its power to bear on Crosby through both the dependency and criminal proceedings. That different legal offices handle different cases does not mean that the State is not a party in both actions. The Attorney General's Office, which represented DCS in the dependency proceedings, not only has supervisory authority over county attorneys, see, e.g. , A.R.S. § 41-193(A)(4), (5), but is also responsible for handling appeals of criminal cases originally tried by county attorneys, who must furnish that office with a statement of facts and legal authority for appellate purposes, see A.R.S. § 11-532(B). Cf. Cleveland , 794 P.2d at 549 (holding that the attorney general and county attorney constituted the same party for preclusion purposes, noting that "[t]he party against whom ... collateral estoppel is asserted is the State of Washington in both cases"); Gates , 452 N.W.2d at 630 (holding that the Department of Social Services and county prosecutor are the same party for preclusion purposes based on a "functional analysis"); People v. Sims , 32 Cal.3d 468, 186 Cal.Rptr. 77, 651 P.2d 321, 332-33 (1982) (holding that the district attorney's office and a county are the same party for preclusion purposes because they both act on behalf of the state).

¶25 The State also argues that the issues are not the same because the two proceedings "are governed by different substantive law and different procedures." This argument misses the mark. The precise issue here is whether Crosby abused C.C. on July 5, 2016, by shaking her, causing bleeding in C.C.'s brain and eyes. This factual issue was adjudicated in the dependency proceeding against the State. The same factual issue is the basis for the criminal charge. The State has not pointed to any additional evidence it was foreclosed from presenting in the dependency proceeding that would apply in the criminal case, nor has it indicated any changed circumstances that would make relitigation appropriate.

¶26 Crosby is using issue preclusion defensively as a shield, not as a sword. This is not an instance of a defendant attempting to use an accomplice's favorable factual determination against the government as offensive issue preclusion-a situation that would present different considerations. See State v. Jimenez , 130 Ariz. 138, 139-41, 634 P.2d 950, 951-53 (1981) (refusing to abandon the mutuality requirement for collateral estoppel in criminal cases). Here, the State failed to prove in the superior court, at a lower burden of proof, that Crosby abused C.C. and thereby caused specific injuries on July 5, 2016. This issue was essential to the dependency allegations and was fully and fairly adjudicated during an eleven-day trial with testimony from several expert witnesses (including two experts the State called). The State then chose not to appeal, making the juvenile court's judgment final for purposes of preclusion. In these circumstances, the State cannot force Crosby to again litigate the same issue.

IV.

¶27 We vacate the court of appeals' opinion and remand this case to the superior court to dismiss the criminal charge.

TIMMER, J., joined by GOULD, J. and LOPEZ, J., dissenting.

¶28 Arizona law empowers the state to address alleged parental child abuse in concurrent ways. The Department of Child Services ("DCS") may initiate dependency or termination-of-parental-rights proceedings in juvenile court, see A.R.S. §§ 8-533 and 8-841 to 8-847, and a prosecutorial agency may criminally prosecute the parent in superior court, see A.R.S. 13-3623. The proceedings serve different interests, and the legislature intended they proceed separately. Applying issue preclusion in the pending criminal case against Crosby for the common factual issue adjudicated in the dependency proceeding concerning C.C. interferes with this legislative structure and the executive's authority to simultaneously protect children through dependency proceedings and vindicate society's insistence that everyone obey our laws. The application also undermines the public's interest and role in criminal justice. I respectfully dissent.

¶29 The doctrine of issue preclusion has several exceptions. See Restatement (Second) of Judgments § 28 (Am. Law Inst. 1982). Two exceptions apply here:

A new determination of the issue is warranted by differences in the quality or extensiveness of the procedures followed in the two courts or by factors relating to the allocation of jurisdiction between them....
....
There is a clear and convincing need for a new determination of the issue ... because of the potential adverse impact of the determination on the public interest or the interests of persons not themselves parties in the initial action....

Restatement § 28(3),(5); see Hullett v. Cousin , 204 Ariz. 292, 298 ¶¶ 28-29, 63 P.3d 1029, 1035 (2003) (applying Restatement § 28 ).

¶30 First, a statutory limitation on the juvenile court's authority in dependency proceedings compels a conclusion that issue preclusion does not apply here. See Restatement § 28(3). Although the juvenile court has exclusive original jurisdiction over dependency proceedings, see A.R.S. 8-202(B), it has no authority to adjudicate pending criminal charges concerning events underlying the dependency allegations, see § 8-202(C)(1) ("[T]he juvenile court shall not consolidate ... [a] criminal proceeding that is filed in another division of superior court and that involves a child who is subject to the jurisdiction of the juvenile court."). Only the superior court adjudicating the criminal charges has that authority. Thus, the juvenile court here had no authority to adjudicate Crosby's criminal liability, and its determination that DCS failed to prove Crosby abused C.C. should not serve to effectively adjudicate the pending criminal charge. See Restatement § 28 cmt. d (stating a compelling reason not to apply issue preclusion exists if "the legislative allocation of jurisdiction among the courts of the state may have been designed to insure that when an action is brought to determine a particular issue directly, it may only be maintained in a court having special competence to deal with it" and thus "after a court has incidently [sic] determined an issue that it lacks jurisdiction to determine directly, the determination should not be binding when a second action is brought in a court having such jurisdiction").

¶31 Issue preclusion should not apply here even though the juvenile court's determination was necessary to the dependency adjudication. An illustration in Restatement § 28 supports this conclusion:

H brings an action for forcible entry and detainer against W before a justice of the peace. W defends on the ground that the parties are legally married and that under the law of the State such an action cannot be maintained between spouses. The justice of the peace rejects the defense, ruling that the parties are not legally married. A subsequent action for divorce is brought between W and H in the domestic relations court, which has exclusive jurisdiction over divorce actions. The determination in the prior action that the parties are not legally married is not conclusive.

Restatement § 28, cmt. d, illus. 9. Like the child abuse issue here, whether H and W were legally married was properly decided by both courts. And just as the domestic relations court had exclusive authority over divorce actions and thus could not be bound by the justice court's determination of a common issue, the superior court here has exclusive jurisdiction in the pending criminal proceedings and cannot be bound by the juvenile court's determination that DCS failed to prove that Crosby abused C.C. Although the juvenile court is part of the superior court and not a different court, as in the illustration, the illustration is apt. The majority disagrees, asserting "[t]he juvenile and criminal divisions of the superior court are each competent to determine if a child was abused." See supra ¶ 22. I do not quibble the point, but the legislature has decreed otherwise. By precluding the juvenile court from adjudicating a related, pending criminal case, the superior court is required to resolve the charges against Crosby through the criminal trial process. See Restatement § 28, cmt. d.

¶32 Second, a clear and convincing need exists to permit a new determination in the pending criminal proceedings because otherwise the public interest would be adversely affected. See Restatement § 28(5). Section 8-202(C)(1) reflects a public policy that the superior court is the exclusive forum to adjudicate criminal charges when the state concurrently files a related dependency action. Cf. Quiroz v. ALCOA Inc. , 243 Ariz. 560, 566-67 ¶ 19, 416 P.3d 824, 830-31 (2018) (recognizing that the legislature has the primary responsibility to declare public policy). Applying issue preclusion here frustrates that public policy by allowing the juvenile court to effectively adjudicate a criminal charge and displace the criminal case. Cf. People v. Gates , 434 Mich. 146, 452 N.W.2d 627, 632-33 (1990) ("[T]he purposes of a child-protective proceeding and a criminal proceeding are so fundamentally different that application in this instance of collateral estoppel would be contrary to sound public policy."); People v. Percifull , 9 Cal.App.4th 1457, 12 Cal.Rptr.2d 331, 335 (1992) (refusing to apply issue preclusion in similar circumstances reasoning, in part, that the dependency proceeding "did not and could not reach the need, paramount in any criminal proceeding, to vindicate society's insistence that every citizen obey the penal laws").

¶33 Apart from the legislative declaration of public policy reflected in § 8-202(C)(1), the public has a significant interest and role in the criminal proceedings that is nullified by the application of issue preclusion here. A grand jury indicted Crosby under § 13-3623(A)(1) while the dependency proceedings were pending. The State, representing the public's interest, has a right for a jury selected from the public to determine whether Crosby committed child abuse. See A.R.S. § 13-3983 (requiring both parties' consent to waive a jury trial); Phx. City Prosecutor's Office v. Ybarra , 218 Ariz. 232, 235 ¶ 14, 182 P.3d 1166, 1169 (2008) ("[ Section] 13-3983 requires that in all criminal cases the right to a bench trial is conditioned on the prosecution's consent."). That right does not exist in dependency proceedings. See Ariz. R.P. Juv. Ct. 6 ("Proceedings as set forth in these rules ... shall proceed in a manner similar to the trial of a civil action before the court sitting without a jury...."). The public also has a right to observe the criminal proceedings against Crosby and examine the record, which was not the case in the dependency proceedings. See A.R.S. §§ 8-208(F) (providing that, with exception, dependency proceeding records "shall not be open to public inspection"), -525(B) (authorizing the juvenile court to close proceedings to the public); Ariz. R. Crim. P. 9.3(b) (requiring that all criminal proceedings be open to the public unless "an open proceeding presents a clear and present danger to the defendant's right to a fair trial by an impartial jury").

¶34 The public's interests in criminal proceedings cannot be vindicated in a dependency proceeding. Likely for this reason, issue preclusion is rarely applied in a criminal case for a factual issue adjudicated in a civil proceeding. Cf. State v. Edwards , 136 Ariz. 177, 188, 665 P.2d 59, 70 (1983) (explaining that Arizona courts apply preclusion in criminal cases only rarely because, "[w]hile the concerns of judicial economy may be a significant factor in applying the doctrine of [issue preclusion] in civil cases, the 'public interest in the accuracy and justice of criminal results is greater' " (quoting Standefer v. United States , 447 U.S. 10, 25, 100 S.Ct. 1999, 64 L.Ed.2d 689 (1980) ) ); Gates , 452 N.W.2d at 630 (recognizing rarity of "cross-over estoppel," between civil and criminal cases); Gregory v. Commonwealth , 610 S.W.2d 598, 600 (Ky. 1980) (noting that issue preclusion applied "civil to criminal" is "least common"). Indeed, although the Supreme Court has acknowledged that issue preclusion can apply in the civil-to-criminal combination, see Yates v. United States , 354 U.S. 298, 335-36, 77 S.Ct. 1064, 1 L.Ed.2d 1356 (1957), overruled on other grounds by Burks v. United States , 437 U.S. 1, 98 S.Ct. 2141, 57 L.Ed.2d 1 (1978), the Court has yet to do so. And the only Arizona case to do so was a civil forfeiture proceeding, which is "quasi-criminal." See Fitzgerald v. Superior Court In and For County of Maricopa , 173 Ariz. 539, 546-48, 845 P.2d 465, 472-74 (App. 1992).

¶35 This is not a case in which the State pursued criminal charges to get a "second bite at the apple" after failing to prove its case in dependency proceedings-a scenario that may result in the "rare circumstance" when issue preclusion should apply. See Lucido v. Super. Ct., 51 Cal.3d 335, 272 Cal.Rptr. 767, 795 P.2d 1223, 1227 (1990) (stating that "the public policies underlying collateral estoppel," including "protection of litigants from harassment by vexatious litigation ... strongly influence whether its application in a particular circumstance would be fair to the parties and constitutes sound judicial policy"). The State indicted Crosby while the dependency proceedings were pending, and the superior court had exclusive authority in that circumstance to adjudicate the criminal charge against him through the criminal trial process. See § 8-202(C)(1). By applying issue preclusion here, the majority eradicates that authority and bypasses the prosecution and public's interest and roles in the pending criminal proceedings.

¶36 To be clear, although issue preclusion rarely applies in the civil-to-criminal context, I do not advocate a "blanket rule" precluding application of issue preclusion in all criminal cases or even in those sharing issues in common with dependency proceedings, as the majority suggests. See supra ¶ 22. But to accommodate public policy, and particularly policies underlying § 8-202(C)(1), the court in a criminal case should always refuse to apply issue preclusion to factual disputes resolved in concurrently pursued dependency proceedings. I would permit the criminal case against Crosby to continue. I therefore respectfully dissent.