Stipulated Facts at Trial Not Actually Litigated And So Have No Collateral Estoppel Effect

On October 12, 2016, the Second Department issued a decision in Douglas Elliman, LLC v. Silver, 2016 NY Slip Op. 06675, holding that facts stipulated at trial were not actually litigated and thus had no collateral estoppel effect, explaining:

Collateral estoppel precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party or those in privity The doctrine applies only if the issue in the second action is identical to an issue which was raised, necessarily decided and material in the first action, and the plaintiff had a full and fair opportunity to litigate the issue in the earlier action. Collateral estoppel effect will only be given to matters actually litigated and determined in a prior action.

[T]he question of whether Lowe's employed the plaintiff was not actually litigated and determined in the main action. Since Lowe's had settled with the plaintiff before trial and the third-party action was severed from the main action, the jury was not asked to consider whether Lowe's had employed the plaintiff. Further, an issue is not actually litigated if, for example, there has been a default, a confession of liability, a failure to place a matter in issue by proper pleading or even because of a stipulation. The settlement agreement between Lowe's and the plaintiff cannot bind the Silver defendants, who were not a party to that agreement. As to the stipulation at trial between the plaintiff and the Silver defendants, the doctrine of collateral estoppel is not applicable, since the issues resolved therein were not actually litigated. In addition, Lowe's failed to demonstrate that the Silver defendants intended for the stipulation to have a binding effect in the third-party action, which had been severed from the main action for trial.

(Internal quotations and citations omitted) (emphasis added).