On appeal from the Superior Court, Law Division, Atlantic County.
King, Gaulkin and Gruccio. The opinion of the court was delivered by Gaulkin, J.A.D.
[224 NJSuper Page 384] In this personal injury action, plaintiffs' complaint was dismissed as barred by a liability finding made in an earlier
uninsured motorist (UM) arbitration. Plaintiffs appeal. We reverse.
Plaintiff Hector Nogue, a passenger in a car operated by his step-brother Jose R. Santiago, was injured when the vehicle went out of control and overturned. Santiago himself died in the accident. Nogue filed with Cigna Companies, Santiago's insurance carrier, a demand for arbitration of his claim for UM benefits on the ground that the Santiago automobile had been "involved in accident with unknown motor vehicle." A similar claim for UM benefits and demand for arbitration was filed on behalf of Santiago. The arbitrations were jointly conducted on January 20, 1987. Counsel for Nogue presented witnesses; counsel for Cigna and the Santiago estate cross-examined Nogue's witnesses, but presented no evidence.
The arbitrator subsequently issued his written award, finding that "a phantom vehicle . . . precipitated the accident and left the scene of the accident before anyone could ascertain his license number." He concluded that "based on the evidence presented, I do not find any negligence on the part of the driver [Santiago]." The arbitrator awarded $5000 as damages to the estate of Santiago and $15,000, the UM policy limit, to Nogue for his personal injuries.
While the arbitration proceedings were pending, Nogue filed this action in the Law Division against the estate of Santiago,*fn1 alleging that Santiago had been negligent in the operation of his car. After the arbitration award was returned, the Santiago estate moved for summary judgment, urging that principles of collateral estoppel and res judicata barred the Nogue claim. The motion was granted and this appeal ensued.
Both parties assume, and we agree, that in appropriate circumstances an arbitration award can have a res judicata or
collateral estoppel effect in subsequent litigation. See Restatement, Judgments 2d, § 84 (1982); Chattin v. Cape May Greene, Inc., 216 N.J. Super. 618, 634-638 (App.Div.1987). The question is whether the circumstances here justify precluding Nogue from relitigating Santiago's liability. In traditional legal parlance, that is a question of collateral estoppel rather than res judicata, since it concerns issue preclusion rather than claim preclusion. See Chattin, 216 N.J. Super. at 635.
Whether a party should be foreclosed from relitigating an issue turns "on many factors, all of which are considered because they contribute to the greatest good for the greatest number so long as fairness is not sacrificed on that altar." Continental Can Co. v. Hudson Foam Latex Prod., 129 N.J. Super. 426, 430 (App.Div.1974). See also Matter of Coruzzi, 95 N.J. 557, 568 (1984); State v. Gonzalez, 75 N.J. 181 (1977); Allesandra v. Gross, 187 N.J. Super. 96 (App.Div.1982). In identifying and weighing the relevant factors, the New Jersey courts have largely been guided by the Restatement. See, e.g., Gonzalez, 75 N.J. at 189-190; United Rental Equip. Co. v. Aetna Life & Cas. Ins. Co., 74 N.J. 92, 101 (1977); Allesandra, 187 N.J. Super. at 104-106. We have not yet had occasion, however, to consider the factors which determine the issue-preclusive effect of an arbitration award. Cf. Chattin, 216 N.J. Super. at 635 (claim-preclusion resulting from arbitration award).
The Restatement suggests that an arbitration award, like an adjudicative determination of an administrative tribunal, should be issue-preclusive only under certain circumstances. That is because of the special ...