Brief Fact Summary. Evelyn Halpern (Appellant) appeals from an order of the District Court for the Eastern District of New York, Judge John F. Dooling Jr., which affirmed the order of the referee in bankruptcy. The referee in bankruptcy denied on summary judgment Appellant’s discharge because Schwartz’s (Appellee) objections to her discharge were concluded by the prior judgment in which she was involuntarily adjudicated bankrupt.
Synopsis of Rule of Law. A prior judgment will not foreclose reconsideration of the same issue if that issue was not necessary to the rendering of the prior judgment, and hence was incidental, collateral, or immaterial to that judgment.
Issue. When the prior judgment rested on three independent, alternative grounds, is that judgment conclusive as to the facts that were necessarily found in order to establish only one separate ground?
Held. No. When a prior judgment adjudicating one bankrupt rests on two or more independent alternative grounds, it is not conclusive as to the issues in trial of objections to discharge which issues were necessarily found in order to establish only one of those grounds. Since the finding of Appellant’s actual intent to hinder and delay her creditors was found in connection with only one of the independent grounds, thus it cannot be given conclusive effect in this litigation.
It is well established that although an issue was fully litigated and a finding on the issue was made in the prior litigation, the prior judgment will not foreclose reconsideration of the same issue if that issue was not necessary to the rendering of the prior judgment, and hence was incidental, collateral, or immaterial to that judgment.View Full Point of Law