Estate of Lloyd P. Cavett - Page 13




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               Recently, we summarized our position with respect to                   
          collateral estoppel as follows:                                             
                    The doctrine of issue preclusion, or collateral                   
               estoppel, provides that, once an issue of fact or law                  
               is “actually and necessarily determined by a court of                  
               competent jurisdiction, that determination is                          
               conclusive in subsequent suits based on a different                    
               cause of action involving a party to the prior                         
               litigation.”  Montana v. United States, 440 U.S. 147,                  
               153 (1979) (citing Parklane Hosiery Co. v. Shore, 439                  
               U.S. 322, 326 n.5 (1979)).  Issue preclusion is a                      
               judicially created equitable doctrine whose purposes                   
               are to protect parties from unnecessary and redundant                  
               litigation, to conserve judicial resources, and to                     
               foster certainty in and reliance on judicial action.                   
               See, e.g., id. at 153-154; United States v. ITT                        
               Rayonier, Inc., 627 F.2d 996, 1000 (9th Cir. 1980).                    
               This Court in Peck v. Commissioner, 90 T.C. 162, 166-                  
               167 (1988), affd. 904 F.2d 525 (9th Cir. 1990), set                    
               forth the following five conditions that must be                       
               satisfied prior to application of issue preclusion in                  
               the context of a factual dispute (the Peck                             
               requirements):                                                         
               (1) The issue in the second suit must be identical in                  
               all respects with the one decided in the first suit.                   
              (2) There must be a final judgment rendered by a court                  
             of competent jurisdiction.                                               
             (3) Collateral estoppel may be invoked against parties                   
             and their privies to the prior judgment.                                 
             (4) The parties must actually have litigated the                         
             issues and the resolution of these issues must have been                 
             essential to the prior decision.                                         
             (5) The controlling facts and applicable legal rules                     
             must remain unchanged from those in the prior                            
             litigation. [Citations omitted.]                                         
               See also Clark v. Bear Stearns & Co., 966 F.2d 1318,                   
               1320 (9th Cir. 1992)(highlighting conditions (1) and                   
               (4) above).                                                            
          Monahan v. Commissioner, 109 T.C. 235, 240 (1997).                          





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