Henry and Esther Misle - Page 26




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                  Under Nebraska law, there are four requirements for the                              
            doctrine of collateral estoppel to apply:  (1) The identical                               
            issue must have been decided in a prior action, (2) a final                                
            judgment must have been rendered on the merits, (3) the party                              
            against whom the rule is applied must have been a party or in                              
            privity with a party to the prior action, and (4) there must have                          
            been an opportunity to litigate the issue fully and fairly in the                          
            prior action.  See Stewart v. Hechtman, 581 N.W.2d 416, 418-419                            
            (Neb. 1998); Cunningham v. Prime Mover, Inc., 567 N.W.2d 178, 181                          
            (Neb. 1997).                                                                               
                  With respect to the third requirement, there is no dispute                           
            that HJA was a party to the State litigation.  See Cunningham v.                           
            Prime Mover, Inc., supra at 181 (as to status of parties, only                             
            requirement is that party against whom rule is being applied was                           
            party or in privity with party to prior action).  There is                                 
            considerable disagreement, however, regarding the remaining                                
            requirements.                                                                              
                  In order for collateral estoppel to apply under Nebraska                             
            law, the identical issue must have been litigated in the prior                             
            action.  An issue is considered “identical” in the absence of a                            
            significant factual change.  See Stewart v. Hechtman, supra at                             
            419.  Henry’s liability under the FirsTier note was not an issue                           
            in the State litigation.  The only issues raised in that                                   
            litigation related to the enforceability, breach, and validity of                          






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