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C. Collateral Estoppel Impact of 1971 and 1973 Gift Tax
Cases
We now evaluate the 1971 and 1973 gift tax cases and the
cases at hand, in light of the Peck requirements, to determine
whether we are precluded from deciding whether True Oil’s and
Belle Fourche’s (1) buy-sell agreements were bona fide business
39(...continued)
Determinations essential to the judgment. It is
sometimes stated that even when a determination is a
necessary step in the formulation of a decision and
judgment, the determination will not be conclusive
between the parties if it relates only to a “mediate
datum” or “evidentiary fact” rather than to an
“ultimate fact” or issue of law. It has also been
stated than [sic] even a determination of “ultimate
fact” will not be conclusive in a later action if it
constitutes only an “evidentiary fact” or “mediate
datum” in that action. Such a formulation is
occasionally used to support a refusal to apply the
rule of issue preclusion when the refusal could more
appropriately be based on the lack of similarity
between the issues in the two proceedings. If applied
more broadly, the formulation causes great difficulty,
and is at odds with the rationale on which the rule of
issue preclusion is based. The line between ultimate
and evidentiary facts is often impossible to draw.
Moreover, even if a fact is categorized as evidentiary,
great effort may have been expended by both parties in
seeking to persuade the adjudicator of its existence or
nonexistence and it may well have been regarded as the
key issue in the dispute. In these circumstances the
determination of the issue should be conclusive whether
or not other links in the chain had to be forged before
the question of liability could be determined in the
first or second action.
The appropriate question, then, is whether the
issue was actually recognized by the parties as
important and by the trier as necessary to the first
judgment. If so, the determination is conclusive
between the parties in a subsequent action * * *.
[Restatement, Judgments 2d, sec. 27 (1982).]
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