## Facts

- Century Home Components, Inc. operated a shed used to build prefabricated housing components about 60 feet from a neighboring warehouse storing property insured by State Farm.
- A fire began in Century’s shed and spread to the warehouse, causing substantial property damage.
- More than 50 separate actions were filed against Century by various property owners and insurers, alleging Century’s negligence caused the fire and resulting losses.
- Before State Farm’s action proceeded to judgment, other cases arising from the same fire were tried, producing inconsistent results on Century’s liability:
  - At least one final judgment found for Century (no liability).
  - At least two final judgments found for plaintiffs (Century negligent and liable).
- State Farm was not a party to the earlier actions but sought to use the plaintiff-favorable judgments to prevent Century from contesting liability in State Farm’s case.
- The trial court consolidated the pending actions for a hearing on collateral estoppel and ruled that Century was precluded from relitigating liability, leaving damages as the remaining issue.

## Issues

1. Whether a new plaintiff may invoke offensive nonmutual collateral estoppel to preclude a defendant from litigating liability when prior adjudications on the same liability issue are inconsistent.
2. Whether inconsistent verdicts on an identical issue make offensive issue preclusion unfair, even if the defendant had a full and fair opportunity to litigate in the earlier actions.

## Decision

- The Oregon Supreme Court reversed the trial court’s preclusion ruling.
- The court held that Century was not collaterally estopped from litigating liability because prior final determinations on the same issue were inconsistent.
- The court remanded for further proceedings, requiring liability to be tried on the merits rather than treated as conclusively established.

## Legal Principles

- Offensive nonmutual collateral estoppel is limited by a fairness requirement to the party against whom preclusion is sought.
- When there are existing, inconsistent determinations on the same issue (some imposing liability, others rejecting it), applying offensive issue preclusion is generally unfair and should be denied.
- Fairness analysis is not satisfied solely by showing the defendant had a full and fair opportunity to litigate in an earlier case; inconsistent outcomes across comparable proceedings may defeat preclusion.
- Minor variations in pleadings do not control if the core acts, omissions, and issue presented are substantially the same across the actions.

## Conclusion

Because earlier trials arising from the same fire produced conflicting final determinations on Century’s negligence, the court refused to allow a new plaintiff to use only the adverse judgments to bar relitigation, and required liability to be resolved in the subsequent actions through trial rather than offensive issue preclusion.


State Farm Fire & Casualty Co. v. Century Home Components, Inc., 275 Or. 97, 550 P.2d 1185 (Or. 1976)