Bankruptcy Law Tip from Attorney Pat Gallagher

When applying collateral estoppel principles to a nondischargeability proceeding, a bankruptcy court is directed to apply the law of the forum where the original proceeding took place. Marrese v. American Academy of Orthopedic Surgeons, 470 U.S. 373, 380 (1985). The Nevada courts have stated four requirements must be met for issue preclusion to apply: (1) the issue decided in the prior litigation must be identical to the issue presented in the current action; (2) the initial ruling must have been on the merits and have become final; (3) the party against whom the judgment is asserted must have been a party or in privity with a party to the prior litigation; and (4) the issue was actually and necessarily litigated. Five Star Capital Corp. v. Ruby, 124 Nev. 1048, 1055 (2008).