Bank of California v. Pan American Tire Corp.

• Decision Date: 16 June 1982
• Citation: 132 Cal.App.3d 843,183 Cal.Rptr. 470
• Court: California Court of Appeals Court of Appeals
• Parties: BANK OF CALIFORNIA, N.A., Plaintiff and Respondent, v. PAN AMERICAN TIRE CORPORATION et al., Defendants and Appellants. Civ. 51274.

Page 470

183 Cal.Rptr. 470

132 Cal.App.3d 843

BANK OF CALIFORNIA, N.A., Plaintiff and Respondent, v. PAN AMERICAN TIRE CORPORATION et al., Defendants and Appellants.

Civ. 51274.

Court of Appeal, First District, Division 3, California.

June 16, 1982.

William W. Schofield, Crosby, Heafey, Roach & May, Professional Corp., Oakland, for defendants and appellants.

James E. Gallagher, Ropers, Majeski, Kohn, Bentley, Wagner & Kane, San Francisco, for plaintiff and respondent.

SCOTT, Associate Justice.

Defendants Richard Landof and Pan American Tire Corporation (Pan American Corp.) appeal from a judgment entered against them in excess of $670,000 after the grant of plaintiff Bank of California's motion for summary judgment. The principal question is whether Landof's prior conviction of conspiracy conclusively established defendants' liability in this civil action.

I

The first amended complaint filed by the Bank of California (BankCal) against these defendants also named as defendant David Glassman, the former operations manager of its San Leandro branch. The first cause of action alleged that the defendants conspired to convert a sum in excess of $800,000, which was paid to the account of Pan American Corp. In other causes of action, BankCal alleged breaches of contract and of implied contract, and sought imposition of a constructive trust. A default judgment in the amount of $670,230.23 was entered against defendant Glassman.

Plaintiff BankCal then moved for summary judgment or partial summary judgment against defendants Landof and Pan American Corp., on the ground that according to principles of collateral estoppel, Landof's prior conviction in federal court of conspiracy conclusively determined defendants' liability for conversion in this case.

Among the documents submitted in support of the motion were the following: (1) an indictment against Glassman and Landof, charging Glassman with bank embezzlement and wilful misapplication of funds by a bank officer, and charging both men with conspiracy to commit an offense against the United States; (2) a judgment convicting Glassman of the offenses charged; (3) a judgment convicting Landof of conspiracy; ¹ (4) a declaration of one of BankCal's attorneys, reporting a conversation with Glassman in which Glassman allegedly admitted that he and Landof obtained funds through a check-kiting scheme to capitalize and operate Pan American Corp.; and (5) a declaration by one of BankCal's officers, stating that as a result of the check-kiting scheme, BankCal was required to honor nine cashier's checks embezzled by Glassman. The nine checks were listed by check number, date, and amount, and totaled over $700,000. BankCal was able to recover over $75,000 from the defendants' bank accounts, for a net loss of $670,230.28.

After a hearing, the trial court granted the motion for summary judgment against Landof and Pan American Corp. as to the first cause of action. Pursuant to plaintiff's motion, its remaining causes of action were dismissed with prejudice; judgment in the amount of $670,230.28 was entered against both defendants.

II

First, defendants contend that summary judgment was improperly granted because defendant Landof's criminal conviction did not necessarily determine all the triable issues of fact raised by BankCal's complaint and supporting documents.

BankCal's complaint alleged that Landof and Glassman conspired to convert a sum in excess of $800,000; as already indicated, that sum was later more precisely calculated. Where a civil action charges a conspiracy and the commission of a wrongful act, the major significance of the conspiracy charge is that each participant may be held responsible as a joint tort-feasor, whether or not he or she directly participated in the wrongful act and regardless of the degree of his or her activity. (Widdows v. Koch (1968) 263 Cal.App.2d 228, 234, 69 Cal.Rptr. 464; Mayes v. Sturdy Northern Sales, Inc. (1979) 91 Cal.App.3d 69, 77, 154 Cal.Rptr. 43.) The gist of an action charging civil conspiracy is not the conspiracy but the damages suffered; a conspiracy, in and of itself, does not give rise to a cause of action unless a civil wrong has been committed resulting in damage. (Widdows v. Koch, supra.) In this case, summary judgment was proper only if there was no triable issue of fact as to the formation and operation of the conspiracy, the wrongful act or acts done pursuant thereto, and the damage resulting from such acts. (See Mayes v. Sturdy Northern Sales, Inc., supra.)

Summary judgment is a drastic remedy and should be used with caution, so that it does not become a substitute for a trial on the merits. Nevertheless, summary judgment is an appropriate remedy when the doctrine of collateral estoppel refutes all triable issues of fact suggested by the pleadings and supporting documents. (County of Alameda v. Sampson (1980) 104 Cal.App.3d 584, 589-590, 163 Cal.Rptr. 915; People v. One 1964 Chevrolet Corvette Convertible (1969) 274 Cal.App.2d 720, 725-726, 79 Cal.Rptr. 447.) A party is collaterally estopped from relitigating an issue necessarily determined in a prior adjudication if (1) the issue decided in the previous litigation is identical with that presented in the action in question; (2) there was a final judgment on the merits in the first action; and (3) the party against whom the plea is asserted was a party or privity with a party to the prior action. (Bernhard v. Bank of America (1942) 19 Cal.2d 807, 810-813, 122 P.2d 892.) The doctrine of collateral estoppel may be applicable when a civil action follows a criminal prosecution; any issue necessarily decided in a prior criminal trial resulting in a conviction is conclusively determined as to the parties if it is involved in a subsequent civil action. (Teitelbaum Furs, Inc. v. Dominion Ins. Co., Ltd. (1962) 58 Cal.2d 601, 607, 25 Cal.Rptr. 559, 375 P.2d 439; People v. One 1964 Chevrolet Corvette Convertible, supra, 274 Cal.App.2d at p. 726, 79 Cal.Rptr. 447; People ex rel. State of Cal. v. Drinkhouse (1970) 4 Cal.App.3d 931, 935, 84 Cal.Rptr. 773.)

In One 1964 Chevrolet, supra, 274 Cal.App.2d 720, 79 Cal.Rptr. 447, Frederick had been convicted of possession of marijuana, after several packages of the substance were seized from his father's car, which Frederick was using with his father's consent. The court affirmed summary judgment for the People in forfeiture proceedings against the car pursuant to former Health and Safety Code section 11610 et seq., on the ground that Frederick's conviction conclusively determined his knowing possession of marijuana in the vehicle. (Id., at pp. 726-727, 79 Cal.Rptr. 447.)

In Drinkhouse, supra, 4 Cal.App.3d 931, 84 Cal.Rptr. 773, property was conveyed to R, among others, at a tax sale. Both R and the tax collector were then convicted both of conspiracy to violate Government Code section 1090, which forbids county officers to be financially interested in contracts made by them in their official capacity, and of violating the section itself, R as an aider and abetter. The state sought to quiet title to the property, on the ground that the sale was void because of the tax collector's financial interest therein. The court affirmed summary judgment in favor of the state and against R, on the ground that when the jury convicted him as an aider and abetter, it necessarily must have determined that the tax collector was financially interested in the sale. (Id., at p. 935, 84 Cal.Rptr. 773.)

In this case, what was necessarily determined by the jury which convicted Landof of conspiracy in violation of 18 United States Code section 371 is not as readily ascertainable. To find a defendant guilty of a criminal conspiracy in violation of that section, the jury must find that the defendant entered into an unlawful agreement, and that at least one overt act, not necessarily in itself harmful to the government, was committed in furtherance of the conspiracy. ² (United States v. Andreen (1980) 9 Cir., 628 F.2d 1236, 1248; United States v. Kates (1976) 419 F.Supp. 846, 852.) All of the overt acts charged in an indictment for conspiracy need not be proved for conviction, and a general verdict of the jury without special findings does not...