Barker v. Hull

• Decision Date: 21 April 1987
• Citation: 191 Cal.App.3d 221,236 Cal.Rptr. 285
• Court: California Court of Appeals Court of Appeals
• Parties: William G. BARKER, Plaintiff and Appellant, v. William C. HULL et al., Defendants and Respondents. A033026.

Page 285

236 Cal.Rptr. 285

191 Cal.App.3d 221

William G. BARKER, Plaintiff and Appellant, v. William C. HULL et al., Defendants and Respondents.

A033026.

Court of Appeal, First District, Division 1, California.

April 21, 1987.

Rehearing Denied May 21, 1987.

Review Denied Aug. 12, 1987.

Harlan E. Van Wye, Berkley, Rhodes & Schwartz, Oakland, for plaintiff and appellant.

Raymond Coates, Christopher L. Holmes, Low, Ball & Lynch, Menlo Park, Mark G. Bonino, Ropers, Majeski, Kohn, Bentley, Wagner & Kane, Redwood City, for defendants and respondents.

NEWSOM, Associate Justice.

This appeal presents the question of when a final order denying a motion to vacate a default judgment based upon fraud prevents a party from relitigating the issue of fraud in a collateral proceeding.

A default judgment was entered against appellant Barker on December 26, 1975, in an action filed by respondent Hull against Barker and a corporation of which Barker was president. In June 1982, Hull filed an abstract of judgment against Barker as an individual.

In July 1982, Barker filed a motion to set aside the judgment supported by his declaration stating that Barker was told by Hull that the action was not being filed against Barker individually, but in his capacity as an officer of the corporation, in order to allow Hull to obtain a judgment against the corporation so that Hull's losses as a shareholder would qualify for a tax deduction. Points and authorities in support of the motion stated that the motion was based on oral and documentary evidence and argued that extrinsic fraud and mistake prevented Barker from asserting his defenses as a corporate officer. The parties appeared before the court on August 6, 1982, when the matter was continued to August 30. A subsequent declaration of Barker's counsel stated that one purpose of the continuance was to allow the parties to obtain a transcript of the default hearing, at which Barker claimed to have told the court that he consented to the judgment because no personal liability would attach to him. No transcript or reporter's notes existed. On October 10, 1982, the superior court denied the motion to set aside the judgment, reciting in the order that both oral and documentary evidence was considered and that the motion, based on extrinsic fraud or mistake, was denied.

On October 6, 1982, Barker filed the instant action against Hull and his attorney, Branson, for breach of contract, fraud and deceit, intentional infliction of emotional distress, negligence and conspiracy. Each cause of action was premised on respondent's representation that no judgment would be taken against Barker individually. On June 7, 1985, respondent Branson moved for judgment on the pleadings, arguing that Barker was barred by the doctrine of collateral estoppel from relitigating the fraud issue. Respondent Hull joined in Branson's motion.

Each party requested the court to take judicial notice of portions of the file in the previous case. Barker's attorney submitted a declaration referencing the motion to set aside the judgment, the order and the supporting documentation in the prior action. The declaration averred the following: that the matter was heard on the law and motion calendar; that no oral testimony was taken at the hearing; that the parties were given an opportunity to locate the reporter's notes of the default hearing; and that no notes could be located.

At the hearing on Branson's motion for judgment on the pleadings, the trial court took judicial notice of the entire file in the earlier case. ¹ This file reveals that Barker was given the opportunity to, and did, depose Hull on the subject of the purported agreement. The court decided that the issue of extrinsic fraud based upon promises to Barker regarding non-liability had been previously determined, granted Branson and Hull's motion, and dismissed the action on August 22, 1985. A notice of appeal was filed October 17, 1985. Our discussion follows.

"The motion for judgment on the pleadings performs the function of a general demurrer. Therefore, it ' "admits all material and issuable facts pleaded." ' [Citation.]" (Baillargeon v. Department of Water & Power (1977) 69 Cal.App.3d 670, 676, 138 Cal.Rptr. 338.) In addition to the facts alleged in the complaint, the court may consider matters which may be judicially noticed, including court records. (Stencel Aero Engineering Corp v. Superior Court (1976) 56 Cal.App.3d 978, 987, and fn. 6, 128 Cal.Rptr. 691.) The standard of appellate review of a judgment on the pleadings is, therefore, identical to that on a judgment following the sustaining of a demurrer. (Baillargeon, supra, 69 Cal.App. 39, at p. 675, 138 Cal.Rptr. 338.) We discuss the complaint in light of these principles.

The instant complaint is not a direct attack on the former judgment, but a collateral attempt to obtain damages for actions taken in connection with entry of that judgment. Each of Barker's five causes of action is based upon the alleged representations of Hull and Branson that personal liability would not attach to Barker and that Barker need not obtain counsel. Thus, the first cause of action for breach of an oral contract alleges a promise by the defendants that no personal liability would attach to Barker.

The second cause of action for fraud and deceit is based upon the same misrepresentation. The third cause, for intentional infliction of emotional distress, is based upon filing of the abstract of judgment in breach of the same oral agreement. The fourth cause of action for negligence alleges negligent drafting of the default judgment in breach of the same oral agreement. The fifth cause of action for conspiracy is based on the same oral representation. The key fact in each cause of action is the existence of the oral promise to Barker.

"A second action between the same parties on a different cause of action is not precluded by a former judgment.... But the first judgment 'operates as an estoppel or conclusive adjudication as to such issues in the second action as were actually litigated and determined in the first action.' [Citation.]" (7 Witkin, Cal. Procedure (3d ed. 1985) Judgment, § 253, p. 691, italics in original.) Barker relies mainly on three cases in support of his argument that his prior motion to vacate the default judgment does not preclude relitigation of the issues raised unless a full adversarial hearing was held in the first instance. We examine those cases.

In Darlington v. Basalt Rock Co. (1961) 188 Cal.App.2d 706, 10 Cal.Rptr. 556, the court considered an independent action to set aside an order approving a compromise which followed denial of a motion to vacate the order. The issues raised in each challenge to the order were identical. (Id., at pp. 706-707, 10 Cal.Rptr. 556.) After examining the transcript of the motion hearing, the court determined that the independent action was barred because the judge in the first case had not restricted the evidence to written declarations, but had urged counsel to present all evidence. (Id., at pp. 709-710, 10 Cal.Rptr. 556.) "[D]etailed presentation of the issues of fraud and mistake on a motion to vacate, with full opportunity at hearing to develop the issues by oral testimony, may bar a subsequent action to set aside the order attacked by the earlier motion." (Id., at p. 710, 10 Cal.Rptr. 556.)

Rose v. Fuqua (1962) 200 Cal.App.2d 719, 19 Cal.Rptr. 634 noted that the remedies for relief from a judgment are cumulative and found a prior decision on a Code of Civil Procedure section 473 motion (which was affirmed on appeal) was no bar to an independent action to set aside a judgment when the record showed only that the motion was heard on affidavits. (Id., at p. 724, 19 Cal.Rptr. 634.)

In the recent case of Lederer v. Rohrbasser (1986) 179 Cal.App.3d 290, 224 Cal.Rptr. 791, a divided court determined that a prior motion to vacate did not bar a party's subsequent cross-complaint which raised the same extrinsic fraud claim where there was no "detailed presentation of the issues of fraud or mistake on his motion to vacate" and the party was not given a full opportunity to present oral evidence at the earlier hearing. (Id., at p. 298, 224 Cal.Rptr. 791.) The court stated that there need be no request for oral testimony, nor need it be shown that such testimony was denied or limited by the trial court. (Id., at p. 299, 224 Cal.Rptr. 791.) Because the record showed only that the motion was heard on affidavits, the Lederer court could find...