Eichman v. Fotomat Corp.
| Citation | 197 Cal.Rptr. 612,147 Cal.App.3d 1170 |
| Court | California Court of Appeals Court of Appeals |
| Decision Date | 14 October 1983 |
| Parties | Adrian C. EICHMAN, et al., Plaintiffs and Appellants, v. FOTOMAT CORPORATION, Defendant and Respondent. Civ. 26921. |
Franklin & McCann and J. David Franklin, La Jolla, for plaintiffs and appellants.
John H. L'Estrange, Jr., San Diego, for defendant and respondent.
Adrian and Margaret Eichman appeal the judgment entered after the superior court sustained Fotomat Corporation's demurrer without leave to amend. The Eichmans contend the superior court erred in finding a judgment in an earlier action between the Eichmans and Fotomat is res judicata and bars the present suit.
The Eichmans entered into a franchise agreement with Fotomat in 1968. In 1973 the Eichmans sued Fotomat in the superior court of San Bernardino County, alleging Fotomat breached the franchise agreement and violated California's Unfair Trade Practices Act (Bus. & Prof.Code, § 17000 et seq.). In that suit, the Eichmans contended Fotomat sold goods and services to them at a higher price than it charged its company-owned stores; did not provide them with advertising and public relations assistance which it was obligated to provide, while the company-owned stores received such assistance; infringed on the Eichmans' territory by locating company-owned stores too close to their store; and misrepresented the amount of competition the Eichmans would face from the company-owned stores. On September 7, 1977, the Eichmans accepted a settlement offer of $7,500 made by Fotomat under Code of Civil Procedure section 998. In May 1978 a judgment based on the settlement was entered nunc pro tunc as of September 7, 1977.
On April 21, 1978, the Eichmans filed this action. The complaint here is much more detailed than was the complaint in the first action as it contains factual allegations regarding Fotomat's price-fixing schemes and its failure to provide certain goods and services it had promised the Eichmans which were not included in the first complaint. The general nature of the wrongs alleged in the two complaints, however, are the same, as is the injury claimed: the inability of the Eichmans to compete on equal footing with Fotomat's company-owned stores. The complaint here states causes of action for breach of contract, restraint of trade, monopoly, fraud, conversion, accounting, breach of fiduciary duty and declaratory relief.
Fotomat demurred to all causes of action except the accounting and declaratory relief counts on the ground the claims are barred by the res judicata effect of the judgment in the first action. In support of its demurrer, Fotomat asked the superior court to judicially notice a complaint against it in another case (the King case), in which the Eichmans are not parties. The King case was brought by other franchisees of Fotomat in 1976. The complaint in that case is almost identical to the one filed by the Eichmans here. Fotomat also asked the court to judicially notice the Eichmans' answer to an interrogatory Fotomat sent them in the first action. The interrogatory asked the Eichmans what expert witnesses they intended to call at trial; the Eichmans' answer listed the plaintiffs in the King case. Fotomat argued these documents show the Eichmans knew or should have known of the basis for its complaint here before they agreed to settle their first action. The superior court sustained the demurrer with leave to amend.
The Eichmans amended their complaint, adding allegations Fotomat fraudulently concealed the full extent of its wrongs until after judgment was entered in the first action. Fotomat again demurred on the ground of res judicata. On February 27, 1979, the superior court sustained the second demurrer without leave to amend. In March 1982 the Eichmans voluntarily dismissed their accounting and declaratory relief claims. In April 1982 a judgment favoring Fotomat was entered.
After the superior court here sustained Fotomat's demurrer without leave to amend, but before judgment was entered, the Eichmans filed yet another suit against Fotomat, this time in the Federal District Court for the Southern District of California. The same general fact pattern pleaded here was also relied on in that action. In April 1982 the federal court dismissed that suit, finding the original suit raised the same cause of action and is res judicata. The court found the Eichmans' allegations of fraudulent concealment of information are without merit as the record of the original action shows the information allegedly concealed was available to the Eichmans.
Whenever a judgment in one action is raised as a bar to a later action under the doctrine of res judicata, the key issue is whether the same cause of action is involved in both suits. California law approaches the issue by focusing on the "primary right" at stake: if two actions involve the same injury to the plaintiff and the same wrong by the defendant then the same primary right is at stake even if in the second suit the plaintiff pleads different theories of recovery, seeks different forms of relief and/or adds new facts supporting recovery. (See Slater v. Blackwood, 15 Cal.3d 791, 795, 126 Cal.Rptr. 225, 543 P.2d 593; Boccardo v. Safeway Stores, Inc., 134 Cal.App.3d 1037, 1043, 184 Cal.Rptr. 903; Sawyer v. First City Financial Corp., 124 Cal.App.3d 390, 399, 177 Cal.Rptr. 398; Mattson v. City of Costa Mesa, 106 Cal.App.3d 441, 447, 164 Cal.Rptr. 913; Merry v. Coast Community College Dist., 97 Cal.App.3d 214, 224-225, 158 Cal.Rptr. 603; Kronkright v. Gardner, 31 Cal.App.3d 214, 216-217, 107 Cal.Rptr. 270.)
(Corral v. State Farm Mutual Auto. Ins. Co., 92 Cal.App.3d 1004, 1010, 155 Cal.Rptr. 342.)
If the same primary right is involved in two actions, judgment in the first bars consideration not only of all matters actually raised in the first suit but also all matters which could have been raised (Sutphin v. Speik, 15 Cal.2d 195, 202-203, 99 P.2d 652).
The same primary right argued here was clearly also at stake in the Eichmans' first action against Fotomat. In both cases the harm alleged was economic injury caused by Fotomat creating a situation in which the company-owned stores enjoy a competitive edge over the franchise stores. The same types of wrongful acts by Fotomat were alleged in both suits: the provision of greater service at a lower cost to the company-owned stores, failure to provide the franchisees with the same advertising assistance given the company-owned stores and the placement of company-owned stores within areas which should have been reserved for franchise stores. The complaint here merely adds new theories of recovery and greater detail regarding the prices...
To continue reading
Request your trial
-
Los Angeles Branch NAACP v. Los Angeles Unified School Dist.
...of Education, --- U.S. ----, 104 S.Ct. 892, 896, 79 L.Ed.2d 56 (1984). That law is properly reflected in Eichman v. Fotomat Corp., 147 Cal.App.3d 1170, 197 Cal.Rptr. 612 (Ct.App.1983). In Eichman, the plaintiff complained of injuries arising from a continuing relationship that was not termi......
-
Kamal v. Cnty. of L. A.
...not 'deprive the opposing party of the opportunity to appear and present his case'" (internal citations omitted)); Eichman v. Fotomat Corp., 147 Cal. App. 3d 1170, 1176 (1983) ("If the aggrieved partyhad a reasonable opportunity to appear and litigate his claim or defense, fraud occurring i......
-
Drawsand v. F.F. Props., L.L.P.
...theories of recovery, seeks different forms of relief and/or adds new facts supporting recovery.” Eichman v. Fotomat Corp., 147 Cal.App.3d 1170, 1174, 197 Cal.Rptr. 612 (1983) (internal citations omitted). Here, the record presented confirms that Drawsand's claims in this action against the......
-
Ewing v. Superior Court of Cal.
...of recovery, seeks different forms of relief and/or adds new facts supporting recovery.” (quoting Eichman v. Fotomat Corp., 147 Cal.App.3d 1170, 1174, 197 Cal.Rptr. 612 (1983) )). “The scope of the primary right therefore depends on how the injury is defined.” Id.; see also Gonzales, 739 F.......