Ponce v. Tractor Supply Co.

• Decision Date: 20 December 1972
• Citation: 105 Cal.Rptr. 628,29 Cal.App.3d 500
• Court: California Court of Appeals Court of Appeals
• Parties: Joseph J. PONCE and Otilia Ponce, Plaintiffs and Respondents, v. TRACTOR SUPPLY CO., a corporation, Defendant and Appellant. Civ. 29679.

Page 628

105 Cal.Rptr. 628

29 Cal.App.3d 500

Joseph J. PONCE and Otilia Ponce, Plaintiffs and Respondents, v. TRACTOR SUPPLY CO., a corporation, Defendant and Appellant.

Civ. 29679.

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

Dec. 20, 1972.

Hearing Denied Feb. 14, 1973.

Farella, Braun & Martel, San Francisco, for defendant and appellant.

Boccardo, Blum, Lull, Niland, Teerlink & Bell, by Edward J. Niland, San Jose, for plaintiffs and respondents.

WEINBERGER, ^* Associate Justice.

Respondent Joseph J. Ponce and his wife Otilia Ponce filed a complaint against Tractor Supply Co. and Doyle Gene Bonham, to recover general damages respectively in the sums of $500,000 and $100,000 for personal injuries allegedly sustained by them on February 24, 1967 when their vehicle was involved in a collision with a vehicle owned and operated by defendant Bonham, at a time when he was allegedly acting as the agent, servant and employee of defendant Tractor Supply Co.

Defendant Tractor Supply filed an answer on January 8, 1968, in which it denied that Bonham was its employee or that he was acting in the course and scope of his employment. Defendant Bonham failed to answer the complaint and his default was entered. Subsequently on January 28, 1969, after a hearing on the default, judgments were entered in favor of Mr. Ponce in the sum of $150,000 and in favor of Mrs. Ponce in the sum of $10,000.

On May 6, 1970, a pretrial conference order was filed, setting forth the factual and legal contentions of the plaintiffs and of defendant Tractor Supply Co. and listing the issues involved in the case. There was mention in this order of the default judgments against defendant Bonham, but there was no reference to any contention on the part of defendant Tractor Supply Co. that these default judgments operated in any way as collateral estoppel.

After a trial by jury a verdict was returned on October 29, 1970, in favor of both plaintiffs and against defendant Tractor Supply, awarding damages to Mr. Ponce in the sum of $180,000 and to Mrs. Ponce in the sum of $4,000, and judgment on this verdict was entered on the same day.

On November 5, 1970, defendant Tractor Supply filed a notice of intention to move for new trial; notice of motion to vacate judgment and entered another and different judgment in the sum of $150,000 in favor of Mr. Ponce under Code of Civil Procedure section 633; notice of motion for judgment notwithstanding the verdict; notice of motion to vacate void judgment; and notice of motion to vacate. The basis of these motions was that the prior default judgment limited Mr. Ponce's recovery against Tractor Supply, as an employer, to $150,000. The judgment in favor of Mrs. Ponce was not questioned and is not involved in this appeal.

On December 7, 1970, Tractor Supply filed a motion to amend its answer to allege, as an affirmative defense, that the Bonham judgment acted as collateral estoppel in this action, therefore, plaintiff Ponce could not obtain a judgment greater than the default judgment entered against Bonham. On the same day, Tractor Supply filed a motion to set aside the judgment in favor of Ponce pursuant to Code of Civil Procedure section 473 on the ground of inadvertence, surprise and excusable neglect in failing to plead, as an affirmative defense, the existence of the default judgment against defendant Bonham.

The lower court denied these various motions on December 21, 1970 and a timely notice of appeal was filed from the judgment and each of the orders denied. Although an order denying a motion for judgment notwithstanding the verdict is specifically made appealable by Code of Civil Procedure section 904.1, subdivision (d), the purported appeals from the denials of the various other motions are not appealable and are accordingly dismissed. The correctness of the rulings may be reviewed on the appeal from the judgment itself. (See Witkin, Cal.Procedure, 2d ed., Appeal, §§ 87--92, pp. 4097--4100; see also Mayo v. Beber, 173 Cal.App.2d 596, 597, 343 P.2d 765.)

There is no substantial disagreement between the parties on the facts herein involved. The issues presented are essentially legal in nature, and require a discussion of:

1. The substantive effect of collasteral estoppel.

2. The procedural requirements for collateral estoppel.

Appellant argues that since its liability is secondary to that of its employee, it can assert, as an upper limit, the damages determined in the prior judgment against its employee and can do so without being bound by such amount. Respondent argues that the prior judgment cannot be used as res judicata or collateral estoppel because the record does not show whether the evidence upon which the prior judgment was based was the same as the evidence upon which the subsequent jury verdict was based. He also asserts that if the judgment is res judicata, then it operates as a conclusive adjudication that the amount of damages is $150,000 and does not simply set an upper limit of recovery.

Although both parties are agreed that the applicable principles here are those of collateral estoppel and not res judicata, the relationship between the two is instructive concerning the various claims made in this case. The doctrine of res judicata is said to have a 'double aspect: (1) it 'precludes parties or their privies from relitigating a cause of action that has been finally determined by a court of competent jurisdiction.' (2) 'Any issue necessarily decided in such litigation is conclusively determined as to the parties or their privies if it is involved in a subsequent lawsuit on a different cause of action.' (Teitelbaum Furs, Inc. v. Dominion Ins. Co., Ltd., 58 Cal.2d 601, 604, 25 Cal.Rptr. 559, 560, 375 P.2d 439, 440, quoting from Bernhard v. Bank of America 19 Cal.2d 807, 810, 122 P.2d 892; see also Solari v. Atlas-Universal Service, Inc., 215 Cal.App.2d 587, 592, 30 Cal.Rptr. 407.) The latter aspect of the doctrine is known as collateral estoppel. This estoppel 'merely involves conclusive evidence of a fact in issue, i.e., some fact constituting either matter of defense or an element of a cause of action, . . .' (Solari at p. 592, 30 Cal.Rptr. at p. 409.)

In determining the validity of the plea of collateral estoppel 'three questions are pertinent: (1) Was the issue decided in the prior adjudication identical with the one presented in the action in question? (2) Was there a final judgment on the merits? and (3) Was the party against whom the plea is asserted a party or in privity with a party to the prior adjudication?' (Bernard, 19 Cal.2d at p. 813, 122 P.2d at p. 895; Solari, 215 Cal.App.2d at p. 593, 30 Cal.Rptr. at p. 410.)

In the present case there is no question but that the third question is answered affirmatively since Mr. Ponce was plaintiff in the prior adjudication. As to the second question, the default judgment was entered January 28, 1969, and became final before the trial in October of 1970. The amount of damages awarded was determined by a judge, after a hearing, on the merits.

Regarding the first question, the claim is made by appellant that 'The issue of damages decided by the prior judgment against Doyle Bonham was exactly the same as that in issue against Tractor Supply.' This claim is based upon the argument that since appellant's liability, if any, is based solely upon the notion of respondeat superior, it cannot be liable for damages in any amount greater than was determined to have been occasioned by its agent and such damages were determined by the prior judgment to have been in the sum of $150,000.

There is ample authority for the proposition that a party secondarily liable is entitled to the benefits of a prior judgment or ruling in favor of the primary tortfeasor. Thus, a prior judgment in favor of an employee bars an action against an employer whose liability could be predicated only on respondeat superior. (Freeman v. Churchill, 30 Cal.2d 453, 461, 183 P.2d 4; Spruce v. Wellman, 98 Cal.App.2d 158, 162, 219 P.2d 472; Hilts v. County of Solano, 265 Cal.App.2d 161, 176, 71 Cal.Rptr. 275.)

In Daniel v. Jones, 140 Cal.App. 145, at page 147, 35 P.2d 198, at page 199, the court stated, 'Since there can be but one verdict for a single sum against the driver and his employer (citation), and since the liability of the latter arises solely by reason of the detriment caused by the former, the judgments against defendant corporation will be reduced to conform to the judgments against defendant Jones, . . .' (See also Luscher v. Jones, 140 Cal.App. 743, 744, 35 P.2d 199, and Bradford v. Brock, 140 Cal.App. 47, 50--51, 34 P.2d 1048.) No other California decision has been found which holds that a recovery against a party secondarily liable is limited to the amount recoverable from the primary tortfeasor, but 'The rule is established, in most jurisdictions in which the question has arisen, that an amount recovered as actual or compensatory damages in a tort action against a servant or other person who was the active tortfeasor is the limit of the amount recoverable as such damages against the master or other person whose responsibility is solely derivative.' (141 A.L.R. 1164--1173.) Thus, the damages determined against the primary tortfeasor in the default judgment would be applicable as an upper limit to the one secondarily liable.

Respondent claims that collateral estoppel is not applicable where there are changed conditions or new facts which were not in existence at the time of a prior adjudication and appellant has not shown that the facts relating to the issue of Mr. Ponce's damages are unchanged from the time of the default judgment. While it is true that changed facts or circumstances can bar the application of collateral estoppel (see People v. Ocean Shore Railroad, 32 Cal.2d 406, 418--419, 196 P.2d 570; Hurd v. Albert, 214 Cal. 15, 26, 3 P.2d 545; Pacific Tel. & Tel. Co. v. City & County of San Francisco, 197 Cal.App.2d 133, 158, 17...