Rohrbasser v. Lederer
| Decision Date | 27 March 1986 |
| Citation | 179 Cal.App.3d 290,224 Cal.Rptr. 791 |
| Court | California Court of Appeals |
| Parties | Les E. LEDERER, Plaintiff, Cross-Defendant and Respondent, v. Daniel M. ROHRBASSER, Defendant, Cross-Complainant and Appellant. B009224. |
Lenske, Lenske & Heller, Lawrence E. Heller and Mark L. Edwards, Woodland Hills, for defendant, cross-complainant and appellant.
Parkinson, Wolf, Lazar & Leo, Maria Rodriguez, Steven M. Slavitt, and Roger A. Parkinson, Los Angeles, for plaintiff, cross-defendant and respondent.
In this cross-action for fraud, breach of contract, and declaratory relief against cross-defendant, Les E. Lederer, cross-complainant, Daniel M. Rohrbasser, appeals from a judgment entered after the trial court granted the motion of cross-defendant for summary judgment. The principal issue presented by this appeal is whether the trial court erred in determining that the cross-complaint is barred by the doctrine of res judicata. We answer this question in the affirmative and conclude that the judgment should be reversed.
In order to understand the facts of this appeal, it will be necessary for us to relate the factual profile of two prior lawsuits in addition to the underlying action of the present cross-action.
On January 26, 1977, Landale S.A., a Swiss corporation, commenced an action for damages against Rohrbasser, Paul Lorda, Landlord Realty Investments, Inc., and others, seeking to recover moneys advanced to the parties for investment purposes.
From the record it appears that this suit was settled. The parties, including Rohrbasser and his attorney, signed a settlement agreement which required, among other things, Landlord Realty to execute a promissory note in favor of Landale in the sum of $350,000.00 and Rohrbasser and Lorda to guarantee the note personally. Rohrbasser signed a guaranty.
On January 23, 1978, Landale filed a complaint for money against Rohrbasser, Lorda, Landlord Realty, and others. In the complaint, Landale alleged, among other things, that the parties failed to comply with the terms of the settlement agreement and the personal guarantees. On January 24, 1978, Rohrbasser was personally served with a copy of the complaint and summons. When Rohrbasser failed to answer the complaint, Landale requested on October 30, 1978 that a default be entered against him. The default was entered that date.
On January 23, 1980, a default judgment in favor of Landale was entered against Rohrbasser in the principal amount of $350,000.00, together with $84,863.01 interest, $5,390.00 attorney fees, and $93.00 costs, for a total amount of $440,253.01.
On March 4, 1980, some eighteen months later, Rohrbasser filed a motion to vacate the default and set aside the default judgment, together with supporting declarations. The motion was made on the ground of extrinsic fraud and was addressed to the equitable power of the court. In connection with the issue of fraud, Rohrbasser contended that Landale's attorney, Les Lederer, told him he had been named a party-defendant in the lawsuit as a mere technicality. Further, Lederer told him that if he provided them with information about the location of Lorda's assets, they would promise never to hold and go against him under the terms of the guaranty. Rohrbasser contended that these representations caused him not to secure counsel or respond to the complaint. Landale filed declarations in opposition to the motion.
On June 19, 1980, the trial court denied Rohrbasser's motion to vacate the default and set aside the default judgment. The trial court found that there was an insufficient showing of extrinsic fraud based on the declarations before the court, stating that "I don't think in the totality of the material that has been presented to [the court] that the moving party has sustained the burden of proof necessary to establish the requirement for extrinsic fraud...."
Thereafter, on July 1, 1980, Landale assigned its judgment against Rohrbasser to Lederer.
Rohrbasser appealed the trial court's order denying his motion to vacate the default and set aside the default judgment on August 8, 1980. The California Court of Appeal for the Second Appellate District, Division Three, affirmed the trial court's decision in an unpublished opinion on July 8, 1983. Thereafter, on September 7, 1983 the California Supreme Court refused to grant a hearing.
In order to enforce the judgment against Rohrbasser, on June 22, 1981, Lederer, as the assignee of the default judgment obtained in the second action, commenced an action against Rohrbasser and others to set aside a fraudulent conveyance. In the complaint, Lederer alleged that Rohrbasser conveyed certain real property to his mother in an attempt to defraud his creditors. In addition to answering the complaint, Rohrbasser filed a cross-complaint against Lederer, raising the same extrinsic fraud claims urged in his motion to vacate the default and set aside the default judgment. Later, Rohrbasser amended his cross-complaint. This first amended cross-complaint is the subject of this appeal.
On March 5, 1984, Lederer filed a motion for summary judgment, claiming that the first amended cross-complaint is barred by the doctrine of res judicata. He contended that the issues raised in the first amended cross-complaint were raised and resolved against Rohrbasser in his motion to vacate the default and set aside the default judgment. Thus, he argued that collateral estoppel precluded a relitigation of these issues.
In opposing the motion, Rohrbasser argued before the trial court, as he does here, that the denial of his prior motion to vacate does not bar his current cross-complaint. He contends that, since he did not present any oral testimony at the hearing on the prior motion to vacate, the issues were not fully developed at the hearing on the prior motion. Therefore, he argues that the doctrine of collateral estoppel is not applicable. In support of his argument, he cites three cases: Darlington v. Basalt Rock Co. (1961) 188 Cal.App.2d 706, 10 Cal.Rptr. 556; Preston v. Wyoming Pac. Oil Co. (1961) 197 Cal.App.2d 517, 17 Cal.Rptr. 443; and Rose v. Fuqua (1962) 200 Cal.App.2d 719, 19 Cal.Rptr. 634.
On April 16, 1984, the trial court granted Lederer's motion for summary judgment, finding that the denial of the motion to vacate operated to preclude those issues raised in the cross-complaint as were actually litigated and determined in the prior motion to vacate. In reaching its decision, the trial court rejected Rohrbasser's argument, reasoning that the three cases relied upon by Rohrbasser were inapplicable to the case at bench. The trial court concluded that those cases are only applicable to the situation where relief from default was first sought by a timely motion under Code of Civil Procedure section 473.
After the denial of Rohrbasser's motion for new trial by the trial court on July 10 1984, Rohrbasser appealed, contending the trial court erred in determining that the cross-complaint is barred by the doctrine of res judicata.
A motion for summary judgment is appropriate only where no triable issue of material fact exists and where the moving party's affidavits set forth sufficient facts to sustain a judgment in its favor. (Zimmerman v. Stotter (1984) 160 Cal.App.3d 1067, 1077, 207 Cal.Rptr. 108; Bank of Beverly Hills v. Catain (1982) 128 Cal.App.3d 28, 33, 180 Cal.Rptr. 67.) A defendant moving for summary judgment maintains the burden of establishing the lack of merit of plaintiff's action. (Ibid.) Moreover, because of the drastic nature of the relief sought, the affidavits of the party moving for summary judgment must be strictly construed, while a liberal construction must be accorded any affidavits in opposition. (Rowland v. Christian (1968) 69 Cal.2d 108, 111, 70 Cal.Rptr. 97, 443 P.2d 561; Seltzer v. Seltzer (1969) 276 Cal.App.2d 137, 140, 80 Cal.Rptr. 688.)
The defense of res judicata not only is properly raised by a motion for summary judgment, but also is a proper ground upon which to grant a summary judgment. (Seltzer v. Seltzer, supra, 276 Cal.App.2d at pp. 141-142, 80 Cal.Rptr. 688; Kaiser Foundation Hospitals v. Superior Court (1967) 254 Cal.App.2d 327, 330, 62 Cal.Rptr. 330; Dryer v. Dryer (1964) 231 Cal.App.2d 441, 446, 41 Cal.Rptr. 839.) Moreover, such a plea presents a question of law for the determination of the trial court. (Pillsbury v. Superior Court (1937) 8 Cal.2d 469, 472, 66 P.2d 149; Baird v. Superior Court (1928) 204 Cal. 408, 412, 268 P. 640.)
The doctrine of res judicata has two aspects. One aspect, which operates as a bar or merger, is not involved in this case. It prevents the parties from relitigating a cause of action a second time and is a complete defense to a second cause of action. (Teitelbaum Furs, Inc. v. Dominion Ins. Co., Ltd. (1962) 58 Cal.2d 601, 604, 25 Cal.Rptr. 559, 375 P.2d 439.)
The other aspect, known as collateral estoppel, is involved in this appeal. It causes a judgment in a previous action between the same parties to operate in the second action as a conclusive adjudication as to whatever issues were actually and necessarily decided in the first action. (Ibid.)
In determining the validity of a plea of collateral estoppel, the court must consider (1) whether the issue decided in the prior adjudication was identical with the one presented in the action in question, (2) whether there was a final judgment on the merits, and (3) whether the party against whom the plea is asserted was party or in privity with a party to the prior adjudication. (In re Marriage of Modnick (1983) 33 Cal.3d 897, 904, fn. 6, 191 Cal.Rptr. 629, 663 P.2d 187; People v. Taylor (1974) 12 Cal.3d 686, 691, 117 Cal.Rptr. 70, 527 P.2d 622.)
Of the three questions, the second question--whether there was full presentation of the issue of fraud on the ...
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