Stolz v. Bank of America

• Decision Date: 27 April 1993
• Docket Number: No. C012927,C012927
• Citation: 15 Cal.App.4th 217,19 Cal.Rptr.2d 19
• Parties: Edward R. STOLZ, II, Plaintiff and Appellant, v. BANK OF AMERICA NATIONAL TRUST and SAVINGS ASSOCIATION, Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

Page 19

19 Cal.Rptr.2d 19

15 Cal.App.4th 217

Edward R. STOLZ, II, Plaintiff and Appellant, v. BANK OF AMERICA NATIONAL TRUST and SAVINGS ASSOCIATION, Defendant and Respondent.

No. C012927.

Court of Appeal, Third District, California.

April 27, 1993.

Certified for Partial Publication.

Rehearing Denied May 21, 1993.

Nelson & Kennard, Robert Scott Kennard, Sacramento, for plaintiff and appellant.

R. Scott McMillen, John F. Cooney, Jr., Michael J. Halloran, San Francisco, for defendant and respondent.

BLEASE, Acting Presiding Justice.

Edward Stolz, II appeals from an order dismissing his action against Bank of America because he failed to furnish security as required by the vexatious litigant statutes (Code Civ.Proc., §§ 391 et seq.) ¹ He challenges the order (judgment of dismissal) on assorted grounds, none of which has merit.

In the published portion of the opinion ² we hold that principles of collateral estoppel preclude Stolz from relitigating the final determination in an unrelated case that six prior cases prosecuted or maintained by him in propria persona meet the definition of a vexatious litigant in section 391, subdivision (b)(1). We also hold that, for purposes of that provision, the "immediately preceding seven-year period" within which such cases must have been "commenced, prosecuted or maintained in propria persona" is measured from the date of filing the motion to declare the plaintiff a vexatious litigant. (§ 391.1.) In the unpublished portion of the opinion, we affirm the ruling of the trial court that Stolz has no reasonable probability of prevailing against Bank of America in this action.

We will affirm the order of dismissal.

Facts and Procedural Background

Edward Stolz does business as KWOD 106, a Sacramento radio station. This action arises out of alleged misappropriations of KWOD 106 funds by Stolz's employee and promotional director. Stolz had several business accounts with Bank of America, two of which were a KWOD 106 general operating account and a KWOD 106 special promotional account. Stolz was the sole authorized signatory on all accounts except the promotional account, on which his promotional director was a joint signatory. The director is alleged to have diverted checks drawn by KWOD 106 clients payable to "KWOD 106" and intended for the general operating account and deposited them in the promotional account and then, as a joint signatory on that account, withdrew the funds for his personal use. Stolz claims the deposits and the withdrawals were made in an unauthorized manner and contrary to an understanding he had with Bank of America as to how KWOD 106 accounts would operate. The complaint charges Bank of America with negligence for allowing this to happen. It was filed April 3, 1991.

On May 7, 1991, in Stolz v. KROY 96.9 FM Radio (Super.Ct.Sacramento County No. CV516026), an unrelated action commenced by Stolz in propria persona on August 29, 1990, the superior court declared Stolz a vexatious litigant. (§ 391, subd. (b)(1)). On June 17, 1991, Bank of America, relying on the determination made in KROY, moved for security on the ground Stolz is a vexatious litigant within the meaning of section 391, subdivision (b)(1), and has no reasonable probability of prevailing in this litigation. The court denied the motion without prejudice, concluding that "[t]he mere fact that there was a prior finding that [Stolz] was a vexatious litigant is not sufficient to meet [Bank of America]'s burden. Since specific cases must be relied on, there must be a showing that each case meets the statutory requirement [ ( ]within 7 years, for example[ ) ]."

On September 13, 1991, Bank of America renewed its motion, requesting the court, pursuant to Evidence Code sections 452, subdivision (d) and 453, ³ to take judicial notice of its files in KROY, arguing that the cases relied upon there to find Stolz a vexatious litigant within the meaning of section 391, subdivision (b)(1) fit the criteria applicable here, too, and would permit the court to make the same finding. Bank of America also urged that principles of collateral estoppel should preclude the court from redeciding what was found to be true in KROY; "[t]o determine otherwise would be to risk inconsistent decisions in the same Court." Bank of America relied upon the same six cases, for the same reasons, relied upon in KROY in support of finding Stolz to be a vexatious litigant.

On December 3, 1991, the trial court entered an order finding Stolz to be a vexatious litigant within the meaning of section 391, subdivision (b)(1). ⁴ Finding further that Stolz had no reasonable probability of prevailing in this action, the court ordered him to furnish security in the amount of $10,000. Stolz failed to furnish the security, and on January 7, 1992, the court ordered the action dismissed (§ 391.4) and entered judgment for Bank of America accordingly.

This appeal followed.

Discussion

I Collateral Estoppel

Section 391, subdivision (b)(1) defines a vexatious litigant as one who, in the relevant time period, "commenced, prosecuted or maintained in propria persona ... five litigations [other than small claims] that have been (i) finally determined adversely to the person or (ii) unjustifiably permitted to remain pending at least two years without having been brought to trial or hearing." The trial court noticed the records, ⁵ and relied upon the final determination of the court, in an unrelated action, Stolz v. KROY 96.9 FM Radio (Super.Ct.Sacramento County No. CV516026) ⁶, that six cases satisfied the statutory definition. Stolz rakes through the litigation histories of these cases in the record of that action and challenges the factual basis in each to support either that a case was finally determined adversely to him or that he unjustifiably permitted a case to remain pending at least two years.

Stolz is precluded by principles of collateral estoppel from relitigating those issues as determined in Stolz v. KROY 96.9 FM Radio. Collateral estoppel applies if (1) the issue decided in the prior case is identical with the one now presented; (2) there was a final judgment on the merits in the prior case; and (3) the party to be estopped was a party to the prior adjudication. (Teitelbaum Furs, Inc. v. Dominion Ins. Co., Ltd. (1962) 58 Cal.2d 601, 604, 25 Cal.Rptr. 559, 375 P.2d 439; Bernhard v. Bank of America (1942) 19 Cal.2d 807, 813, 122 P.2d 892.) When principles of collateral estoppel are sought to be used by one not a party to the prior adjudication, it is appropriate to ask, also, whether application of the doctrine would be unfair (e.g., the person to be estopped had lesser incentive to litigate the issue in the prior proceeding, or the prior determination is itself inconsistent with a previous judgment, or the person to be estopped operated under different and less advantageous procedure in the prior adjudication). (Parklane Hosiery Co. v. Shore (1979) 439 U.S. 322, 330-331, 99 S.Ct. 645, 58 L.Ed.2d 552, 561-562; Imen v. Glassford (1988) 201 Cal.App.3d 898, 905-908, 247 Cal.Rptr. 514; see Rest.2d Judgments, § 29.)

In the KROY litigation, six cases were urged by the defendant to establish that Stolz was a vexatious litigant within the meaning of section 391, subdivision (b)(1)--(1) Stolz v. Cooke (Super.Ct.Sacramento County No. 312002), a case both finally determined adversely to Stolz and unjustifiably permitted to remain pending at least two years; (2) Stolz v. Cooke (Super.Ct.Sacramento County No. 315512), a case finally determined adversely to Stolz; (3) Stolz v. Metts (Super.Ct.Sacramento County No. 329676), a case unjustifiably permitted to remain pending at least two years; (4) Stolz v. Roseville Toyota (Muni.Ct.Sacramento County No. 88C26541), a case unjustifiably permitted to remain pending at least two years; (5) Stolz v. Wadlow (Super.Ct.Sacramento County No. 345224), a case unjustifiably permitted to remain pending at least two years; and (6) Stolz v. Johnson (Super.Ct.Sacramento County No. 342203), a case unjustifiably permitted to remain pending at least two years.

In the KROY litigation Stolz challenged KROY regarding compliance of each case with the requirements of section 391, subdivision (b)(1) under the same rules of procedure involved here and with adequate incentive to do so (Stolz was asked to furnish $100,000 security). The court found that Stolz "is a vexatious litigant under Code of Civil Procedure section 391(b)(1)," impliedly accepting the factual basis urged by the defendant and rejecting Stolz's challenge.

Bank of America relies on the same cases, using the same factual bases relied upon by the court in KROY to find Stolz, the same party, a vexatious litigant. The determination in KROY is final and conclusive. (See ante, fn. 6.) Thus, to the extent the issues are the same--whether a particular litigation commenced, prosecuted or maintained in propria persona was finally determined adversely to Stolz or unjustifiably permitted to remain pending at least two years--Stolz cannot challenge anew such determinations.

An issue that is not necessarily the same, however, is whether a particular case was commenced, prosecuted or maintained in propria persona in "the immediately preceding seven-year period," because, as we next show, that period is dependent upon the date the motion to declare Stolz a vexatious litigant was filed. For that reason the trial court made an independent determination based upon the KROY record that each case relied upon fell within the seven-year period. ⁷ In so doing the court was authorized to notice the relevant court documents.

II Period of Limitations

Section 391 provides, in pertinent part, "As used in this title [title 3A, headed "Vexatious Litigants," of part 2, headed "Civil Actions," of the Code of Civil Procedure], the following terms have the following meanings: .... [p] (b) 'Vexatious litigant' means a person who does any of the following: [p] (1) In the immediately...