Boyd v. Freeman, B279246

Background

Paula Boyd borrowed from her attorney David Freeman in 2005; loan secured by a deed of trust on a Glendale property.
Freeman initiated nonjudicial foreclosure; he purchased the property at a trustee’s sale on July 16, 2012.
Boyd previously sued Freeman (Case No. BC486054) alleging malpractice, breach of fiduciary duty, fraud and a UCL claim tied in part to the loan and possible violations of the nonjudicial foreclosure statutes; the complaint was dismissed after demurrer and Boyd appealed, and the appellate court affirmed dismissal as time‑barred in part and rejected certain theories.
In July 2015 Boyd filed the present action alleging wrongful foreclosure, vacation of the trustee’s sale and deed, unjust enrichment, and quiet title based on alleged defects in the note, overstated notice of default, failure to comply with Civil Code foreclosure notice rules, and an inadequate sale price.
Freeman demurred on res judicata / cause‑splitting grounds relying on the prior dismissal; the trial court sustained the demurrer without leave to amend and entered judgment for Freeman.
The Court of Appeal reversed, holding the prior dismissal was not a judgment on the merits as to the foreclosure‑related primary right (it rested mainly on statute‑of‑limitations rulings and denial of leave to amend), so claim preclusion did not bar Boyd’s new wrongful‑foreclosure claims.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Boyd’s new wrongful‑foreclosure suit is barred by res judicata / the rule against splitting a cause of action	Boyd: prior action ended without a merits judgment on foreclosure issues; new allegations cure defects and thus suit is permitted	Freeman: prior dismissal and denial of leave to amend mean Boyd split her primary right and cannot relitigate; res judicata or a rule against splitting bars the second suit	Reversed: prior judgment was not "on the merits" as to the foreclosure primary right (it rested on statute‑of‑limitations and other non‑merits grounds), so claim preclusion does not bar the FAC; denial of leave to amend does not preclude bringing a new action with new facts
Whether the trial court properly sustained demurrer without leave to amend based on prior appellate decision	Boyd: appellate affirmance of dismissal did not foreclose alleging wrongful foreclosure with additional facts	Freeman: the appellate decision indicated Boyd could not show how to amend to state wrongful foreclosure claims, supporting dismissal	Court: appellate decision did not foreclose a new action; judicially noticed record did not show the FAC was facially barred by issues decided previously
Whether California should apply the federal claim‑splitting doctrine that permits dismissal even without a merits judgment	Boyd: federal doctrine not controlling in state court; no California authority adopting it	Freeman: urged adoption or application of similar principle to prevent circumvention of prior rulings	Court: declined to apply federal claim‑splitting doctrine; California follows its own res judicata primary‑right jurisprudence requiring a prior judgment on the merits
Whether issue preclusion (collateral estoppel) bars the FAC	Boyd: issues in FAC were not actually litigated and decided to finality in prior action	Freeman: portions of foreclosure procedure were raised earlier and should be precluded	Court: issue preclusion not met — prior judgment did not actually decide foreclosure issues to finality and Freeman did not show FAC was facially barred by prior determinations

Key Cases Cited

DKN Holdings LLC v. Faerber, 61 Cal.4th 813 (explanation: distinguishes claim preclusion and issue preclusion and frames the primary‑right test)
Boeken v. Philip Morris USA, Inc., 48 Cal.4th 788 (explanation: explains single cause‑of‑action/primary‑right concept)
Mycogen Corp. v. Monsanto Co., 28 Cal.4th 888 (explanation: judgment for defendant bars further litigation of same cause of action)
Crowley v. Katleman, 8 Cal.4th 666 (explanation: defines cause of action as violation of a single primary right)
Keidatz v. Albany, 39 Cal.2d 826 (explanation: prior dismissal not a bar where plaintiff later pleads new facts that cure original pleading defects)
Mid‑Century Ins. Co. v. Superior Court, 138 Cal.App.4th 769 (explanation: judgment based on statute of limitations ordinarily is not a merits bar)
Ricard v. Grobstein, Goldman, Stevenson, Siegel, LeVine & Mangel, 6 Cal.App.4th 157 (explanation: distinguished — court struck second suit that improperly sought to circumvent prior rulings but did not create a broader non‑merits split‑cause doctrine)
Katz v. Gerardi, 655 F.3d 1212 (explanation: federal claim‑splitting doctrine — federal rationale discussed and declined for state application)