43 Cal.App.5th 988
Cal. Ct. App.2019Background:
- Plaintiffs borrowed $110 million in 2007 to buy Rincon Towers; after default and transfers, CP III purchased the property at a nonjudicial foreclosure sale in 2010.
- Plaintiffs sued multiple defendants asserting mixed claims: legal claims (breach of three contracts, fraud, slander of title, UTSA) and equitable claims (to set aside foreclosure, UCL unfair-competition, accounting).
- At bench trial Judge Miller struck plaintiffs’ jury demand based on contractual jury waivers, tried the case, found for defendants on all claims, and entered judgment for defendants.
- On the first appeal (Rincon I) the Court of Appeal reversed as to the legal claims (jury waiver error) but affirmed as to the equitable claims and remanded for further proceedings on the legal claims.
- On remand Judge Kahn granted defendants summary judgment, holding Judge Miller’s findings resolving the equitable UCL claim were binding and dispositive of the remaining legal claims; plaintiffs appealed.
- The Court of Appeal affirmed Judge Kahn: Miller’s equitable findings (including that plaintiffs were in default and proved no damages) disposed of the legal claims; judicial notice of Miller’s findings to assess preclusive effect was proper.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether factual findings resolving equitable UCL claim are binding and dispositive of remaining legal claims | Miller’s equitable findings applied different standards and plaintiffs should be allowed to relitigate legal issues to a jury | Findings in an equity-first resolution bind later proceedings and can dispose of legal claims when the UCL incorporated those claims | Held: Binding; Miller’s UCL ruling addressed unlawful and fraudulent prongs and expressly rejected the predicate legal claims, disposing of the legal claims |
| Whether remittitur or law-of-the-case forbade Judge Kahn from relying on Miller’s findings on remand | Remand required retrial of factual issues on legal claims | Rincon I permitted defendants to move for dispositive relief on remand; footnote 12 expressly allowed such motions | Held: Kahn acted within remand scope; Rincon I did not preclude assessing preclusive effect of Miller’s findings |
| Whether summary judgment improperly relied on judicial notice of the truth of Miller’s findings | Judicial notice cannot be used to establish truth of prior findings as evidence on summary judgment | Courts may take judicial notice of prior judicial findings to determine their preclusive effect without resolving their truth | Held: Proper to take judicial notice of Miller’s findings for preclusion analysis; this does not decide truth, only preclusive effect |
| Whether Samara (or similar procedural rules) prevents giving preclusive effect to unreviewed aspects of Miller’s findings | Prior appellate opinion left Miller’s determinative findings unreviewed so they should not preclude relitigation | Plaintiffs did not properly challenge key Miller findings on appeal (e.g., default and lack of damages); Samara does not bar preclusion here | Held: Samara inapplicable—plaintiffs failed to challenge the dispositive findings in Rincon I, so those findings remain binding |
Key Cases Cited
- Raedeke v. Gibraltar Sav. & Loan Assn., 10 Cal.3d 665 (Cal.) (equitable findings may resolve legal claims; ‘‘equity first’’ principle)
- Hoopes v. Dolan, 168 Cal.App.4th 146 (Cal. Ct. App.) (trial practice and preclusion where equity and law claims intersect)
- Cel‑Tech Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163 (Cal.) (test for “unfair” practices under the UCL)
- Samara v. Matar, 5 Cal.5th 322 (Cal.) (limits on preclusive effect when appellate decision does not reach certain grounds)
- Hawkins v. SunTrust Bank, 246 Cal.App.4th 1387 (Cal. Ct. App.) (judicial notice of prior judicial findings for preclusion purposes)
- Alcoa Global Fasteners, Inc. v. Orange County Water Dist., 12 Cal.App.5th 252 (Cal. Ct. App.) (discussion of ‘‘equity first’’ practice)
- Candelore v. Tinder, Inc., 19 Cal.App.5th 1138 (Cal. Ct. App.) (UCL ‘‘unlawful’’ prong borrows violations of other laws)
- Hall v. Superior Court, 45 Cal.2d 377 (Cal.) (rule that reversal generally remands for a new trial, subject to appellate opinion directions)
- Ayyad v. Sprint Spectrum, L.P., 210 Cal.App.4th 851 (Cal. Ct. App.) (reading remittitur in conjunction with appellate opinion on remand scope)