Talley v. Valuation Counselors Group, Inc.
191 Cal. App. 4th 132
| Cal. Ct. App. | 2010Background
- Talley filed a 2002/2004 state court action asserting fraud and related claims against groups of defendants involved in Heritage bonds transactions from 1996–1999.
- Bar orders and good faith settlements in a related Betker federal action were issued, temporarily barring further litigation and influencing state court dismissals.
- From 2005–2008, several demurrers were sustained with prejudice against different defendant groups, leading to dismissals; the Court of Appeal upheld the dismissals as proper for some groups based on the Bar orders.
- Talley’s prior September 2007 opinion addressed pleadings issues and allowed leave to amend only as to corporate defendants; the corporate defendants later obtained dismissals with prejudice in 2008, which Talley did not appeal.
- After the Ninth Circuit modified the Bar orders in October 2008 and district court implemented changes in February 2009, Talley moved in April 2009 to set aside the dismissals and file a second amended complaint.
- The trial court granted the motion in part, allowing a second amended complaint against the Group of Five Appellants but also indicated jurisdictions for future demurrers; the Clarey Respondents were treated differently, with final judgments not set aside.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court had statutory or inherent authority to set aside the final dismissals. | Talley contends Bar orders were voided by the Ninth Circuit, permitting vacatur under 473. | Group of Five argues dismissals were not void or voidable and could not be revived by inherent powers. | Trial court erred; could not revive dismissed actions via inherent power or 473. |
| Whether the Restatement Second of Judgments supports vacating the later judgments. | Talley relied on Restatement §16 to erase the basis for later dismissals and permit relief. | Restatement §16 does not authorize revival where judgments were not void, and no pending case existed. | Restatement analysis misapplied; no pending case to revive; not appropriate relief. |
| Whether the Bar orders, even if modified, justify setting aside the dismissals as to the Group of Five Appellants. | Ninth Circuit modification removed the predicates for the Bar orders, allowing reinstatement. | Bar orders, though modified, did not render the state dismissals void on their face or warrant collateral attack. | No, cannot set aside; Bar orders' modification does not revive the action. |
| Whether the Clarey Respondents' dismissals could be set aside. | Clarey Respondents should be treated the same as others and revival permitted. | Clarey demurrers were based on res judicata/primary rights, not Bar orders; final judgments should remain. | Clarey Respondents' final judgments affirmed; no basis to set aside. |
Key Cases Cited
- Grain Dealers Mutual Ins. Co. v. Marino, 200 Cal.App.3d 1083 (Cal. Ct. App. 1988) (Restatement proximity; limitations on post-judgment relief; grain dealers as guidance for setting aside judgments)
- Levy v. Cohen, 19 Cal.3d 165 (Cal. 1977) (finality of federal orders pending appeal informs state proceedings)
- Carroll v. Abbott Laboratories, Inc., 32 Cal.3d 892 (Cal. 1982) (equity power narrower than statutory relief; limits on relief from judgments)
- Lee v. An, 168 Cal.App.4th 558 (Cal. App. 2008) (void vs. voidable orders; fundamental authority vs. excess of jurisdiction)
- In re Heritage Bond Litigation v. U.S. Trust Corp., 546 F.3d 667 (9th Cir. 2008) (Ninth Circuit on Bar orders; overbreadth and need for modification)
- In re Heritage Bond Litigation v. U.S. Trust Corp., 546 F.3d 667 (9th Cir. 2008) (modification of Bar orders governed by Ninth Circuit decision)
- Topa Insurance Co. v. Fireman’s Fund Insurance Companies, 39 Cal.App.4th 1331 (Cal. App. 1995) (inherent powers; scope and limits of court authority)