Opinion
D070503
11-30-2017
SEAN M. PARK, Plaintiff and Appellant, v. BANK OF AMERICA, N.A. et al., Defendants and Respondents.
Stephen F. Lopez APC and Stephen F. Lopez for Plaintiff and Appellant. Sheppard, Mullin, Richter & Hampton, Edward D. Vogel, Karin Dougin Vogel and Mark G. Rackers for Defendants and Respondents Wells Fargo Bank, N.A., and Bank of America, N.A. First American Law Group and Brian H. Tran for Defendant and Respondent First American Trustee Servicing Solutions, LLC, formerly known as First American Loanstar Trustee Services.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 37-2014-00039328-CU-OR-CTL) APPEAL from a judgment of the Superior Court of San Diego County, Katherine A. Bacal, Judge. Affirmed. Stephen F. Lopez APC and Stephen F. Lopez for Plaintiff and Appellant. Sheppard, Mullin, Richter & Hampton, Edward D. Vogel, Karin Dougin Vogel and Mark G. Rackers for Defendants and Respondents Wells Fargo Bank, N.A., and Bank of America, N.A. First American Law Group and Brian H. Tran for Defendant and Respondent First American Trustee Servicing Solutions, LLC, formerly known as First American Loanstar Trustee Services.
Sean M. Park and Michelle Park (collectively the Parks) filed this wrongful foreclosure action against Bank of America, N.A. (Bank of America), Wells Fargo Bank, N.A. and Wells Fargo Home Mortgage, LLC (collectively Wells Fargo), and First American Loanstar Trustee Services, LLC, also known as First American Servicing Solutions, LLC (First American). The trial court sustained demurrers without leave to amend and thereafter dismissed the action against these defendants on claim preclusion (res judicata) grounds. We affirm the judgment.
Counsel for Wells Fargo states that Wells Fargo Home Mortgage, LLC is a division of Wells Fargo Bank, N.A., and refers to both entities as "Wells Fargo" without distinction. For convenience and clarity, we do the same.
The Parks also sued Vivian Rich, who the Parks allege purchased the Property from Bank of America after foreclosure. Rich also demurred; however, the court overruled her demurrer. Rich filed a writ petition challenging that order, which is the subject of a related proceeding we consider concurrently with this appeal, Rich v. Superior Court (Nov. 30, 2017, D071638) [nonpub. opn.].
FACTUAL AND PROCEDURAL BACKGROUND
Because this appeal follows the sustaining of a demurrer without leave to amend, we summarize the facts as alleged in the operative complaint, including facts subject to judicial notice. (Landmark Screens, LLC v. Morgan, Lewis & Bockius, LLP (2010) 183 Cal.App.4th 238, 240.)
Park states the operative complaint was not before the trial court when it ruled on the demurrer; however, the order sustaining the demurrer states the court had a copy of this complaint.
A. Loan Origination, Modification Denial
In 2005 the Parks obtained a $699,300 loan from Wells Fargo (the Loan) secured by a deed of trust on the Parks' residence in La Mesa, California (the Property). The trustee was Fidelity National Title Insurance Company.
The Parks made timely payments on the Loan for approximately four years in the amount of about $190,000. However, after their income was drastically reduced in March 2009, the Parks asked Wells Fargo about modifying the Loan to provide for lower payments. Wells Fargo told the Parks to miss at least three monthly mortgage payments to qualify for a modification. Based on this instruction and their own attorney's similar advice, the Parks stopped paying the Loan in July 2009.
The attorney representing Park here is not the attorney identified in the Parks' complaint.
In October 2009, while the Parks' loan modification application was pending, First American was substituted as trustee—and filed a notice of default.
In December 2009 Wells Fargo assigned the Loan to Bank of America, while remaining the loan servicer. Wells Fargo told the Parks they qualified for a modification under the Home Affordable Modification Program (HAMP), and if the Parks made three temporary payment plan (TPP) payments of $2,511.12 each, the loan would be modified. The Parks timely made the TPP payments; however, Wells Fargo denied their loan modification application.
B. The District Court Action
1. Original and first amended complaint
The opening brief states, "This matter began" when the Parks sued Wells Fargo, Bank of America, and First American in November 2014. But this assertion is incorrect. The case actually began more than four years earlier, in 2010.
In August 2010, while the Loan was in default but before foreclosure, the Parks filed an action in federal district court against Wells Fargo, Bank of America, and other entities entitled Sean M. Park, Michelle Park v. Wells Fargo Bank Home Mortgage et al., No. 10-cv-1737-LAB (WMC) (the District Court action). There, the Parks asserted 14 claims for relief, including claims for fraud, rescission, "predatory lending," and quiet title. Subsequently, the Parks filed a first amended complaint after the district court sustained motions to dismiss filed by Wells Fargo and Bank of America (collectively the Banks) with leave to amend.
2. Nonjudicial foreclosure sale
On March 30, 2011, the Property was sold at a trustee's sale to Bank of America.
3. Second amended complaint
On April 28, 2011, about one month after the foreclosure sale, and after the district court granted another motion to dismiss with leave to amend—the Parks filed a second amended complaint (SAC) in the District Court action. The SAC exceeds 100 pages, plus contains 185 pages of exhibits, and purports to state 18 claims for relief. Generally, the SAC alleges Bank of America engaged in a "wrongful and illegal" nonjudicial sale of the Property and Wells Fargo "arbitrarily cancelled" the HAMP loan modification. The SAC challenged the foreclosure sale by alleging breach of contract, wrongful foreclosure, fraud, quiet title, and numerous violations of state and federal statutes.
In addition to seeking damages and injunctive relief, the SAC asked the court to "cancel[]" the trustee's deed, declare the trustee's deed upon sale "void[]," and order judgment quieting title to the Parks. The Parks also asked the district court to order the Banks to "return all monies, proceeds, [and] payments" arising from the challenged transactions.
4. The Banks move to dismiss the SAC
The Banks brought a motion to dismiss the SAC for failure to state a claim upon which relief can be granted under Federal Rules of Civil Procedure 12(b)(6) (28 U.S. C.). The Banks asserted, among other things: (1) the injunction claim failed because injunction is a remedy, not a claim for relief; (2) the breach of contract claims were barred by the parol evidence rule and the Parks lacked standing to bring a HAMP claim; (3) the conversion, Truth-in-Lending, and Home Ownership And Equity Protection Act claims were time-barred; (4) the debt collection claims failed because the Banks' foreclosure activities do not constitute debt collection; (5) the wrongful foreclosure claims were refuted by documents subject to judicial notice, as well as lack of tender; (6) the Banks have no fiduciary duties to the Parks; and (7) the fraud claims were both time-barred and insufficiently pled.
Undesignated references to rules are to the Federal Rules of Civil Procedure.
5. The district court dismisses the SAC with prejudice
In February 2012 the district court granted the Banks' motion to dismiss, and the court entered judgment dismissing the District Court action with prejudice. The Parks did not appeal from that judgment.
C. Unlawful Detainer Action
After Bank of America purchased the Parks' property at the foreclosure sale, it brought an unlawful detainer action against the Parks, who apparently refused to vacate. In September 2011, by special verdict, a jury found that the Property was sold in accordance with Civil Code section 2924 under a power of sale contained in a deed of trust signed by the Parks, and title to the Property under the sale was duly perfected in Bank of America, which was entitled to possession of the Property. In May 2012 the appellate division of the superior court dismissed the Parks' appeal of the unlawful detainer judgment for failure to deposit funds for preparing the record on appeal.
D. Sale to the Rich Trust
On October 28, 2012, Bank of America sold the Property to "a [third] party investor," the Rich Trust.
E. State Court Wrongful Foreclosure Action Filed
About two years later, in November 2014, the Parks filed the instant state court action against Wells Fargo, Bank of America, and First American. The Parks did not sue the Rich Trust as a named defendant.
Like they had done in the District Court action, the Parks' new complaint challenged the same foreclosure of the Property. This state court complaint alleged many of the same legal theories alleged in the Parks' District Court action: quiet title, fraud and deceit, wrongful foreclosure, and breach of contract under HAMP. The Parks did allege some new theories of liability. For example, unlike the dismissed federal complaint, the state court complaint alleged a cause of action for cancellation of instruments, negligence, and violation of the California Homeowners Bill of Rights ban on dual tracking and illegal collection of fees. However, although there were some new liability theories, the state court complaint was based on the same underlying alleged facts and asserted the same violation of the Parks' primary right to be free from an unlawful foreclosure sale of the Property. For example, the state court complaint alleges the defendants violated numerous laws "by foreclosing on the [s]ubject Property" while the loan modification was being reviewed.
F. The Banks Remove the State Court Action to District Court
In December 2014 Wells Fargo removed the Parks' state court action to federal district court on federal question grounds. First American consented to the removal. About a week later, the Banks moved to dismiss the Parks' complaint for failure to state a claim upon which relief can be granted under rule 12(b)(6).
G. Remand Back to State Court
With the action removed to federal court, in mid-January 2015 the Parks (1) filed a first amended complaint in the district court, which jettisoned their federal claims; and (2) filed a motion to remand to state court for lack of federal question jurisdiction. Stating it was sympathetic to the "Defendants' plight"—but unable to keep the case absent federal question jurisdiction—the district court granted the Parks' motion to remand to state court, and denied the Banks' motion to dismiss under rule 12(b)(6) as moot.
H. Demurrers on Remand
Now back in state court, the Parks' operative complaint was the first amended complaint (FAC) they had filed in the district court before remand. The FAC alleges wrongful foreclosure of the Property under several different theories including: wrongful foreclosure, fraud and deceit, cancellation of instruments, breach of contract, tortious interference with contract, violation of Business and Professions Code section 17200; promissory estoppel, and quiet title.
In July 2015 the Banks and First American demurred to the FAC. They asserted the judgment dismissing the Parks' District Court action with prejudice in February 2012 barred the FAC under claim preclusion (res judicata) principles. Alternatively, the Banks asserted the unlawful detainer judgment barred the FAC under issue preclusion principles because the jury in that action determined the Banks lawfully conducted the foreclosure sale and title was perfected in Bank of America.
The Parks filed opposition and, after conducting a hearing, the court sustained the demurrers without leave to amend on the grounds the action is barred by claim preclusion. Sean M. Park timely appealed from the judgment of dismissal.
The record contains two notices of appeal, file-stamped the same day, and only five minutes apart. The first states that Sean M. Park and Michelle Park appeal from the judgment. The second is identical except that a line is drawn through Michelle Park's name. The Banks construe these as meaning only Sean M. Park has appealed. The opening and reply briefs are consistent with that view, stating they are filed on behalf of Sean M. Park. References in this opinion to Park are to Sean M. Park only.
DISCUSSION
I. THE TRIAL COURT CORRECTLY SUSTAINED THE DEMURRERS BASED ON
CLAIM PRECLUSION PRINCIPLES
A. The Standard of Review
"'On appeal from a judgment of dismissal entered after a demurrer has been sustained, this court reviews the complaint de novo to determine whether it states a cause of action. [Citation.] We assume the truth of all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.'" (Saterbak v. JPMorgan Chase Bank, N.A. (2016) 245 Cal.App.4th 808, 813.) "We may [also] consider matters that are properly judicially noticed." (Ibid.) If all of the facts necessary to show an action is barred by res judicata are within the complaint or subject to judicial notice, a trial court may sustain a demurrer on res judicata grounds. (Frommhagen v. Board of Supervisors (1987) 197 Cal.App.3d 1292, 1299.)
B. Claim Preclusion Principles
"Claim preclusion 'prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them.'" (DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 824 (DKN Holdings), italics omitted.) This doctrine "'rests upon the ground that the party to be affected, or some other with whom he is in privity, has litigated, or had the opportunity to litigate the same matter in a former action in a court of competent jurisdiction, and should not be permitted to litigate it again to the harassment and vexation of his opponent. Public policy and the interest of litigants alike require that there be an end to litigation.'" (Citizens for Open Access etc. Tide, Inc. v. Seadrift Assn. (1998) 60 Cal.App.4th 1053, 1065.)
Claim preclusion bars litigation not only of issues that were actually litigated in the prior proceeding, but also issues that could have been litigated in that proceeding. (Busick v. Workmen's Comp. Appeals Bd. (1972) 7 Cal.3d 967, 974-975.) "The fact that different forms of relief are sought in the two lawsuits is irrelevant, for if the rule were otherwise, 'litigation finally would end only when a party ran out of counsel whose knowledge and imagination could conceive of different theories of relief based upon the same factual background.'" (Interinsurance Exchange of the Auto. Club v. Superior Court (1989) 209 Cal.App.3d 177, 181-182.) Thus, if the matter raised in the second suit "'"was within the scope of the [prior] action, related to the subject matter and relevant to the issues, so that it could have been raised, the judgment is conclusive on it despite the fact that it was not in fact expressly pleaded or otherwise urged.'"'" (Villacres v. ABM Industries Inc. (2010) 189 Cal.App.4th 562, 583-584, italics omitted.) "A predictable doctrine of res judicata benefits both the parties and the courts because it 'seeks to curtail multiple litigation causing vexation and expense to the parties and wasted effort and expense in judicial administration.'" (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 897, italics omitted.)
"Claim preclusion arises if a second suit involves (1) the same cause of action (2) between the same parties (3) after a final judgment on the merits in the first suit." (DKN Holdings, supra, 61 Cal.4th at p. 824.) "If claim preclusion is established, it operates to bar relitigation of the claim altogether." (Ibid.)
1. Same cause of action
In applying the doctrine of res judicata, the phrase "cause of action" has a precise and particular meaning: The cause of action is the right to obtain redress for a harm suffered, regardless of the specific remedy sought or the legal theory advanced. (See Bay Cities Paving & Grading, Inc. v. Lawyers' Mutual Ins. Co. (1993) 5 Cal.4th 854, 860.)
The claims the Parks asserted in the District Court action, and those Park asserts here, involve the same loan, secured by the same deed of trust, and involve the same alleged wrongful foreclosure. Therefore, the Banks contend Park's claims in both actions involve the same primary right to be free from a wrongful foreclosure, and therefore both actions involve the same cause of action for claim preclusion purposes.
Park's opening brief does not challenge the trial court's determination that both the District Court action and the instant case involve the same cause of action. Rather, he contends the court should not have applied res judicata because the judgment in the District Court action was not "on the merits" and, even if it was, "from a policy standpoint" res judicata should not apply in this case because "in this case justice and fairness would be trumped by a technical application of claim preclusion."
By failing to assert in his opening brief that the court erred in determining the same cause of action is involved in both actions, Park has forfeited that issue on appeal. (Reyes v. Kosha (1998) 65 Cal.App.4th 451, 466, fn. 6 [de novo review is limited to issues adequately raised and supported in the opening brief; issues not raised are forfeited].)
Moreover, even if the issue were not forfeited, we would affirm the trial court's determination that the same cause of action is alleged in both cases. As the Banks point out, a comparison of the operative complaints in the two lawsuits demonstrates they arise out of the same alleged harm. For example:
| In the District Court Action, the Parksalleged: | In the state court FAC, the Parksallege: |
|---|---|
| Bank of America engaged in a "wrongfuland illegal" nonjudicial sale of theProperty. | "[T]he entire foreclosure process isfraudulent and therefore, it is void . . . ."(Italics omitted.)"Defendants unlawfully invoked thepower of sale . . . and conducted anunlawful sale on their home." |
| Defendants rejected their earlieragreement to permanently modify theLoan and "proceeded with a wrongful andunwarranted foreclosure sale." | The Banks denied the Parks HAMP loanmodification and continued foreclosureproceedings to obtain title to property towhich they had "no rights." |
| Defendants committed fraud for thepurpose of wrongfully foreclosing on theProperty. | The Banks committed fraud by neverintended to honor their promise to approvethe loan modification. |
| The Banks engaged in unfair debtcollection practices in the wrongfulforeclosure proceedings. | The Banks engaged in unfair debtcollection practices. |
| The Banks failed to properly give noticeof default, improperly recorded thesubstitution of trustee, and did not complywith statutory requirements governingnonjudicial foreclosure sales. | The Banks were not authorized toforeclose, failed to properly record andgive notice of default, improperlyrecorded the substitution of trustee, andviolated statutory requirements governingnonjudicial foreclosures. |
| Entitlement to an order quieting title,declaring the trustee's deed upon sale to bevoid, and damages. | Entitlement to an order quieting title,rescinding the trustee's sale, and damages. |
2. Same parties
The Banks and First American were defendants in both the District Court action and in the FAC. Park does not contend otherwise.
3. Final judgment on the merits
In the District Court action, the court dismissed the Parks' complaint under rule 12(b)(6) after determining the SAC failed to state a claim upon which relief may be granted. The Parks did not appeal from that February 2012 judgment, and the time to do so has long since lapsed. (28 U.S.C. § 2107(a) [30 days to appeal where United States is not a party].) Accordingly, that judgment is final. As discussed next, it is also a judgment "on the merits" for claim preclusion purposes.
Full faith and credit must be given to a federal court's final judgment. (Levy v. Cohen (1977) 19 Cal.3d 165, 172.) A dismissal under rule 12(b)(6) for failure to state a claim upon which relief may be granted is regarded by federal courts, including the United States Supreme Court, as a judgment on the merits to which res judicata applies. (Federated Dep't Stores v. Moitie (1981) 452 U.S. 394, 399, fn. 3; Stewart v. U.S. Bancorp (9th Cir. 2002) 297 F.3d 953, 957.) Such a dismissal is on the merits because in ruling on the motion, the district court analyzes the facts and legal claims to determine if the plaintiff has stated a cause of action. (Stewart, at p. 957.)
Here, Park concedes that a rule 12(b)(6) dismissal is generally on the merits, but asserts this Court must look past the label and cannot "assume it was on the merits." Citing Rodriguez v. Bank of New York Mellon (S.D.Cal., Jan. 17, 2014, No. 13 cv1830-GPC-BLM) 2014 U.S. Dist. Lexis 6501 (Rodriguez), Park contends the record must show the basis for the trial court's ruling and "confirm that the ruling was actually on the merits." Park contends that here, the district court's order granting the rule 12(b)(6) motions only addressed three issues, and the district court's determination that his claims were frivolous "seems in part to be based" upon Park's indictment for perjury in another case, his threat to report a judge for failing to docket records, and the fact an unrelated writ petition was deemed frivolous by the Ninth Circuit Court of Appeals.
We reject Park's assertions that the judgment in the District Court action was not on the merits. To begin, Park's reliance on Rodriguez, supra, 2014 U.S. Dist. Lexis 6501 is unavailing because the issue there was whether a trial court's ruling on an unopposed demurrer was "on the merits" where the record did not indicate whether the order was based on an actual determination of the merits of the plaintiff's claims. (Id. at *18-*19.) In contrast here, Park opposed the rule 12(b)(6) motions. Moreover, the district court stated it had "reviewed Park's [second] amended complaint, Defendants' motion to dismiss, and Park's opposition in great detail." (Italics added.)
Contrary to Park's assertions, on its face the district court's order granting the rule 12(b)(6) motion shows the ruling was on the merits. Addressing the fifth cause of action under the Real Estate Settlement Procedures Act (12 U.S.C. § 2601 et seq.), the district court noted that the Banks raised several fatal problems with that claim, including that the Parks' own exhibits showed the Banks complied with the law. On the Parks' claims under the Fair Debt Collection Practices Act and the Rosenthal Fair Debt Collection Practices Act, the district court stated that the Parks offered only a "feeble response" to the Banks's assertions that the SAC contains no allegations showing how the Banks violated these statutes. The district court stated that the Parks' other arguments were ineffective because they meandered "from one grievance to another" with "conclusory" legal arguments "too divorced from the facts of this case to be very helpful" and which "harp[] on points that have no bearing on the [c]ourt's adjudication of the actual claims before it."
After considering these specific issues, the district court stated it would "not address each of [the Parks'] claims, or each of the [Banks'] arguments for dismissal, because [the court] finds that [the Parks'] arguments are at best misguided and at worst downright frivolous." The district court added, "There is no argument that Defendants make that [the] Park[s] overcome[]."
Thus, the record shows the district court analyzed the merits of all Parks's claims and found them to be legally insufficient. If Park believed the district court erred or failed to address any merits issues, his remedy was to appeal from the judgment of dismissal. Having chosen not to do so, Park is bound by that judgment.
4. Policy exception
Wrongful foreclosure is in some respects an evolving area of law. For example, the California Supreme Court's 2016 decision in Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919 (Yvanova) broke ground by holding that in an action for wrongful nonjudicial foreclosure of a deed of trust securing a home loan, the borrower has standing to challenge the assignment of the note and deed of trust based on defects allegedly rendering the assignment void. (Id. at p. 924.) Recently, this court applied Yvanova in holding that in an action for wrongful foreclosure based upon a void assignment of the deed of trust, the homeowner is not required to prove the wrongful foreclosure interfered with his or her ability to pay on the debt or lead to a foreclosure that would not have otherwise occurred. (Sciarratta v. U.S. Bank National Assn. (2016) 247 Cal.App.4th 552, 555.) In other recent developments, a split of authority now exists on whether lenders or loan servicers owe a duty of reasonable care to borrowers in connection with loan modifications. (Compare Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1183 [duty of care exists] with Lueras v. BAC Home Loans Servicing, L.P. (2013) 221 Cal.App.4th 49, 67-68 [residential mortgage lender does not owe duty of care to borrower in handling an application for a loan modification].) And in 2013, the year after the Parks' District Court action was dismissed, the court in Chavez v. Indymac Mortgage Services (2013) 219 Cal.App.4th 1052 held that in some circumstances, banks are contractually required to offer permanent loan modifications to borrowers who have complied with a TPP as part of an offered modification under HAMP.
Park contends that because changes in the law occurring after the district court dismissed his case would now establish his claims were legally viable—the court should not apply claim preclusion. Citing Greenfield v. Mather (1948) 32 Cal.2d 23 (Greenfield), Park contends res judicata should not be applied "so rigidly as to defeat the ends of justice or important considerations of policy." (Id. at p. 35.)
Park's argument fails, however, because of stronger countervailing policies he does not address and a California Supreme Court decision his opening brief ignores. It has been nearly 70 years since Greenfield, supra, 32 Cal.2d 23, and the quotation from that opinion upon which Park relies has never gained any traction. Justice Traynor dissented in Greenfield, stating that such a departure from res judicata "throws into question the finality of any judgment and thus is bound to cause infinitely more injustice in the long run that it can conceivably avert in this case. It is an invitation to all unsuccessful litigants to relitigate their cases, for they commonly view judgments against them as erroneous and hereafter can contend with justifiable cause that their cases also present an exceptional combination of circumstances requiring a departure from the doctrine of res judicata." (Id. at p. 36 (dis. opn. of Traynor, J.).)
In his reply brief, Park contends Greenfield, supra, 32 Cal.2d 23 "remains alive and well," citing as proof: Arcadia Unified School Dist. v. State Dept. of Education (1992) 2 Cal.4th 251 (Arcadia), City of Sacramento v. State of California (1990) 50 Cal.3d 51, and Robert J. v. Leslie M. (1997) 51 Cal.App.4th 1642. However, Arcadia and City of Sacramento do not involve the injustice exception. In fact, City of Sacramento does not even cite Greenfield. Rather, both cases involve the distinct "public interest exception" to res judicata—an exception Park does not, and cannot, assert because his claims are individual ones that do not concern a matter of public interest. Park's reliance on Robert J. is also misplaced. There, the court held res judicata should be "scrupulously honored," and the court refused to apply any "interests of justice" exception. (Robert J., at p. 1647.)
Claim preclusion does not preclude relitigation of a question of law where the issue concerns a matter of public interest, such as whether school districts can charge for public transportation (Arcadia, supra, 2 Cal.4th at pp. 257-259) or the validity of a tax affecting public finances and the interests of the public at large (Myers v. Board of Equalization (2015) 240 Cal.App.4th 722, 742-743).
In any event, the language in Greenfield, supra, 32 Cal.2d 23 upon which Park relies has been significantly limited by more recent California Supreme Court authority. In Slater v. Blackwood (1975) 15 Cal.3d 791 (Slater), the Supreme Court held that notwithstanding any contrary language in Greenfield, there is no intervening-change-in-law exception to res judicata:
"'In every instance where a rule established by case law is changed by a later case the earlier rule may be said to be "mistaken"'. . . . Such "mistakes" or "injustices" are not a ground for equity's intervention. So to hold would be to emasculate, if not wipe out, the doctrine of res judicata because the doctrine is most frequently applied to block relitigation based upon contentions that a law has been changed. Our courts have repeatedly refused to treat the self-evident hardship occasioned by a change in the law as a reason to revive dead actions . . . ." (Slater, supra, 15 Cal.3d at pp. 796-797.)
Park is correct that over time, changes in the law can lead to seemingly arbitrary and unwarranted distinctions in the treatment accorded similarly situated parties. (See Slater, supra, 15 Cal.3d at p. 797.) However, in Slater the Supreme Court determined that "'[public] policy and the interests of litigants alike require that there be an end to litigation.'" (Ibid.) The Slater Court concluded that the result urged by the plaintiff in that case (and, by a parity of reasoning, the result urged by Park here) would call into question "'the finality of any judgment and thus is bound to cause infinitely more injustice in the long run that it can conceivably avert in this case.'" (Ibid.) This is because "[t]he consistent application of the traditional principle that final judgments, even erroneous ones [citations] are a bar to further proceedings based on the same cause of action is necessary to the well-ordered functioning of the judicial process. It should not be impaired for the benefit of particular plaintiffs, regardless of the sympathy their plight might arouse in an individual case." (Ibid.)
In addition to citing Greenfield, supra, 32 Cal.2d 23, Park also contends his public policy argument is supported by Kerner v. Superior Court (2012) 206 Cal.App.4th 84, Zevnik v. Superior Court (2008) 159 Cal.App.4th 76, In re Harmon (9th Cir. 2001) 250 F.3d 1240, Lucido v. Superior Court (1990) 51 Cal.3d 335, and Danko v. O'Reilly (2014) 232 Cal.App.4th 732. However, these cases are materially distinguishable: Kerner involved an attempt to bind a nonparty who was not in privity to a factual determination made in some other case. (Kerner, at p. 126.) In Zevnik, the court addressed how issue preclusion should apply when a trial court renders a decision on alternative grounds. (Zevnik, at pp. 83-84.) Harmon involved issue preclusion, not claim preclusion, where a default judgment was entered. (Harmon, at pp. 1247-1249.) Lucido dealt with whether issue preclusion bars prosecuting a defendant for indecent exposure when, at a probation revocation hearing before trial, the court found the prosecution failed to prove a violation of probation based on the allege offense. (Lucido, at p. 348.) Danko involved adding an alter ego judgment debtor where a prior motion to do the same was expressly denied without prejudice. (Danko, at p. 741.)
Because the trial court correctly entered a judgment of dismissal based on the claim preclusive effect of the final judgment entered in the District Court action, it is unnecessary to consider the parties' other contentions, including whether the same result would be compelled by Bank of America's unlawful detainer judgment against the Parks, or whether Park's claims fail as a matter of law for reasons other than claim preclusion.
DISPOSITION
The judgment is affirmed. Respondents are entitled to costs incurred on appeal.
NARES, J. WE CONCUR: McCONNELL, P. J. AARON, J.