Opinion
D071245
10-26-2018
TIM M. BELNAP, D.D.S., INC., et al., Plaintiffs and Appellants, v. CONNIE L. PIERCE, D.D.S., INC., et al., Defendants and Respondents.
Catanzarite Law Corporation and Kenneth Joseph Catanzarite, Brandon E. Woodward for Plaintiffs and Appellants. Angelo Luigi Rosa for Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 37-2014-00004430-CU-FR-CTL) APPEAL from a judgment of the Superior Court of San Diego County, Judith F. Hayes, Judge. Affirmed; motion to dismiss denied. Catanzarite Law Corporation and Kenneth Joseph Catanzarite, Brandon E. Woodward for Plaintiffs and Appellants. Angelo Luigi Rosa for Defendants and Respondents.
Plaintiff and appellant Tim M. Belnap, D.D.S., Inc. appeals from a summary judgment in favor of defendants and respondents Connie L. Pierce, D.D.S. and Connie L. Pierce, D.D.S., Inc. (collectively Pierce) on plaintiff's San Diego County Superior Court complaint for fraud, breach of fiduciary duty and other causes of action arising out of a failed partnership between the parties, the dissolution of which was the subject of a 2013 arbitration resulting in an award favorable to Pierce. The trial court granted Pierce's summary judgment motion, ruling Pierce had demonstrated there were no triable issues of material fact as to plaintiff's claims, which due to the arbitrator's decision were barred by the doctrines of res judicata and collateral estoppel. Plaintiff contends the court erred by granting summary judgment, by denying its request for a continuance for additional discovery, and by assertedly disregarding its supplemental brief on the applicability of Bucur v. Ahmad (2016) 244 Cal.App.4th 175, decided after submission of briefing in connection with Pierce's summary judgment motion.
Pierce moves to dismiss the present appeal under the so-called doctrine of disentitlement, based on what she claims is the willful disobedience of court orders or obstructive tactics of Tim Belnap, the individual defendant who is no longer a party to this appeal. She alternatively contends the appeal is moot or "not appealable" based on the doctrines of res judicata and collateral estoppel. Pierce argues we should dismiss the appeal based on counsel's pursuit of it for his own personal interests. We decline to apply the doctrine of disentitlement in part because plaintiff already suffered the consequences of Belnap's misconduct, and reject Pierce's other contentions.
In March 2017, Tim Belnap filed for voluntary bankruptcy under Chapter 7 of the United States Bankruptcy Code. In April 2018, we dismissed his appeal for his failure to file an opening brief and because he lacked standing to pursue the appeal. Because both Belnap and his dental corporation were involved in the arbitration and litigants in the summary judgment proceedings below, in stating the background facts we refer to them collectively as Belnap. We refer to the remaining appellant, Belnap's dental corporation, as plaintiff.
On the merits, we conclude Pierce met her initial summary judgment burden to show prima facie that res judicata and collateral estoppel barred the present action, which presents the same primary rights and identical issues that were, or could have been, litigated in the arbitration. Plaintiff has not demonstrated the existence of triable issues of material fact justifying denial of Pierce's motion. Accordingly, we affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
In setting out the background facts, we view the evidence in the light most favorable to plaintiff as the losing party, liberally construing its evidentiary submissions while strictly scrutinizing Pierce's showing, and resolving evidentiary doubts or ambiguities in plaintiff's favor. (Elk Hills Power, LLC v. Board of Equalization (2013) 57 Cal.4th 593, 606; County of San Diego v. Superior Court (2015) 242 Cal.App.4th 460, 467; Code Civ. Proc., § 437c, subd. (c).)
Plaintiff is a corporation solely owned by Timothy M. Belnap, D.D.S. In 1988, Belnap acquired a dental practice. Beginning in about 1994, Connie Pierce worked there as an associate dentist. About ten years later in February 2004, Belnap and Pierce engaged a consultant to advise them about forming a partnership. They reviewed and approved preliminary documents, including a June 2004 "transition scenario" that allocated patients on a percentage basis (63 percent to Belnap and 37 percent to Pierce), and decided to proceed to form their partnership effective January 2005 as outlined in those documents. Belnap and Pierce assigned Belnap to handle the partnership's business aspects, and gave Pierce the responsibility to jointly engage a law firm to conform the draft partnership documents to California law. In the meantime, Belnap and Pierce operated the partnership under an oral agreement under which they would retain ownership and control over their pre-partnership patient lists, divide their income in a particular way, and retain their respective patient lists on the partnership's dissolution. The consultant prepared a purchase agreement and a form partnership agreement, labeled "Schedule B," which was to be the framework for the practice's governance, management and operations. At some point, Pierce informed Belnap that she had retained attorney Aaron Roberts and his then law firm to represent them both on partnership matters.
In March 2005, Pierce gave Belnap a transition and purchase agreement as well as a general partnership agreement, explaining that they had been conformed to California law. Without reading them, Belnap signed the documents, which formed the partnership effective January 1, 2005. According to Belnap, unbeknownst to him, Pierce had instructed the attorneys to change Schedule B to make "subtle [but] material" changes as to the patient allocations and exit provisions that would permit Pierce to take Belnap's patients on the partnership's dissolution.
The Arbitration
Several years later, Pierce sought to dissolve the partnership and initiated binding arbitration, which took place over the course of nine days in May 2013. At issue, among other things, were the parties' claims for breach of contract, breach of fiduciary duty, fraud, conversion, and interference with prospective economic advantage. The parties presented, and the arbitrator considered, both oral and written evidence in deciding the issues.
Belnap learned of Pierce's changes to the partnership documents during the arbitration. He had not known that attorney Roberts told Pierce he could not represent them both. The arbitrator permitted attorney Roberts to testify at the arbitration about matters from the time he first received a request to prepare documents to the time the March 2005 partnership documents were signed. She declined to permit any claim that no contract or partnership was ever created, and that the partnership should be rescinded. Thereafter, Belnap moved to amend his counter claims in the arbitration to add the affirmative defenses of mutual or unilateral mistake, in part based on the parties' arbitration testimony that they believed attorney Roberts and his law firm mutually represented them. Attorney Roberts in the meantime testified at the arbitration that he had explained to Pierce that he could only represent her; he could not represent both her and Belnap because they had adverse interests; and he had never been engaged by the partnership, met Belnap or spoke with him.
The arbitrator ruled in part: "I have the discretion to focus the presentation, and because arbitration—the function is to save you time and money, both parties, my order will be that Mr. Roberts can testify, but he can only testify about the time frame during—from the time that he first received any documentation and a request by the parties to prepare documents on this new partnership to the time that the documents were signed by the parties. And when I say 'documents,' I mean specifically the March [2005] partnership agreement, since the transition document predates that by three months, two or three months. [¶] . . . [¶] . . . And so the testimony would be limited to that scope."
At the same hearing, the arbitrator instructed the parties to brief their position as to what documents made up the written partnership agreements (including whether the transition agreement was part of the partnership documents), what specific conduct breached the agreements, and what provisions of the agreements were breached. She asked them to brief what conduct they believed breached fiduciary duties. The arbitrator stated, "[T]he parties agree that they want to dissolve their partnership, and what they're asking the arbitrator for is a ruling on how the . . . agreements of the parties govern the dissolution of their partnership and what the determinations will be regarding the rights of the parties in dissolution, including whether there are any damages that flow to either party as a result of any conduct of the other party, whether it be for a breach of terms of the contract or for a breach of some fiduciary duty that arises out of the partnership and the agreements."
The arbitrator ultimately denied Belnap's motion to amend. In his closing arbitration brief, Belnap nevertheless argued that Pierce's misrepresentations caused mutual or unilateral mistake allowing the March 2005 partnership documents to be rescinded or reformed. He also argued those documents were void "under the doctrines of equitable estoppel and unclean hands given Dr. Pierce's misrepresentations." He asked the arbitrator to find Pierce had breached fiduciary duties to him in part by intentionally misrepresenting that attorney Roberts represented them both and not disclosing changes to the partnership documents, and he had not committed such a breach. He asserted he reasonably expected that attorney Roberts represented both he and Pierce, and Pierce never advised him to the contrary. Belnap asserted Pierce admitted she knew attorney Roberts had made changes to the drafts but did not tell him.
The arbitrator issued an interim award in February 2014. In addition to determining whether the respective professional corporations of Belnap and Pierce were parties to the arbitration, the arbitrator addressed what operating documents governed the partnership; whether the partnership should be dissolved and the terms of dissolution; whether any party breached the operating documents; and whether any party breached fiduciary duties, committed fraud, interfered with the other's economic advantage, or converted partnership assets. In detailed findings, the arbitrator determined that the March 2005 transition and purchase agreement and general partnership agreement made up the original partnership documents governing the partnership; that the parties had jointly engaged attorney Roberts to prepare them, and both parties signed them. The arbitrator rejected Belnap's arguments that the partnership documents included the "long form Schedule B" or the transition scenario: she found both parties testified they had not seen that Schedule B until after the arbitration and "there was no credible evidence to support a finding that Belnap was induced to enter into the Partnership Agreement based on the [transition scenario] or its contents" but "[o]n the contrary, . . . Belnap acknowledged that he was not relying on other Transition Documents or the Transition 'other than the express representations and warranties made by such other Party in this Agreement or the other Transition Documents.' " The arbitrator made clear her decision was "an effort to explain the 'reasoned' basis for this Interim Award and Order" and not an attempt to reference all operative facts, all evidence introduced during the hearing, or all evidence supporting any specific finding or ultimate determination. The arbitrator's decision states: "The failure to refer to all the theories advanced, or authorities cited, does not mean that they were not reviewed or considered."
The arbitrator ruled in Pierce's favor, finding the parties had agreed to amend their original partnership documents to implement an equal partnership with equal ownership and responsibilities, and an equal patient allocation; Belnap had breached the partnership documents by failing to ensure such an allocation but instead taking steps to prevent an equal allocation of patients as well as diverting new patients to himself; Belnap had breached his fiduciary duty to Pierce by these actions as well as by making decisions affecting the practice without Pierce's agreement and denying her management, control, and access to patient charts and records; and Belnap interfered with Pierce's ability to obtain an equal patient allocation by thwarting reallocation of existing and new patients, and denying Pierce the opportunity to provide dental services resulting from her performance of exams. The arbitrator answered "no" to whether "any party perpetrate[d] fraud on any other party" and whether "any party convert[ed] assets of the partnership to the detriment of another party . . . ." The arbitrator dissolved the partnership as of March 1, 2014. She awarded Pierce $443,445 in damages and declared her the prevailing party in the arbitration.
The arbitrator entered a final award, which incorporated the interim findings, in March 2014. In October 2014, the court confirmed the arbitration award and concurrently denied Belnap's petition to vacate the award. The court entered judgment in the arbitration, awarding Pierce damages, interest, attorney fees and costs.
The Present Lawsuit and the Orange County Appeal
On the day the arbitrator issued the interim award, Belnap and his dental corporation sued Pierce in San Diego County Superior Court (the San Diego action), alleging various species of fraud, breach of fiduciary duty, declaratory relief, conversion, breach of oral partnership agreement as well as breach of implied contract, dissolution of the partnership, and unfair business practices under the Unfair Competition Law (UCL, Bus. & Prof. Code, § 17200 et seq.). Belnap sought an accounting and recovery in quantum meruit from January 2005 for Belnap's labor and services as the manager of the partnership business. Belnap alleged Pierce engaged in fraud, as well as breached her fiduciary duties as a partner, relating to her efforts in what should have been the joint engagement of attorney Roberts and his law firm to conform the draft partnership agreements to California law. He alleged Pierce hid the fact she had not engaged the law firm on behalf of both partners so as to obtain an advantage for herself when the attorneys made changes to the documents. He alleged that as a result of Pierce's fraud, he agreed to form a partnership with Pierce under their oral agreement, and later was induced to sign the partnership agreement and accept a promissory note. Belnap sought a judicial declaration that the partnership documents were void ab initio and subject to rescission due to Pierce procuring them by fraud. He claimed Pierce converted partnership assets to her own possession and control; breached oral and implied agreements concerning the partnership's operation; and engaged in wrongful business practices by all of her previously described acts, causing him injury. Belnap notified the arbitrator of his filing, and asked the arbitrator to defer further action until the San Diego court could address the assertedly void nature of both partnership agreements.
Specifically, the complaint alleges 12 causes of action: (1) fraud and deceit in violation of Civil Code sections 1572, 1709 and 1710; (2) breach of fiduciary duty; (3) constructive fraud; (4) negligent misrepresentation; (5) declaratory relief; (6) conversion; (7) breach of oral partnership agreement; (8) breach of implied contract; (9) dissolution of partnership; (10) accounting; (11) reasonable value of services (quantum meruit); and (12) unfair business practices under Business and Professions Code section 17200 et seq.
In February 2015, Pierce moved for summary judgment or alternatively summary adjudication of issues. She argued the arbitrator had conclusively adjudicated the issues raised in Belnap's litigation to his detriment, and that the complaint was not just an improper collateral attack, but also an attempt to harass Pierce by relitigating exactly the same issues. Pierce argued: "A confirmed arbitration award has the same effect as a judgment in a civil action . . . meaning the doctrines of res judicata and collateral estoppel apply to confirmed arbitration awards. [Citation.] When either of these doctrines refute [sic] all triable issues of material fact in an action summary judgment is an appropriate remedy[.]" (Emphasis omitted.)
Shortly after Pierce moved for summary judgment, Belnap appealed from the Orange County Superior Court's judgment confirming the arbitration award. The Fourth District Division Three court ultimately dismissed that appeal in a nonpublished opinion. (Pierce v. Belnap (Dec. 1, 2015, G051433) [nonpub. opn.].) That opinion is an exhibit to Pierce's motion to dismiss the appeal. It was not part of the summary judgment papers.
In April 2015, Belnap opposed Pierce's summary judgment motion, lodging objections to some of Pierce's evidence. He asserted that Pierce's alternate motion for summary adjudication was procedurally improper. On the merits, he argued Pierce did not meet her burden to show collateral estoppel applied in part because the present claims and issues were not identical or actually litigated. He argued the arbitrator had refused his motion to amend his counter claims and defenses, and ignored a reconsideration motion he had made based on later-discovered new facts and evidence. Thus, he maintained he was not allowed a full and fair opportunity in the arbitration to litigate his claims, including for fraud, breach of fiduciary duty, conversion and partnership dissolution. Thereafter, the trial court vacated the summary judgment hearing and trial date.
Parties are required to recite facts in their separate statements, not legal conclusions. (See Code Civ. Proc., § 437c, subd. (b).) Plaintiff's opposing separate statement disputed virtually every fact set forth by Pierce with argumentative assertions and conclusions. For example, plaintiff disputed Pierce's factual assertions concerning the arbitrator's findings, including her finding that the March 2005 partnership documents governed the partnership, stating that the "issue is presently being appealed" and the "Arbitrator refused to allow Plaintiffs to make any amendments and would not allow a claim that there was no contract, which clearly have divested the Arbitrator of jurisdiction." Plaintiff disputed on the same ground the fact that the Orange County Superior Court granted Pierce's motion to confirm the award and entered judgment on it. To defeat summary judgment or adjudication, plaintiff cannot rely on assertions that are " 'conclusionary [and] argumentative,' " but rather must " 'make an independent showing by a proper declaration or by reference to a deposition or another discovery product that there is sufficient proof of the matters alleged to raise a triable question of fact . . . .' " (Roberts v. Assurance Co. of America (2008) 163 Cal.App.4th 1398, 1404.) Plaintiff's opposing statement is of little value. Though we are bound to view plaintiff's evidence liberally, we are entitled to disregard such statements.
In April 2016, the court permitted the parties to file a supplemental brief on a recently decided case: Bucur v. Ahmad, supra, 244 Cal.App.4th 175. That same month, it reset the trial date. Shortly afterwards the court rescheduled the summary judgment hearing.
In May 2016, Belnap sought ex parte to continue the summary judgment hearing on grounds he required further discovery to add new facts to his opposition. He asserted that despite Pierce having stated under oath she produced all material information during the arbitration, in February 2016 Pierce produced new evidence—invoices and an email—assertedly showing, contrary to the arbitrator's finding, Pierce and attorney Roberts had received and seen the "long-form Schedule 'B' " before entering into the written partnership agreements. Belnap characterized the documents as "wrongfully withheld during the [a]rbitration." In a supporting declaration, his counsel asserted that the discovery would refute Pierce's argument that attorney Roberts had not made changes to the Schedule B document and show fraud in the inception, establishing that the issues concerning the attorney's knowledge could not have been actually litigated at the arbitration to invoke collateral estoppel. The trial court denied the request, stating it would review the matter in connection with the summary judgment motion and request further briefing if necessary.
In June 2016, the parties submitted their supplemental briefing on Bucur v. Ahmad, supra, 244 Cal.App.4th 175. Belnap argued Bucur v. Ahmad did not state new law but was distinguishable and inapplicable in any event; he sought to submit a declaration of an attorney regarding the purported new evidence that was the subject of Belnap's prior ex parte application to continue the summary judgment motion. For her part, Pierce argued Bucur stood for the proposition that collateral estoppel and res judicata were not limited to identical claims or issues. She objected to and moved to strike Belnap's briefing on Bucur, asserting it improperly went beyond the court's order by addressing her arguments.
The court ultimately granted Pierce's motion. Overruling Belnap's evidentiary objections, it ruled Pierce had sustained her burden to demonstrate there were no triable issues of material fact as to any of Belnap's claims, which were otherwise barred by the doctrines of res judicata and collateral estoppel. It rejected Belnap's attempts to distinguish the arbitration claims from the claims alleged in his complaint, finding "any version of [Belnap's] claims asserted in the instant complaint, were necessarily litigated in the arbitration, or could have been litigated in the arbitration. Whether the arbitrator discounted arguments or defenses raised in the arbitration or whether [Belnap] contend[s] the contract was fraudulently induced in its inception or in its execution or whether the oral contract is enforceable despite the integration clauses in the subsequent written contracts are all issues that were either necessarily litigated or could have been litigated in the arbitration proceeding." Quoting from Bucur v. Ahmad, supra, 244 Cal.App.4th 175, it continued: " 'If the matter was within the scope of the 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. The reason for this is manifest. A party cannot by negligence or design withhold issues and litigate them in consecutive actions. Hence the rule is that the prior judgment is res judicata on matters which were raised or could have been raised, on matters litigated or litigable.' [Citation.] For purposes of res judicata, even an unconfirmed arbitral award is the equivalent of a final judgment." The trial court disregarded Belnap's supplemental brief on Bucur and the accompanying declaration as "improperly before the Court."
Plaintiff appeals from the ensuing judgment.
DISCUSSION
I. Pierce's Motion to Dismiss
We begin with Pierce's motion to dismiss plaintiff's appeal. She advances several grounds for dismissal, all of which are presented almost verbatim in her respondent's brief on appeal. None of them persuade us to dismiss the appeal, as we will explain. A. Doctrine of Disentitlement
Pierce argues the appeal should be dismissed under the doctrine of disentitlement, which gives courts inherent power to dismiss an appeal by a party who has engaged in willful disobedience or obstructive tactics. (See Stoltenberg v. Ampton Investments, Inc. (2013) 215 Cal.App.4th 1225, 1229-1230.) Both in a separately-filed motion and in her respondent's brief, Pierce argues the conduct of Tim Belnap, the individual, who is no longer a party to this appeal, in asserting legal challenges to the 2014 arbitration award, then violating the arbitrator's orders by his handling of partnership assets, warrants application of the doctrine. She asks us to take judicial notice of various court documents, including her motion to dismiss the appeal of the Orange County Superior Court's judgment confirming the arbitration award by Tim Belnap and his dental corporation filed in the Fourth District Division Three Court of Appeal, the appellate court's opinion dismissing that appeal, a June 2017 order granting discharge in bankruptcy, the docket in Tim Belnap and his wife's Chapter 7 bankruptcy filed in the United States Bankruptcy Court for the Southern District of California, and other bankruptcy court papers including applications, rulings, transcripts and schedules. Pierce also asks us to take judicial notice of the San Diego court's tentative and final summary judgment orders that are the subject of the present appeal. Because the validity of the summary judgment orders is before us and the orders are in the record, we deny the request with regard to those documents as unnecessary. (Accord, Kelsey v. Waste Management of Alameda County (1999) 76 Cal.App.4th 590, 599, fn. 5.)
Pierce incorrectly states that it was "this court" that in December 2015 dismissed Belnap's last appeal. It appears she intended to refer to the Fourth District Division Three Court of Appeal.
Apparently based on the documents identified in her request, Pierce makes assertions about Tim Belnap's and his company's underlying conduct. According to Pierce, the documents show they "have a long history of challenging the findings of lower courts issuing orders against them . . . ." She asserts Tim Belnap was "cited for contempt in his attempt to bankrupt the remaining entity [his dental corporation], refused to appear for examination as a judgment-debtor in the collection proceedings initiated by [Pierce], and the basis of his contempt could accurately be described as trespass, breaking and entering, and theft." She argues the judicially noticeable documents show Belnap "stole partnership patient records, improperly transferred property, and conveyed a software license to his son-in-law's practice . . . ." She argues Tim Belnap "unilaterally closed the partnership bank account and has refused repeated requests for an accounting of partnership expenses . . . ." None of these assertions are accompanied by pinpoint cites to any particular document or court record. Rather, in making these assertions, she purports to broadly incorporate by reference "[t]he facts identified in the pleadings and rulings attached" to her request for judicial notice.
We decline to apply the disentitlement doctrine. As a preliminary matter, Pierce's request for judicial notice does not comply with California Rules of Court, rule 8.252(a), which requires that she state in the request, among other things, "[w]hy the matter to be noticed is relevant to the appeal" and "[w]hether the matter to be noticed relates to proceedings occurring after the order or judgment that is the subject of the appeal." (Cal. Rules of Court, rule 8.252(a)(2)(A), (D).) Such information is not contained in the request; Pierce merely describes the documents and requests that we take judicial notice of them under Evidence Code sections "452(c), 452(c) [sic], 452(g) and 453 . . . ." Thus, we do not judicially notice the various facts asserted by Pierce to support the doctrine.
Even if we were to judicially notice on our own motion Pierce's Orange County Superior Court filing, the appellate court's opinion and the bankruptcy papers as court records (Evid. Code, §§ 452, subd. (d), 459, subd. (a); Brosterhous v. State Bar (1995) 12 Cal.4th 315, 325 [reviewing court may take judicial notice of matters not before the trial court]; Van Zant v. Apple Inc. (2014) 229 Cal.App.4th 965, 971, fn. 3 [taking judicial notice of federal court docket to show no litigation in that court between December 2011 and the filing of the appellate opinion]), we may not take judicial notice of factual matters stated within them. (Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 987-988.) " ' "Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning." [Citation.] While courts take judicial notice of public records, they do not take notice of the truth of matters stated therein. [Citation.] "When judicial notice is taken of a document, . . . the truthfulness and proper interpretation of the document are disputable." ' " (Ibid.)
Judicial notice of an appellate opinion in particular is generally limited to the existence of the opinion and result reached and does not include the facts stated therein. (See Kilroy v. State of California (2004) 119 Cal.App.4th 140, 145-147, 148 [it is proper for trial court to take judicial notice of another judge's order to prove the truth of the fact such an order was issued, but not to use it as evidence of the facts found by the judge; "[a]n appellate court's description of facts is merely the hearsay assertions of the justices who delivered the opinion" and such assertions are inadmissible unless they fall within an exception to the hearsay rule]; Williams v. Wraxall (1995) 33 Cal.App.4th 120, 130, fn. 7; Gilmore v. Superior Court (1991) 230 Cal.App.3d 416, 418.) We may take judicial notice of the existence of the opinion and the fact the appellate court dismissed Belnap's appeal of the Orange County Superior Court's order (Evid. Code, §§ 452, subd. (d), 459, subd. (a)), but we may not judicially notice the facts asserted within the opinion as proof of Belnap's conduct. (Kilroy, at pp. 146-147; Heritage Pacific Financial, LLC v. Monroy, supra, 215 Cal.App.4th at p. 988.)
Whether a factual finding in an opinion is true " ' "is a different question than whether the truth of that factual finding may or may not be subsequently litigated a second time. The doctrines of res judicata and collateral estoppel will, when they apply, serve to bar relitigation of a factual dispute even in those instances where the factual dispute was erroneously decided in favor of a party who did not testify truthfully." [Citation.] In other words, even though a factual finding in a prior judicial decision may not establish the truth of that fact for purposes of judicial notice, the finding itself may be a proper subject of judicial notice if it has a res judicata or collateral estoppel effect in a subsequent action.' " (Hawkins v. SunTrust Bank (2016) 246 Cal.App.4th 1387, 1393, quoting Kilroy v. State of California, supra, 119 Cal.App.4th at p. 148.)
As for the bankruptcy court docket, the same principles apply. (See Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1607, fn. 1 [taking judicial notice that the bankruptcy court made a finding, but not taking judicial notice of the truth of the finding].) We may take judicial notice of the fact of Tim Belnap's bankruptcy and discharge, but other facts concerning Tim Belnap's underlying conduct purportedly reflected in those court records are not properly the subject of judicial notice. In sum, Pierce's invocation of the doctrine of disentitlement fails for the absence of a factual basis to support her assertions of Tim Belnap's wrongful or obstructive conduct.
Setting aside the evidentiary failures, we would be hesitant in any event to apply the disentitlement doctrine in this appeal. Our colleagues in the Fourth District, Division Three previously invoked the doctrine to dismiss Belnap's appeal of the Orange County Superior Court's order confirming the arbitration award. Thus, Belnap has already suffered the consequences of whatever willful or wrongful conduct he engaged in that the court found justified application of the doctrine in connection with the arbitrator's orders and Belnap's Chapter 7 bankruptcy. Further, though we acknowledge the doctrine is not limited to cases in which an appellant has violated the order from which he or she appeals (In re E.M. (2012) 204 Cal.App.4th 467, 477), we observe that neither Belnap nor his dental corporation have been accused of violating any proceeding in connection with the San Diego action or frustrating the San Diego court with regard to the summary judgment at issue in this appeal. The disentitlement doctrine is a discretionary tool, not a jurisdictional doctrine, and " 'may be applied when the balance of equitable concerns make it a proper sanction . . . .' " (San Francisco Unified School Dist. ex rel. Contreras v. First Student, Inc. (2013) 213 Cal.App.4th 1212, 1239.) We decline to exercise our discretion to resort to it here. B. Standing
Pierce suggests Tim M. Belnap, D.D.S., Inc. lacks standing to appeal. As we understand her argument, because the corporation is an entity owned by Tim Belnap, it became property of the bankruptcy estate under the control of the United States trustee. She supports the argument with title 11 United States Code section 541, which provides in part that the bankruptcy estate is comprised of "all legal or equitable interests of the debtor" as of the case's commencement, and Ninth Circuit authority holding that a debtor's property includes causes of action. She asserts the case law is "dispositive" apart from all of her other arguments supporting her motion to dismiss.
The argument is without merit. Plaintiff here is a separate legal entity that was not a party to Belnap's Chapter 7 bankruptcy petition. Pierce's authorities are inapposite, as they involve individuals who were stripped of standing after filing for bankruptcy protection either alone (Turner v. Cook (9th Cir. 2004) 362 F.3d 1219, 1225-1226 [after individual filed for bankruptcy, his cause of action became property of the bankruptcy estate and his appeal was dismissed]) or with their company. (Sierra Switchboard Co. v. Westinghouse Electric Corporation (9th Cir. 1986) 789 F.2d 705, 706, 709 [both individual and her company that she co-owned and managed filed for bankruptcy, court held her emotional distress claim became part of the bankruptcy estate].) Notably, the Ninth Circuit in Turner v. Cook went on to decide the merits of the appeal as to the other appellants in that case (Turner, at p. 1226), which included a limited liability company owned by the debtor's family trust. (Id. at p. 1222 & fn. 1.)
A "party seeking to appeal must (1) be a party of record in the trial court, and (2) be aggrieved by the order or judgment from which the appeal is taken. [Citation.] A party is aggrieved for appellate standing purposes if the party's ' " ' "rights or interests are injuriously affected by the judgment [or order]." ' " ' [Citation.] Standing is a jurisdictional requirement [citation], but we must liberally construe standing and resolve all doubts about it in favor of the right to appeal." (Vitatech Internat., Inc. v. Sporn (2017) 16 Cal.App.5th 796, 803-804.) Plaintiff here meets both criteria; it was a party to the San Diego action against which the court entered summary judgment. It is aggrieved by the judgment at issue and has standing to pursue this appeal. C. Mootness and Appealability
Pierce argues the appeal is moot or the trial court's findings are "not appealable" based on the doctrines of res judicata and collateral estoppel. She argues appeals "must not be allowed" where a " 'subsequent action' . . . would allow a litigant to be subjected to the same claim in consecutive proceedings . . . ." (Emphasis omitted.)
We have no quarrel with the general principles of collateral estoppel expressed in Lumpkin v. Jordan (1996) 49 Cal.App.4th 1224, cited by Pierce, though we observe the California Supreme Court prefers the terms "issue preclusion" and "claim preclusion" in place of collateral estoppel and res judicata, respectively. (Samara v. Matar (2018) 5 Cal.5th 322, 326.) But in Lumpkin v. Jordan, the Court of Appeal did not dismiss the appeal as moot; it considered the merits of the plaintiff's claim that the trial court improperly applied issue and claim preclusion to sustain without leave to amend the defendant's demurrer. (49 Cal.4th at pp. 1229-1231.) While the preclusion doctrines operate as a bar to relitigating entire causes of action or previously decided issues that have been finally determined by a trial court (Samara, at pp. 326-327), they do not render "moot" an appeal by a party subjected to a trial court's decision to grant summary judgment based on the doctrines. Ample authority demonstrates that when a party raises issue and claim preclusion as defenses, including by motion for summary judgment, the propriety of a trial court's order will be considered on appeal. (See Saunders v. New Capital for Small Businesses, Inc. (1964) 231 Cal.App.2d 324, 331; see Basurto v. Imperial Irrigation District (2012) 211 Cal.App.4th 866, 877 [appeal raised the question of whether the trial court erred in granting summary judgment on grounds of collateral estoppel and res judicata]; George v. California Unemployment Ins. Appeals Bd. (2009) 179 Cal.App.4th 1475, 1486-1488 [" ' "Summary judgment is an appropriate remedy when the doctrine of res judicata in its subsidiary form of collateral estoppel refutes all triable issues of fact suggested by the pleadings" ' "; Court of Appeal considered issue and held res judicata did not preclude the plaintiff's FEHA claim and summary judgment was thus properly denied].) Pierce's authority provides no basis to conclude that either preclusion doctrine requires an appeal be dismissed as moot.
Nor is there any basis to conclude the summary judgment here is not appealable under Code of Civil Procedure section 904. It is an appealable judgment under Code of Civil Procedure section 904, subdivision (a) as any other judgment. (See Saunders v. New Capital for Small Businesses, Inc., supra, 231 Cal.App.2d at p. 326.)
Pierce further contends "the examination of res judicata on appeal is limited to jurisdictional challenges" and that "this is the only way to appeal a finding of res judicata." (Emphasis omitted.) She suggests this court may review the trial court's order only if the parties in the summary judgment papers raised issues concerning "the venue and jurisdiction of the San Diego Superior Court . . . ." None of Pierce's cited authorities stand for this broad proposition, which confuses several principles and misreads the cases. Estate of Buck (1994) 29 Cal.App.4th 1846 discusses when a litigant may launch a collateral attack on a final judgment (id. at pp. 1853-1854); it does not involve application of the preclusive doctrines of res judicata or collateral estoppel. Brady v. Superior Court (1962) 200 Cal.App.2d 69 did not involve either an appeal or application of either preclusive doctrine: the appellate court, on a petition for writ of certiorari, reviewed a lower court's contempt order based on the petitioner's asserted willful disobedience of a permanent injunction. (Id. at p. 77.) Brady held the trial court had improperly interpreted an ordinance in issuing the injunction, an act that was in excess of its jurisdiction that rendered the order void. (Id. at pp. 71, 73, 77, 82.) Consequently, Brady held the trial court could not adjudge the petitioner in contempt. (Id. at p. 75.) Brady does not support Pierce's proposition. Nelson v. Crocker National Bank (1975) 51 Cal.App.3d 536 says nothing about an appellate court's authority to consider the doctrine of res judicata on appeal; the court upheld a grant of summary judgment in a bank trustee's favor predicated on the existence of a prior valid and binding judgment against the plaintiff (id. at pp. 539, 541-542), rejecting the plaintiff's argument that res judicata did not apply because the prior judgment was void for lack of jurisdiction. (Id. at pp. 538-539.) Additionally, the Nelson court observed that after the prior judgment was entered, the plaintiff "undertook three additional spurious proceedings seeking to circumvent, by devious means, the decision of the court." (Id. at p. 541.) Thus, it held the present appeal was frivolous, warranting sanctions. (Id. at pp. 541-542.) Pierce here does not contend that plaintiff has filed a frivolous appeal, nor does she seek sanctions. In sum, we reject Pierce's challenges based on mootness and appealability. C. Claim of Improper Pursuit of Appeal
In explaining why it was required to address the court's power to issue the injunction that produced the contempt proceedings, the Brady court pointed out the difference between a court's fundamental jurisdiction and acts taken in excess of jurisdiction and distinguished several authorities relied upon by the real party in interest as not involving contempt citations. (Brady v. Superior Court, supra, 200 Cal.App.2d at pp. 73-75.) It was in this context that Brady quoted from Hollywood Circle, Inc. v. Dept. of Alcoholic Beverage Control (1961) 55 Cal.2d 728, 731: " 'An act that may be in excess of jurisdiction so as to justify review by prerogative writ [citations] will nevertheless be res judicata if the court had jurisdiction over the subject and the parties." (Id. at p. 76, recounting the California Supreme Court's discussion of Signal Oil & Gas Co. v. Ashland Oil & Refining Co. (1958) 49 Cal.2d 764.)
Pierce maintains the present appeal is being pursued only for plaintiff's counsel's personal benefit in his quest to recover fees and costs, not on plaintiff's behalf. According to Pierce, counsel's conduct, which she suggests violates California Rules of Professional Conduct prohibiting counsel from bringing an action "without probable cause" (Rules of Prof. Conduct, rule 3-200) or accepting unconscionable fees (Rules of Prof. Conduct, rule 4-200), reflects an improper use of the appellate process. Pierce argues this is an independent basis to dismiss the appeal.
None of these assertions persuade us to dismiss this appeal. Pierce cites no authority for the proposition that a counsel's violation of ethical rules pertaining to his continued employment and fee agreement with his client warrant dismissal of an appeal. Pierce has forfeited any points concerning dismissal of the appeal on this ground. (Petitpas v. Ford Motor Co. (2017) 13 Cal.App.5th 261, 271.) This latter claim also asks us to draw inferences from counsel's filings reflected in the bankruptcy court docket accompanying Pierce's request for judicial notice, which Pierce states assertedly show counsel's only motivation in pursuing the present appeal is to obtain a fee award. This is not a proper use of judicial notice. (See Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 760-761 ["[J]udicial notice can be taken of matters not reasonably subject to dispute, but cannot be taken of matters shown to be reasonably subject to dispute"]; Hamilton v. Greenwich Investors XXVI, LLC, supra, 195 Cal.App.4th at p. 1607, fn. 1 [declining to judicially notice the truth of court's findings that the filing of a bankruptcy petition " 'was part of a scheme to delay, hinder and defraud creditors that involved either: [¶] transfer of all or part ownership of, or other interest in, the Property without the consent of the secured creditor or court approval. [¶] [or] multiple bankruptcy filings affecting the Property' "].) As we have stated, where the proposed material to be noticed is subject to interpretation as to its legal significance, it does not fall within the scope of appropriate judicial notice on appeal. (Id. at p. 761; L.B. Research & Education Foundation v. UCLA Foundation (2005) 130 Cal.App.4th 171, 180, fn. 2.)
II. Summary Judgment
A. Standard of Review
"We review the granting of [Pierce's] summary judgment motion de novo, considering all of the evidence presented by the parties, except that which was properly excluded by the trial court." (Basurto v. Imperial Irrigation Dist., supra, 211 Cal.App.4th at p. 877, citing Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334.) Despite that review standard, we presume the judgment is correct, and the " 'appellant has the burden of showing error, even if he did not bear the burden in the trial court.' " (Go Tek Energy, Inc. v. SoCal IP Law Group, LLP (2016) 3 Cal.App.5th 1240, 1245.) " 'We are not bound by the [trial] court's stated reasons for its summary judgment ruling; rather, we examine the facts before the trial court then independently determine their effect as a matter of law.' " (Basurto, at p. 877.) B. Pierce Sufficiently Raised Both Issue and Claim Preclusion Doctrines Below
Plaintiff contends that Pierce did not raise the bar of claim preclusion (res judicata) in her moving or reply summary judgment papers, waiving any arguments concerning that doctrine and failing to meet her burden to show prima facie that claim preclusion applies. We disagree.
Pierce asserted both defenses in her answer to plaintiff's complaint. And, as we have summarized above, Pierce's summary judgment papers referenced both doctrines and pointed out that when either doctrine refuted all triable issues of material fact, summary judgment was appropriate. In her motion Pierce cited authorities applying res judicata, including in the summary judgment context. (See Wade v. Ports American Management Corp. (2013) 218 Cal.App.4th 648, 653-660 [application of res judicata in a summary judgment context]; Sartor v. Superior Court (1982) 136 Cal.App.3d 322, 327 ["Summary judgment is an appropriate remedy when the doctrine of res judicata in its subsidiary form of collateral estoppel refutes all triable issues of fact suggested by the pleadings and supporting documents"]; Roberson v. City of Rialto (2014) 226 Cal.App.4th 1499, 1510 [describing doctrine of res judicata and its prerequisites for applying it " ' " 'to either an entire cause of action or one or more issues . . . .' " ' "].) Pierce specifically argued both in her moving and reply papers that plaintiff's "claims" and "causes of action" were identical to those litigated or could have been litigated in the arbitration and therefore barred by the arbitrator's findings. Pierce also argued in opposition to Belnap's ex parte application to continue the summary judgment hearing that her motion "proves this action is barred by the collateral estoppel and res judicata doctrines." (Some capitalization and emphasis omitted.) The trial court relied upon both doctrines; ruling Pierce had shown "plaintiff's claims are otherwise barred by the doctrines of res judicata and collateral estoppel."
Notably, at the time Pierce filed her answer (in November 2014) and summary judgment motion (in February 2015), courts commonly used the term res judicata to encompass both claim and issue preclusion; the term referred to both preclusion doctrines. (See DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 823-824 [discussing usage in prior opinions]; Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 797 [characterizing res judicata as having a "primary aspect" (claim preclusion) and "secondary aspect" (collateral estoppel)].) Thus, even had Pierce referred only to collateral estoppel in her papers, she would have necessarily invoked principles of res judicata. In any event, on this record we see nothing preventing Pierce from raising both doctrines in her respondent's brief, particularly where the trial court relied upon both doctrines in granting summary judgment. C. Pierce Met Her Threshold Burden by Making a Prima Facie Showing that Plaintiff's Present Complaint Involves the Same Primary Rights and Same Issues Asserted in the Arbitration
Pierce as the defendant moving for summary judgment had the initial burden to demonstrate that plaintiff's claims were barred by the doctrines of issue or claim preclusion. (Morris v. De La Torre (2005) 36 Cal.4th 260, 264-265; Basurto v. Imperial Irrigation District, supra, 211 Cal.App.4th at p. 877.) She was required to do so by a prima facie showing. (Basurto, at p. 881; see Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 861; Thompson v. Ioane (2017) 11 Cal.App.5th 1180, 1195-1196.)
"Claim and issue preclusion have different requirements and effects. Claim preclusion prevents relitigation of entire causes of action. [Citation.] Claim preclusion applies only when 'a second suit involves (1) the same cause of action (2) between the same parties [or their privies] (3) after a final judgment on the merits in the first suit.' [Citation.] Issue preclusion, by contrast, prevents 'relitigation of previously decided issues,' rather than causes of action as a whole. [Citation.] It applies only '(1) after final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party in the first suit or one in privity with that party.' [Citation.] Courts have understood the ' "necessarily decided" ' prong to 'require[ ] only that the issue not have been "entirely unnecessary" to the judgment in the initial proceeding' [citation]—leaving room for a decision based on two grounds to be preclusive as to both." (Samara v. Matar, supra, 5 Cal.5th at pp. 326-327.)
The preclusion doctrines apply to arbitration awards as well. (See Wade v. Ports America Management Corp., supra, 218 Cal.App.4th at p. 653; Thibodeau v. Crum (1992) 4 Cal.App.4th 749, 755; Kelly v. Vons Companies, Inc. (1998) 67 Cal.App.4th 1329, 1335-1336; Sartor v. Superior Court, supra, 136 Cal.App.2d at p. 328.)
" 'Two proceedings are on the same cause of action if they are based on the same "primary right." [Citation.] The plaintiff's primary right is the right to be free from a particular injury, regardless of the legal theory on which liability for the injury is based. [Citation.] The scope of the primary right therefore depends on how the injury is defined. A cause of action comprises the plaintiff's primary right, the defendant's corresponding primary duty, and the defendant's wrongful act in breach of that duty. [Citation.] [¶] An injury is defined in part by reference to the set of facts, or transaction, from which the injury arose.' " (Silverado Modjeska Recreation & Parks District v. County of Orange (2011) 197 Cal.App.4th 282, 297-298; see Boeken v. Philip Morris USA, Inc., supra, 48 Cal.4th at p. 798 ["the cause of action is the right to obtain redress for a harm suffered, regardless of the specific remedy sought or the legal theory (common law or statutory) advanced"]; Cal Sierra Development, Inc. v. George Reed, Inc. (2017) 14 Cal.App.5th 663, 675-676 [harm suffered is the "significant factor" in determining whether the same cause of action is involved in two suits].) Because a cause of action is independent of the remedy and relief sought, seeking more than one type of relief in connection with a single injury does not create more than one cause of action. (Bay Cities Paving & Grading, Inc. v. Lawyers' Mutual Ins. Co. (1993) 5 Cal.4th 854, 860; Crowley v. Katleman (1994) 8 Cal.4th 666, 682.) And a single cause of action defined in terms of the plaintiff's primary right may include more than one instance of alleged wrongdoing. (Baral v. Schnitt (2016) 1 Cal.5th 376, 394.)
With respect to issue preclusion, " '[t]he "identical issue" requirement addresses whether "identical factual allegations" are at stake in the two proceedings, not whether the ultimate issues or dispositions are the same.' " (Diocese of San Joaquin v. Gunner (2016) 246 Cal.App.4th 254, 266, quoting Lucido v. Superior Court (1990) 51 Cal.3d 335, 342.) " 'An issue is actually litigated "[w]hen [it] is properly raised, by the pleadings or otherwise, and is submitted for determination, and is determined . . . . A determination may be based on a failure of . . . proof . . . ." ' " (Mills v. U.S. Bank (2008) 166 Cal.App.4th 871, 896.) Further, the parties are not required to have actually litigated an issue in the prior lawsuit for it to be precluded, as res judicata also bars issues that could have been litigated. (In re Prather (2010) 50 Cal.4th 238, 260; Federation of Hillside and Canyon Associations v. City of Los Angeles (2004) 126 Cal.App.4th 1180, 1202; Weikel v. TCW Realty Fund II Holding Co. (1997) 55 Cal.App.4th 1234, 1245.) When the parties have had an opportunity to present their full case, the issue is considered actually litigated. (Lucido v. Superior Court, supra, 51 Cal.3d at p. 341.)
Plaintiff does not dispute Pierce's summary judgment arguments that the arbitration resulted in a final judgment on the merits via a confirmed arbitration award, and the parties were identical. Its challenge on appeal concerns the identity of the issues decided by the arbitrator and the issues presented in the present complaint. On that point, Pierce argued the issues in the present action were either litigated in the arbitration or could have been raised. She also argued Belnap was estopped from raising issues as to fraud, breach of fiduciary duty, constructive fraud and negligent misrepresentation (Belnap's first, second, third and fourth causes of action) because the arbitrator specifically found Pierce had not defrauded Belnap or breached any fiduciary duty, and that Pierce and Belnap had in fact jointly engaged counsel. She argued the fifth cause of action for declaratory relief was barred for the same reason, but additionally failed because there were no future rights requiring such relief. Pierce argued the seventh through tenth causes of action hinged on Belnap's allegations of an oral agreement, but that later written contracts containing integration clauses precluded such claims, and additionally the claims failed because they either could have been raised in the arbitration, or were barred by the statute of frauds. She argued the sixth (conversion) and twelfth (UCL) causes of action likewise failed in view of the arbitrator's findings that she did not convert partnership assets or otherwise engage in improper behavior.
Pierce included in her moving papers the arbitrator's interim and final awards reflecting the issues presented by the parties and finally decided by the arbitration, comparing them to plaintiff's San Diego complaint giving rise to the present lawsuit. This showing contradicts plaintiff's assertion that Pierce presented no evidence to prove identity of claims and issues or their actual determination at the arbitration. The awards reveal that the same transactional facts and circumstances are involved in both the arbitration and the San Diego lawsuit: the operative facts are Pierce and Belnap's entry into their partnership agreement and what documents defined their rights and duties in running the partnership and governed its dissolution. Belnap's primary rights in both matters are his right to be free from misrepresentations or nondisclosures by Pierce in connection with the partnership and its formation; and his right to her performance in accordance with the ultimate partnership agreement. Regardless of the characterization of the relief sought or the legal theory advanced to vindicate those rights, be it fraud, nondisclosure, breach of fiduciary duty, conversion, interference with prospective economic advantage, unfair business practices or some other theory, the underlying right is the same.
Plaintiff's arguments on appeal improperly focus on the legal theories asserted, not the primary rights involved. Additionally, many of plaintiff's assertions as to the state of the evidence during the arbitration are not supported by the summary judgment record. For example, plaintiff argues the arbitrator would not entertain the idea that Pierce concealed material changes made to the general partnership agreement, leaving plaintiff "unaware of the [general partnership agreement's] true nature and effect." It provides a block page reference to the entirety of the arbitrator's interim award to support that proposition, which is insufficient to support a claim of reversible error, particularly with regard to a summary judgment. (See Bernard v. Hartford Fire Ins. Co. (1991) 226 Cal.App.3d 1203, 1205.) The interim award does not contain any ruling or finding to that effect in any event. Plaintiff also asserts that Pierce's "conversion of profits, income, and other assets belonging to [Belnap] was unknown during the Arbitration and could not be alleged or litigated at that time as shown from the Arbitration Award." Plaintiff points to a supplemental submission of facts, claims, and issues Belnap presumably presented in the arbitration, Pierce's demand for arbitration, and the arbitrator's interim award. The supplemental submission of facts in the record is an exhibit to Belnap's petition to vacate the arbitration award; it is not within the "compendium of exhibits" plaintiff submitted with its opposing summary judgment papers. We do not consider it. (Accord, Roman v. BRE Properties, Inc. (2015) 237 Cal.App.4th 1040, 1054-1055 [material not presented in opposition to a summary judgment motion itself is not properly considered by the court in ruling on the motion; appellate court reviews the propriety of the court's ruling based on the record before the trial court].) Pierce's demand for arbitration states only that Pierce "seeks to dissolve the dental partnership with Respondent, and to recover damages for breach of contract and breach of fiduciary duty, among other claims." It does not support plaintiff's assertion that the arbitrator did not address plaintiff's claim of Pierce's alleged conversion. To the contrary, the arbitrator specifically found in the interim award that neither party converted assets of the partnership to the detriment of the other. The arbitrator's interim award contradicts plaintiff's proposition.
Pierce's papers also demonstrated prima facie that the identical issues presented in plaintiff's San Diego complaint were decided in the arbitration. That is, she showed the arbitrator addressed whether Belnap and Pierce jointly engaged attorney Roberts—the factual premise underlying all of plaintiff's present causes of action—and concluded they did. In the face of Belnap's closing arguments that Pierce had intentionally misrepresented to him that Roberts represented them both and concealed the fact the partnership documents had been changed, the arbitrator broadly determined whether "any party," Belnap or Pierce, breached the partnership agreements or engaged in fraud, conversion, breach of fiduciary duty, and interference with economic advantage. The arbitrator decided on what terms the partnership should be dissolved.
Plaintiff argues its arbitration claims pertained to Pierce's misconduct occurring after the parties signed the March 2005 partnership documents whereas the present San Diego complaint deals with Pierce's misconduct occurring before that period while the parties operated under their oral agreement. Plaintiff asserts that as a consequence, the arbitrator did not address Pierce's misrepresentations relating to changes to the partnership documents that assertedly left it unaware of the March 2005 agreement's "true nature and effect," nor did the arbitrator address its claim that the partnership should be rescinded, which the arbitrator declined to consider by denying its motion to amend. The reason for the arbitrator's ruling, plaintiff contends, is that "any determination [Pierce] committed fraud by omission at the [general partnership] Agreement's execution would have stripped [the] Arbitrator of jurisdiction as the . . . Agreement would be void due to fraud in-the-inception."
These arguments are unavailing. Plaintiff did not present arbitration testimony or any other ruling by the arbitrator reflecting such a limitation of evidence. To the contrary, the arbitrator gave the parties broad leeway to brief what conduct or breach of fiduciary duty they felt resulted in damages (see footnote 3, ante), and as summarized above, plaintiff argued in its closing statement that Pierce's misrepresentations concerning her engagement of attorney Roberts voided the partnership documents. The arbitrator's decision to deny plaintiff's proposed amendment precluded plaintiff from asserting two new affirmative defenses (unilateral or mutual mistake) supporting rescission of the partnership documents as a legal theory; nothing indicates the arbitrator prevented the parties from otherwise presenting evidence pertaining to their dealings leading up to their March 2005 entry into the various partnership agreements. In fact, plaintiff's motion for leave to amend indicates such facts were presented during the arbitration. The arbitrator also expressly addressed and rejected Belnap's arguments concerning the preliminary, pre-March 2005 documents that he claimed constituted the partnership agreement (the transition scenario and Schedule B), showing the arbitrator's review and conclusions necessarily encompassed the parties' dealings before they signed the partnership documents. The record thus contradicts plaintiff's claim that only "post execution" matters were at issue in the arbitration. Plaintiff's claim of rescission merely recasts the same issues presented in the arbitration as to whether attorney Roberts was or was not jointly engaged, whether documents (the transition scenario and Schedule B) other than the March 2005 general partnership and purchase agreements constituted the governing partnership documents, and whether Pierce engaged in fraud in connection with their dealings.
In seeking leave to amend, plaintiff presented the declaration of its counsel, who averred: "At the last hearing session [Pierce's] deposition testimony was read into the record concerning changes to the Partnership agreement made by Roberts, her knowledge of those changes, the absence of notice thereof to [Belnap] and questions arose as to whether or not Roberts had in his possession . . . the Schedule B . . . which included provisions for patient allocations . . . . [Belnap] requested the opportunity to be allowed to examine Roberts and the person most knowledgeable at [Roberts's law firm] at hearing. [¶] The Arbitrator agreed . . . ." Counsel recounts the arbitration testimony of both Pierce and Belnap about their understanding that Roberts was working for them together.
There is no merit to plaintiff's assertion that the arbitrator's conclusions as to breach of fiduciary duty were somehow limited only to Belnap's conduct concerning the equal allocation of patients, the purchase of another dental practice, and the terms of his son-in-law's employment agreement. The sole support for this assertion—the interim award and its recitation of issues—contradicts it. It shows the arbitrator broadly decided "[w]hether the parties owed each other fiduciary duties as partners, and if so was there a breach of any such duty by any party." As we have set out above, the arbitrator invited the parties to explain, without limitation, what conduct they believed breach fiduciary duties, and its findings were not limited to Belnap.
We disagree that Pierce's failure to inform Belnap of changes made to the partnership agreement, assuming that were the case, would constitute fraud in the inception; that doctrine operates to render contracts void where parties to the contract "do not know what they are signing . . . ." (Village Northridge Homeowners Association v. State Farm Fire & Casualty Co. (2010) 50 Cal.4th 913, 921.) Accepting the truth of plaintiff's opposing summary judgment papers including Belnap's declaration as we must, they as a matter of law present a " ' "usual case of fraud, where the promisor knows what he is signing but his consent is induced by fraud . . . ." ' " (Ibid.) This argument does not compel us to reverse the summary judgment based on issue preclusion; neither plaintiff's complaint nor the opposing summary judgment papers suggest Belnap did not understand he was signing a general partnership agreement and purchase agreement in March 2005.
Finally, plaintiff suggests that the attorney invoices produced in 2016 after the arbitration created new or different issues that the parties could not have litigated and the arbitrator did not address. In particular, plaintiff asserts that a January 2005 billing statement in which attorney Roberts wrote he "[r]eceived and reviewed correspondence from Mrs. Honikman [the consultant's attorney] (asset purchase agreement and post-closing schedule)" contradicted Roberts's arbitration testimony that he had never seen Schedule B. Even assuming the billing statement tended to rebut Roberts's arbitration testimony (which we assume for purposes of our review), plaintiff does not explain what issue now presented in its San Diego complaint could not have been litigated at the arbitration as a result. It argued below that the new evidence would establish Roberts's knowledge going to fraud in the inception, a theory or issue that we have already stated is not presented by either plaintiff's complaint or Belnap's summary judgment declaration.
Because Pierce met her burden to make a prima facie showing to support summary judgment in her favor, the burden shifted to plaintiff to demonstrate the existence of triable issues of material fact. (Basurto v. Imperial Irrigation Dist., supra, 211 Cal.App.4th at p. 881; Y.K.A. Industries, Inc. v. Redevelopment Agency of City of San Jose (2009) 174 Cal.App.4th 339, 353.) D. Plaintiff Does Not Demonstrate Triable Issues of Material Fact Regarding Application of Issue or Claim Preclusion
Plaintiff contends it demonstrated triable issues of material fact as to at least one of its causes of action such that the trial court erred in granting summary judgment in Pierce's favor on grounds of issue or claim preclusion. It maintains the issues involved in its San Diego complaint are not identical to those issues decided in the arbitration, and were not actually litigated at the arbitration. We are not persuaded.
Plaintiff also reiterates some of its arguments concerning the procedural propriety of Pierce's papers seeking summary adjudication of issues, including her separate statement. Because we uphold the trial court's grant of summary judgment, we need not address these procedural arguments.
1. Fraud
Plaintiff asserts the only fraud claim presented at the arbitration was Pierce's claim that Belnap "signed an evaluation form promising the transfer of patients to [Pierce] and [Belnap] took cash deposits," not Pierce's fraud as to the joint retention of counsel. It maintains it was unable during the arbitration to litigate issues arising out of attorney Roberts's testimony; that the "extent of the falsity" of attorney Roberts's testimony could not be raised until the present complaint. Plaintiff reiterates that the arbitrator denied its motion to amend its arbitration claims to add defenses of mutual and unilateral mistake, which would have permitted it to claim fraud in the inception.
Plaintiff has not demonstrated that the arbitration was as limited as it maintains. The sole piece of evidence cited by plaintiff, Pierce's arbitration demand (which we have quoted above), does not support plaintiff's assertion as to the specific acts of fraud presented in arbitration. And the assertion is contradicted by the arbitrator's interim award, which shows the arbitrator addressed claims pertaining to both parties' fraud, and made clear her decision did not set forth all the evidence, theories or authorities considered. Indeed, because attorney Roberts testified during the arbitration that he represented only Pierce, we presume plaintiff had a full opportunity to raise the issue of Pierce's alleged fraud in connection with the scope of his engagement. The arbitrator's ruling on the motion to amend did not bar the parties' from presenting evidence as to fraud in the inducement, the theory presented in plaintiff's San Diego complaint, and Belnap did make such arguments to the arbitrator. Because plaintiff does not present evidence to the contrary, it has not shown a triable issue of material fact or overcome the presumed correctness of the summary judgment.
2. Breach of Fiduciary Duty
Plaintiff contends its present breach of fiduciary duty claim against Pierce was not actually litigated at the arbitration. Again, relying on attorney Roberts's arbitration testimony, plaintiff repeats the assertion, which we have rejected above, that the arbitrator only considered and decided Pierce's claims about Belnap's conduct. Plaintiff further argues the arbitrator "specifically limited Roberts's testimony to formation of the Partnership Agreement, not [Pierce's] fiduciary duty as to the engagement of [his law firm]." The latter claim mischaracterizes the trial court's ruling (see footnote 2, ante), which permitted Roberts to testify about events leading up to the parties' entry into the March 2005 partnership agreement. Even accepting plaintiff's characterization of the court's ruling, Roberts's arbitration testimony extended to Pierce's initial meeting with him and her engagement of him or his law firm. And nothing in the court's ruling prevented Belnap from questioning Pierce as to these events. Plaintiff has not shown the issues as to Pierce's claimed breach of fiduciary duty concerning her engagement of Roberts or his law firm were not, or could not be, litigated during the arbitration.
3. Plaintiff's Claims for Constructive Fraud, Negligent Misrepresentation, Declaratory Relief, Conversion, Breach of Oral Agreement, Breach of Implied Contract, Accounting and Quantum Meruit
Again pointing only to the arbitrator's interim award, plaintiff contends its claims for constructive fraud, negligent misrepresentation, declaratory relief, conversion, breach of oral agreement, breach of implied contract, accounting and quantum meruit were not and could not have been litigated in the arbitration. It is insufficient to simply point to the entirety of the arbitrator's interim order and its characterization of issues, and compare them to the causes of action alleged in the complaint, to argue triable issues of fact exist as to whether the same issues were or could have been litigated. Plaintiff's showing does not convince us that the trial court erred in granting summary judgment as to these causes of action.
4. Partnership Dissolution
Plaintiff contends Pierce's "violations of Corporations Code [section] 16801" (italics omitted) were never at issue in the arbitration; that the "dissolution sought during the Arbitration was premised on the Partnership Agreement." This argument does not specify what issues are presented by plaintiff's asserted Corporations Code violations. It does not meet plaintiff's summary judgment burden to demonstrate triable issues of material fact exist such that the court erred in granting summary judgment on this cause of action.
Our review of plaintiff's complaint reveals that this claim is based on the same conduct as presented in the arbitration in any event. Plaintiff alleges the conduct constituting the violation was Pierce's fraud in procuring the partnership and purchase agreements, her misappropriation of partnership assets by taking Belnap's patients, the transfer of Belnap's patients without his consent, self-dealing in "matters relating to the partnership," Pierce's false representations "to force them to litigate to declare their rights" and "not acting in the best interests of the partnership," and other acts "against the interests of the partnership . . . ." Plaintiff alleged that by these acts, Pierce "breached the oral partnership agreement . . . ." The claim is identical to and presents the same underlying factual allegations as Belnap's unsuccessful claims in the arbitration that the parties' partnership was not governed by the March 2005 executed partnership documents, but rather the long form Schedule B and the transition scenario, as well as his claims that Pierce breached her fiduciary duties and engaged in fraud, conversion, or interference with prospective economic advantage.
5. Claim of Unfair Business Practices
Plaintiff contends this cause of action is "unsuited for summary judgment," because whether conduct meets the definition of unfair, unlawful or fraudulent conduct is a question of fact. It again asserts that the present claim is based on Pierce's conduct during the oral partnership period, showing it was not actually litigated during the arbitration. We have rejected plaintiff's arguments that the arbitration evidence was limited to the parties' post-March 2005 conduct. Plaintiff's assertions that Pierce falsely represented the scope of attorney Robert's representation and concealed his changes to the partnership documents—the conduct underlying plaintiff's unfair business practices claim in the present case—were addressed and actually decided in the arbitration. E. The Trial Court Did Not Abuse its Discretion by Denying Plaintiff's Request for Continuance
Plaintiff contends the trial court erred by denying its May 2016 ex parte application to continue the summary judgment motion to permit additional discovery and to present assertedly new evidence. According to plaintiff, the discovery was material to refute Pierce's assertion that attorney Roberts "had not received and did not secretly make material changes to the . . . 'Schedule B' . . . during the oral partnership period," a claim that was assertedly not before the arbitrator.
Code of Civil Procedure section 437c, subdivision (h) requires a trial court to deny or continue a motion for summary judgment if the opposing party submits declarations demonstrating that " 'facts essential to justify opposition may exist but cannot, for reasons stated, then be presented . . . .' " (Cooksey v. Alexakis (2004) 123 Cal.App.4th 246, 253-254.) Any such request for a continuance must be submitted "in opposition" to the motion or "by ex parte motion at any time on or before the date the opposition response to the motion is due." (Code Civ. Proc., § 437c, subd. (h), italics added; see Ambrose v. Michelin North America, Inc. (2005) 134 Cal.App.4th 1350, 1353.)
As Pierce argued below, Belnap's continuance request was untimely under the statute. (See Cooksey v. Alexakis, supra, 123 Cal.App.4th at pp. 252, 255 [attorney declaration submitted the day of the hearing was not timely].) Code of Civil Procedure section 437c, subdivision (h) authorizes continuance requests by ex parte application so long as the application is filed on or before the date the opposition is due. Belnap's ex parte application for a continuance was made in 2016, well after he filed his April 2015 opposition to the motion. Thus, the court properly exercised its discretion to decide the summary judgment motion without granting Belnap a continuance.
Nevertheless, "[w]here a plaintiff cannot make the showing required under [Code of Civil Procedure] section 437c, subdivision (h), a plaintiff may seek a continuance under the ordinary discretionary standard applied to requests for a continuance. [Citation.] This requires a showing of good cause. [Citation.] '[I]n deciding whether to continue a summary judgment to permit additional discovery courts consider various factors, including (1) how long the case has been pending; (2) how long the requesting party had to oppose the motion; (3) whether the continuance motion could have been made earlier; (4) the proximity of the trial date or the 30-day discovery cutoff before trial; (5) any prior continuances for the same reason; and (6) the question whether the evidence sought is truly essential to the motion.' " (Hamilton v. Orange County Sheriff's Dept. (2017) 8 Cal.App.5th 759, 765.) We review for abuse of discretion the question of whether good cause has been shown. (Denton v. City and County of San Francisco (2017) 16 Cal.App.5th 779, 791.) We will find such an abuse only when the court's ruling exceeds the bounds of reason, all of the circumstances before it being considered, or it is arbitrary, whimsical, or capricious. (Ibid.)
Though Belnap made his ex parte application under Code of Civil Procedure section 437c, subdivision (h), he argued there was "good cause" to continue the motion. Assuming this adequately invoked the alternate ground, we have no difficulty concluding that the trial court's ruling was correct on the basis that Belnap did not demonstrate the sought-after discovery was " 'truly essential to the motion.' " (Hamilton v. Orange County Sheriff's Dept., supra, 8 Cal.App.5th at p. 765.) The asserted "new evidence," the January 2005 billing description and other invoices, purported to warrant discovery to establish some sort of fraud in the execution or inception of the partnership agreements, which would render them void. But the present complaint does not allege fraud in the inception; its allegations make out a claim of fraud in the inducement. Plaintiff alleges he and Pierce agreed to form a general partnership and during those efforts, Pierce presented the purchase and partnership agreements to Belnap "without notice of any changes . . . ." According to the complaint, Belnap, "believing his partner Pierce's representation, signed both the Purchase Agreement and the Partnership agreement . . . without reading the same . . . ." (Some capitalization omitted.) The complaint alleges that plaintiffs "were ignorant of the falsity of [Pierce's] representations" and "[i]n reliance on these representations, [Belnap] was induced to sign both the Purchase Agreement and the Partnership Agreement . . . ." This is not a situation where Belnap "did not know [he] was signing a contract," or did not intend to "enter into a contract at all" (St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1200), which would render the agreements void for lack of mutual assent. (Ibid.)
Further, the doctrine of fraud in the execution is unavailable to plaintiff on the complaint's allegations. "In a fraud in the execution case, 'California law . . . requires that the plaintiff, in failing to acquaint himself or herself with the contents of a written agreement before signing it, not have acted in an objectively unreasonable manner. One party's misrepresentations as to the nature or character of the writing do not negate the other party's apparent manifestation of assent, if the second party had 'reasonable opportunity to know of the character or essential terms of the proposed contract.' " [Citation.] Thus, a 'party's unreasonable reliance on the other's misrepresentations, resulting in a failure to read a written agreement before signing it, is an insufficient basis, under the doctrine of fraud in the execution, for permitting that party to avoid [provisions] contained in the contract.' " (Ramos v. Westlake Services LLC (2015) 242 Cal.App.4th 674, 688-689, quoting Rosenthal v. Great Western Financial Securities Corp. (1996) 14 Cal.4th 394, 423.) According to the complaint, though Belnap was aware the draft partnership documents had been modified by counsel, he elected to not read them before signing them, believing the changes were a "mere formality." We conclude under these allegations it was objectively unreasonable for Belnap, a highly educated and knowledgeable business person, to not scrutinize what he knew were modified partnership documents before signing them. The doctrine is unavailable to plaintiff.
"The complaint limits the issues to be addressed at the motion for summary judgment" and it "is the allegations in the complaint to which the summary judgment motion must respond." (Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1258; see also Gafcon, Inc. v. Ponsor & Associates (2002) 98 Cal.App.4th 1388, 1424.) Because plaintiff's allegations do not give rise to a claim for fraud in the inducement, the trial court did not abuse its discretion by denying a continuance for discovery to support such a claim. F. Plaintiff Has Not Shown the Trial Court Abused Its Discretion by Disregarding Plaintiff's Supplemental Briefing
Plaintiff contends the trial court abused its discretion by disregarding its supplemental brief it had filed on Bucur v. Ahmad, supra, 244 Cal.App.4th 175; that its ruling was arbitrary and without a reasonable basis. We conclude plaintiff has not established an abuse of discretion, particularly in view of the presumption of correctness we apply to trial court rulings. (See Samara v. Matar, supra, 5 Cal.5th at p. 335; In re Julian R. (2009) 47 Cal.4th 487, 498-499; Goodman v. Lozano (2010) 47 Cal.4th 1327, 1339 [test for abuse of discretion is whether the trial court exceeded the bounds of reason].) Plaintiff asserts its submission, including the inclusion of an attorney declaration attaching the same so-called "new evidence" previously rejected by the court, complied with the court's order for supplemental briefing, but that order is not before us in the record. We have no basis to conclude the court exceeded the bounds of reason by disregarding a submission attaching new evidence, when its order, by plaintiff's own admission, merely asked them to brief a newly decided case.
DISPOSITION
The judgment is affirmed.
O'ROURKE, J. WE CONCUR: NARES, Acting P. J. HALLER, J.