Sawyer v. First City Financial Corp.

WIENER, J.

Concurring. I start with the obvious. This is not a simple case. One senses, however, that the energies of highly talented counsel *410 may not have been channeled towards simplifying the issues in order to expeditiously resolve this controversy. Nevertheless, it is probably fair to say this dispute with exceptionally competent and diligent lawyers has been handled in the same way as are other commercial cases involving large sums of money. The ritual of litigation seems to take on new ceremonies with each advance in the electronics industry. The word processor, spewing out pages of interrogatories, requests for admissions and motions, spawns gobs of materials for copying machines, the product of which ultimately descends upon the court. Here, for example, before a full trial, the record stands 22 3/4 inches high, weighing in at an even 50 pounds. One queries what the height and weight will be after the main event when we undoubtedly will have another chance to search for error. On occasion, one questions whether the paper mill improves the quality of justice and ponders the effect if all of us, including judges, were deprived of technology and required to write by quill pen.

These musings, perhaps technically unnecessary to my concurrence, are helpful to describe the setting in which this court is called upon to deny plaintiffs a full trial because of res judicata, a doctrine tied to the concept of judicial economy. But the lawyer-created environment here is important to accurately analyze the issue of estoppel. As I will explain, I conclude defendants, except for the Toronto Dominion Bank and its officers, are estopped from raising the defense of res judicata. Accordingly, I agree with the result reached by the majority.

A defendant in a second action may be precluded from asserting res judicata as a defense because of his conduct in prior proceedings. (See 4 Witkin (2d ed. 1971) Cal. Procedure, § 152, p. 3298, (1981 supp.) p. 248.) At an earlier time this court explained, “Our courts have in appropriate situations weighed the motions and objections of counsel in a former action to determine whether a contradictory stand was later assumed, and the general principle has been applied that one cannot take inconsistent positions to the injury of an opponent. Thus, where a party litigant successfully blocked the attempt of its opponents in an earlier case to amend their pleading and consolidate with another pending action to include certain issues, and later contended that such issues were res judicata because they might have been ajudicated in the earlier case, the Supreme Court in United Bank & Trust Co. v. Hunt, 1 Cal. 2d 340 , 345 ..., held that ‘Litigants can not successfully assume such inconsistent positions’ and treated the situation developed in the first trial as ‘... tantamount to an express determination on the part of the court with the consent of opposing counsel to reserve the issues involved for *411 future ajudication.’” (Lunsford v. Kosanke (1956) 140 Cal.App.2d 623, 628-629 [ 295 P.2d 432 ].) Whether this principle should be applied will turn on the facts of each case for uncertainty as to the finality of a judgment should not as a general rule be induced into our judicial system “by occasional apparent inequities.” (See Slater v. Blackwood (1975) 15 Cal.3d 791, 798 [ 126 Cal.Rptr. 225 , 543 P.2d 593 ].) Obviously, one must move cautiously. “Judicious utilization of judicial and litigant resources become ever more essential in the wake of the law explosion. The efficient administration of justice would not be advanced by a rule resulting in or encouraging multiple litigation of a single cause of action.” (Mattson v. City of Costa Mesa (1980) 106 Cal.App.3d 441, 455 [ 164 Cal.Rptr. 913 ].) I examine the record with these principles in mind.

Plaintiffs filed their first case (No. 369573) in July 1975; their second (No. 409803) on January 11, 1978. On January 13, 1978, plaintiffs moved to consolidate both cases because some of the parties and certain of the issues were the same. Unable to serve all defendants, plaintiffs’ motion to consolidate was reset beyond February 15, 1978, the trial date in case No. 369573. Pending hearing on that motion, plaintiffs moved to continue the trial to allow the court to consider the motion for consolidation. Counsel for First City defendants in Sawyer I, one of whom is appellate counsel here, opposed the motion for continuance by saying there was no basis for consolidation, arguing further that “[p]laintiffs are pursuing theories of action for conspiracy and fraud in Case No. 409803, whereas in the above-captioned action plaintiffs are pursuing theories for breach of contract, declaratory relief and judicial foreclosure. The issues raised in the two cases are necessarily and substantially different.” (Italics supplied.)

At first blush it appears United Bank & Trust Co. v. Hunt, supra, 1 Cal.2d 340 [ 34 P.2d 1001 ], controls. Defendants respond to this superficial similarity, however, by explaining they were deliberate in their use of language in opposing the motion. They referred to different theories of action, not causes of action.

Whether I am correct in believing that there is only a subtle difference between the phrases “theory of action” and “cause of action” is immaterial. What is important is defendants’ failure to have communicated this distinction in any meaningful fashion to the trial judge who ruled on the continuance. If defendants’ counsel made the tactical decision to oppose the continuance on the assumption that if successful they *412 would then be able to prevent litigation in the second case on the basis of res judicata, it would have been simple enough for them to tell the court that res judicata was involved. If they had done so the judge considering the motion would then have been able to evaluate all relevant factors affecting his decision before exercising discretion in making his ruling. In light of the language which defendants selected to oppose the motion for the continuance the ruling on which prevented the court from ever considering the merits of plaintiffs’ request for consolidation, it was reasonable for both the court and plaintiffs’ counsel to conclude defendants’ opposition to the continuance would not prevent a trial of the second case in which the issues were represented to be “necessarily and substantially different.” Accordingly, reasonably interpreted, defendants’ actions fall within the narrow rule of United Bank &Trust Co. v. Hunt, supra. Once having represented to the court there were two different actions with different issues, they may not now stop plaintiffs from having a full trial on those “different issues.”

I concur in the court’s judgment as to defendants Toronto Dominion Bank of California, Charles Klugherz and William McIntosh.

A petition for a rehearing was denied October 26, 1981, and on November 6, 1981, the judgment was modified to read as printed above. The petitions of respondents First City Financial Corporation et al., Cytrynbaum, Ostrow and Belzberg for a hearing by the Supreme Court were denied December 16, 1981.