holding that when a party stipulates to the resolution of a specific issue in a court-approved judgment, the judgment binds the party in subsequent actions
How later courts described this case
- holding that when a party stipulates to the resolution of a specific issue in a court-approved judgment, the judgment binds the party in subsequent actions
- “[A] stipulated judgment may properly be given collateral estoppel effect, at least when the parties manifest an intent to be collaterally bound by its terms.”
- “In a ... consent decree, litigants voluntarily terminate a lawsuit by assenting to specified terms, which the court agrees to enforce as a judgment.”
- where parties intended a settlement to have collateral estoppel effect, it would
Written by the judges who cited it.
The opinion
BROUSSARD, J.,
Concurring.—I fully agree with the well-reasoned and persuasive majority opinion. The unanimous view of this court that a judgment, even though arrived at by stipulation, is a “final judicial determination” of liability for the purpose of Moradi-Shalal v. Fireman’s Fund Ins. Companies (1988) 46 Cal.3d 287 [ 250 Cal.Rptr. 116 , 758 P.2d 58 ] can come as little surprise. I write separately only to comment on the gross unfairness which California State Automobile Association (hereinafter petitioner) sought to achieve, and the adverse consequences it was prepared to cause in the interest of avoiding liability.
Petitioner provided counsel to represent the insured in these proceedings and, in addition, petitioner retained corporate counsel to represent its own interests in the settlement process. Having reached a settlement, both counsel for the insured and petitioner’s corporate counsel signed a stipulation providing that the defendant insured “admits liability and consents to the entry of judgment in favor of plaintiff” for $175,000, and that “plaintiff reserves all claims against California State Automobile Association Inter-Insurance Bureau and its agents arising out of its handling of plaintiff’s claims arising out of the March 4, 1983, automobile accident with defendant.” Plaintiff’s demand for a reservation of rights no doubt was a subject for negotiation and played a part in the final settlement figure.
As soon as plaintiff sued petitioner for its handling of the claim arising out of the accident, petitioner denied that the judgment constituted a final adjudication of liability and refused to be bound by the stipulation in which plaintiff reserved her rights to pursue her claim. To put it bluntly, petitioner repudiated the stipulated judgment and sought to get the benefit of its bargain without paying the agreed-upon price.
In order to achieve this result, petitioner argued that we should not give collateral estoppel effect to a stipulated judgment. This argument calls into *667 question decisions dating back to 1883 holding that a stipulated judgment is the equivalent of a judgment after a contested trial for the purpose of res judicata and collateral estoppel. (McCreery v. Fuller (1883) 63 Cal. 30, 31-32 ; see also Moore v. Schneider (1925) 196 Cal. 380, 389 [ 238 P. 81 ]; Partridge v. Shepard (1886) 71 Cal. 470, 475 [ 12 P. 480 ]; Wittman v. Chrysler Corp. (1988) 199 Cal.App.3d 586, 591-592 [ 245 Cal.Rptr. 20 ] [consent judgment in judicial foreclosure collaterally estops parties from relitigating issue of fraud]; In re Marriage of Buckley (1982) 133 Cal.App.3d 927, 935 [ 184 Cal.Rptr. 290 ] [stipulated judgment annulling marriage estops claim of fraudulent inducement to marry in later action]; De Weese v. Unick (1980) 102 Cal.App.3d 100, 105 [ 162 Cal.Rptr. 259 ] [stipulated judgment in paternity action estops father from relitigating paternity in later action for child support].) It is simply settled law that normally a stipulated judgment is given collateral estoppel effect as to parties or their privies to the same extent as a judgment after a contested trial. (See Gates v. Superior Court (1986) 178 Cal.App.3d 301, 308 [ 223 Cal.Rptr. 678 ]; Ellena v. State of California (1977) 69 Cal.App.3d 245, 253 [ 138 Cal.Rptr. 110 ]; Avery v. Avery (1970) 10 Cal.App.3d 525, 529 [ 89 Cal.Rptr. 195 ]; United States Fire Ins. Co. v. Johansen (1969) 270 Cal.App.2d 824, 833 [ 76 Cal.Rptr. 174 ]; Guaranty L. Corp. v. Board of Supers. (1937) 22 Cal.App.2d 684, 686 [ 71 P.2d 931 ]; 7 Witkin, Cal. Procedure (3d ed. 1985) Judgment, § 219, p. 656, and cases cited.)
Thus, petitioner’s legal claim is totally without merit and contrary to long-established authority. It is an understatement to say that petitioner’s position is also devoid of equitable appeal. Petitioner is seeking to avoid its express commitment in a transaction in which plaintiff has already lived up to her part of the bargain. We refuse to do violence to the law and open thousands of final judgments to collateral attack in order to allow petitioner to find a way to repudiate its obligations.