Thursday, February 11, 2016

Know when to Fold 'Em.

Bucur v. Ahmad, No. D068689 (D3d1 Jan. 26, 2016)

Plaintiffs in this case are on their fifth lawsuit over more or less the same operative facts. The court of appeal upholds dismissal on several theories, and also permits an award of sanctions under Code of Civil Procedure § 128.7.

First and foremost, the case, like several before it, gets unsurprisingly dismissed as barred by res judicata. As the court explains, even if the issues are not exactly the same, if the claim could have been litigated in the first case, claim preclusion still applies. Given the substantial overlap between the facts and the parties, plaintiffs’ loss at a jury trial in the first case precluded this one.

Plaintiffs also made certain admissions in their cross-claim in the first case that are sideways with the theory they now allege. Because facts alleged in a complaint are judicial admissions that are binding on the party in future actions, they are fatal to this case.

And then going full belt-and-suspenders, the court also finds the new action to be judicially estopped due to statements make in the second litigation, which was sent to an arbitration where the arbitrator ultimately dismissed plaintiff’s claims. I don’t really follow this one. Generally, judicial estoppel requires you to successfully advocate a position with a court, after which, you can’t advocate an irreconcilable position to the same or a different court. The representation here seems to be a concession by plaintiffs to send the case to arbitration. But it’s not clear that plaintiffs had moved to send the second case to arbitration, so I don’t really get how the successful advocacy element was met. (Generally, judicial estoppel isn’t implicated by merely conceding a point raised by an opponent because the kind of fast-and-loose conduct that is the rationale for the doctrine is not present in that scenario.) But in any event, the case is also res judicata to the issues in the dismissed arbitration, so I suppose it doesn’t matter much more than being confusing dicta.

Perhaps the reason the court goes through all of these different and redundant potential grounds for dismissal is that it upholds an award of sanctions against the plaintiffs for bringing a frivolous case. Given that this case was clearly precluded by the earlier litigation, bringing the current case was objectively baseless. “Filing a new complaint based on the same facts to evade a ruling made in a previous litigation constitutes sanctionable conduct under section 127.8.” Indeed, not only was the trial court case frivolous, so was taking this appeal. So in addition to the sanctions ordered by the trial court, the court of appeal here adds on another $31k in appellee’s costs and fees as well as $25k payable to the clerk of the court of appeal for the burden plaintiffs put on the court. The court further notes that it will inform the State Bar, as required under Business & Professions Code § 6086.7.


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