Modification: Riverside County Transportation Comm. v. Southern California Gas Co.

RIVERSIDE COUNTY TRANSPORTATION COMMISSION,

Plaintiff, Cross-defendant and Appellant,

v.

SOUTHERN CALIFORNIA GAS COMPANY,

Defendant, Cross-complainant and Appellant.

No. E069462

(Super.Ct.No. RIC1412266)

California Courts of Appeal

Fourth Appellate District

Division Two

Filed September 16, 2020

ORDER MODIFYING OPINION AND DENYING PETITION FOR REHEARING

[NO CHANGE IN JUDGMENT]

The petition for rehearing filed on September 8, 2020 is denied. The opinion filed in this matter on August 24, 2020, is modified as follows:

1. Delete the paragraph that starts at the bottom of page 21 and ends at the top of page 22 and replace it with:

We disagree. The dismissal with prejudice merely prevented the Commission from recovering on its breach of contract cause of action. It did not preclude it from recovering on its reimbursement cause of action, based on the Licenses.

The Gas Company is essentially asserting that the dismissal of the first cause of action is res judicata or collateral estoppel. However, these doctrines do not apply here, because there is no final judgment. Both doctrines require a final judgment. (Producers Dairy Delivery Co. v. Sentry Ins. Co. (1986) 41 Cal.3d 903, 910-911 [collateral estoppel]; Busick v. Workmen's Comp. Appeals Bd. (1972) 7 Cal.3d 967, 974 [res judicata].) Thus, normally, an order is not res judicata or collateral estoppel later in the same action. (Lennane v. Franchise Tax Bd. (1996) 51 Cal.App.4th 1180, 1185.) We know of only two exceptions: (1) an appealable order can be res judicata or collateral estoppel in a later phase of the same action (In re Matthew C. (1993) 6 Cal.4th 386, 393; People v. Mbaabu (2013) 213 Cal.App.4th 1139, 1147); and (2) in criminal cases, as an aspect of double jeopardy, an acquittal can be collateral estoppel in a retrial in the same action (Yeager v. United States (2009) 557 U.S. 110, 118-123; see also People v. Barragan (2004) 32 Cal.4th 236, 255, fn. 7.)

In California, a judgment is not final for purposes of res judicata or collateral estoppel if an appeal is pending or could still be taken. (Baker v. Eilers Music Co. (1917) 175 Cal. 652, 655; National Union Fire Ins. Co. v. Stites Prof. Law Corp. (1991) 235 Ca1.App.3d 1718, 1726.) Even under the exceptions noted above, the prior order or ruling must be final, in the sense that it is no longer subject to appeal. (In re Matthew C., supra, 6 Cal.4th at p. 393; People v. Burns (2011) 198 Cal.App.4th 726, 733.) Thus, here, there is no final judgment yet. And, by definition, if we reverse the judgment, there will still be no final judgment.

As authority to the contrary, the Gas Company cites Alpha Mechanical, Heating & Air Conditioning, Inc. v. Travelers Casualty & Surety Co. of America (2005) 133 Cal.App.4th 1319. There, a subcontractor sued the contractor and the contractor's surety. (Id. at pp. 1323-1324.) The contractor cross-complained against the subcontractor, alleging, among other things, that the subcontractor breached the subcontract and negligently performed the subcontract. (Id. at p. 1324.) The parties reached a settlement, as to the cross-complaint only, pursuant to which the contractor dismissed its cross-complaint with prejudice in exchange for $162,500. (Id. at p. 1324.)

The appellate court held that the dismissal of the cross-complaint, with prejudice, barred the contractor from using the matters alleged in its cross-complaint as defenses to the complaint. (Alpha Mechanical, Heating & Air Conditioning, Inc. v. Travelers Casualty & Surety Co. of America, supra, 133 Cal.App.4th at pp. 1326-1334.) It reached this result as a matter of res judicata (id. at pp. 1327-1332) and also, alternatively, as a matter of collateral estoppel (id. at pp. 1332-1334).

As relevant here, the court held that the dismissal of the cross-complaint was sufficiently final for res judicata and collateral estoppel purposes. It explained: "[A] retraxit --- modernly effected by a plaintiff's filing of a dismissal of his or her action with prejudice --- is deemed to be a judgment on the merits against that plaintiff. [Citations.] . . . A retraxit arising from a dismissal with prejudice thus operates as a legal fiction, and it is given the same finality as if the matter were adjudicated and proceeded to a final judgment on the merits." (Alpha Mechanical, Heating & Air Conditioning, Inc. v. Travelers Casualty & Surety Co. of America, supra, 133 Cal.App.4th at pp. 1330-1331; see also id. at p. 1333.)

This reasoning is open to question. The Alpha Mechanical court relied on its own opinion in Torrey Pines Bank v. Superior Court (1989) 216 Cal.App.3d 813. There, however, the court held that the dismissal with prejudice of a previous action --- not a cross-complaint in the same action --- barred the relitigation of matters alleged in that previous action. (Id. at pp. 817, 819-820.) It also relied on Walsh v. West Valley Mission Community College Dist. (1998) 66 Cal.App.4th 1532. Walsh assumed that, under Torrey Pines, the dismissal of a cross-complaint with prejudice could have preclusive effect in the same action; however, it held that there it did not have preclusive effect when the matters alleged in the cross-complaint were reasserted under a general denial, rather than as affirmative defenses. (Walsh v. West Valley Mission Community College Dist., supra, at pp. 1545-1546.) Thus, neither case supported the conclusion that the dismissal of a cross-complaint is sufficiently final to have res judicata or collateral estoppel effect later in the same action.

We may assume, however, that Alpha Mechanical is correct, as far as it goes. Our case is significantly different, for two reasons.

First, the Commission did not dismiss its entire complaint; it merely dismissed some of its causes of action. "Pleading of alternative theories of relief on the same set of facts is, of course, quite proper . . . . [Citation.]" (Gebert v. Yank (1985) 172 Cal.App.3d 544, 554.) "A plaintiff who sets forth alternative remedies in separate counts in his complaint may abandon or dismiss one count without prejudice to his right to proceed on the other. [Citations.]" (Steele v. Litton Industries, Inc. (1968) 260 Cal.App.2d 157, 172.)

Second, the dismissal was pursuant to a settlement agreement which indicated that the dismissal was not intended as a retraxit. As the Alpha Mechanical court conceded, "parties may by agreement limit the legal effect of a dismissal with prejudice so that it would not constitute a retraxit and affect their rights in a later pending action. [Citations.]" (Alpha Mechanical, Heating & Air Conditioning, Inc. v. Travelers Casualty & Surety Co. of America, supra, 133 Cal.App.4th at p. 1334.) The settlement agreement here specifically provided that it was entered "with both [the Commission] and [the Gas Company] fully reserving (and without waiving any) of their rights to appeal with regard to the Court's prior orders and rulings and the Court's judgment . . . ." If we were to hold that the resulting dismissal of some causes of action barred the Commission from obtaining a reversal of the judgment on its other causes of action, we would be violating the settlement agreement.

2. On page 22, replace this sentence:

The only authority that the Gas Company cites in support of this argument is Neubauer v. Goldfarb (2003) 108 Ca1.App.4th 47.

with:

The Gas Company also cites Neubauer v. Goldfarb (2003) 108 Ca1.App.4th 47.

3. On page 24, at the end of footnote 11, add:

Finally, in a petition for rehearing, the Gas Company argued that, because Civil Code section 1084 was not cited below, it had no reason or opportunity to introduce evidence regarding the intent of the parties to the Purchase Agreement. But even aside from Civil Code section 1084, the intent of the contracting parties is pretty obviously relevant to the question of whether the Purchase Agreement conveyed the Licenses.

4. On page 25, replace this sentence:

We can reasonably conclude that they provided for a separate assignment and assumption agreement strictly for evidentiary and recordkeeping reasons.

with:

The only reasonable conclusion is that they provided for a separate assignment and assumption agreement strictly for evidentiary and recordkeeping reasons.

5. On page 76, replace this sentence:

The railroad may immediately seek to eject it, on the ground that, by having its workers enter the railroad's property without permission, by exposing the railroad to liability, or by failing to comply with safety and engineering standards, the utility is interfering with its property rights.

with:

The railroad may immediately sue it for damages and injunctive relief on a trespass theory, or even attempt to eject it, on the ground that, by having its workers enter the railroad's property without permission, by exposing the railroad to liability, or by failing to comply with safety and engineering standards, the utility is interfering with its property rights.

There is no change in the judgment.

RAMIREZ

P. J.

We concur:

CODRINGTON

J.

RAPHAEL

J.