Smith et al v. Wilt

Filing 38

ORDER FOR FURTHER BRIEFING. Signed by Judge Hamilton on 6/14/2013. (pjhlc1, COURT STAFF) (Filed on 6/14/2013) (Additional attachment(s) added on 6/14/2013: # 1 Certificate/Proof of Service) (nah, COURT STAFF).

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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For the Northern District of California

United States District Court

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GWENDOLYN SMITH, et al.,

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Plaintiffs,
v.

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ORDER FOR FURTHER BRIEFING

BARBARA WILT,

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No. C 12-5451 PJH

Defendant.
_______________________________/

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Plaintiffs Gwendolyn Smith and Zeus Harrison Smith filed this action on October 22,

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2012, against defendant Barbara Wilt (“Wilt”). The original complaint alleged claims of

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breach of contract and “false light conspiracy,” in connection with a landlord tenant dispute.

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On February 15, 2013, Wilt filed a motion to dismiss and an anti-SLAPP motion to strike,

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pursuant to California Code of Civil Procedure § 425.16, or in the alternative, a motion for a

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more definite statement. On March 1, 2013, plaintiffs filed an opposition to Wilt’s motions,

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but also filed a first amended complaint (“FAC”), alleging claims of breach of contract, “false

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light,” and civil conspiracy to commit invasion of privacy by false light.

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On March 18, 2013, plaintiffs filed a motion for leave to file a second amended

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complaint (“SAC”), to which Wilt filed a statement of non-opposition. The court granted the

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motion, and on April 18, 2013, plaintiffs filed the SAC, which alleges claims of breach of

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contract, fraudulent inducement, fraudulent misrepresentation, and conspiracy to defraud.

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On May 1, 2013, Wilt filed a motion to dismiss the SAC pursuant to Federal Rule of

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Civil Procedure 12(b)(6), arguing that plaintiffs’ claims are time-barred. Plaintiffs filed an

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opposition on May 15, 2013, arguing that the court should find that the complaint is not

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time-barred, based on application of the discovery rule and the doctrine of equitable tolling.

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Wilt filed a reply on May 31, 2013, in which she responded to plaintiffs’ arguments, and also

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argued (among other things) that plaintiffs’ claims are barred by res judicata.

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The doctrine of “res judicata” insures the finality of decisions, conserves judicial
resources, and protects litigants from multiple lawsuits. Americana Fabrics, Inc. v. L&L

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For the Northern District of California

United States District Court

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Textiles, Inc., 754 F.2d 1524, 1528-29 (9th Cir. 1985). “Res judicata” includes both claim

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preclusion and issue preclusion. See Taylor v. Sturgell, 553 U.S. 880, 892 (2008).

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Claim preclusion and issue preclusion “are related doctrines used to protect the

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finality of decisions and prevent the proliferation of litigation.” Littlejohn v. United States,

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321 F.3d 915, 919 (9th Cir. 2003). “The two doctrines are based on the same general

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principle: After a claim or issue is properly litigated, that should be the end of the matter for

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the parties to that action. Although the two doctrines are related, they protect distinct

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values and may be used in different ways.” Id.

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Claim preclusion “provides that a final judgment on the merits bars further claims by

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parties or their privies based on the same cause of action.” Tahoe-Sierra Pres. Counsel,

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Inc. v. Tahoe Reg'l Planning Agency, 322 F.3d 1064, 1077 (9th Cir. 2003) (citations and

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quotations omitted). “A final judgment on the merits of an action precludes the parties or

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their privies form relitigating issues that were or could have been raised in that action.”

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Federated Dep't Stores, Inc. v. Moitie, 453 U.S. 394, 398 (1981); see also Alpha

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Mechanical, Heating & Air Conditioning, Inc. v. Travelers Cas. & Sur. Co. of America, 133

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Cal. App. 4th 1319, 1326 (2005) (claim preclusion prevents relitigation of same cause of

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action in a second suit between the same parties or parties in privity with them).

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Thus, claim preclusion requires three things – (1) identity of claims; (2) a final
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judgment on the merits; and (3) the same parties, or privity between the parties. Harris v.

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Cnty. of Orange, 682 F .3d 1126, 1132 (9th Cir. 2012); Alpha Mechanical, 133 Cal. App.

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4th at 1326-27. “Res judicata bars ‘not only the reopening of the original controversy, but

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also subsequent litigation of all issues which were or could have been raised in the original

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suit.’” Torrey Pines Bank v. Superior Court, 216 Cal. App. 3d 813, 821 (1989) (citations

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omitted).

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“The doctrine of issue preclusion prevents relitigation of all issues of fact or law that

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were actually litigated and necessarily decided in a prior proceeding.” Robi v. Five Platters,

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Inc., 838 F.2d 318, 322 (9th Cir. 1988); Littlejohn, 321 F.3d at 923 (issue preclusion bars
the relitigation of issues actually adjudicated in previous litigation between the same

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For the Northern District of California

United States District Court

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parties). A party invoking issue preclusion must show that (1) the issue at stake is identical

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to an issue raised in the prior litigation; (2) the issue was actually litigated in the prior

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litigation; and (3) the determination of the issue in the prior litigation must have been a

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critical and necessary part of the judgment in the earlier action.” Littlejohn, 321 F.3d at

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923; see also Alpha Mechanical, 133 Cal. App. 4th at 1326-27 (collateral estoppel, or issue

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preclusion, precludes a party from relitigating issues already argued and decided in prior

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proceedings).

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A federal court may examine the res judicata effect of a prior judgment sua sponte.

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McClain v. Apodaca, 793 F.2d 1031, 1032-33 (9th Cir. 1986). However, where the parties

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are not allowed an opportunity to brief the issue before the court’s ruling, the Ninth Circuit

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has held that sua sponte consideration of preclusion is not proper. See Hawkins v. Risley,

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984 F.2d 321, 324 (9th Cir. 1993) (citing State of Nevada Employees Ass’n v. Keating, 903

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F.2d 1223, 1225-26 (9th Cir. 1990)); see also Headwaters Inc. v. U.S. Forest Serv., 399

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F.3d 1047, 1055 n.6 (9th Cir. 2005).

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Here, while Wilt did suggest in the motion to dismiss the FAC that plaintiffs’ claims

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should be dismissed because they had previously been alleged and adjudicated, she did

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not specifically argue application of “res judicata” as such until the reply to plaintiff’s

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opposition to the present motion. Because plaintiffs have not had an opportunity to brief
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the issue, the court finds that further briefing would be helpful, particularly given the

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similarity between the facts underlying the claims raised in this action and the facts

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underlying the amended cross-complaint filed by Gwendolyn Smith in the state court

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unlawful detainer action.

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Accordingly, no later than July 3, 2013, plaintiffs shall file a further brief addressing

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the question whether their claims are barred by res judicata. Wilt shall file a reply no later

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than July 11, 2013. The briefs shall not exceed ten pages. The court will issue a decision

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on the papers. The June 19, 2013 hearing date is VACATED.

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IT IS SO ORDERED.

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For the Northern District of California

United States District Court

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Dated: June 14, 2013
______________________________
PHYLLIS J. HAMILTON
United States District Judge

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