Opinion
NOT TO BE PUBLISHED
Super. Ct. No. 06AS01663
SIMS, Acting P.J.This case represents the second lawsuit in a dispute between two brothers over an alleged breach of contract for the sale of a house. In the first lawsuit, plaintiffs sought to enforce defendants’ alleged written promise to sell them the house for $150,000; they lost on summary judgment, and this court ultimately affirmed that judgment on appeal. (Hampton v. Hampton (Aug. 28, 2007, C052918) [nonpub. opn.] (Hampton).)
Immediately after the trial court granted summary judgment to defendants in Hampton, plaintiffs initiated this action, in which they alleged defendants had agreed to sell them the same house for $203,000 (or $268,000 with a built-in gift of equity that reduced the price to $203,000), and sought to enforce that agreement. While the appeal was pending in Hampton, the trial court sustained defendants’ demurrer to the instant complaint without leave to amend, and ordered the action abated.
We find the demurrer was properly granted without leave to amend. Inasmuch as the circumstances warranting abatement of the action no longer exist, we shall remand the action to the trial court to allow it to vacate its order abating the instant action and to order instead that the action be dismissed.
BACKGROUND
Standard of Review
In reviewing a general demurrer sustained without leave to amend, we must determine whether--assuming the facts alleged in the complaint are true--a cause of action has been or can be stated. (Rogoff v. Grabowski (1988) 200 Cal.App.3d 624, 628; Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) We may also consider matters that may be judicially noticed. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The pertinent facts alleged in the complaint, and those we may judicially notice (Evid. Code, § 452, subd. (d) [court records]), are as follows.
The First Lawsuit: Hampton
We take judicial notice of our prior unpublished opinion addressing plaintiffs’ attempts to compel defendants to complete the sale of the house. Unpublished cases may be cited “[w]hen the opinion is relevant under the doctrines of law of the case, res judicata, or collateral estoppel . . . .” (Cal. Rules of Court, rule 8.1115(b)(1); see Hampton.) We also take judicial notice of our appellate record in Hampton. (Evid. Code, § 452, subd. (d)(1).) The prior proceedings demonstrate that the contentions raised in the instant action were already resolved against plaintiffs.
Recitation of the background facts is taken chiefly from the factual recitation in our nonpublished opinion in Hampton.
Both cases involve the same two couples: defendants Louis and Donna Hampton, who owned a house; and plaintiffs Gregory and Patricia Hampton, who wanted to buy it. Louis and Gregory are brothers. (Hampton, supra, at p. 3.)
Plaintiffs and defendants first executed a real estate lease effective May 14, 1998, and signed May 17 and 18, 1998, under which plaintiffs were to rent the house from defendants. The parties also discussed the possibility of plaintiffs buying the house from defendants. A “Purchase Option Addendum” was prepared, providing in part: “[Defendants] and [plaintiffs] acknowledge and agree that the property is currently valued at $160,000. [Defendants are] willing to sell property at a discount to [plaintiffs] at a price of $150,000.00. [Plaintiffs and defendants] agree to share 50/50% future equity in premises from the time of this agreement until [plaintiffs] refinance [the] property.” The purchase option addendum set forth the procedures for exercising the option, but it was not dated and was never signed. (Hampton, supra, at p. 3.)
At some point, the parties signed another document, entitled “Real Estate Purchase” (the Purchase Agreement) with the same effective date as the lease, May 14, 1998. Under the Purchase Agreement, defendants agreed to sell plaintiffs the house, but the agreement did not specify a purchase price. It provided only that the purchase term would begin on June 13, 1998, and that plaintiffs were to make monthly payments in the same amount specified in the lease agreement. (Hampton, supra, at pp. 3-4.) The Purchase Agreement also included a clause representing that it “contains the entire agreement of the parties and there are no other promises or conditions in any other agreement whether oral or written. This Purchase may be modified or amended in writing if the writing is signed by the party obligated under the amendment.” (Hampton, supra, at p. 4.)
Again at some unspecified point, the parties prepared an amortization schedule, showing payments on a loan of $150,000 at an 8 percent interest rate. This document bears a fax date of May 17, 1998. This schedule is neither referenced in the Purchase Agreement, nor signed by the parties. (Hampton, supra, at p. 4.)
Approximately six years later, in 2004, the parties apparently undertook further negotiations over the sale of the house and exchanged numerous e-mails. One such document, undated but showing a fax date in June 2004, is signed by all parties and states: “We Louis & Donna Hampton hereby offer the property . . . to Greg and Patricia Hampton ‘AS IS’ for the sum of $203,000. Greg and Patricia Hampton will be paying all closing cost[s].” (Hampton, supra, at p. 4.)
Thereafter, plaintiffs opened escrow and had escrow/sale documentation prepared showing a purchase price not of $203,000, but of $268,000, with a credit to plaintiffs of $65,000 in gift equity. Defendants refused to sign these papers, because they did not comport with defendants’ understanding of the parties’ agreement, and they did not want to incur the increased capital gains and gift taxes associated with the higher purchase price and gift equity. The escrow company responded by preparing alternative versions of the sales documents, with different sales amounts and/or credits; defendants refused to execute these documents as well. (Hampton, supra, at p. 5.)
Plaintiffs then initiated the first lawsuit against defendants, in which they sought to enforce a sale of the house for $150,000. The operative and third amended complaint, alleged causes of action for breach of contract, specific performance, and promissory estoppel. Two exhibits were attached to the complaint: Exhibit A included both the May 14 Purchase Agreement and the amortization schedule; and Exhibit B was the signed document showing a June 2004 fax transmission date and an agreed-to purchase price of $203,000.
The complaint alleged that the Purchase Agreement was “the culmination of an exchange of proposals back and forth from [defendants] to [plaintiffs].” It alleged that “[i]n or around May 1998, Plaintiffs and Defendant[s] agreed to a purchase price of $150,000.00. Subsequently, Plaintiffs and Defendants began drafting the Purchase Agreement. [¶] . . . The Purchase Agreement, Exhibit A attached hereto . . ., including the Amortization Schedule, is a complete agreement of the parties.”
The complaint’s first cause of action for breach of contract alleged that “[d]efendant[s] refused to sign the documents needed to consummate the sale, insisting, instead, that Plaintiff[s] execute a new agreement in escrow for $203,000.00.” Plaintiffs referenced Exhibit B, the signed document indicating a purchase price of $203,000, and alleged, “Plaintiff[s have] requested that defendants perform their obligations under the purported new agreement and sign the documents necessary to sell the house and transfer title into Plaintiff[s’] name[s]. [¶] . . . Defendant[s have] repudiated both agreements by refusing to sign escrow documents to accept Plaintiff[s’] lump sum payment and refuse[] to transfer title into Plaintiff[s’] name[s].” According to plaintiffs, defendants’ refusal to comply with the “new agreement” shown by Exhibit B “amounts to a breach of contract of the May 14, 1998[,] Purchase Agreement” and they sought “enforcement of the May 14, 1998[,] Purchase Agreement.”
A second cause of action for specific performance was based on the same facts.
The third cause of action for promissory estoppel alleged that “Defendant[s] promised and assured Plaintiff[s] that Defendant[s] would convey title of the property to Plaintiff[s] if Plaintiff[s] secured full payment of the agreed price of $150,000.00 less payments made based upon a thirty year amortization period at 8% interest.” Plaintiffs alleged that they relied on these assurances and that their reliance was reasonable, and asked that “[d]efendants be ordered to accept payoff from Plaintiff[s] based upon the original installment agreement” and to complete the conveyance to plaintiffs.
Defendants moved for summary judgment, asserting there was no contract to be enforced. They noted that the Purchase Agreement did not include a purchase price or indicate when the sale would occur, and argued that the amortization schedule was not part of the initial agreement and could not cure these deficiencies because the Purchase Agreement stated--to the contrary--that it represented the full agreement of the parties and could be modified only by written agreement. They pointed out that even if the amortization schedule was considered part of the contract, the agreement did not meet the requirements for an installment sales contract under Civil Code section 2985.5 because it did not indicate the number of years to complete payment or the basis for any tax estimates. (Hampton, supra, at p. 7.)
Defendants also noted that even if there had been agreements to sell the house for $203,000 or $150,000, the undisputed facts demonstrated that plaintiffs set up escrow on completely different terms, with a purchase price of $268,000 and a credit for $65,000 in gift equity. This conduct, according to defendants, demonstrated that plaintiffs had not relied on the agreement they were now seeking to enforce. (Hampton, supra, at pp. 3-8)
As pertinent to the instant appeal, plaintiffs opposed the motion for summary judgment (at issue in Hampton) with--among other things--two additional purported written agreements pertaining to the sale of the house. Both are dated only “April 14th”; plaintiffs aver both were signed in 2004.
The first, designated Plaintiff’s Exhibit 10 to the deposition of defendant Louis Hampton (portions of which plaintiffs submitted in opposition to the motion), bears only defendants’ signatures and contains a single sentence: “We Louis & Donna Hampton hereby offer the property . . . to Greg and Patricia Hampton ‘AS IS’ for the sum of $203,000.”
The second, designated Plaintiff’s Exhibit 12 to Louis Hampton’s deposition (Exhibit 12), contains three sentences, the first of which is identical to Exhibit 10: “We Louis & Donna Hampton hereby offer the property . . . to Greg and Patricia Hampton ‘AS IS’ for the sum of $203,000. The house appraised at $268,000, and we will be gifting the equity of approximately $65,000 to Greg and Patricia Hampton (my brother and sister-in-law). Greg and Patricia Hampton will be paying all closing cost[s].” Exhibit 12 bears the signatures of all parties.
Plaintiffs submitted Exhibit 12 in opposition to the following assertion of fact contended by defendants to be undisputed: “At no time during the six (6) year period following execution by the parties of the May 14, 1998 ‘Real Estate Purchase’ Agreement did the parties ever execute an amendment to said agreement.” Plaintiffs responded: “Disputed. The parties executed an agreement whereby Plaintiff could purchase the real property for $203,000.00. (Louis Deposition, Ex. 12.)”
In reply, defendants urged the trial court to reject Exhibits 10 and 12 as unauthenticated. They also argued that the two purported agreements were “immaterial to the facts in dispute” because they did not represent “the final agreement entered into between the parties, and submitted into escrow” and “are directly inconsistent with Plaintiffs’ verified allegations throughout the three versions of their Verified Complaints.”
Plaintiffs did not submit the portions of Louis’s deposition pertaining to Exhibit 10 or Exhibit 12.
The trial court granted defendants’ motion for summary judgment. In so doing, it concluded there was no basis to enforce a sale of the house for $150,000: “Plaintiff does not dispute that the escrow papers, which he drew up, set the purchase price at $268,000. This fact alone defeats his claim that the purchase price of $150,000 must be enforced. . . . Even if defendant agreed to a price of $268,000, this defeats plaintiff’s claim that the sales price was $150,000.”
Noting that e-mails between plaintiffs and defendants referring to “misunderstandings” between them showed there was no meeting of the minds on the material terms of any sale, the trial court went on: “Based on the undisputed facts that plaintiff demanded a purchase price of $268,000 in escrow (with a ‘gift equity’ of $65,000 [sic] bringing the price to $203,000), and his admission at his deposition that he never agreed to any equity split, he cannot prevail on any of his claims that the property should be sold for $150,000. The court cannot enforce an agreement to sell real property when there are three conflicting sales prices. The moving target nature in which plaintiff’s claims have developed through the pleadings and in opposing this motion do not raise any reasonable inference from which a trier of fact could infer that the sales price was $150,000. To the contrary, plaintiff’s evidence only further supports defendant’s defense that the brothers never reached an agreement to sell the property for $150,000.
“The real dispute in this case appears to be over how the ultimate sales transaction was structured once the parties agreed on the second price of $203,000. However, the plaintiff’s pleadings are not framed as such and the court is confined to the pleadings in ruling on a motion for summary judgment. Even if the complaint were amended to seek to enforce a sales price of $203,000, the motion would be granted since it is undisputed Plaintiff set the sales price in escrow of $268,000 (the appraised value), which finds no support in any written agreement of the parties and constitutes a material breach of any agreement to sell for $203,000, thereby excusing defendants from performing.”
The Current Lawsuit
Immediately after the trial court granted summary judgment to defendants in Hampton, plaintiffs initiated this action, in which they seek to enforce the purported agreement represented by Exhibit 12, and allege defendants agreed to sell them the same property at issue in Hampton for $203,000 (the appraised value of $268,000 minus gift equity of $65,000).
The instant complaint alleges all parties “entered into [the] written agreement for the purchase and sale of the real property” on April 14, 2004. It makes no mention of any other agreements between the parties concerning the property.
Like its predecessor, the instant complaint purports to allege causes of action for breach of contract, specific performance, and promissory estoppel.
Defendants demurred to the complaint. They argued that plaintiffs’ claims are barred by the doctrine of res judicata and/or collateral estoppel because the current lawsuit is based on an agreement upon which plaintiffs had previously relied in the prior action, and which predated the date on which plaintiffs filed the previous action. Defendants also argued the current action represents an impermissible “splitting” of their cause of action against defendants to compel the sale of the property; alternatively, defendants asserted demurrer was proper because another action between the parties on the same cause of action was then pending. (Code Civ. Proc., § 430.10, subds. (c) & (e).) In defendants’ view, plaintiffs either “have already litigated the issue of whether the April 2004 agreement supported their right to purchase” the house from defendants in the first lawsuit or, alternatively, if the motion for summary judgment in Hampton “did NOT squarely address the enforceability of the April 2004 agreement, then [it] certainly SHOULD HAVE been raised in” those prior proceedings.
By separate motion, defendants also sought sanctions against plaintiffs and their counsel for bringing a complaint for an improper purpose. (Code Civ. Proc., § 128.7.)
Plaintiffs responded that the first lawsuit constituted an action to enforce only the specific terms of the parties’ 1998 agreement that plaintiffs would purchase the house for $150,000. Thus, the enforceability of the April 14, 2004, agreement attached to the current complaint was “not adjudicated on the merits (res judicata) nor an issue necessarily decided at a previous proceeding (collateral estoppel).”
In plaintiffs’ view, the trial court in the first action held only that plaintiffs could not enforce the 1998 Purchase Agreement, relying on that portion of the trial court’s ruling italicized below: “The real dispute in this case appears to be over how the ultimate sales transaction was structured once the parties agreed on the second price of $203,000. However, the plaintiff’s pleadings are not framed as such and the court is confined to the pleadings in ruling on a motion for summary judgment. Even if the complaint were amended to seek to enforce a sales price of $203,000, the motion would be granted since it is undisputed Plaintiff set the sales price in escrow of $268,000 (the appraised value), which finds no support in any written agreement of the parties and constitutes a material breach of any agreement to sell for $203,000, thereby excusing defendants from performing.”
Plaintiffs opposed defendants’ request for sanctions, and requested the court sanction defendants’ counsel instead.
While the demurrer was pending, plaintiffs filed their appeal from the judgment entered in Hampton.
The trial court sustained defendants’ demurrer without leave to amend, on the grounds (1) plaintiffs are barred by the doctrine of res judicata from stating a cause of action and, alternatively, (2) another action was then pending between the parties on the same subject matter.
In granting defendants’ summary judgment motion in Hampton, the trial court “also found that plaintiffs’ evidentiary and judicial admissions precluded him from alleging that the property was to be sold for $203,000. The court specifically ruled that plaintiff had materially breached any purported contract for $203,000 when he insisted in [sic] a price of $268,000 in escrow, thereby materially breaching the contract and excusing any performance by defendant.”
In sum, the court concluded, “[t]he issues raised in this action were also raised in the former action. The same document attached to the complaint was submitted in evidence in the underlying action, yet the court found this evidence did not raise a triable issue of fact as to plaintiff’s entitlement to purchase the residence. Plaintiff cannot relitigate his claim that his brother is required to sell the house to him. Plaintiff’s opposition clearly misconstrues the court’s ruling, which stated that even if the complaint were amended to allege a price of $203,000, the motion would be granted since plaintiff materially breached the agreement.”
Thereafter, the trial court ordered the action abated. Plaintiffs appeal.
The court also granted defendants’ request for sanctions, finding that the instant complaint is not warranted by existing law or by a nonfrivolous argument for the extension or change in existing law, and ordering plaintiffs’ counsel to pay $2,650.
The order abating the action is an appealable order. (See Leadford v. Leadford (1992) 6 Cal.App.4th 571, 573; Grant v. McAuliffe (1953) 41 Cal.2d 859, 861-862.)
DISCUSSION
I. Plaintiffs’ Appeal is Timely
As a threshold matter, we reject defendants’ contention that plaintiffs’ appeal is untimely.
The court entered its “Order on Demurrer to Complaint” on July 13, 2006. Defendants gave notice of entry of the order on August 7, 2006. Defendants contend on appeal that this notice triggered the time period within which a notice of appeal must be filed.
But the court’s order on demurrer to complaint merely incorporated its tentative ruling, which sustained the demurrer without leave to amend. When plaintiffs sought writ relief in this court, we denied their request, and on September 14, 2006, issued the following order: “No formal order has been entered in the trial court. If a formal order abating the action is entered, or if a judgment of dismissal is entered, remedy by appeal will be adequate. The petition for writ of mandate is denied. [Citations.]”
Thereafter, on December 28, 2006, the trial court entered an order abating the action on the ground that another action was then pending. Plaintiffs gave notice of entry of that order on January 4, 2007, and filed their notice of appeal therefrom on February 15, 2007.
In sum, no appealable order was entered prior to December 28, 2006. Plaintiffs’ appeal was timely.
II. The Instant Complaint is Barred by Res Judicata
Plaintiffs contend on appeal the trial court erred in concluding that Hampton bars the instant action. To the contrary, we find the trial court properly sustained the demurrer without leave to amend.
“Res judicata” describes the preclusive effect of a final judgment on the merits. Res judicata, or claim preclusion, prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them. Collateral estoppel, or issue preclusion, “precludes relitigation of issues argued and decided in prior proceedings.” (Lucido v. Superior Court (1990) 51 Cal.3d 335, 341 [272 Cal.Rptr. 767, 795 P.2d 1223].) “Res judicata bars the relitigation not only of claims that were conclusively determined in the first action, but also matter that was within the scope of the action, related to the subject matter, and relevant to the issues so that it could have been raised.” (Burdette v. Carrier Corp. (2008) 158 Cal.App.4th 1668, 1674-1675, citing Sutphin v. Speik (1940) 15 Cal.2d 195, 202.)
“A clear and predictable res judicata doctrine promotes judicial economy. Under this doctrine, all claims based on the same cause of action must be decided in a single suit; if not brought initially, they may not be raised at a later date. ‘“Res judicata precludes piecemeal litigation by splitting a single cause of action or relitigation of the same cause of action on a different legal theory or for different relief.”’ [Citation.] A predictable doctrine of res judicata benefits both the parties and the courts because it ‘seeks to curtail multiple litigation causing vexation and expense to the parties and wasted effort and expense in judicial administration.’” (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 897, quoting 7 Witkin, Cal. Procedure (4th ed. 1997) Judgment, § 280, p. 820.)
California’s res judicata doctrine is based upon the primary right theory. As the Supreme Court explained in Crowley v. Katleman (1994) 8 Cal.4th 666, at pages 681 and 682:
“The primary right theory is a theory of code pleading that has long been followed in California. It provides that a ‘cause of action’ is comprised of a ‘primary right’ of the plaintiff, a corresponding ‘primary duty’ of the defendant, and a wrongful act by the defendant constituting a breach of that duty. [Citation.] The most salient characteristic of a primary right is that it is indivisible: the violation of a single primary right gives rise to but a single cause of action. [Citation.]
“As far as its content is concerned, the primary right is simply the plaintiff’s right to be free from the particular injury suffered. [Citation.] It must therefore be distinguished from the legal theory on which liability for that injury is premised: ‘Even where there are multiple legal theories upon which recovery might be predicated, one injury gives rise to only one claim for relief.’ [Citation.] The primary right must also be distinguished from the remedy sought: ‘The violation of one primary right constitutes a single cause of action, though it may entitle the injured party to many forms of relief, and the relief is not to be confounded with the cause of action, one not being determinative of the other.’ [Citation.]
“The primary right theory . . . is invoked . . . when a plaintiff attempts to divide a primary right and enforce it in two suits. The theory prevents this result by either of two means: (1) if the first suit is still pending when the second is filed, the defendant in the second suit may plead that fact in abatement [citations]; or (2) if the first suit has terminated in a judgment on the merits adverse to the plaintiff, the defendant in the second suit may set up that judgment as a bar under the principles of res judicata.” (Crowley v. Katleman, supra, 8 Cal.4th at pp. 681-682; see also Mycogen Corp. v. Monsanto Co., supra, 28 Cal.4th at p. 904.)
Thus, judgment in Hampton bars the current lawsuit if both suits seek to vindicate the same primary right. The trial court in this case found that the proceedings in Hampton and the current lawsuit arose from the same injury to a single primary right, and therefore concluded that the instant proceeding was barred.
We agree. In the first lawsuit, plaintiffs asserted the right to compel defendants to sell the house to them. The right to purchase the house from defendants is the “primary right” asserted in that action; it was not merely, as defendants now argue, the right to enforce defendants’ 1998 promise to sell the house for $150,000. The first lawsuit alleged that a written agreement made in or about June 2004 represented the most recent agreement--the “new agreement”--between the parties for the sale of the house at a price of $203,000, and alleged that defendants had failed to honor the “new” agreement. And, although plaintiffs may have preferred to enforce, if possible, their alleged right to buy the house for $150,000, they argued in opposition to defendants’ motion for summary judgment that the April 2004 agreements (including the purported April 2004 agreement which is the basis for the current action) for a higher price constituted valid intervening “amendments” to the 1998 Purchase Agreement. At any price, the right plaintiffs sought to enforce against defendants in the first lawsuit was the right to buy the house. That is the same right they now seek to vindicate in the current action.
Indeed, the trial court’s ruling on defendants’ summary judgment motion in the first lawsuit expressly recognizes plaintiffs’ assertion in that action not only the enforceability of a purported agreement allowing them to buy the house for $150,000, but also purported amendments to that agreement allowing them to buy it for $203,000 or for $268,000 with an “equity gift” built into the transaction. In granting the motion for summary judgment, the court opined that the “real dispute in this case appears to be over how the ultimate sales transaction was structured once the parties agreed on the second price of $203,000.” But it also found that plaintiffs’ “set[ting] the sales price in escrow [at] $268,000” constituted a material breach of any agreement by defendants’ to sell the property for $203,000, and that there exists “no support in any written agreement of the parties” to support a sales price of $268,000.
Thus, not only do plaintiffs now attempt to vindicate the same primary right asserted in the first lawsuit, but their claim that defendants had agreed to sell them the house for $203,000 (or for $268,000 with a built-in equity gift) was within the scope of the first lawsuit, actually litigated, and conclusively determined against plaintiffs in that action. It is res judicata in any subsequent action to enforce that agreement. (See Mycogen Corp. v. Monsanto Co., supra, 28 Cal.4th at p. 897; see also Sutphin v. Speik, supra, 15 Cal.2d at p. 202 [the prior judgment is res judicata on matters which were raised or could have been raised, on matters litigated or litigable].)
Finally, the trial court correctly found two bases for sustaining defendants’ demurrer: the existence of another pending action between the parties on the same cause of action, and plaintiffs’ inability to state a cause of action against defendants because the first lawsuit was res judicata as to the claim asserted in the instant action. Because the appeal in Hampton was then pending, it properly entered an order abating the current action.
With the filing of our opinion in Hampton, which has become final, there no longer is an action pending between the same parties on the same cause of action. Inasmuch as we have concluded that the claims in the instant action are barred by the doctrine of res judicata, the proper outcome is the entry of a judgment of dismissal, consistent with the trial court’s order on demurrer to complaint.
DISPOSITION
The matter is remanded to the trial court so that it may vacate its order abating action, and may order instead that the action be dismissed with prejudice. Respondents shall recover their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(3), (5).)
We concur: DAVIS, J., RAYE, J.