Opinion
NOT TO BE PUBLISHED
Superior Court County Super. Ct. No. CIV231274 of Ventura Vincent O'Neill, Judge
Russell Manthey, in pro. per. for Plaintiff and Appellant.
Schuering Zimmerman Scully Tweedy & Doyle, Leo H. Schuering and Theodore D. Poppinga, for Defendant and Respondent.
COFFEE, J.
Appellant Russell Manthey appeals from a judgment of dismissal after an order granting summary judgment in favor of Norcal Mutual Insurance Company (Norcal). Appellant contends that the doctrines of collateral estoppel and judicial estoppel did not bar his claims, because the issues decided in a prior administrative hearing and a prior superior court action were not identical to those raised in the present case, and because the court relied upon inadmissible evidence. He also contends that expert witness fees and other costs awarded to Norcal were not allowable, reasonable or necessary. We affirm.
FACTS AND PROCEDURAL BACKGROUND
Appellant previously held a license to practice medicine in this state. In about 1999, the California Medical Board (Medical Board) began an investigation into appellant's billing practices and patient treatment. Appellant had "physician's administrative defense" insurance coverage with Norcal. Norcal retained attorney Thomas McAndrews to represent appellant in the Medical Board investigation and proceedings. McAndrews was also representing appellant in several pending medical malpractice actions.
In July of 2001, appellant informed Norcal that he did not want McAndrews to represent him before the Medical Board. Norcal replaced McAndrews with a new attorney, Rene Kern.
In December 2001, the Attorney General served appellant with a formal accusation. In the fall of 2002, appellant informed Norcal that he had "no intention of associating with Mr. Kern in any further 'defense' and [Kern] is absolutely not to exchange any communication or information with [the deputy Attorney General handling the investigation]." Kern stopped representing appellant. At the January 2003 hearing before the Medical Board, appellant represented himself and signed a stipulation and order surrendering his medical license (the stipulated surrender).
One year later, appellant filed a legal malpractice action against attorney Kern (the former action), in which he alleged the following facts: He lost his medical license as a result of Kern's "lack of skill, prudence, ethics and diligence." Kern engaged in fraudulent billing, misrepresented defense options, and made false statements about forensic evidence and about his professional responsibilities. Appellant signed the stipulated surrender and failed to maintain adequate medical records. "The inadequate medical records revolved around the lack of documentation of charts related to retinal examinations pre-operatively." He acknowledged to the Medical Board that he had not maintained adequate administrative oversight of his office.
In the former action, Kern filed a demurrer to appellant's first amended complaint on the ground that judicial admissions in appellant's pleadings barred the claim that legal malpractice caused appellant to lose his medical license. The trial court sustained Kern's demurrer without leave to amend and entered judgment of dismissal in October of 2004. We dismissed an appeal from that judgment pursuant to California Rules of Court, former rule 17(a), now rule 8.220(a).
(Manthey v. Kern, B179767 [Oct. 17, 2005].)
Appellant then filed the present action against his insurer, Norcal. In this action, appellant alleges that Norcal caused him to lose his license by failing to timely and properly investigate the disciplinary matter, failing to retain expert consultants, retaining counsel which Norcal knew to be incompetent, and failing to monitor, supervise or control counsel's activities.
Norcal moved for summary judgment on the grounds that appellant was collaterally estopped by the decision in the former action from claiming in this action that he did not receive an adequate defense. In support of its motion, Norcal offered the complaint, the demurrer and the judgment filed in the former action, the Attorney General's accusation and amended accusation before the Medical Board, and the stipulated surrender. The trial court sustained appellant's objection to the stipulated surrender. Norcal also submitted a declaration of a Norcal claims supervisor, Patricia Bernstein, describing the retention of McAndrews and Kern.
In opposition to the motion, appellant offered his own affidavit. He declared that Norcal promised that he would be represented to his satisfaction, and that it would retain a forensic accountant and a handwriting expert. Appellant declared that he complained to Norcal about Kern's performance and billing, and Norcal did not satisfactorily respond. He declared that Norcal took the position that 1) under the terms of the policy it had sole discretion to select defense counsel; 2) that appellant did not have a right to independent counsel because there was no reservation of rights; and 3) that if appellant hired a new attorney, it would be at his own expense. Appellant declared that Kern abandoned him in the Medical Board proceedings and left him to defend himself at the hearing.
The trial court granted Norcal's motion for summary judgment, finding that the doctrine of collateral estoppel barred any claim that Kern committed attorney malpractice and that, as a result, appellant could not prove that Norcal caused him any harm. Appellant filed a notice of intent to move for new trial. The trial court set the matter for hearing. Appellant did not file any points and authorities or affidavits in support. The trial court denied the motion for new trial.
DISCUSSION
Motion for Summary Judgment
Appellant argues that the doctrine of collateral estoppel does not apply because the obligations of Norcal were distinct from the previously adjudicated obligations of attorney Kern. Appellant also contends that the stipulated surrender was inadmissible and that Bernstein's affidavit lacked foundation and was not truthful. We reject his contentions.
Summary judgment is appropriate when there is no material issue of fact or where the record establishes as a matter of law that a cause of action cannot prevail. (Code Civ. Proc., § 437c.) A defendant has met the burden of showing that a cause of action has no merit if it shows that one or more element cannot be established or that there is a complete defense to that cause of action. Once a defendant meets that burden, the burden shifts to the plaintiff to show that a triable issue of material fact exists. (Id., subd. (p)(2).) On appeal, we independently review an order granting summary judgment. (Yuzon v. Collins (2004) 116 Cal.App.4th 149, 159.)
Collateral estoppel prevents a party from relitigating in a second proceeding an issue that was already fully and fairly litigated against it to a final adjudication on the merits in a prior proceeding. (Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 828.) The doctrine applies only if the issues are identical. (Lucido v. Superior Court (1990) 51 Cal.3d 335, 341.) A judgment entered on the sustaining of a demurrer has preclusive effect if "the complaint states the same facts which were held not to constitute a cause of action on the former demurrer or, notwithstanding differences in the facts alleged, when the ground on which the demurrer in the former action was sustained, is equally applicable to the second one." (Chappelle v. City of Concord (1956) 144 Cal.App.2d 822, 825.)
The ground on which the demurrer was sustained in appellant's former action is equally applicable to the present action. In the former action, appellant alleged that Kern failed to adequately investigate, retain experts, or represent appellant in the Medical Board proceedings. Kern's demurrer was sustained on the ground that appellant had judicially admitted that his own conduct caused him to lose his license. (Kirby v. Albert D. Seeno Construction Co. (1992) 11 Cal.App.4th 1059, 1066, fn. 4.) The judgment in Kern's favor is final and appellant is bound by it. In the present action, appellant alleges that Norcal failed to investigate, failed to retain experts, and failed to monitor, supervise or control Kern. The doctrine of collateral estoppel applies to conclusively establish that Kern's legal representation did not cause appellant to lose his medical license.
As a result, appellant cannot establish that Norcal caused him to lose his license. Once an insurer retains counsel to defend its insured, it has no independent duty to conduct the insured's defense. (Merritt v. Reserve Ins. Co. (1973) 34 Cal.App.3d 858, 881.) Norcal had only a duty to conduct an initial investigation, employ competent counsel, fund the defense and monitor the litigation. (Id. at p. 882) Its duty to defend was otherwise delegable to Kern. (Id. at p. 881.) "[T]he amount and extent of discovery, the interrogation, evaluation, and selection of witnesses, the employment of experts, and the presentation of the defense in court, remains the responsibility of trial counsel . . . ." (Id. at p. 882.) Kern's competent performance has been established as a matter of law. Therefore, any negligent retention of counsel or failure to monitor Kern could not have caused appellant harm. Appellant does not allege that Norcal failed to fund the defense up to the amount of the policy limits. Correspondence attached to appellant's declaration indicates that Norcal was at all times willing to fund the defense up to the $25,000 policy limit.
Appellant's evidentiary contentions are without merit. The trial court sustained his objection to the stipulated surrender, and struck it from the record. Appellant waived any objections to the declaration of Bernstein when he did not object to it in the trial court. (Evid. Code, § 353, subd. (a).)
Motion for New Trial
Appellant contends that the trial court should have granted him a new trial because Norcal's obligations were independent of Kern's and because the stipulated surrender was inadmissible and prejudicial. The denial of a motion for new trial is nonappealable. (Walker v. Los Angeles Metropolitan Transportation Authority (2005) 35 Cal.4th 15, 18.) We treat the challenge as an appeal from the underlying judgment (ibid.), and reject it for the reasons previously stated.
Costs
Appellant contends that the court erroneously awarded costs to Norcal. We have no jurisdiction to review the trial court's postjudgment ruling allowing Norcal to recover expenses pursuant to Code of Civil Procedure section 998, absent timely notice of appeal. (Fish v. Guevara (1993) 12 Cal.App.4th 142, 147.) In this case there was none. Costs to respondent.
We affirm the judgment.
We concur: GILBERT, P.J., PERREN, J.