Diaccents-Superings v. Cal. Center Bank

Filed 6/27/06 Diaccents-Superings v. Cal. Center Bank CA2/1

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

APPEAL from an order of the Superior Court of Los Angeles County, Ronald M. Sohigian, Judge. Reversed.

Pritchard and Kay and M. Gregg McKerroll for Plaintiff and Appellant.

Aldrich & Bonnefin, Alan I. White and Keith R. Forrester for Defendant and Respondent.

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INTRODUCTION

Plaintiff Diaccents-Superings, Inc. (Diaccents) appeals from an order of dismissal entered after the trial court sustained the demurrer of defendant California Center Bank (Bank) without leave to amend. Diaccents contends the trial court erred in sustaining Bank's demurrer on the ground Diaccents' action was barred by res judicata. Diaccents also contends the trial court erred in failing to specify its grounds for sustaining the demurrer. We agree in part and reverse the order.

FACTUAL AND PROCEDURAL BACKGROUND[1]

In its first amended complaint, Diaccents alleged that it opened a business checking account with Bank in November 2001. Between December 2001 and June 2002, Diaccents made about 500 deposits, totaling about $5,357,000. Diaccents wrote about 1,400 checks, totaling $5,341,000.

Bank charged Diaccents' account in excess of $21,050 in insufficient funds/overdraft fees and returned item fees for checks for which Bank had paid. These charges were for 28 checks which Diaccents wrote between May 15 and June 5, 2002. Bank initially paid these checks then reversed payment and returned the checks for insufficient funds.

Diaccents alleged causes of action for late return and wrongful dishonor of the checks (Com. Code, §§ 4302, 4402), breach of contract, and unfair competition (Bus. & Prof. Code, § 17200 et seq.). All causes of action were based on Bank's dishonor of and imposition of fees for the 28 checks.

At Bank's request, we take judicial notice of the following facts, as did the trial court: On July 3, 2002, Bank filed a complaint against Diaccents for unjust enrichment, breach of contract, breach of warranty, restitution, money had and received, constructive trust, conversion and injunctive relief. (California Center Bank v. Diaccents-Superings, Inc. (L.A.Super. Ct. No. BC277088).) Bank alleged that in early June 2002, Diaccents deposited four checks totaling $215,923.20 into its account. These checks were drawn on an account at Bank of America. Bank gave Diaccents provisional credit for these checks, and Diaccents wrote checks on its account against this credit. Bank of America then notified Bank that the checks were counterfeit and it was returning them. Bank in turn informed Diaccents that its account would be debited in the amount of the counterfeit checks. This left Diaccents' account overdrawn by $120,117.09. Bank demanded that Diaccents pay this amount, but Diaccents refused. Bank sought return of this amount.

Diaccents failed to respond to Bank's complaint, and Bank took its default. Diaccents moved to set aside the default. According to Diaccents' attorney, John C. Clark, after Bank filed its complaint, he discussed settlement of the case with Bank's attorney, Bruce T. Bauer. Attorney Bauer did not tell him that he was entering a default against Diaccents. Once Attorney Clark learned of the default, his office asked Attorney Bauer to set it aside. Attorney Bauer refused to do so.

Attached to Attorney Clark's declaration was a proposed answer to Bank's complaint. Among the affirmative defenses alleged was failure to comply with the Commercial Code, including sections 4302 and 4402. Attorney Clark also proposed to file a cross-complaint, alleging Bank's violation of banking and consumer statutes and regulations. In opposition to the motion to set aside the default, Attorney Bauer stated that while he discussed settlement with Attorney Clark, he insisted that Diaccents respond to Bank's complaint. On October 21, 2002, he wrote to Attorney Clark: â€