Sun v. Cunningham
Filed 8/16/06 Sun v. Cunningham CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 977.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 TWO
| FRANK SUN et al., Plaintiffs and Respondents, v. WILLIAM E. CUNNINGHAM et al., Defendants and Appellants. | B184478 (Los Angeles County Super. Ct. No. BC310802) |
APPEAL from a judgment of the Superior Court of Los Angeles County.
Warren L. Ettinger and Ralph M. Dau, Judges. Reversed and remanded.
Law Office of David M. Johnson and David M. Johnson for Defendants and Appellants.
Law Offices of Lilli B. Musil and Lilli B. Musil for Plaintiffs and Respondents.
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This lawsuit arises out of the failed attempt by respondents Frank Sun (Sun), Hui Y. Bao (Bao), and Mariposa Investment Company (collectively Mariposa) to obtain financing for the purchase of a 44-unit apartment building in Los Angeles (the property). They sued appellants American Commercial Mortgage, LLC (American) and William E. Cunningham (Cunningham), American's president, for fraud and breach of contract in Los Angeles Superior Court (Los Angeles action). Mariposa prevailed at trial and obtained a judgment for $27,283.
In their appeal, American and Cunningham contend: (1) Because a default judgment in a prior El Dorado Superior Court action (El Dorado action) absolved American of liability arising out of its loan commitment, collateral estoppel (the secondary aspect of res judicata) barred Mariposa from obtaining an inconsistent judgment in any subsequent lawsuit, including the Los Angeles action; and (2) the trial court erred in not granting American and Cunningham's motion to reopen the trial. We agree that the elements of collateral estoppel are present, but that does not automatically dictate a judgment in favor of American and Cunningham. Mariposa was served by publication in the El Dorado action, and there is a dispute as to whether it was ignorant of the El Dorado action or was aware and did nothing. As a public policy matter, if Mariposa was innocently ignorant of the El Dorado action, then the appealed money judgment is not barred by collateral estoppel. If, however, Mariposa knew about the El Dorado action, or was willfully ignorant of it, then collateral estoppel bars the appealed money judgment.
We reverse and remand for a limited new trial on the issue of whether the El Dorado action has preclusive effect.[1]
FACTS
Background
On October 29, 2001, Mariposa entered into an agreement with Ideal Properties to purchase the property for $3,650,000.
To obtain funding, Mariposa sent American a loan application. Mariposa also sent a $24,000 check. Of this sum, $4,000 was for a nonrefundable application fee, and the remaining $20,000 was for a â€
