Filed 12/20/17 Morris v. M5 Land & Cattle CA1/5

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

A former spouse who was awarded a parcel of real property as part of a stipulated family court judgment in a dissolution action sought in a subsequent legal proceeding to establish four easements for the benefit of that property. We conclude the family court judgment did not operate as res judicata so as to bar the easement claims. We therefore reverse the judgment of dismissal entered after the trial court sustained the demurrer of cross-defendants Robert Morris (Robert), M5 Land & Cattle, LLC and Fitzell Ranch, LLC to the first amended cross-complaint (FACC) of cross-complainant Carol Morris (Carol).[1]

BACKGROUND

Carol and Robert were married and jointly owned real property in the Blocksburg area of Humboldt County. Carol petitioned for divorce, and the parties entered into a Marital Settlement Agreement (MSA), which was incorporated into a Judgment of Dissolution on Reserved Issues dated August 5, 2013.

As part of the Judgment of Dissolution, Carol was awarded the former family home, described in the MSA as: “Former family residence known as 40500 Alder Point Road, Blocksburg, situated on a 120-acre parcel of land in Blocksburg, California, with easement for water and road right-of-way (Humboldt County APN: 208-142-35) and all timber rights associated with same. Respondent will vacate upon execution of deeds by the parties.” Robert was awarded a contiguous parcel of land on Alder Point Road and also received Carol’s interest in M5 Land & Cattle LLC and Fitzell Ranch LLC, two limited liability corporations held by the community. The MSA provided that each party would execute and deliver “any legal instrument, document of title or other legal document that may be necessary to carry out the provisions of this Agreement, including, but not limited to, the division of property or confirmation of property set forth in this Agreement.”

In September 2013, Carol raised concerns about water easements to benefit her parcel and a lot-line adjustment to satisfy the County’s setback requirements. On October 3, 2013, Robert filed a motion to enforce the judgment, seeking an order directing Carol to execute certain documents required by the MSA. Also on October 3, 2013, Carol filed a motion to enforce the judgment, seeking, among other things, “unfettered access to the residence and property” that had been awarded to her in the MSA, Robert’s cooperation with her in obtaining a lot-line adjustment, and Robert’s cooperation regarding water and road-right easements for her property.

On December 12, 2013, the parties appeared in court and stated on the record that they had reached a settlement of the “three issues that were the only remaining issues. There is a water issue, the boundary setback issue and road easement issue.” Under the terms of the settlement, an interspousal transfer deed to be signed by Robert would specify certain water rights for Carol’s property. Additionally, “[o]n access, we will also be modifying the interspousal grant deed from Bob to Carol to add – there is an existing easement on the house road that will stay the same. We will add a nonexclusive easement under very similar terms to the house road for the use of what is called the Hill Creek Road, and there will be a third easement added that will allow the use of the middle road for logging trucks only.” Robert also agreed to cooperate in making a lot line adjustment consistent with the County’s requirements.

As contemplated by the settlement recited on the record, an interspousal transfer deed was executed by Robert and was recorded on January 14, 2014, under which Robert transferred his interest in Carol’s parcel of property subject to a water easement and three road easements across Robert’s property. The parties executed a Stipulation and Order that was signed by the court on April 7, 2014, in which they stipulated that the issues raised in the respective motions to enforce the judgment were resolved under the following conditions: (1) neither side would admit liability for the necessity of bringing the motions to enforce the judgment; (2) Robert would pay Carol $2,500; (3) Robert would pay a portion of the electric bill for a shared water pump; and (4) each side would bear their own attorney fees and costs on the motions to enforce.

A year later, on April 7, 2015, Robert filed the instant action for damages and injunctive relief, alleging Carol had trespassed on his property by removing a newly constructed fence.[2] On October 25, 2016, Carol filed the FACC against Robert, M5 Land & Cattle, LLC and Fitzell Ranch, LLC, which alleged that when the couple’s real property had been jointly owned, the property now held by Robert had been used to benefit the property now held by Carol, and included four easements reasonably necessary for the enjoyment of Carol’s property: the “Front Door,” “North Door,” “Woodshed’ and “Garage” Easements. The FACC contained three causes of action seeking (1) quiet title and the recognition of implied easements;[3] (2) a reformation of the deed to reflect that Carol had these easement rights, based on her unilateral mistake in believing those easements were included in the interspousal transfer deed; and (3) an injunction preventing Robert from erecting fences to block Carol’s access to those easements.

Robert filed a demurrer to the FACC on the ground that Carol’s claims regarding her right to the easements were barred by the final judgment in the family court action under principles of res judicata and collateral estoppel. The trial court agreed, sustained the demurrer without leave to amend, and entered a judgment of dismissal in Robert’s favor on the FACC. In its written order, the trial court explained that res judicata applied because (1) the parties to the instant action were either parties to the family court action or their privies; (2) a final judgment had been entered in the family court action; (3) the issues of easements benefiting Carol’s property had been litigated and resolved in the family court action. The court denied Carol leave to amend the FACC, finding no reasonable probability the defect in the pleading could be cured by amendment, and entered a judgment of dismissal.

DISCUSSION

A. General Principles and Standard of Review

“ ‘Res judicata’ describes the preclusive effect of a final judgment on the merits.” (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 896.) The doctrine has two distinct aspects. (Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 530.) In its primary aspect, claim preclusion, it “prevents religitation of the same cause of action in a second suit between the same parties or parties in privity with them.” (Mycogen, at p. 896.) In its secondary aspect, issue preclusion or collateral estoppel, the doctrine “bars the relitigation of specific issues that were actually litigated in an earlier proceeding and decided adversely to the party against whom the doctrine is asserted.” (Ferraro, at p. 531.) The burden of proving the requirements for the application of res judicata is upon the party seeking to assert it as a bar or estoppel. (Vella v. Hudgins (1977) 20 Cal.3d 251, 257.)

“ ‘If all of the facts necessary to show that an action is barred by res judicata are within the complaint or subject to judicial notice, a trial court may properly sustain a general demurrer. [Citation.] In ruling on a demurrer based on res judicata, a court may take judicial notice of the official acts or records of any court in this state. [Citations].’ [Citation.]” (Planning & Conservation League v. Castaic Lake Water Agency (2009) 180 Cal.App.4th 210, 225 (Conservation League).) “[A] demurrer based on res judicata is properly sustained only if the pleadings and judicially noticed facts conclusively establish the elements of the doctrine.” (Id at p. 231.)

On review of an order sustaining a demurrer, our standard of review is de novo, i.e., we exercise our independent judgment about whether the complaint states a cause of action as a matter of law. We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law, and consider matters which may be judicially noticed. (Walgreen Co. v. City and County of San Francisco (2010) 185 Cal.App.4th 424, 432.) We review a trial court’s refusal to grant leave to amend the pleading for abuse of discretion. (G.L. Mezzetta, Inc. v. City of American Canyon (2000) 78 Cal.App.4th 1087, 1091–1092.)

B. Res Judicata

In the FACC, Carol is seeking to establish the existence of four implied easements benefitting the property she was awarded as part of the MSA. Robert contends these claims were necessarily resolved by the prior judgment in the family court action. The trial court agreed and sustained Robert’s demurrer to the FACC without leave to amend. We conclude this was error.

“Three elements must exist for res judicata (or claim preclusion) to apply: ‘ “(1) the decision in the prior proceeding is final and on the merits; (2) the present proceeding is on the same cause of action as the prior proceeding; and (3) the parties in the present proceeding or parties in privity with them were parties to the prior proceeding.” ’ [Citation.] To put it another way, res judicata or claim preclusion ‘arises if a second suit involves (1) the same cause of action (2) between the same parties [or their privies] (3) after a final judgment on the merits in the first suit.’ [Citation.] ‘Only a final judgment on the merits between the same parties or their privies and upon the same cause of action is entitled to the res judicata effect of bar or merger.’[Citation.]” (Association of Irritated Residents v. Department of Conservation (2017) 11 Cal.App.5th 1202, 1219 (Irritated Residents).)

In determining whether res judicata bars the claims raised by Carol in the FACC, we must first identify the “judgment” in the family court action that allegedly has preclusive effect.[4] The Judgment of Dissolution and on Reserved Issues entered August 5, 2013, which incorporated the terms of the MSA, was a final judgment on the merits of the parties’ marital dissolution and associated property issues, notwithstanding that it was entered upon stipulation rather than after a contested trial on the merits. (Warga v. Cooper (1996) 44 Cal.App.4th 371, 377 [“ ‘It is simply settled law that normally a stipulated judgment is given [res judicata] effect as to parties or their privies to the same extent as a judgment after a contested trial’ ”].)[5] Robert suggests the Stipulation and Order signed April 7, 2014, by which the parties resolved the motions to enforce the judgment, was itself a judgment on the merits that may be given preclusive effect. But that document simply indicates that the parties had settled the post-judgment motions to enforce on unspecified grounds, subject to conditions unrelated to the merits of those motions. Thus, even if it could be characterized as “final,” the Stipulation and Order is lacking in any substance that could operate as res judicata on the claims in the present case. In evaluating Robert’s claim of res judicata, therefore, we look to the Judgment of Dissolution entered August 5, 2013, and consider whether Carol’s FACC alleges causes of action that were already resolved on the merits by that judgment.

Robert argues the Judgment of Dissolution operates as res judicata because it involves the same “primary right,” and thus the same cause of action, as the FACC. (Boeken v. Phillip Morris USA, Inc. (2010) 48 Cal.4th 788, 798; see Villacres v. ABM Industries Inc. (2010) 189 Cal.App.4th 562, 575–576.) We disagree. The primary rights theory is “notoriously uncertain in its application,” but “[t]he most salient characteristic of a primary right is that it is indivisible.” (Baral v. Schnitt (2016) 1 Cal.5th 376, 394, 395 [discussing primary rights theory in connection with motions to dismiss under Code of Civ. Proc., § 425.16].) The easements alleged in the FACC were in no way indivisible from the rights adjudicated by the Judgment of Dissolution, and cannot be said to involve the same cause of action.

The family court action was concerned with Carol and Robert’s marital status and the division of their property. The MSA and Judgment of Dissolution resolved those issues and specified, among other things, that Carol would receive the property that had formerly been the family home. While the MSA noted the transfer would include an unspecified “easement for water and right-of-way,” it did not contain a legal description of the property or otherwise describe the nature of the property interests that Carol or Robert would be receiving. The FACC, by contrast, does not concern the marital dissolution and does not seek to alter the division of property under the MSA. Rather, it seeks judicial recognition of four easements on Robert’s property, which are allegedly necessary to allow Carol to access her house and outbuildings on her property. Each of the easements alleged in the FACC is distinct from the water and road easements referenced in the Judgment of Dissolution and none of them were litigated or determined in the family court action.

Robert argues that the settlement of the parties’ motion to enforce the judgment manifested an intent to “conclusively settle the easement matters” affecting Carol’s property. As previously noted, the Stipulation and Order filed on April 7, 2014, does not reference any such easement matters and cannot operate as res judicata on those issues. To the extent the recitation of certain easements in the interspousal transfer deed executed by Robert might be viewed as an agreement that no other easements existed (see Ronay Family Limited Partnership v. Tweed (2013) 216 Cal.App.4th 830, 842 [maxim expression unius est exclusion alterius—mention of one thing is exclusion of another—applies to contract interpretation]), that deed was not a judgment and cannot have preclusive effect under the doctrine of res judicata.

C. Collateral Estoppel Does Not Bar Carol’s Claims

Although the trial court did not rely on the issue preclusion variant of res judicata in its order sustaining the demurrer, Robert argues that collateral estoppel also operates to bar the FACC. We conclude collateral estoppel does not provide an alternative basis for upholding the trial court’s ruling.

There are five requirements for issue preclusion or collateral estoppel: “First, the issue sought to be precluded from relitigation must be identical to that decided in a former proceeding. Second, this issue must have been actually litigated in the former proceeding. Third, it must have been necessarily decided in the former proceeding. Fourth, the decision in the former proceeding must be final and on the merits. Finally, the party against whom preclusion is sought must be the same as, or in privity with, the party to the former proceeding.” (Lucido v. Superior Court (1990) 51 Cal.3d 335, 341.) The Judgment of Dissolution and MSA divided the couple’s property and provided that Carol would have the former family home. The four easements alleged by Carol in the FACC are not the same as the “easement for water and road right-of-way” mentioned in the Judgment, meaning identical issues were not actually litigated or necessarily decided in the family court action. Collateral estoppel does not provide an alternative basis for upholding the order sustaining the demurrer.

D. Conclusion

We express no opinion on the merits of the claims Carol asserts in the FACC. We hold only that Robert has not carried his burden of establishing that those claims have already been resolved by a final judgment on the merits. As that was the sole basis for the trial court’s order sustaining the demurrer to the FACC without leave to amend, we will reverse the judgment of dismissal. Though Robert has offered several arguments as to why the FACC lacks merit, those arguments present factual issues not suitable for resolution on demurrer. (See Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113.)

DISPOSITION

The judgment of dismissal of the FACC is reversed. Costs are awarded to appellant.

NEEDHAM, J.

We concur.

SIMONS, ACTING P.J.

BRUINIERS, J.

(A150828)