Tentative Ruling

Judge Donna Geck
Department 4 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

CIVIL LAW & MOTION
Zane Windrich vs Edward St George
Case No: 19CV02432
Hearing Date: Fri Nov 22, 2019 9:30

Nature of Proceedings: Demurrer

TENTATIVE RULING: For reasons articulated below, the Court will dismiss the small claims appeal in Case No. 17CV03446-APP. Upon such dismissal, the small claims judgment becomes final, and plaintiffs’ current claims are barred by res judicata, requiring that the demurrer be sustained, without leave to amend.

Plaintiff Zane Windrich (Windrich) filed the current complaint on May 7, 2019, alleging causes of action for promissory fraud, bad faith retention of security deposit, conversion, and common counts. The complaint alleges that Windrich and defendants entered into a written term lease or rental agreement for premises located at 821 Cliff Drive, No. 101, in Santa Barbara, under which Windrich agreed to pay monthly rent of $800.00, commencing June 15, 2015. Windrich deposited with defendants $1,600 as security for his performance of the lease provisions. Due to defendants’ substantial breach of the express and implied provisions of the rental agreement, Windrich rejected possession of the premises. Windrich was entitled to a return of his security deposit, and defendants promised to return his security deposit, as required under the lease and California law, but failed to do so, and failed to provide Windrich with an itemized statement indicating a lawful basis for doing so. As a result, Windrich has been damaged in the sum of $1,600. The complaint seeks the $1,600 in compensatory damages, penalties under Civil Code section 1950.5(l) (in the bad faith retention of security deposit claim), and punitive damages (in the conversion claim).

Defendants seek judicial notice of documents in Santa Barbara Superior Court Case No. 17CV03446, a small claims action in which Windrich sought the $1600 security deposit from Edward St. George, dba St. George & Associates. Judge Pauline Maxwell entered judgment for Windrich and against St. George in the amount of $1,600, plus costs of $95, staying the judgment for 30 days. Judgment was entered on October 20, 2017. Edward St. George d.b.a. St. George & Associates appealed the judgment on October 23, 2017. That appeal remains pending.

Defendant St. George has demurred to the complaint, alleging that the small claims judgment is res judicata as to each cause of action asserted in the current complaint, all of which are based upon the alleged failure to return the $1,600 security deposit. He further cites Jellinek v. Superior Court (1991) 228 Cal.App.3d 652, 656, to assert that a plaintiff waives excess damages over the small claims court jurisdictional limit when filing a case in small claims court, and therefore cannot either transfer or bring the same claim in superior court, seeking sums in excess of the small claims jurisdictional bar. Plaintiff has not filed opposition to the demurrer.

ANALYSIS: The demurrer is sustained, without leave to amend. In doing so, the Court takes judicial notice not just of the contents of Case No. 17CV03446, as requested by defendant, but also of Case Nos. 15CV02824, 15CV02824-APP, and 17CV03446-APP, all of which revolve around the same dispute which is the subject of this action, and which involve the identical parties as those present in this action. The case files are noticed to provide context for the current complaint and demurrer only.

Plaintiff’s current complaint alleges four causes of action, all of which are based upon the alleged failure to defendant to return the $1,600 security deposit plaintiff had provided to defendant in 2015. Plaintiff had, in 2017, pursued a Small Claims action for return of the $1,600. The Small Claims Court, through the Honorable Pauline Maxwell, entered judgment for plaintiff in the amount of $1,600, plus costs of $95. That judgment was stayed for 30 days. Defendant timely filed an appeal of the small claims judgment.

The small claims appeal (Case No. 17CV03446-APP) was assigned to this Department, and set for hearing on November 29, 2017. Prior to that date, and in proceedings which took place in the now-related unlawful detainer action which St. George had filed against plaintiff in 2015 (Case No. 15CV02824), the hearing date on the small claims appeal was vacated, to be reset upon resolution of a motion to vacate default pending in the unlawful detainer action. The Court’s November 17, 2019 Minute Order in the unlawful detainer action reflects its intent to hear the small claims appeal along with the unlawful detainer action, should Windrich’s motion to set aside the default in that action be granted. If the motion was not granted, the Court expressed its intent to proceed to schedule and hear the small claims trial de novo.

The motion to set aside the default was denied by the Court on December 15, 2017. However, contrary to the Court’s November 17, 2019 Minute Order, the small claims appeal hearing was never rescheduled and heard.

The Court’s order denying Windrich’s motion to set aside the default in the unlawful detainer case was ultimately reversed on appeal in August 2018 (Case No. 15CV02824-APP), and the Remittitur was issued on October 31, 2018. Windrich ultimately answered the complaint in Case No. 15CV02824 on May 7, 2019. That case remains pending and unresolved.

Similarly, the small claims appeal has never been heard, and remains technically pending.

Defendant demurred to plaintiff’s complaint, asserting that (a) the current action is barred by the doctrine of res judicata, and (b) plaintiff, by filing and pursuing the Small Claims Action, waived any damages in excess of the small claims jurisdictional limit, and this action is therefore barred.

As defendant has noted, res judicata precludes the re-litigation of a cause of action or claim if (1) the decision in the prior proceeding is final and on the merits; (2) the present action is on the same cause of action as the prior proceeding, and (3) the parties in the present action or parties in privity with them were parties to the prior proceeding. (Franceschi v. Franchise Tax Board (2016) 1 Cal.App.5th 247, 257.) This aspect of res judicata is applicable to judgments rendered by the small claims court. (Allstate Ins. Co. v. Mel Rapton, Inc.(2000) 77 Cal.App.4th 901, 905.)

Taking the last element first, the parties to this action are identical to the parties to the prior small claims action.

Defendant also contends that the small claims action and the current action are on the same cause of action, for res judicata purposes, since a “cause of action” is the right to obtain redress for a harm suffered, regardless of the specific remedy sought or the legal theory advanced. (Franceschi, supra, 1 Cal.App.5th at 257.) The definition of a “cause of action” for purposes of res judicata is based on the primary right theory, which provides that a cause of action is comprised of a ‘primary right’ of the plaintiff, a corresponding ‘primary’ duty by the defendant, and a wrongful act by the defendant constituting a breach of that duty. (Bay Cities Paving & Grading, Inc. v. Lawyers’ Mutual Ins. Co. (1993) 5 Cal.4th 854, 860.) Here, while different legal theories are involved, each cause of action in this action is based upon the same “primary right,” i.e., plaintiff’s right to the return of his security deposit from defendant—which was the subject of the small claims action. The Court agrees that the two actions are based upon the purported violation of the same primary right, and therefore assert the same “cause of action,” for res judicata purposes, regardless of the fact that different legal theories have been utilized to pursue that primary right.

The sole element which is not clear-cut on its face is the requirement that the decision in the prior proceeding be final and on the merits. Generally speaking, for res judicata purposes, a judgment is not final during the pendency of and until the resolution of an appeal. (Agarwal v. Johnson (1979) 25 Cal. 3rd 932, 954 n. 11, citing Wood v. Herson (1974) 39 Cal.App.3d 737, 747.) Defendant’s appeal of the small claims judgment against him was timely filed in 2017, but has never come to hearing. Officially, it is still pending, and would outwardly appear to preclude application of res judicata to preclude plaintiff’s current claims.

However, defendant contends that the underlying small claims judgment is effectively final, precisely because the appeal has been pending for more than a year without having come to hearing. Pursuant to Code of Civil Procedure section 116.795(a), the superior court may dismiss a small claims appeal if it is not heard within one year from the date of filing the notice of appeal with the clerk of the small claims court. Defendant cites Wood v. Herson, supra, 39 Cal.App.3d at pp. 747-748, for the proposition that, for purposes of res judicata, a judgment is deemed final even if an appeal is only technically pending, and has apparently been abandoned, and the court has the power to dismiss the appeal on its own motion.

The Court notes that the California Rules of Court also provide for dismissal of a small claims appeal if it is not brought to trial within one year after the date of filing the appeal. Indeed, the rules state that, except under circumstances not present here, the superior court must dismiss the appeal if it is not brought to trial within one year. (Cal. Rules of Court, Rule 8.963, subd. (c)(1).)

Upon dismissal of a small claims appeal by the superior court, the small claims court thereafter has the same jurisdiction as if no appeal had been filed. (Code Civ. Proc., § 116.795, subd. (b).)

The small claims appeal has been pending for more than two years, and on its face would appear to be subject to dismissal under both Code of Civil Procedure section 116.795(a) and California Rules of Court, Rule 8.963(c)(1). Under the Court’s November 17, 2017 Minute Order, the matter should have been scheduled and determined, separate and apart from the unlawful detainer action, upon entry of the Court’s order denying Windrich’s motion to set aside the default in the unlawful detainer action. That did not happen. The pendency of the appeal in the separate unlawful detainer action should not have had an impact on the scheduling and determination of the small claims appeal; it simply was never rescheduled and heard.

Defendant’s conduct in this action is inconsistent with any intent to continue to pursue his small claims appeal, and is tantamount to his filing of an official request for its dismissal. Finality of the underlying small claims judgment is entirely in defendant’s hands, as the small claims appellant, and defendant has chosen to abandon that appeal, both in failing to bring it to trial within a year after its filing, and in requesting from this court its dismissal.

The Court will therefore remove all doubt about the finality and enforceability of the small claims judgment, and will dismiss the small claims appeal in Case No. 17CV03446-APP. As a result of this order, the current action is precluded by principles of res judicata, requiring that defendant’s demurrer to the complaint be sustained, without leave to amend.