Mesa Water District v. KDC, Inc.

30-2016-00832860

Cross-Defendant Synetcom Digital’s (“Synetcom”) Demurrer to the KDC, Inc.’s Cross-Complaint is sustained in part and overruled in part. The Demurrer is sustained with 15 days leave to amend as to third and fifth causes of action. The Demurrer is overruled as to the first, second, and fourth causes of action.

Cross-Defendant’s request for judicial notice is granted.  The matter for which judicial notice is requested, is not in dispute. Judicial notice of trial transcripts is permissible under Evidence Code section 452. (See People v. Sakarias (2000) 22 Cal.4th 596, 635.)

Cross-Complainant’s request for judicial notice is denied. It is unnecessary to ask the court to take judicial notice of materials previously filed in this case.  “[A]ll that is necessary is to call the court’s attention to such papers.”  (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2014) ¶ 9.53.1a, p. 9(l)-33.)

Third and Fifth Causes of Action for Express Indemnity and Breach of Written Contract

Judicial estoppel precludes a party from taking inconsistent positions in separate judicial proceedings. (Swahn Group, Inc. v. Segal (2010) 183 Cal.App.4th 831, 841 [internal citation omitted].) It is “intended to protect against a litigant playing ‘fast and loose with the courts,’” by “first [advocating] one position, and later, if it becomes beneficial, to assert the opposite.” (Ibid. [internal citation omitted].) The purpose of judicial estoppel is to “maintain the purity and integrity of the judicial process by preventing inconsistent positions from being asserted.” (Id. at p. 842.)

Judicial estoppel may be applied if five elements are met: “(1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake.” (Ibid.)

All five elements are found here. Cross-Complainant first took the position that the subcontract at issue was void ab initio, and it was successful in asserting that position in the underlying litigation. Cross-Complainant did not take the first position as a result of ignorance, fraud, or mistake. Its first position is totally inconsistent with its position, here, that the subcontract is valid and enforceable. It would be patently unfair to allow Cross-Complainant to advocate the first position to avoid liability under the subcontract in the underlying litigation, then allow it to assert a totally inconsistent position now that it has become beneficial for Cross-Complainant in this action. The application of judicial estoppeldoes not require a final judgment, i.e., it is not precluded by an appeal. (Swahn Group, Inc. v. Segal, supra, 183 Cal.App.4th at p. 841.)

However, judicial estoppel would not apply to Cross-Complainant’s other causes of action, which are not based on contract.  The Demurrer as to the third and fifth causes of action is sustained with 15 days leave to amend.

First and Second Causes of Action for Equitable Indemnity and Comparative and Equitable Apportionment

Cross-Defendant demurs to these claims on the grounds that (1) the Cross-Complaint does not include allegations of any wrongdoing or negligence or fault on which Cross-Defendant’s liability could be based; and (2) they are barred by res judicata.

Contrary to the first ground, the Cross-Complaint includes allegations that the underlying lawsuit “arose out of, and directly and indirectly involved Synetcom’s alleged work or services” on the public construction project and as a “result of the primary, active and concurrent negligence, fault, or other wrongful conduct of Cross-Defendants, and each of them.” (Cross-Compl., ¶¶ 6, 7, 10.)

As to the second ground, unlike judicial estoppel, res judicata and collateral estoppel do not apply unless the decision sought to be applied as res judicata is “final.” (See e.g.,Morris v. McCauley’s Quality Transmission Serv. (1976) 60 Cal.App.3d 964, 973 [res judicata “applies only to final judgments, that is, judgments which are free from attack on appeal”].) The judgment in the underlying litigation is on appeal. (See Demurrer at 6, fn. 3 [“Synetcom has filed a Notice of Appeal on the Judgment, Court of Appeal Case Number E066559.”].) Res judicata does not apply.  The Demurrer as to the first and second causes of action is overruled.

Fourth Cause of Action for Declaratory Relief

Declaratory relief is available to “any interested person” to resolve an “actual controversy” about “his or her rights or duties with respect to another.” ( Code Civ. Proc., ­§ 1060.) That there may be another remedy available other than declaratory relief does not warrant sustaining a demurrer as to this cause of action.  Accordingly, the Demurrer as to the fourth cause of action is overruled.

Cross-Defendant Synetcom shall give notice of the ruling.