Filed 11/5/15 Wu v. Liu CA2/2

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication

or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

NANCY WU,

Cross-complainant and Appellant,

v.

HAN LIU et al.,

Cross-defendants and Respondents.

 B256203 (consolidated w/ B259554)

 (Los Angeles County

 Super. Ct. No. BC472110)

APPEAL from a judgment of the Superior Court of Los Angeles County. 

Deirdre Hill, Judge. Reversed.

James A. Gallo for Cross-complainant and Appellant.

Steve Luan for Cross-defendants and Respondents Han Liu, John Lau, and Linda 

Yan-Lin Chen.

* * * * * *
2

In a marital dissolution action, the family court was called upon to decide if a 

single-family residence was community property or instead the separate property of 

wife’s stepson. Wife sought to join stepson in the action to settle ownership of the 

residence and to obtain damages under tort and contract theories. The family court ruled 

that the home was stepson’s separate property, but made conflicting statements as to 

whether it was deciding wife’s tort and contract claims. Wife subsequently cross-claimed 

against stepson and others in a separate civil action, raising the same tort and contract 

theories. The trial court in the civil action initially ruled that wife’s tort and contract 

claims had not been previously litigated, but later ruled that they had been and were thus 

barred by collateral estoppel. Wife appeals this ruling. We conclude that stepson and the 

others have not carried their burden of showing that the family court actually litigated the 

tort and contract claims, and accordingly reverse.

FACTS AND PROCEDURAL BACKGROUND

I. Marital Dissolution Proceeding

Cross-complainant and appellant Nancy Wu (wife) married cross-defendant and 

respondent John Lau (husband) in 1994. In 2009, wife filed for divorce in Los Angeles 

County Superior Court. One of the issues in the ensuing dissolution proceeding was 

whether a single-family residence in Temple City, California, was community property or 

instead the separate property of cross-defendant and respondent Han Liu (stepson), who 

was husband’s son from a prior relationship. Wife claimed the residence was community 

property, despite the fact that the deed listed stepson as the owner, because stepson acted 

solely as their real estate agent and because she and husband had provided the down 

payment and had made the mortgage payments. Stepson claimed the property was his 

separate property, arguing that he repaid wife and husband for their down payment and 

then leased the residence to them. Soon after this issue arose, wife filed a request to join 

stepson in the dissolution proceeding, seeking to resolve the status of the residence under 

a variety of equitable theories and to obtain damages for breach of contract, breach of 

fiduciary duty, fraud and deceit, constructive fraud and abuse of process. 
3

In July 2012, the family court ruled that the residence was stepson’s separate 

property because wife did not adduce clear and convincing evidence to rebut the 

evidentiary presumption that stepson’s title to the residence was controlling. (Evid. 

Code, § 662.) As to wife’s request for damages for breach of fiduciary duty, the family 

court stated: “[A]ny damages resulting from that breach are not properly before this 

court. This court’s jurisdiction is limited to determining whether the community has an 

interest in this home. If [stepson] breached his fiduciary duties to [wife], that breach 

might result in civil damages, but this court takes no position on any breach of any 

responsibility between [stepson] and [wife].” 

Wife subsequently filed a request for statement of decision, seeking the family 

court’s “clarification and/or determination” as to whether she satisfied the elements of her 

breach of contract, breach of fiduciary duty, fraud and deceit, constructive trust and abuse 

of process claims; she did not purport to seek damages on those claims. In response, the 

family court issued an order in August 2012 that stated: “There is insufficient evidence 

for the court to make findings in [wife’s] favor on breach of agreement, fraud and deceit, 

breach of fiduciary duty, constructive fraud, constructive trust, unjust enrichment, and 

abuse of process. [Wife] simply did not have sufficient evidence to establish that 

[stepson] breached any of his fiduciary duties to [wife]. Further, in light of the evidence, 

the court cannot find that [stepson] was unjustly enriched, or that he abused any process.” 

Wife thereafter filed a motion for new trial. The family court denied that motion 

in October 2012. In its order, the court reaffirmed its initial ruling that “any fiduciary 

duty [stepson] owed [wife] as a real estate agent might be subject to a civil claim but was 

not then before the [family] court at the bifurcated trial re[garding] property ownership.”

II. Civil Lawsuit (This Case)

While the marital dissolution proceeding was pending and prior to the family 

court’s rulings on the status of the residence, stepson filed a separate civil lawsuit against 
4

wife in October 2011 seeking relief on grounds of (1) quiet title, (2) breach of the lease,

and (3) unjust enrichment.

1

After the family court issued its rulings in July and August 2012, wife filed a 

cross-complaint against stepson in March 2013 alleging (1) breach of contract, (2) breach 

of fiduciary duty, (3) constructive fraud, (4) fraud and deceit, (5) negligent 

misrepresentation, (6) unjust enrichment, (7) civil conspiracy, and (8) unfair business 

practices, in violation of Business and Professions Code section 17200.

2

Stepson moved 

for judgment on the pleadings, arguing that collateral estoppel barred wife from 

relitigating the first six claims that had already been decided by the family court. The 

trial court denied the motion as to those claims, concluding that these “cause[s] of action 

[were] specifically not decided by [the judge] in the family law action . . . . [That judge] 

specifically made it clear that he was not deciding claims for breach of fiduciary duty, or 

any damages resulting from [stepson’s] conduct.” The trial court granted the motion with 

respect to the civil conspiracy and unfair business practices claims, finding they were too 

indefinite as alleged. 

Wife filed a first amended cross-complaint, realleging the same causes of action 

that survived stepson’s motion for judgment on the pleadings but adding four new crossdefendants—namely, husband; cross-defendant and respondent Linda Yan-Lin Chen 

(stepson’s wife); cross-defendant and respondent Amy Chen (stepson’s mother-in-law); 

and Wan-Chun Chu (who supplied a $50,000 cashier’s check used by stepson to repay 

wife and husband for the residence’s down payment). Husband and stepson’s wife filed 

 

1 The parties’ appendices are not complete, and we take judicial notice of the 

portions of the trial court’s file necessary to provide a complete picture of the 

proceedings below. (Evid. Code, §§ 452 & 459.)

2 The cross-complaint also alleged four other causes of action—breach of 

agreement, breach of fiduciary duty, constructive fraud, and fraud and deceit—on a 

different factual theory than that at issue in the dissolution proceeding. The trial court 

ruled that these claims were barred by the statute of limitations, and wife does not appeal 

that ruling. 
5

demurrers. In February 2014, the trial court sustained both demurrers. Inconsistently

with its earlier ruling on stepson’s motion for judgment on the pleadings, the trial court 

reasoned: “[I]t is clear that [the family court judge] already determined that there was no 

breach of contract, breach of fiduciary duty, fraud, or unjust enrichment committed by 

[stepson] with respect to the alleged ‘straw buyer’ agreement concerning the subject 

[residence] . . . . [The family court judge’s] decisions are therefore final, and no showing 

has been made that his rulings were appealed or otherwise remain pending.” 

A few months later, stepson filed a second motion for judgment on the pleadings, 

again arguing that wife was collaterally estopped from relitigating the family court’s 

rulings. This time, the trial court accepted this argument, dismissing all claims against 

stepson. 

Wife filed notices of appeal as to the trial court’s rulings on the two demurrers and 

stepson’s second motion for judgment on the pleadings. We consolidated the appeals.

DISCUSSION

The propriety of the three trial court orders at issue in this appeal turns on the 

same question: Does the doctrine of collateral estoppel preclude wife from litigating her 

claims of breach of contract, breach of fiduciary duty, constructive fraud, fraud and 

deceit, and negligent misrepresentation in this civil action because they were previously 

decided in the marital dissolution proceeding?

3

The doctrine of “‘[c]ollateral estoppel precludes relitigation of issues argued and 

decided in prior proceedings.’” (Pacific Lumber Co. v. State Water Resources Control 

Bd. (2006) 37 Cal.4th 921, 943 (Pacific Lumber Co.), quoting Lucido v. Superior Court

(1990) 51 Cal.3d 335, 341.) This doctrine, which is also referred to as “issue preclusion,” 

applies only if (1) “the issue sought to be precluded from relitigation [is] identical to that 

decided in a former proceeding”; (2) “this issue [was] actually litigated in the former 

 

3 Stepson, his wife, and his mother-in-law do not argue that the family court decided 

wife’s civil conspiracy or unfair business practice claims, but those claims as alleged by 

wife rise or fall on the viability of her underlying contract and tort claims. 
6

proceeding”; (3) the issue was “necessarily decided in the former proceeding”; (4) “the 

decision in the former proceeding [was] final and on the merits”; and (5) “the party 

against whom preclusion is sought [is] the same as, or [is] in privity with, the party to the 

former proceeding.” (Ibid.) The party asserting collateral estoppel bears the burden of 

proving that these prerequisites are met. (Ibid.) “Where there is doubt about the 

application of issue preclusion, it should not apply.” (Union Pacific Railroad Co. v. 

Santa Fe Pacific Pipelines Inc. (2014) 231 Cal.App.4th 134, 186 (Union Pacific

Railroad); Flynn v. Gorton (1989) 207 Cal.App.3d 1550, 1554.)

Wife argues that the trial court erred in determining that stepson, husband, and 

stepson’s wife had carried their burden of establishing that wife’s contract and tort claims 

had been “actually litigated in the former” marital dissolution action. “‘For purposes of 

collateral estoppel, an issue was actually litigated in a prior proceeding if it was properly 

raised, submitted for determination, and determined in that proceeding’” (Hernandez v. 

City of Pomona (2009) 46 Cal.4th 501, 511), by a court of “‘competent jurisdiction’” 

(Western Mutual Ins. Co. v. Yamamoto (1994) 29 Cal.App.4th 1474, 1482-1483). We 

review this issue de novo (Union Pacific Railroad, supra, 231 Cal.App.4th at p. 179), and 

agree with wife that these claims were not “actually litigated” in the marital dissolution 

proceeding for two reasons.

First, the family court did not have jurisdiction over wife’s tort and contract claims 

for damages. A family court’s “jurisdiction in domestic relations cases is limited” to 

issues of marital status, child custody, spousal and child support, and “[t]he settlement of 

the property rights of the parties.” (Fam. Code, § 2010; see also Sosnick v. Sosnick

(1999) 71 Cal.App.4th 1335, 1339 (Sosnick); Cal. Rules of Court, rule 5.17.) A family 

court has the power to join third parties to a dissolution proceeding, but only to resolve 

the above-enumerated issues. (Sosnick, at p. 1339; Glade v. Glade (1995) 38 

Cal.App.4th 1441, 1451-1452; In re Marriage of Johnston (1978) 85 Cal.App.3d 900, 

906 [joinder of pension plan to resolve nature of property interest in pension fund; 

permissible].) Joinder cannot reach tort or other actions seeking damages. (Sosnick, at 
7

p. 1339; In re Marriage of McNeill (1984) 160 Cal.App.3d 548, 557, overruled on other 

grounds in In re Marriage of Fabian (1986) 41 Cal.3d 440, 451, fn. 13.) The only way 

contract and contract issues may be heard before a family court is if the court 

consolidates an ongoing civil action with the family court action and hears them at the 

same time. (Sosnick, at p. 1339; Code of Civ. Proc., § 1048, subd. (a).) In this case, the 

family court lacked jurisdiction to adjudicate wife’s contract and tort claims for damages 

because those claims sought more than “[t]he settlement of property rights” and because 

those claims were never consolidated with the dissolution proceeding. Indeed, 

consolidation was impossible in this case because wife did not file her cross-complaint 

until after the family court issued its rulings. 

Second, even if we assume that the family court did have jurisdiction over these 

claims, stepson, husband, and stepson’s wife did not establish that the family court 

actually litigated and decided wife’s contract and tort claims. The family court’s rulings 

vacillated as to whether it was deciding those claims: The court initially stated that those 

claims were “not properly before” it, subsequently stated that wife had not adduced 

“sufficient evidence” to support her claims, but ultimately returned to its initial ruling that 

the claims were not before the court.

4

 Given this uncertainty, the trial court also 

vacillated in its ruling as to whether the family court had actually litigated wife’s contract 

and tort claims. Because the parties to this appeal have not provided us with the 

pleadings and other evidence before the family court at the time of its rulings, we are left 

to decide whether the family court actually decided wife’s contract and tort claims based 

solely on the family court’s seemingly contradictory statements in its orders. On this 

record, we conclude that the parties asserting collateral estoppel have not carried their 

burden of showing that these claims were actually litigated, especially in light of the 

maxim that any doubt is to be resolved against a finding of collateral estoppel. 

 

4 While this appeal was pending, wife asked the family court to clarify its prior 

orders. We decline to consider this additional attempt by wife to “stack the deck” and 

will instead evaluate the family court’s actions by its contemporaneous orders.
8

Stepson, husband, and stepson’s wife argue that wife’s appeal is an untimely 

collateral attack on the family court’s ruling, but this argument assumes its own 

conclusion. The issue to be decided is whether the family court previously ruled on these 

claims; we cannot conclude that it did, so this is not an unfair “second bite at the apple.”

Our determination regarding collateral estoppel reaches only the issue presented to 

us on appeal—namely, whether the doctrine applies to wife’s contract and tort claims as 

a whole. That was the basis of the trial court’s ruling. We accordingly have no occasion 

to decide whether the parties to the marital dissolution proceeding actually litigated, and 

the family court actually decided, specific factual issues attendant to the resolution of the 

ownership status of the residence that may bear on wife’s pending contract and tort 

claims.

DISPOSITION

The judgment of dismissal is reversed. The case is remanded to the trial court 

with directions to vacate the orders granting the motion for judgment on the pleadings 

and sustaining the demurrers, and enter a new order denying those motions. Wife is 

entitled to her costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

_______________________, J.

 HOFFSTADT

We concur:

_______________________, P. J.

 BOREN

_______________________, J.

 CHAVEZ