Filed 2/25/21 Zhao v. Global Valley CA2/4

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

JESSIE ZHAO, 

Plaintiff and Appellant,

v.

GLOBAL VALLEY et al.,

Defendants and 

Respondents.

 B304372

 (Los Angeles County

 Super. Ct. No.BC597103)

APPEAL from a judgment of the Superior Court of 

Los Angeles County, Randolph Hammock, Judge. Affirmed.

Gonzalez & Gonzalez, Rosendo Gonzalez and Zachary 

Gonzalez for Plaintiff and Appellant.

Wright Kim Douglas, J. Andrew Douglas, David Kim and 

Max Yueh for Defendants and Respondents.
2

INTRODUCTION

Plaintiff Weijing “Jessie” Zhao sued David Kuo and Global 

Valley, LLC, asserting that Zhao invested in and was part owner 

of Global Valley, which Kuo managed, but Kuo never repaid Zhao 

her investment or provided her with required information about 

the company. Defendants moved for summary judgment on the 

basis of issue preclusion, asserting that Zhao’s contentions about 

ownership in Global Valley had been fully litigated and decided 

against her in a previous action. The trial court granted the 

motion and entered judgment in favor of defendants. 

We affirm. The previous judgment addressed the identical 

issue of whether Zhao had an ownership interest in Global 

Valley, and Zhao had a full and fair opportunity to assert her 

contentions in the underlying action. Issue preclusion therefore 

bars Zhao’s claims. 

FACTUAL AND PROCEDURAL BACKGROUND

A. Complaint

Zhao’s original complaint was apparently filed on October 

8, 2015; it is not included in the record on appeal. The first 

amended complaint (FAC), filed January 8, 2016, is the operative 

complaint for purposes of the motion for summary judgment. In 

the FAC, Zhao asserted that she was a member and 50 percent 

shareholder of Global Valley, and defendant Kuo was a member, 

manager, and 50 percent shareholder of Global Valley. Zhao

asserted that she included Global Valley “as a nominal defendant 

for the sole purpose of a Court ordered accounting and 

dissolution.” 

Zhao alleged that she provided $2,250,000 in cash 

contributions to Global Valley, but from the time of Global 

Valley’s inception in 2009 through December 2014, Kuo never 
3

provided Zhao with financial statements or other information 

about the business. Zhao asserted that in November 2014 she 

discovered that Kuo had removed her name from Global Valley’s 

tax returns in 2012. She alleged that in November 2014, Kuo 

had Zhao sign a document that was backdated to January 2, 

2012, purporting to transfer Zhao’s 50 percent interest in Global 

Valley to Kuo in exchange for $2,800,000. Kuo told Zhao that the 

document was intended to resolve issues with the Internal 

Revenue Service, and would not be used for any other purpose. 

Zhao alleged that she learned in December 2015 that in 

March 2015, Kuo had transferred the company’s main asset, 

three parcels of land in San Gabriel, to an entity called Jia Jia

US Investment Company, Inc., which later changed its name to 

San Yi US Investment Company, Inc. Zhao alleged she was 

never informed of this transaction. 

Zhao alleged nine causes of action. In the first two causes 

of action for breach of fiduciary duty and breach of the “obligation 

of good faith and fair dealing,” Zhao alleged that Kuo failed to 

provide Zhao with financial records for Global Valley, and 

fraudulently induced Zhao to transfer her share of the company 

to Kuo. In the third and fourth causes of action for breaches of 

the Corporations Code, Zhao alleged that Kuo failed to obtain 

Zhao’s consent before transferring Global Valley to a third party, 

and failed to provide financial documents to Zhao. In the fifth 

cause of action for fraud, Zhao alleged that Kuo defrauded her 

into transferring her share of Global Valley to him; in the sixth 

cause of action for rescission of contract, Zhao requested that the 

transfer be rescinded. In the seventh cause of action Zhao

requested a constructive trust; in the eighth cause of action she 
4

requested an accounting, and in the ninth cause of action she 

requested a judicial dissolution of Global Valley. 

B. Motion for summary judgment

Defendants filed a motion for summary judgment asserting 

that Zhao’s claims were barred by collateral estoppel. They 

contended that Zhao’s claims relied on her having an ownership 

interest in Global Valley, but another court had already 

determined that Zhao did not have an interest in Global Valley. 

Defendants’ motion and related request for judicial notice, 

along with Zhao’s opposition and related evidence, reveal the 

nature of the parties’ dispute. Kuo formed Global Valley in 2009 

to build, operate, and manage a real property and hotel in San 

Gabriel called the Crowne Plaza Hotel. Kuo stated in a 

declaration that one of the investors in Global Valley was East 

Asia Investment Group, Inc., which was owned by Kuo’s friend 

and Zhao’s uncle, Yue “Gary” Zhao.1 However, documents 

relating to Global Valley show that Zhao, not Yue,2 was an 

investor in and member of Global Valley. Kuo asserted Zhao was 

only listed as a straw investor due to restrictions relating to 

Zhao’s student visa status and her family’s residency in China, 

and Yue/East Asia was the only true investor.3 Zhao asserts that 

1 Zhao objected to the portion of Kuo’s declaration stating 

these facts, and the court overruled the objection. 

2 We refer to Yue by his first name for clarity; no disrespect 

is intended. 

3 Kuo’s testimony on this point is not entirely clear. He 

testified that the investment came from Yue, and “Weijing Zhao’s 

name was merely used for the purpose of this investment. [¶] In 

addition to that, back then she held an F1 student visa. As a 

student, she was not allowed to make an investment. 

Furthermore, due to her father’s identification and status, who 
5

the Global Valley tax returns and other documents showing her 

as the investor are accurate.

Yue died in March 2015. In May 2015, Global Valley sold 

its assets, and $750,000 from the sales proceeds was held in the 

trust account of a law firm that represented Global Valley. 

On February 29, 2016—about seven weeks after Zhao filed 

the FAC in this case—Global Valley’s law firm filed an 

interpleader action because “it was unclear who was entitled to 

[the] $750,000 in proceeds from Global Valley’s sale of the Hotel . 

. . particularly in light of certain transfers of property as a result 

of a marital settlement agreement” between Yue and his ex-wife, 

Jennifer Tan. Zhao was named as one of the defendants in the 

interpleader action. The law firm stated in its complaint that 

Yue’s estate might be entitled to the funds, Tan contended that 

entitlement to the funds was disputed, and Zhao claimed she was 

entitled to the funds. The law firm asked the court to resolve the 

conflict. 

In the interpleader action, Zhao argued that the disputed 

$750,000 was from the proceeds of the sale of Global Valley’s 

assets, and because Zhao was a 50 percent owner of Global 

Valley, she was entitled to at least part of the disputed funds. 

Zhao filed a demurrer asking the court to dismiss the 

interpleader action because her entitlement to the funds was 

already being litigated in this case, which was filed first. Zhao 

asserted that the interpleader action and the earlier-filed action

was working in China, her family would not – would be improper 

for her family to invest here.” 
6

“involve the same parties and same cause of action.”4 Defendants 

stated that Zhao later withdrew the demurrer. 

The interpleader action went to trial over three days before 

Judge Elizabeth R. Feffer, who took the matter under submission 

on February 2, 2018. In a statement of decision following the 

trial,5 the court stated that Yue controlled East Asia Investment 

Group, Inc., and he had been married to Tan for 25 years before 

they divorced. A marital settlement agreement between Yue and 

Tan assigned to Tan a “business interest held in the name of East 

Asia,” including interests in Crowne Plaza. The marital 

settlement agreement was entered as a judgment on February 

14, 2017. 

The court noted that in January 2015, Zhao testified in a 

deposition in Yue and Tan’s divorce proceeding that she did not 

invest in Global Valley6:

“Question: Did you invest any funds in Global Valley LLC?

Answer: No. 

4Although Zhao asserted that the law firm was included as 

a defendant in this case, the record on appeal does not suggest as 

much.

5Zhao and defendants cite the interpleader court’s tentative 

statement of decision signed on February 23, 2018, as the court’s 

statement of decision. This statement of decision notes that it is 

tentative and subject to objection by the parties. A minute order 

included in the record stated that on April 9, 2018 the court 

issued a final statement of decision, which does not appear to be 

in the record on appeal. Because the parties do not dispute that 

the tentative statement of decision reflects the interpleader 

court’s final analysis, we also rely on that version. 

6The statement of decision does not make clear why Zhao 

testified as a part of Yue and Tan’s divorce proceeding.
7

[Question:] Did you ever invest in a hotel called Crown[e]

Plaza? 

Answer: No.”

In a second exchange the court quoted, Zhao testified again 

that she did not invest in Global Valley:

“[Question:] . . . . Did you invest $2,250,000 into Global 

Valley LLC in 2009?

Answer: No.” 

The court stated that at the interpleader trial, by contrast, 

Zhao testified that she had invested over $3.5 million in Global 

Valley. When asked about her contradictory testimony in the 

divorce, Zhao said she had been confused by the term 

“investment.” The court noted that although Zhao used a 

Mandarin interpreter in the divorce deposition, in the 

interpleader action she testified in English that she had been in 

the United States since she was 16 or 17 years old, and she had 

attended high school in San Marino; college at the University of 

California, Irvine; and graduate school in Las Vegas—all with 

instruction in English. The court also noted, “Prior to the Final 

Settlement [sic] Conference on August 2, 2017, [Zhao] failed to 

file an exhibit list, witness list or trial brief. . . . [Zhao’s] exhibits 

and witness testimony, other than those witnesses and exhibits 

offered by [Tan], were excluded.” 

The court stated, “The court finds that [Zhao’s] trial 

testimony regarding having invested any amount of funds into 

Global Valley or Crowne Plaza is not credible. . . . The court also 

finds that [Zhao’s] trial testimony that she had any actual 

interest in Global Valley to not be credible.” The court further 

noted that Zhao testified she had assigned any interest she had 

in Global Valley to Kuo in November 2014. The court stated that 
8

it appeared Zhao was using the interpleader action to attempt to

effectively set aside the judgment in Yue and Tan’s divorce. The 

court ordered the disputed funds at issue to be distributed to Tan. 

Zhao appealed the court’s judgment, but later abandoned the 

appeal. 

In their motion for summary judgment, defendants argued 

that each of Zhao’s causes of action relied on her having an 

interest in Global Valley as an investor and member, but that 

fact had already been fully litigated and rejected in the 

interpleader action. Defendants asserted, “This lawsuit is yet 

another improper attempt by [Zhao] to collaterally attack an 

issue that has been previously decided. A court has already 

determined that [Zhao] has no interest in Global Valley. That 

decision is binding on her here.” Defendants argued that 

summary judgment was warranted because collateral estoppel 

provided a complete defense to each of Zhao’s causes of action. 

C. Opposition

In her opposition to defendants’ motion for summary 

judgment, Zhao asserted that collateral estoppel and res judicata 

were not applicable to her claims. She contended that Kuo issued 

her a stock certificate for 50 percent of Global Valley in July 

2009, and Kuo and Zhao confirmed in writing that “member 

Weijing Zhao contributed two million two hundred fifty thousand 

dollar [sic] ($2,250,000) cash.” Zhao argued that tax returns and 

other documents also showed that she was part owner of Global 

Valley. Beginning in 2012, tax returns showed that Kuo or his 

family members were the members of Global Valley. Zhao 

alleged that following the May 2015 sale of Global Valley’s assets, 

“no disbursements were actually made from the sale proceeds to 
9

any of the members of Global Valley,” but instead, Kuo made 

“payments to companies related to and/or controlled by Kuo.” 

Zhao asserted that her claims were not precluded by the 

decision in the interpleader action. She contended that in this 

case she was seeking the recovery of approximately $2.8 million 

that she invested in Global Valley, in contrast to the $750,000 at 

issue in the interpleader action, and therefore the claims were 

not the same in the two cases. She also asserted that different 

parties were involved in the interpleader action, since Kuo and 

Global Valley were not parties in that case. Zhao argued that 

“[a]s a result, the doctrines of collateral estoppel and/or res 

judicata are not applicable in this lawsuit.” 

Zhao further asserted that the interpleader appeal was

resolved through settlement agreements addressing multiple 

litigations involving Zhao; Tan; and Yue and Tan’s son Zidan 

Zhao, acting individually, as executor as Yue’s estate, and on 

behalf of East Asia Investment Group. Zhao asserted that in the 

settlement agreement addressing the interpleader action, “J. Tan 

agreed that W. Zhao is the sole holder of any claims or causes of 

action as to Global Valley.” Zhao argued that as a result, “W. 

Zhao, and not J. Tan, . . . is the rightful and only party that can 

proceed and assert the causes of action against the Defendants in 

the case before this Court.” 

Zhao also asserted that even if collateral estoppel did apply, 

any prior decision should not be enforced because “Kuo’s evasive 

and misleading testimony in the Interpleader Action” constituted 

extrinsic fraud. She noted that Kuo testified in the interpleader 

action that Yue and East Asia invested in Global Valley, and 

“Weijing Zhao’s name was merely used for the purpose of this 
10

investment.” However, Kuo acknowledged that the tax returns 

he signed stated that Zhao was a member of Global Valley. 

D. Reply

Defendants asserted that Zhao was “using the exact same 

evidence that she submitted in the Interpleader Action in an 

effort to relitigate Judge Feffer’s decision. Indeed, while that 

Court considered evidence on both sides of the issue as to 

whether [Zhao] had an actual ownership issue [sic] in Global 

Valley, that issue was, ultimately and definitively, decided 

against [Zhao].” Defendants requested judicial notice of Zhao’s 

exhibit list and closing trial brief from the interpleader action, 

asserting that her opposition to the motion for summary 

judgment “simply makes the same arguments based on the same 

evidence from the Interpleader Action.” 

Defendants also asserted that the settlement agreement 

from the interpleader action did not support Zhao’s claims, 

because it showed only that Tan waived any claims against 

Global Valley, and did not “undo Judge Feffer’s decision on the 

issue that is dispositive of all [of Zhao’s] claims.” In addition, 

defendants argued that although Zhao claimed that there was 

fraud in the interpleader action, she “fails to identify what the 

alleged fraud was, how that alleged fraud prejudiced her ability 

to argue her position in the Interpleader Action and/or how 

[Zhao] did not know about that alleged fraud earlier.” 

Defendants asserted that Kuo’s testimony had been consistent, 

but even if it had not, inconsistencies in testimony or other 

evidence did not constitute fraud. 

E. Hearing and ruling

The court issued a tentative ruling granting the motion for 

summary judgment. The court granted defendants’ requests for 
11

judicial notice of documents from the interpleader action. The 

court noted the question presented was “whether the previous 

findings of another department of this Court meet the 

requirements for collateral estoppel or whether there is a genuine 

dispute of material fact as to whether collateral estoppel applies.” 

The court found there had been a final adjudication in the 

interpleader action, and the parties’ settlement agreement “does 

not . . . render the judgment in the interpleader action less than 

final.” The court also found that Zhao’s claim to an interest in 

Global Valley was identical to the one she asserted in the

interpleader action, and the issue had been actually litigated in 

that case. The court stated, “[G]iven that another department of 

this Court already expended resources to determine the factual 

issue that [Zhao] attempts to relitigate here, the Court finds that 

the application of the doctrine of collateral estoppel to this issue 

will promote judicial economy and the integrity of the judicial 

system.” The court also rejected Zhao’s claim of extrinsic fraud, 

noting that she did not “point to new evidence that was not 

considered in the interpleader action.” 

At the hearing on December 19, 2019 before Judge 

Randolph M. Hammock, Zhao’s counsel contended for the first 

time that the case had not been “actually litigated” in the 

interpleader action. Zhao’s counsel noted that the court’s 

tentative ruling cited Murphy v. Murphy (2008) 164 Cal.App.4th 

376, 401 (Murphy), which states, “A party urging collateral 

estoppel must prove that the issue was actually litigated and that

the evidence was not restricted, but need not establish that oral 

testimony, or any particular type of evidence was presented.” 

(Emphasis added.) Zhao’s counsel argued that the evidence in 

the interpleader action was restricted, because Judge Feffer 
12

barred Zhao from presenting evidence or witnesses after she 

failed to follow a local rule regarding the timing of pretrial 

disclosures. Zhao’s counsel argued that Zhao had been “prevented 

from introducing a single exhibit or calling a witness,” and asked 

to introduce Judge Feffer’s order and a transcript.

The court noted that Zhao failed to present evidence or 

argument to support this argument in her opposition to the 

motion for summary judgment. However, the court agreed to 

“consider [Zhao’s] point about whether Judge Feffer’s evidentiary 

ruling was to the effect that resulted in a travesty of justice,” 

such that collateral estoppel should not apply. The court agreed 

to take judicial notice of additional documents from the 

interpleader case, and took the issue under submission. 

Later the same day, the court issued a written ruling 

granting defendants’ motion for summary judgment. The ruling 

included the analysis in the written tentative ruling, and also 

addressed Zhao’s arguments from the hearing. The court rejected 

Zhao’s interpretation of Murphy, stating, “It is non-sensical [sic] 

to assert that [in] every case where there is an issue preclusion 

analysis, this Court must first determine whether material 

evidence in the prior case was ‘restricted,’ and if it was,” 

determine if the prior decision lacked collateral estoppel effect as 

a result. The court also stated that evidence restricted due to a 

discovery sanction “willfully caused by a party . . . cannot mean 

that a resulting final judgment does not have res 

judicata/collateral estoppel effect. That would be absurd, and 

would simply give incentive for a party to violate rules . . . .” The 

court noted that if Zhao felt Judge Feffer’s rulings were unfair or 

resulted in a miscarriage of justice, she could have appealed; but 

Zhao abandoned her appeal and “[h]aving agreed to let that 
13

judgment stand, it would be unfair to allow [Zhao] to attack it 

collaterally here.” The court also stated that the documents from 

the interpleader action showed that Zhao “was allowed to make a 

full and complete argument on her alleged ownership” in Global 

Valley, “which is the same issue in this case.” The court 

concluded, “No matter how you spin it, the simple fact is that 

[Zhao] in this case is merely attempting to re-litigate the exact 

ownership issue which was adequately and fairly presented in 

the interpleader action.” 

The court entered judgment in favor of defendants. Zhao 

timely appealed. 

DISCUSSION

On appeal, Zhao asserts that the trial court erred in 

granting defendants’ motion for summary judgment. She asserts 

four arguments: that the issue litigated in the interpleader action 

was not identical to the issues presented here, that the issues in 

the interpleader action were not “actually litigated” due to Judge 

Feffer’s limitation of Zhao’s evidence, that the interpleader 

judgment was based on Kuo’s fraud, and that the trial court erred 

in overruling Zhao’s objection to Kuo’s declaration. Defendants 

assert that the trial court was correct in finding that collateral 

estoppel bars Zhao’s claims, and that the court did not err in 

overruling Zhao’s evidentiary objection. We find no error and 

affirm. 

Summary judgment is appropriate when “all the papers 

submitted show that there is no triable issue as to any material 

fact and that the moving party is entitled to a judgment as a 

matter of law.” (Code Civ. Proc., § 437c, subd. (c).) A defendant 

may establish that a cause of action has no merit by 

demonstrating that there is a complete defense to that cause of 
14

action. (Id., subd. (p)(2).) “[T]he party moving for summary 

judgment bears an initial burden of production to make a prima 

facie showing of the nonexistence of any triable issue of material 

fact; if he carries his burden of production, he causes a shift, and 

the opposing party is then subjected to a burden of production of 

his own to make a prima facie showing of the existence of a 

triable issue of material fact.” (Aguilar v. Atlantic Richfield Co. 

(2001) 25 Cal.4th 826, 850.) “We review the trial court’s grant of 

summary judgment de novo and decide independently whether 

the parties have met their respective burdens and whether facts 

not subject to triable dispute warrant judgment for the moving 

party as a matter of law.” (Jessen v. Mentor Corp. (2008) 158 

Cal.App.4th 1480, 1484.) “[A] trial court judgment is ordinarily 

presumed to be correct and the burden is on an appellant to 

demonstrate, on the basis of the record presented to the appellate 

court, that the trial court committed an error that justifies 

reversal of the judgment.” (Jameson v. Desta (2018) 5 Cal.5th 

594, 608-609.)

Each cause of action alleged in Zhao’s FAC relies on 

allegations that Zhao invested in Global Valley and that Kuo 

owed her certain duties as a result of her membership in Global 

Valley. Thus, if the court in the interpleader action determined 

that Zhao had no ownership interest in Global Valley, and that 

determination precludes Zhao from asserting otherwise in this 

action, summary judgment in favor of defendants is appropriate. 

California courts “now refer to ‘claim preclusion’ rather 

than ‘res judicata’ [citation], and use ‘issue preclusion’ in place of 

‘direct or collateral estoppel.’” (Samara v. Matar (2018) 5 Cal.5th 

322, 326.) Claim preclusion “‘prevents relitigation of the same 

cause of action in a second suit between the same parties or 
15

parties in privity with them.’” (DKN Holdings LLC v. Faerber

(2015) 61 Cal.4th 813, 824 (DKN Holdings).) By contrast, issue 

preclusion “prohibits the relitigation of issues argued and decided 

in a previous case, even if the second suit raises different causes 

of action.” (Ibid.) 

Claim preclusion does not apply here, because the 

interpleader action involved Zhao, Tan, and Global Valley’s law 

firm; it did not involve the same parties as this case. In addition, 

the interpleader action involved rights to $750,000 in disputed 

funds, and therefore did not involve the same causes of action as 

Zhao has alleged here. We therefore focus solely on issue 

preclusion. 

“[I]ssue preclusion applies: (1) after final adjudication (2) 

of an identical issue (3) actually litigated and necessarily decided 

in the first suit and (4) asserted against one who was a party in 

the first suit or one in privity with that party.” (DKN Holdings, 

supra, 61 Cal.4th at p. 825.) It is undisputed that the 

interpleader action resulted in a final adjudication, and that Zhao 

was a party to that action. 

A. Identical issue

Zhao contends that “the legal and factual issues in the 

Interpleader Action were not ‘identical’ to those” in this case. She 

asserts that the issue here is “whether W. Zhao was entitled to 

recover any damages for Kuo’s acts and conduct of having taken 

or embezzled [money] from Global Valley, without paying back 

anything to W. Zhao on her $2,250,000 initial investment,” which 

she contends was not decided in the Interpleader Action. 

Defendants argue that the interpleader action directly addressed 

the factual basis upon which all of Zhao’s claims rely: whether 

Zhao had an ownership interest in Global Valley. 
16

“The ‘identical issue’ requirement addresses whether 

‘identical factual allegations’ are at stake in the two proceedings, 

not whether the ultimate issues or dispositions are the same.” 

(Lucido v. Superior Court (1990) 51 Cal.3d 335, 342.) Thus, 

“when an issue of ultimate fact has been determined by a valid 

and final judgment, that issue cannot be relitigated . . . in a 

future lawsuit.” (California Logistics, Inc. v. State of California

(2008) 161 Cal.App.4th 242, 249.) In addition, “findings that 

were important to the court’s decision may be binding even if 

they were not themselves dispositive of an ultimate legal issue.” 

(Key v. Tyler (2019) 34 Cal.App.5th 505, 534-535.) 

In the interpleader action, the court’s statement of decision 

made clear that Zhao asserted she was entitled to the disputed 

funds “as partial payment of her alleged investment in Global 

Valley of $2.8 million which investment she asserts has not been 

repaid.” Zhao also asserted that “the interest in Global Valley 

represented by the Disputed Funds belongs to [Zhao] and has 

never belonged to East Asia/Yue Zhao.” The court rejected these 

claims, finding that Zhao’s “trial testimony regarding having 

invested any amount of funds into Global Valley or Crowne Plaza 

is not credible. . . . The court also finds that [Zhao’s] trial 

testimony that she had any actual interest in Global Valley to not 

be credible.” Based on the finding that Zhao had no interest in 

Global Valley, the court awarded the disputed funds to Tan. 

Zhao’s claims here rely on an identical underlying premise: 

that Zhao invested in Global Valley, had an interest in it, and is 

entitled to funds from Global Valley based on that interest. The 

interpleader court directly addressed and rejected that 

contention. Thus, the “identical issue” factor is met here. 
17

B. Actually litigated

Zhao further contends that the issue was not “actually 

litigated” in the interpleader action because “Judge Feffer 

prevented W. Zhao from introducing any exhibits or witnesses at 

trial in the Interpleader Action.” In the interpleader action, the 

court found “that defendant Zhao did not comply with the Final 

Status Conference filing rules and will not be allowed to offer 

documents or witnesses from the untimely filed witness and 

exhibit lists.” Zhao again relies on Murphy, supra, 164 

Cal.App.4th at p. 401, which states, “A party urging collateral 

estoppel must prove that the issue was actually litigated and that 

the evidence was not restricted . . . .” She argues that the 

evidence was “restricted” by Judge Feffer, so Zhao “was not 

afforded a ‘full and fair opportunity’ to present her case.” 

We disagree. “[W]here, as here, the party to be estopped 

was a party who participated in the earlier proceeding, due 

process requires that this party must have had an adequate 

incentive to fully litigate the issue in the prior proceeding 

[citation], and must have had a fair opportunity to pursue [her] 

claim the first time.” (Murphy, supra, 164 Cal.App.4th at p. 404.) 

Zhao had notice of the interpleader action; she appeared 

throughout the proceedings; she testified at trial; she crossexamined the other witnesses at trial, including Kuo; and she 

had every incentive to assert arguments to establish her interest 

in Global Valley, because that was the central issue in the action.

To the extent Zhao’s ability to present any evidence was 

limited, any such limitation resulted from her own actions. 

Judge Feffer limited Zhao’s presentation of evidence because she 

failed to follow local rules regarding the timing of pretrial 

disclosures. Although Zhao could have challenged this ruling in 
18

her appeal of the interpleader judgment, she abandoned that

appeal and allowed the judgment to stand. Zhao now argues that 

Judge Feffer’s ruling was “improper,” “inexplicable,” 

“contradicted by a number of legal authorities,” and an “excessive

decision to penalize” Zhao. However, she may not collaterally 

attack the interpleader judgment in a separate litigation because 

she was unsatisfied with the result.

7

(See, e.g., OC Interior 

Services, LLC v. Nationstar Mortgage, LLC (2017) 7 Cal.App.5th 

1318, 1328 [“[A] judgment that is valid on the face of the record is 

generally not subject to collateral attack. [Citation.] In other 

words, a judgment that is valid on the face of the record must be 

challenged by direct attack, such as a motion in the original 

action, an appeal in the original action, or an independent 

equitable action.”].)

Zhao quotes Murphy, supra, 164 Cal.App.4th 376 and 

Smith v. ExxonMobil Oil Corp. (2007) 153 Cal.App.4th 1407 

(Smith) in support of her arguments, but she does not discuss the 

issues or findings in those cases. They do not support her 

position. In Murphy, supra, 164 Cal.App.4th 376, a brother filed a 

lawsuit against his sister challenging an estate plan for their

father, William, which had been imposed pursuant to various 

orders by the probate court. The brother argued in part that the 

estate plan resulted from fraud on the part of the sister. The 

sister argued that “collateral estoppel barred all of the causes of 

action because the validity of William’s living trust, including the 

issues of William’s capacity, intent and undue influence were 

7With her reply brief, Zhao filed a request that we judicially 

notice Judge Feffer’s courtroom rules. That request is denied; the 

document is not relevant to the issues on appeal. (See Roth v. 

Jelley (2020) 45 Cal.App.5th 655, 678, fn. 10.)
19

actually litigated and finally decided on the merits in the 

[probate] proceeding.” (Murphy, supra, 164 Cal.App.4th at p. 

393.) The trial court rejected the sister’s contentions and found 

in favor of the brother. 

The Court of Appeal reversed. In discussing the “actually 

litigated” requirement, the court noted that issue preclusion may 

bar arguments that could have been asserted in an earlier 

proceeding, but were not. The court stated, “‘If the matter was 

within the scope of the [previous] action, related to the subjectmatter and relevant to the issues, so that it could have been 

raised, the judgment is conclusive on it despite the fact that it 

was not in fact expressly pleaded or otherwise urged. The reason 

for this is manifest. A party cannot by negligence or design 

withhold issues and litigate them in consecutive actions. Hence 

the rule is that the prior judgment is res judicata on matters 

which were raised or could have been raised, on matters litigated 

or litigable.’” (Murphy, supra, 164 Cal.App.4th at p. 401, quoting 

Interinsurance Exchange of the Auto. Club v. Superior Court

(1989) 209 Cal.App.3d 177, 182.) The Murphy court also added

that a prior judgment “‘is a collateral estoppel on issues which 

were raised, even though some factual matters or legal 

arguments which could have been presented were not.’”

(Murphy, supra, 164 Cal.App.4th at p. 401, quoting 7 Witkin, Cal. 

Procedure (4th ed. 1997), Judgment, § 359, pp. 923-924.)

The Murphy court found that in approving William’s estate 

plan, the probate court impliedly found the plan did not result 

from the sister’s fraud or undue influence. (Murphy, supra, 164 

Cal.App.4th at p. 403.) The court added, “[E]ven if we could not 

conclude that fraud and undue influence were actually 

adjudicated in the prior proceeding, we would find them barred in 
20

this proceeding. These arguments could have been raised before 

Judge McMath [in the probate court] to persuade her on at least 

two different issues she necessarily resolved: that the proposed 

disposition plan was in the best interest of William and his estate 

and that the plan was objectively reasonable. Therefore, [the 

brother] was estopped from raising these contentions here.” (Id. 

at pp. 403-404.) 

Zhao also cites Smith, supra, 153 Cal.App.4th 1407, a 

wrongful death case. In an underlying personal injury action, a 

pipefitter, Smith, alleged that he had been exposed to asbestos at 

various job sites, including an oil refinery owned by the 

defendant, Mobil. After the trial had started, Mobil’s expert 

witness on causation had a serious family emergency and could 

not testify. Mobil could not immediately replace the witness. 

“Because the presentation of evidence was by then nearly 

completed, and Smith was seriously ill and apparently near 

death, so that trial could not be significantly delayed beyond the 

few days that had been allowed by the court, Mobil decided it had 

no alternative but to proceed without the testimony expected of 

[the expert].” (Id. at p. 1412.) The jury found Mobil liable for 

negligence. (Ibid.) Mobil appealed, and the Court of Appeal 

affirmed. (Ibid.)

After Smith died, his family members sued Mobil for 

wrongful death. They moved to preclude Mobil from challenging 

causation and negligence on the basis that those issues had been 

litigated and adjudicated adversely to Mobil in the personal 

injury action. (Smith, supra, 153 Cal.App.4th at p. 1412.) Mobil 

opposed the motion, asserting that it would be unfair to apply 

collateral estoppel because the expert’s “sudden inability to 

testify at the personal injury trial, for which Mobil was not 
21

responsible, prevented it from mounting a complete defense to 

the liability claim.” (Ibid.) The trial court rejected Mobil’s 

contentions, and a jury found in favor of Smith’s family. 

The Court of Appeal reversed. It discussed the offensive use 

of issue preclusion: issue preclusion used by a plaintiff against a 

defendant. (Smith, supra, 153 Cal.App.4th at p. 1414.) The court 

acknowledged that “collateral estoppel does not apply ‘when the 

party against whom the earlier decision is asserted did not have a 

“full and fair opportunity” to litigate the claim or issue.’ 

[Citation.] The problem is that parties against whom a verdict is 

returned commonly feel they were denied a ‘full and fair 

opportunity’ to litigate their claims and, because no trial is 

perfect, it is usually not difficult for them to find a defect upon 

which to try to hang their hats.” (Id. at p. 1416.) The court 

emphasized that in the underlying action, neither Mobil nor its 

counsel was responsible for the expert witness’s unavailability. 

(Id. at p. 1420.) The court continued, “It is additionally clear that 

those issues—causation, the applicable standard of care at the 

time, and apportionment of fault—were all crucial issues. Mobil’s 

fortuitous inability, through no fault of its own, to produce 

evidence on these crucial issues makes it impossible to say that 

the prior trial provided it a full and fair opportunity to present a 

defense. In the unusual and compelling circumstances of this 

case, the trial court’s application of collateral estoppel was unfair 

and must be set aside.” (Ibid.)

The reasoning in Smith does not compel a similar 

conclusion here. There were no unusual or compelling 

circumstances in the interpleader action caused by factors beyond 

Zhao’s control. To the contrary, Judge Feffer’s limitation on 

Zhao’s evidence resulted from Zhao’s and her counsel’s failure to 
22

comply with court rules regarding the timing of filing pretrial 

documents. The situation here is one that the Smith court 

cautioned against: a litigant unsatisfied with a prior decision who 

claims she was denied a fair trial and “find[s] a defect upon which 

to try to hang [her] hat[ ].” (Smith, supra, 153 Cal.App.4th at p. 

1416.) Moreover, as stated in Murphy, issue preclusion applies to 

issues that were raised or could have been raised in the earlier 

proceeding, which includes all of the contentions Zhao makes 

here. In short, we find no support for Zhao’s assertion that the

relevant issue was not “actually litigated” in the interpleader 

action.

C. Fraud

Zhao asserts that the “trial court should not have given 

preclusive effect to the interpleader judgment obtained by Kuo’s 

fraudulent means.” She argues that Kuo “falsely and evasively 

testified in the Interpleader Action in favor of J. Tan,” and his 

testimony contradicted various Global Valley documents 

regarding whether Yue/East Asia or Zhao invested in Global 

Valley. Zhao contends that “Judge Feffer specifically relied on 

Kuo’s misrepresentations, evasiveness and false testimony” in 

reaching her decision. She argues that issue preclusion “is an 

equitable concept,” and therefore Kuo, who is “seeking to 

capitalize on his fraudulent testimony,” should not be permitted 

to use issue preclusion against Zhao. 

As discussed above, Zhao had a full and fair opportunity to 

assert her contentions in the interpleader action, including 

addressing Kuo’s contentions about the history and ownership of 

Global Valley. A transcript from the interpleader action filed 

with Zhao’s opposition makes clear that Zhao cross-examined

Kuo about issues such as Global Valley’s investors and the 
23

documents demonstrating membership in Global Valley, 

including documents showing that Zhao was part owner. The 

interpleader court stated in its decision that it considered the 

testimony presented and made credibility findings. Zhao chose 

not to pursue an appeal of the court’s judgment. She may not 

now collaterally attack the interpleader judgment on the basis

that she disagrees with the court’s credibility determinations. 

Thus, Zhao’s contention that “Kuo gave evasive testimony, lied 

and/or made a number of misrepresentations in the Interpleader 

Action” is not a basis for limiting the application of issue 

preclusion here. 

Zhao also asserts that it was “no coincidence that Kuo 

falsely testified in favor of J. Tan in the Interpleader Action,” 

suggesting some sort of undefined collusion between Kuo and 

Tan. She asserts that the settlement agreement from the 

interpleader action “established that W. Zhao (and not J. Tan) 

had all the legal rights and/or had acquired them to proceed in 

[this action] against Kuo and Global Valley.” Zhao argues that 

the trial court erred because it did not “fully and adequately 

consider the fact that W. Zhao had the legal rights to proceed 

(regardless of the Interpleader Judgment) against Kuo and 

Global Valley.” She also asserts that these were “new facts or 

changed circumstances from the Interpleader Action directly 

affecting whether the doctrine of collateral estoppel should have 

been applied.” 

However, Zhao’s claims in the FAC are based on her 

purported investment in and ownership of Global Valley—not on 

rights assigned to her by Tan. Moreover, she does not explain 

how these newly assigned rights differed from her own, or on 

what basis they might warrant a different result. Thus, Zhao has 
24

not established any error regarding the court’s consideration of 

the settlement agreement. 

Because the identical issue was actually litigated in the 

interpleader action, and Zhao’s claims of fraud are not supported 

by the record, issue preclusion bars Zhao’s claims that she had an 

ownership interest in Global Valley. Summary judgment was 

therefore warranted.8

DISPOSITION

The judgment is affirmed. Defendants are entitled to their 

costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

COLLINS, J.

We concur:

WILLHITE, ACTING P.J.

CURREY, J.

8With her opposition to the motion for summary judgment, 

Zhao objected to a portion of Kuo’s declaration stating that “One 

of the investors in Global Valley was East Asia Investment 

Group, Inc., which was owned and operated by Yue ‘Gary’ Zhao.” 

The trial court overruled the objection, and Zhao asserts on 

appeal that the court abused its discretion in doing so. Because 

the facts stated in the declaration are not relevant to the 

application of issue preclusion, and issue preclusion is 

dispositive, we do not reach Zhao’s contentions regarding the 

court’s evidentiary ruling.