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Filed 4/8/13 DiPietro v. Wachovia Mortgage CA1/5

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

FIRST APPELLATE DISTRICT

DIVISION FIVE

JAMES DiPIETRO,

Plaintiff and Appellant,

v.

WACHOVIA MORTGAGE, FSB,

Defendant and Respondent.

A134181

(Napa County

Super. Ct. No. 26-36809)

The trial court sustained, without leave to amend, a demurrer filed by defendant 

Wachovia Mortgage, FSB (respondent), to a complaint filed by plaintiff James DiPietro 

(appellant). We affirm.

BACKGROUND1

Appellant is the owner of real property located in Napa County. In April 2006, 

appellant received in the mail an offer from defendants Svetlana Conway and Dirk 

Kuivenhoven to refinance the loan on the house. At that time, Conway and Kuivenhoven 

were acting on behalf of defendant Transamerican Financial Corporation—a California 

corporation performing real estate services by and through a corporate officer licensed as 

a real estate broker.2 Conway presented a proposed loan to appellant that appellant found 

acceptable.

 

1 Because this matter was resolved at the pleading stage of the litigation by way of 

demurrer, the following summary of the facts is derived from the allegations set forth in 

appellant‟s operative complaint. (See Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

2 Conway, Kuivenhoven, and Transamerican are not parties to this appeal. Neither is 

another defendant, Chicago Title Company.
2

Appellant signed certain loan documents at his home with Conway, Kuivenhoven, 

and a notary present. During the signing, appellant noticed the loan terms were different 

than those he had agreed upon. Appellant refused to sign any more documents and 

rejected the loan.

Conway and/or Kuivenhoven forged appellant‟s signature on the remaining loan 

documents and completed the loan transaction. The lender was World Savings & Loan, 

FSB, succeeded by respondent.3

Appellant filed second and third amended complaints. The third amended 

complaint alleged causes of action for cancellation of instrument, quiet title, fraud, 

negligent misrepresentation, constructive fraud, tortuous breach of a licensee‟s duties, 

economic duress, intentional infliction of emotional distress, financial elder abuse, breach 

of contract, negligent breach of contract, and breach of fiduciary duty. In June 2010, 

appellant filed a petition seeking relief from creditors under Chapter 13 of the 

Bankruptcy Code and a notice of automatic stay in the civil case. Appellant sought to 

remove the action to bankruptcy court and, in June 2011, the bankruptcy court issued an 

order to remove and retain jurisdiction over appellant‟s cancellation of instrument and 

quiet title causes of action, as well as a cross-complaint filed by respondent. The court 

severed and remanded all the other causes of action to the state court.

Following a court trial, the bankruptcy court entered judgment in favor of 

respondent. Prior to entry of the bankruptcy court‟s judgment, appellant had filed a 

fourth amended and operative complaint (Complaint) in the present action. Following 

entry of the bankruptcy court‟s judgment, respondent demurred to the causes of action 

against it in the Complaint, including cancellation of instrument, quiet title, fraud, 

negligent misrepresentation, constructive fraud, and financial elder abuse. The trial court 

sustained the demurrer to those causes of action without leave to amend and entered a 

judgment dismissing respondent from the action. This appeal followed.

 

3 Hereafter, the term respondent is used to refer to both World Savings & Loan, FSB, 

and Wachovia Mortgage, FSB, its successor in interest.
3

DISCUSSION

Appellant maintains the trial court erred in sustaining respondent‟s demurrer 

without leave to amend on the ground that the ultimate facts underlying appellant‟s 

causes of action for fraud, negligent representation, constructive fraud, and financial elder 

abuse were previously adjudicated against him in the bankruptcy court, and therefore 

those claims are barred by the doctrine of collateral estoppel.4

“On demurrer a court considers the allegations on the face of the complaint and 

any matter of which it must or may take judicial notice. [Citation.] If judicially noticed 

records of prior litigation show the complaint is barred by collateral estoppel, the 

demurrer may be sustained. [Citations.] On appeal from the judgment of dismissal 

following the sustaining of the demurrer without leave to amend, we review the order de 

novo to determine whether as a matter of law the complaint is barred by collateral 

estoppel. [Citation.]” (Groves v. Peterson (2002) 100 Cal.App.4th 659, 667 (Groves).)

“Collateral estoppel is one of two aspects of the doctrine of res judicata. In its 

narrowest form, res judicata „ “precludes parties or their privies from relitigating a cause 

of action [finally resolved in a prior proceeding].” ‟ [Citations.] But res judicata also 

includes a broader principle, commonly termed collateral estoppel, under which an issue

„ “necessarily decided in [prior] litigation [may be] conclusively determined as [against] 

the parties [thereto] or their privies . . . in a subsequent lawsuit on a different cause of 

action.” ‟ [Citation.] [¶] Thus, res judicata does not merely bar relitigation of identical 

claims or causes of action. Instead, in its collateral estoppel aspect, the doctrine may also 

preclude a party to prior litigation from redisputing issues therein decided against him, 

even when those issues bear on different claims raised in a later case.” (Vandenberg v. 

Superior Court (1999) 21 Cal.4th 815, 828.) The doctrine is applied “ „only if several 

threshold requirements are fulfilled. First, the issue sought to be precluded from 

 

4 Although the trial court‟s ruling does not use the term “collateral estoppel,” the 

court‟s reasoning mirrors respondent‟s collateral estoppel argument below. The trial 

court also sustained the demurrer as to some of the causes of action on other grounds that 

we need not and do not address.
4

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. 

[Citations.]‟ [Citation.]” (Hernandez v. City of Pomona (2009) 46 Cal.4th 501, 511.)

At issue in the present case are the bankruptcy court‟s findings regarding 

respondent‟s knowledge of the fraud perpetrated on appellant. In its memorandum after 

trial, the bankruptcy court found respondent did not know “that the loan applications 

submitted by Transamerican were in many cases entirely fictional, with made-up assets 

and income. These were supposedly signed by the potential borrower, but in fact the 

signatures were forged by Transamerican employees.” The bankruptcy court stated that 

neither appellant nor respondent were aware of Transamerican‟s “duplicity” in forging 

appellant‟s signature. The bankruptcy court ultimately rejected appellant‟s equitable 

claims for loan cancellation and quiet title on the ground that appellant ratified the loan 

after discovering Transamerican‟s misconduct. The bankruptcy court explained, “Having 

heard all of the evidence, the court finds that by his conduct [appellant] has ratified 

[respondent‟s] loan so that, whatever rights he may have for damages, the note and deed 

of trust are fully enforceable. It is clear that within a few days of the loan escrow closing, 

when [respondent] learned that some of [appellant‟s] signatures had been forged, it was 

able to rescind the loan. [Appellant‟s] own witness established this fact. The evidence 

also shows that [respondent] was willing to do so. By calling [respondent] and telling 

them that he was accepting the loan, [appellant] deprived [respondent] of the opportunity 

to undo the loan and set the parties back to their original positions. He therefore is not 

entitled to equitable relief to undo the transaction.” (Fn. omitted.) The bankruptcy 

court‟s judgment quieted title in favor of respondent and stated, “[appellant] will take 

nothing against [respondent] by the claims not remanded to state court. [Respondent] 

will have judgment declaring that its note and the above-mentioned deed of trust are fully 

valid and enforceable . . . .” The judgment also stated it was “without prejudice as to all 
5

other claims and defenses [appellant] and [respondent] may have other than those 

actually decided” in the bankruptcy court‟s memoradum after trial.

On appeal, appellant fails to frame his arguments in terms of the elements required 

to justify application of the collateral estoppel doctrine. He does not dispute that the 

issues of fact in the bankruptcy proceeding were identical to those underlying his fraud 

and elder abuse claims, that those issues of fact were actually litigated before the 

bankruptcy court, that the bankruptcy court‟s decision was final and on the merits, or that 

the parties in the two proceedings are identical. Neither does appellant dispute that a 

bankruptcy court‟s findings can have collateral estoppel effect in a state court action.5

Instead, appellant argues the collateral estoppel doctrine does not apply because, 

even though the evidence presented to the bankruptcy court will also be presented in the 

state court action, “in upholding the enforceability of the [p]romissory [n]ote and [d]eed 

of [t]rust, the [b]ankruptcy [c]ourt was concerned only with [a]ppellant‟s conduct postclose of escrow (i.e., [a]ppellant accepted the proceeds from the loan and notified 

[respondent] that he would make payments). By contrast, [a]ppellant‟s remaining 

damages claims are focused on the conduct of [r]espondent and the other defendants 

before the close of escrow (i.e., Was [r]espondent engaged in knowingly assisting and 

financially benefiting from a criminal fraud against [a]ppellant?).” Although not so 

framed, we construe appellant‟s argument to be that the bankruptcy court‟s findings 

about respondent‟s lack of knowledge of the fraud perpetrated on appellant were not 

necessary to the bankruptcy court‟s ruling.6

 

5 Appellant makes reference to the fact that he had the right to a jury trial on his tort 

claims and no such right on the equitable claims before the bankruptcy court. We do not, 

however, understand appellant to argue that precludes application of the doctrine of 

collateral estoppel. If appellant intended to so argue, the contention has been forfeited 

due to his failure to present reasoned argument with citations to authority in support of 

the contention. (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785 (Badie).)

6 Appellant also contends his claims are not precluded because the bankruptcy court 

“was careful to specify that his ruling NOT have any effect on the remaining damages 

claims that were returned to the [trial court] for jurisdiction.” However, those claims 

were not before the bankruptcy court, so it is unsurprising the bankruptcy court did not 
6

It is well established that, where a “court decides the case on one issue, the 

remaining issues were „ “necessarily decided” ‟ if they were actually litigated and not 

„ “entirely unnecessary” ‟ to the case. [Citation.]” (People v. Parham (2003) 111 

Cal.App.4th 1178, 1182.) As noted previously, in concluding appellant was “not entitled 

to equitable relief to undo the transaction,” the bankruptcy court emphasized respondent‟s 

lack of knowledge of the fraud and willingness to rescind the loan. This demonstrates 

that the findings at issue were relevant to the equitable considerations involved in 

appellant‟s loan cancellation and quiet title actions. (See Herrington v. Weigel (1978) 82 

Cal.App.3d 676, 687 [“Quiet title actions lie in equity and equitable principles apply 

[citation].”]; see also Gonzalez v. Hirose (1948) 33 Cal.2d 213, 217 [same].) Appellant 

cites no authority to the contrary. We conclude the bankruptcy court‟s findings regarding 

respondent‟s knowledge of the fraud perpetrated on appellant were not entirely 

unnecessary to the court‟s ruling.

Because the requirements for application of the collateral estoppel doctrine are 

satisfied and appellant has not shown there is a basis to decline to apply the doctrine, the 

trial court properly sustained respondent‟s demurrer without leave to amend. (Groves, 

supra, 100 Cal.App.4th at p. 667.)7

DISPOSITION

The trial court‟s judgment is affirmed. Costs on appeal are awarded to respondent.

 

purport to resolve them. Moreover, the bankruptcy court‟s memorandum after trial states 

that appellant‟s complaint was not part of the record, so the court could not confirm that 

the state court claims were based on the same underlying issues of fact. In any event, 

appellant presents no reasoned argument or citation to authority why the bankruptcy 

court‟s statements preclude the application of the collateral estoppel doctrine if the 

ultimate issues of fact were actually and necessarily litigated in the bankruptcy court. 

Appellant‟s argument requires no further consideration from this court. (See Badie, 

supra, 67 Cal.App.4th at pp. 784-785.)

7 We deny respondent‟s August 2, 2012 motion for judicial notice as unnecessary to our 

decision.
7

SIMONS, J.

We concur.

JONES, P.J.

BRUINIERS, J.