Court Opinion

ID: 9722230
Source: CourtListenerOpinion
Date Created: 2023-08-26 09:21:33.65166+00
Date Added: 2024-06-11T18:24:32.468686
License: Public Domain

BENKE, J., Dissenting
I respectfully disagree with that portion of the majority opinion applying the doctrine of collateral estoppel to this case. I do not believe precedent supports the position or analysis advanced by the majority, but, quite to the contrary, requires a reversal of the decision below.
Underlying the majority’s application of collateral estoppel is its conclusion People v. Sims (1982) 32 Cal.3d 468 [186 Cal.Rptr. 77, 651 P.2d 321], mandates the use of the doctrine where the administrative agency involved has “acted in a judicial capacity.” The court in Sims, however, effectively qualified this conclusion by also observing the statutory scheme involved there governing prosecutions for aid to families with dependent children (AFDC) fraud and the circumstances of individuals who receive welfare benefits made application of collateral estoppel particularly appropriate. (Id. at p. 489.) Thus I am not convinced Sims can be limited in the manner set forth by the majority. As was recently stated in Mahon v. Safeco Title Ins. Co. (1988) 199 Cal.App.3d 616 [245 Cal.Rptr. 103], such a limited interpretation of Sims ignores both the caveats and complexities of that case and the use of the doctrine at common law.
The doctrine of collateral estoppel, upon which the Imens rely, is “not an inflexible, universally applicable principle; policy considerations may limit its use where the limitation on relitigation underpinnings of the doctrine are outweighed by other factors.” (Jackson v. City of Sacramento (1981) 117 Cal.App.3d 596, 603 [172 Cal.Rptr. 826]; Kelly v. Trans Globe Travel Bureau, Inc. (1976) 60 Cal.App.3d 195, 202 [131 Cal.Rptr. 488].) As the court in Kelly explained in a somewhat analagous situation: “Collateral estoppel is by no means an unmixed blessing where it is potentially applicable to bind a party to a proceeding in future litigation with nonparties. Then the possibility of collateral estoppel changes the economic balance of litigation by creating a controversy in which the potential of loss to one party is much greater than the possible gain to the other. A defendant fearing the collateral consequences of the result of litigation in future proceedings with others may be forced to spend in defense sums all out of proportion to the amount in immediate question. He is required to take procedural steps at trial and on appellate review that otherwise would not be taken because of the economics involved. Inevitably, the adversary system requires that the plaintiff meet those actions and take his own to counter them. In the end, the *910collateral estoppel possibility can, and sometimes does, result in expense of litigation that threatens to exhaust the amount in immediate controversy.”
This flexibility was echoed in Parklane Hosiery Co., Inc. v. Shore (1979) 439 U.S. 322, 329-330 [58 L.Ed.2d 552, 99 S.Ct. 645]: “The present case . . . involves offensive use of collateral estoppel—a plaintiff is seeking to estop a defendant from relitigating the issues which the defendant previously litigated and lost against another plaintiff. In both the offensive and defensive use situations, the party against whom estoppel is asserted has litigated and lost in an earlier action. Nevertheless, several reasons have been advanced why the two situations should be treated differently.
“First, offensive use of collateral estoppel does not promote judicial economy in the same manner as defensive use does. Defensive use of collateral estoppel precludes a plaintiff from relitigating identical issues by merely ‘switching adversaries.’ [Citation.] Thus defensive collateral estoppel gives a plaintiff a strong incentive to join all potential defendants in the first action if possible. Offensive use of collateral estoppel, on the other hand, creates precisely the opposite incentive. Since a plaintiff will be able to rely on a previous judgment against a defendant but will not be bound by that judgment if the defendant wins, the plaintiff has every incentive to adopt a ‘wait and see’ attitude, in the hope that the first action by another plaintiff will result in a favorable judgment. [Citations.] Thus offensive use of collateral estoppel will likely increase rather than decrease the total amount of litigation, since potential plaintiffs will have everything to gain and nothing to lose by not intervening in the first action.
“A second argument against offensive use of collateral estoppel is that it may be unfair to a defendant. If a defendant in the first action is sued for small or nominal damages, he may have little incentive to defend vigorously, particularly if future suits are not foreseeable. [Citations.] Allowing offensive collateral estoppel may also be unfair to a defendant if the judgment relied upon as a basis for the estoppel is itself inconsistent with one or more previous judgments in favor of the defendant. Still another situation where it might be unfair to apply offensive estoppel is where the second action affords the defendant procedural opportunities unavailable in the first action that could readily cause a different result.
“We have concluded that the preferable approach for dealing with these problems in the federal courts is not to preclude the use of offensive collateral estoppel, but to grant trial courts broad discretion to determine when it should be applied. The general rule should be that in cases where a plaintiff *911could easily have joined in the earlier action or where, either for the reasons discussed above or for other reasons, the application of offensive estoppel would be unfair to a defendant, a trial judge should not allow the use of offensive collateral estoppel.” (Italics added; fns. omitted.) Nothing in Sims suggests the concerns of Parklane are not valid concerns or are improper considerations here. While mentioning Parklane, the majority in effect ignores it, damning its concerns with faint praise.
In this case the disciplinary proceeding the Imens rely upon was designed to determine Glassford’s fitness as a licensee rather than the monetary damage suffered by any individual. Thus, in addition to evidence of misrepresentations made to the Imens, at the administrative hearing the judge considered evidence that Glassford wrongfully deprived his employer of a commission in an entirely unrelated transaction. In the Imens’ suit for damages, evidence of Glassford’s conduct in the second transaction would likely be barred under Evidence Code sections 786, 787 and 1101, subdivision (a). (See People v. Martin (1983) 150 Cal.App.3d 148, 160 [197 Cal.Rptr. 655].) In a case such as this, which turns upon the credibility of the defendant, such a procedural difference is material. In attempting to establish his credibility in the disciplinary proceeding, Glassford faced a prior “bad act” which would not confront him in the Imens’ lawsuit. Fairness suggests that Glassford be given the opportunity to convince a trier of fact of his version of the Imens’ transaction unfettered by evidence of collateral wrongdoing.
In addition to eliminating the evidentiary protection Glassford enjoys in a civil lawsuit, the potential detriment to the administrative process involved here cannot be ignored. In cases such as this where a licensee is facing multiple unrelated charges, one of which carries potentially large civil liability, application of collateral estoppel would make it imperative the licensee vigorously contest all charges. If he does not, he runs the risk a finding on any one of the charges will adversely impact the charge which involves the civil liability. The potential for settlement is obviously lessened. Such an incentive to litigation in the context of licensing regulation is not consistent with the doctrine of collateral estoppel or with an administrative procedure designed to both protect the public from unscrupulous and incompetent licensees, and at the same time protect the licensee from arbitrary action. Indeed, the majority turns such policies on their head. Its conclusion a licensee is somehow more insulated from arbitrary action because the administrative hearing has suddenly become a trial on financial liability issues which are far beyond the scope of the hearing, is a nonsequitur of significant proportions. It is not an assurance of fairness. Such a process is an open invitation to abuse and perversion of the administrative hearing processes in this state.
*912In addition, contrary to the holding of the majority, public policy does not encourage litigants to vigorously contest their rights in any forum.
“ . . “[I]t is the policy of the law to discourage litigation and to favor compromises of doubtful rights and controversies, made either in or out of court.” (Hamilton v. Oakland School Dist., 219 Cal. 322, 329 [26 P.2d 296]; see also Central Basin etc. Wat. Dist. v. Fossette, 235 Cal.App.2d 689, 705 [45 Cal.Rptr. 651].) Settlement agreements “ ‘are highly favored as productive of peace and goodwill in the community, and reducing the expense and persistency of litigation.҆ ”(McClure v. McClure, 100 Cal. 339, 343 [34 P. 822]; see also Estate of Johanson, 62 Cal.App.2d 41, 56 [144 P.2d 72].). . . .” [Citations.]҆ ” (Fisher v. Superior Court (1980) 103 Cal.App.3d 434, 441 [163 Cal.Rptr. 47].)1 This policy applies no less in administrative proceedings than in our courts. As the court in Kirby v. Alcoholic Bev. etc. Appeals Bd. (1971) 17 Cal.App.3d 255, 260 [94 Cal.Rptr. 514], stated: “Even in cases strictly criminal, there is a public policy in favor of negotiations for compromise (People v. West (1970) 3 Cal.3d 595 [91 Cal.Rptr. 385, 477 P.2d 409]); a fortiori there is an equal policy in cases such as this. The department, acting on the basis of written reports, secures a prompt determination, at little administrative cost; the licensee avoids the risks that testimony at a formal hearing may paint him in a worse light than the reports and, also, avoids the costs and delay of a hearing.”
In this case considerations of fairness and administrative procedure outweigh the efficiency offered by application of collateral estoppel. I do not believe application of the doctrine is appropriate.
A petition for a rehearing was denied June 15, 1988, and appellant’s petition for review by the Supreme Court was denied August 17, 1988. Panelli, J., was of the opinion that the petition should be granted.

 The repeated internal quotations as indicated by the quoted material is evidence of the frequency with which its principle has been cited.