Court Opinion

ID: 5115871
Source: CourtListenerOpinion
Date Created: 2021-10-04 20:05:19.135292+00
Date Added: 2024-06-11T08:21:53.076387
License: Public Domain

Filed 10/4/21 Wine Country Gateway Recreational etc. v. Eagle Energy CA2/6
     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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 SIX

THE WINE COUNTRY                                             2d Civ. No. B306375
GATEWAY RECREATIONAL                                     (Super. Ct. No. 19CVP-0217)
VEHICLE PARK, LLC et al.,                                  (San Luis Obispo County)

     Plaintiffs and Appellants,

v.

EAGLE ENERGY, INC. et al.,

  Defendants and
Respondents.

      Here a party who brings an action for breach of contract
based on alleged overcharges under the contract is collaterally
estopped from bringing a second action for violating Business and
Professions Code section 17045, prohibiting secret rebates that
tend to destroy competition.1 We affirm.

       All statutory references are to the Business and
         1

Professions Code unless otherwise stated.
                               FACTS
       The Wine Country Gateway Recreational Vehicle Park,
LLC (WCG); Templeton Market and Deli, Inc.; Letters, Inc.; John
Letters; and Abby Allen (collectively Plaintiffs) each operate
independent service stations in Paso Robles, Templeton, and
Santa Maria. Eagle Energy, Inc. (Eagle) is a fuel distributor.
Eagle acts as a middleman between Phillips 66 Company, the
manufacturer of 76 brand fuel, and independent service stations.
       In 2010 and 2013, Plaintiffs entered into 10-year contracts
with Eagle to supply fuel to their service stations. Because fuel
prices can fluctuate daily, sometimes even hourly, the contracts
contain no set price for the fuel delivered. This is typical in the
petroleum industry.
                            2016 Litigation
       In 2016, Plaintiffs sued Eagle alleging that Eagle was
overcharging them for fuel. Plaintiffs claimed that under their
contracts, Eagle could only charge them a specific market rate
known as the dealer tank wagon or “DTW” rate, but that Eagle
was charging them $0.03 per gallon more. Plaintiffs alleged
causes of action for breach of contract, fraud, unfair business
practices, and declaratory relief on their right to terminate their
contracts.
       Eagle cross-complained against WCG on a matter not
related to this appeal.
       Eagle moved for summary adjudication on most of
Plaintiffs’ causes of action. The trial court granted the motion.
The court concluded that Plaintiffs’ contracts did not specify a
rate, and that Eagle complied with Commercial Code section
2305, allowing a seller in an open price contract to set prices as
long as they are reasonable and in good faith.

                                2.
       The cross-complaint and some causes of action remain. But
the trial court’s ruling took the heart out of Plaintiffs’ case. No
final judgment was entered.
                            2019 Litigation
       A few months after the trial court granted Eagle’s motion
for summary adjudication, Plaintiffs filed the instant action.
       The gravamen of this case is not that Eagle was
overcharging Plaintiffs. Instead the gravamen is that Eagle
breached section 17045, prohibiting the secret payment of rebates
to some purchasers and not to all purchasers where such
payment tends to destroy competition. Plaintiffs’ complaint
contained a cause of action for declaratory relief asking the court
to declare that Eagle breached its contracts and that Plaintiffs
had the right to contract with other parties.
       Eagle demurred to the complaint on the ground that there
was another complaint pending between the same parties, that
the summary adjudication in the 2016 action precluded Plaintiffs
from relitigating previously decided issues, and that the
complaint did not sufficiently allege destruction of competition.
       The trial court sustained Eagle’s demurrer on the ground
that the summary adjudication in the 2016 action precludes
relitigation of those issues. The parties stipulated to a judgment
in Eagle’s favor.
                            DISCUSSION
                                   I
                             Appealability
       Eagle cites to the general rule that a stipulated judgment
cannot be appealed. (Citing In re Estate of Gurnsey (1923) 61
Cal.App. 178, 182.) But an exception to the rule occurs when the
appellant’s consent to the judgment is given to facilitate an

                                3.
appeal after an adverse determination on a critical issue.
(Nogart v. Upjohn Co. (1999) 21 Cal.4th 383, 399-400.)
       Here Plaintiffs claim they stipulated to the judgment only
to facilitate the appeal. Eagle does not contest the claim.
Therefore, we proceed to the substance of the appeal.
                                   II
                         Standard of Review
       The function of a demurrer is to test whether, as a matter
of law, the facts alleged in the complaint state a cause of action
under any legal theory. (Intengan v. BAC Home Loans Servicing,
LP (2013) 214 Cal.App.4th 1047, 1052.) We assume the truth of
all facts properly pleaded, as well as facts of which the trial court
properly took judicial notice. (Ibid.) But we do not assume the
truth of contentions, deductions, or conclusions of law. (Ibid.)
Our review of the trial court’s decision is de novo. (Ibid.)
                                  III
                Collateral Estoppel Does Not Require
                     Final Appealable Judgment
       Plaintiffs contend that because there is no final judgment
in the 2016 action, the trial court erroneously applied the
doctrine of collateral estoppel.
       The doctrine of collateral estoppel precludes relitigation of
an issue previously litigated if: 1) the issue necessarily decided
in the previous action is identical to the issue sought to be
relitigated; 2) there was a final judgment on the merits in the
previous action; and 3) the party against whom the plea is
asserted was a party, or in privity with a party, to the previous
action. (Producers Dairy Delivery Co. v. Sentry Ins. Co. (1986) 41
Cal.3d 903, 910.)

                                 4.
       But a final appealable judgment is not always necessary for
collateral estoppel. For purposes of collateral estoppel, a “final
judgment” includes any prior adjudication of an issue in another
action that is determined to be “sufficiently firm” to be accorded
preclusive effect. (Sandoval v. Superior Court (1983) 140
Cal.App.3d 932, 936.) Factors the courts consider in determining
whether a prior adjudication is sufficiently firm are: 1) whether
the decision was tentative, 2) whether the parties were fully
heard, 3) whether the court supported its decision with a
reasoned opinion, and 4) whether the decision was subject to
appeal. (Ibid.; see Border Business Park, Inc. v. City of San Diego
(2006) 142 Cal.App.4th 1538, 1565 [order sustaining demurrer
sufficiently firm].)
       Here the trial court’s summary adjudication order was not
tentative; the parties were fully heard; and the trial court
supported its decision with a reasoned 11-page opinion. Although
the summary adjudication order is technically not appealable, it
is a final determination of the issues related to the causes of
action to which it applies. The order is sufficiently firm to be
given preclusive effect.
                                  IV
                 Plaintiffs Are Collaterally Estopped
       Plaintiffs contend that because the instant action involves
a different primary right than the 2016 action, they are not
collaterally estopped.
       The primary right doctrine is properly involved in
analyzing whether a claim is precluded under the doctrine of res
judicata. (See DNK Holdings, LLC v. Faerber (2015) 61 Cal.4th
813, 824-825.) Claim preclusion prevents relitigation of the same
cause of action between the same parties, that is, the same

                                5.
primary right. (Id. at p. 824.) In contrast, collateral estoppel,
that is, issue preclusion, bars relitigation of the same issue that
was actually litigated and necessarily decided in a prior action.
(Ibid.) Thus, because collateral estoppel does not involve claim
preclusion, the primary right doctrine does not apply. (See id. at
pp. 824-825 [discussion of the difference between res judicata and
collateral estoppel and the proper application of the primary
right analysis].)
       Res judicata requires a final judgment. (Border Business
Park, Inc. v. City of San Diego, supra, 142 Cal.App.4th at
p. 1560.) Because here there is no final judgment, we are not
concerned with claim preclusion, only issue preclusion.
       In the instant litigation, Plaintiffs claim Eagle violated
section 17045. Section 17045 provides: “The secret payment or
allowance of rebates, refunds, commissions, or unearned
discounts, whether in the form of money or otherwise, or secretly
extending to certain purchasers special services or privileges not
extended to all purchasers purchasing upon like terms and
conditions, to the injury of a competitor and where such payment
or allowance tends to destroy competition, is unlawful.”
       In the 2016 action, Plaintiffs complained that Eagle was
overcharging them on their contracts. The trial court found
that Eagle was not overcharging Plaintiffs. In the present
litigation, Plaintiffs are essentially alleging that Eagle is
overcharging them by not offering them the same discount it
offers competitors. The issue of overcharging was resolved
against Plaintiffs in the 2016 action. Plaintiffs are collaterally
estopped from raising it here.
       Even if we were to assume a judgment was entered in the
2016 action and apply the primary right analysis, the result

                                6.
would be the same. The two actions involve the same injury to
Plaintiffs and the same wrong by Eagle, overcharging. The
same primary right is at stake. (Alpha Mechanical, Heating &
Air Conditioning, Inc. v. Travelers Casualty & Surety Co. of
America (2005) 133 Cal.App.4th 1319, 1332.)
      Eagle is correct that Plaintiffs have raised no issues on
appeal as to other causes of action on which the trial court
sustained its demurrer. Plaintiffs have waived any challenges
related to those causes of action. (Golden Door Properties, LLC v.
County of San Diego (2020) 50 Cal.App.5th 467, 554-555.)
                           DISPOSITON
      The judgment is affirmed. Costs are awarded to
respondents.
             NOT TO BE PUBLISHED.

                                     GILBERT, P. J.
We concur:

             YEGAN, J.               PERREN, J.

                                7.
                   Linda D. Hurst, Judge

          Superior Court County of San Luis Obispo

              ______________________________

     Bleau Fox, Thomas P. Bleau, Andrew M. Grassel and
Ramshin Daneshi for Plaintiffs and Appellants.
     Adamski Moroski Madden Cumberland & Green, Michelle
L. Gearhart, and Joshua M. George for Defendants and
Respondents.

                             8.