Court Opinion

ID: 4016945
Source: CourtListenerOpinion
Date Created: 2016-07-18 22:02:47.50877+00
Date Added: 2024-06-11T14:34:05.458923
License: Public Domain

Filed 7/18/16 Du Toit v. Englund CA4/3

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                     FOURTH APPELLATE DISTRICT

                                                 DIVISION THREE

MONIQUE M. DU TOIT,

     Plaintiff and Appellant,                                          G051872

         v.                                                            (Super. Ct. No. 30-2014-00749480)

ROBERT BARTON ENGLUND,                                                 OPINION

     Defendant and Respondent.

                   Appeal from a judgment of the Superior Court of Orange County,
Deborah C. Servino, Judge. Affirmed.
                   Monique M. Du Toit, in pro. per.; and Larned B. Fowler for Plaintiff and
Appellant.
                   Wellman & Warren, Scott W. Wellman, Stuart M. Miller and
Anabella Q. Bonfa for Defendant and Respondent.
                                             *               *               *
                                      INTRODUCTION
              In a prior lawsuit, Monique M. Du Toit (Plaintiff) asserted against Robert
Barton Englund (Defendant) various causes of action arising out of or related to a written
partnership agreement to which she was not a named party. The trial court sustained
without leave to amend demurrers to the first amended complaint in the prior lawsuit on
the ground Plaintiff was not a third party beneficiary of the partnership agreement.
Plaintiff did not appeal from the subsequent judgment of dismissal.
              In the present lawsuit, Plaintiff asserted against Defendant various causes
of action arising out of or related to the same partnership agreement that was the subject
of the prior lawsuit. The trial court sustained Defendant’s demurrer without leave to
amend on the ground Plaintiff’s causes of action were barred by res judicata or collateral
estoppel. Exercising de novo review (City of Dinuba v. County of Tulare (2007) 41
Cal.4th 859, 865), we affirm.
                 ALLEGATIONS AND PROCEDURAL HISTORY
                                  I. The Prior Lawsuit
              Plaintiff’s first amended complaint in the prior lawsuit alleged:
              In 1994, Defendant and Theodore D. Phillips entered into an oral contract
(the 1994 Oral Contract) by which they purchased a house on Bluebird Canyon Drive in
Laguna Beach (the Bluebird Canyon House). Title to the Bluebird Canyon House was
taken in Defendant’s name only. Phillips moved into the Bluebird Canyon House.
Phillips and Plaintiff wed in 1998.
              In February 2001, Defendant and Phillips entered into a written contract
(the 2001 Contract) by which they agreed (1) they had purchased the Bluebird Canyon
House in partnership in 1995, (2) Phillips owed Defendant $70,000, and (3) if Defendant
died, the Bluebird Canyon House would “be deeded” to Phillips.
              In April 2003, Defendant and Phillips entered into a second written contract
(the 2003 Contract) “to define the contract between [them].” The 2003 Contract

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confirmed that Defendant and Phillips were “in partnership concerning” the Bluebird
Canyon House, recited the history of their purchase of that house, recited the terms of the
1994 Oral Contract and the 2001 Contract, and set forth the terms of distribution of
proceeds from and sale of the Bluebird Canyon House. The 2003 Contract stated that in
case of death, “[a]ll conditions mentioned above are to be honored by [Defendant]’s
spouse Nancy Englund and Mr. Phillip[s]’s spouse [Plaintiff].” Neither Nancy Englund
nor Plaintiff was a party to the 2003 Contract.
              In July 2010, Phillips filed for divorce from Plaintiff. Phillips and
Defendant have been in wrongful possession of the Bluebird Canyon House since
October 2010.
              A joint venture or partnership exists among Plaintiff, Defendant, and
Phillips “in regards to the [Bluebird Canyon House] as referenced in the April 22, 2003,
Written Contract.” Plaintiff is not a party to the 2003 Contract but is a third party
beneficiary of it. Defendant and Phillips breached their fiduciary duties owed to Plaintiff
by denying that she is a partner to the joint venture or partnership and by contending she
has no ownership interest in the Bluebird Canyon House.
              Plaintiff’s first amended complaint in the prior lawsuit alleged five causes
of action: (1) breach of a written contract, (2) declaratory relief and imposition of a
constructive trust, (3) specific performance, (4) cancellation of a written instrument, and
(5) quasi-contract/unjust enrichment. Plaintiff also asserted a cause of action for breach
of fiduciary duty against Phillips only. Plaintiff sought a declaration that she and Phillips
are the “true owners” of the Bluebird Canyon House and Defendant has no right to the
property.
                    II. Judgment of Dismissal in the Prior Lawsuit
              Defendant demurred to the first amended complaint in the prior lawsuit and
moved to strike portions of it. Phillips joined in the demurrer and motion to strike. The

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trial court sustained the demurrers without leave to amend and granted the motions to
strike. A formal order and judgment of dismissal were entered in December 2013.
              In the order and judgment, the trial court found that Plaintiff was not a third
party beneficiary of the 2003 Contract between Defendant and Phillips and, as a result,
she lacked standing to assert the first through fifth causes of action “which each arise
from and rely on the Agreement.” Plaintiff did not appeal from the judgment.
                                III. The Present Lawsuit
              In October 2014, Plaintiff filed the complaint in the present lawsuit (the
Complaint). The Complaint repeated the basic allegations of the first amended complaint
in the initial lawsuit. The Complaint alleged again that a partnership was formed among
Plaintiff, Phillips, and Defendant for purposes of owning the Bluebird Canyon House
pursuant to the 1994 Oral Contract, the 2001 Contract, and the 2003 Contract. The
Complaint also alleged that Defendant sold the Bluebird Canyon House in January 2014
to defendants Joseph Rice and Gabriella Rice for less than $650,000 when the property
had a value of $2.5 million to $3 million.
              The Complaint asserted five causes of action. In the first cause of action,
Plaintiff alleged that Phillips and Defendant breached the contracts by failing to pay her
the value of her partnership interest. In the second cause of action, for quasi-contract/
unjust enrichment, Plaintiff alleged that Joseph Rice and Gabriella Rice wrongfully
received title to the Bluebird Canyon House “contrary to Plaintiff and Phillips having
performed their obligations pursuant to the written contract, dated April 22, 2003.” In the
third cause of action, for breach of fiduciary duty, Plaintiff alleged that Defendant and
Phillips breached fiduciary duties they owed her as a partner by selling the Bluebird
Canyon House for an amount below market value. In the fourth cause of action, for
fraudulent transfer, Plaintiff alleged that Defendant and Phillips fraudulently transferred
the Bluebird Canyon House to Joseph Rice and Gabriella Rice. In the fifth cause of
action, for constructive fraudulent transfer, Plaintiff alleged Defendant and Phillips

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transferred the Bluebird Canyon House to Joseph Rice and Gabriella Rice without
receiving a reasonably equivalent value in exchange.
                   IV. Judgment of Dismissal in the Present Lawsuit
              Defendant demurred to the Complaint on the grounds the first and second
causes of action were barred by res judicata and the third, fourth, and fifth causes of
action were barred by collateral estoppel. The trial court sustained the demurrer without
leave to amend, and an order and judgment was entered.
              In the order and judgment, the trial court ruled: “This court previously
ruled in Du Toit v. Englund, case number 30-2012-00610418, that plaintiff Du Toit had
no interest in the real property and was not an intended third-party beneficiary to the
contract, and therefore she had no standing to assert her claims. The five causes of action
stated in this pending action all arise from the same facts, are premised on the same
contract regarding the same real property, and are all based on the same claims and issues
raised in the prior action against defendant Englund. [¶] The first and second causes of
action are barred by the doctrine of res judicata. The third, fourth, and fifth causes of
action are barred by the doctrine of collateral estoppel. Defendant Englund’s demurrer to
the [C]omplaint is sustained without leave to amend.”
              Plaintiff did not seek leave to amend and timely appealed from the
judgment.
                                      DISCUSSION
              The doctrine of res judicata has two aspects: claim preclusion and issue
preclusion. (Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 828, 829.) “In its
narrowest form, res judicata ‘“precludes parties or their privies from relitigating a cause
of action [finally resolved in a prior proceeding].”’ [Citation.]” (Id. at p. 828.) Under
res judicata, a prior judgment bars a subsequent lawsuit on the same cause of action
between the parties or their privies. (Busick v. Workmen’s Comp. Appeals Bd. (1972)
7 Cal.3d 967, 972-973.) Res judicata bars a subsequent lawsuit if three elements are

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established: (1) the prior lawsuit resulted in a final judgment on the merits; (2) the
lawsuit sought to be barred is on the same cause of action as the prior lawsuit; and (3) the
party against whom claim preclusion is sought was a party or in privity with a party to the
prior lawsuit. (Id. at p. 974.)
              “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.]” (Vandenberg v. Superior
Court, supra, 21 Cal.4th at p. 828.) Collateral estoppel or issue preclusion bars
relitigation of issues actually decided in the prior lawsuit. (Mooney v. Caspari (2006)
138 Cal.App.4th 704, 717.) Collateral estoppel applies if (1) the issue necessarily
decided in the prior lawsuit is identical to the one which is sought to be relitigated; (2) the
prior lawsuit resulted in a final judgment on the merits; and (3) the party against whom
collateral estoppel is asserted was a party or in privity with a party to the prior lawsuit.
(Ibid.)
              Defendant argues, and the trial court found, that the first two causes of
action of the Complaint are barred by the claim preclusion aspect of res judicata. In her
appeal, Plaintiff does not challenge that ruling as to the second cause of action. We do
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not address claim preclusion as to the first cause of action because the first, third, fourth,
and fifth causes of action are barred by collateral estoppel. Plaintiff did not allege she
was a named party to the 2003 Contract between Defendant and Phillips. In the initial
lawsuit, the trial court found that Plaintiff was not a third party beneficiary of the 2003

 1
   Because the appeal may be decided based on collateral estoppel, we do not address
whether the breach of contract cause of action of the present lawsuit is barred by claim
preclusion, which raises knotty and complicated issues regarding the primary rights
theory. (See Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 904.)

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Contract. Adjudication of that issue, which became final when Plaintiff failed to appeal
from the prior judgment, resolved the first, third, fourth, and fifth causes of action.
              The determination that Plaintiff was not a third party beneficiary of the
2003 Contract means that Plaintiff cannot sue for its breach (first cause of action) or for
breach of fiduciary duties arising out of that agreement (third cause of action). Because
the Bluebird Canyon House was, according to the Complaint, owned by the partnership,
and Plaintiff was not a named party to or third party beneficiary of the partnership
agreement, she had no interest in the Bluebird Canyon House. As a consequence, any
transfer of the Bluebird Canyon House by Defendant was not fraudulent as to Plaintiff.
              Plaintiff argues that neither claim preclusion nor issue preclusion bars the
first cause of action because the first amended complaint in the prior lawsuit was based
only on the 2003 Contract, while the Complaint in the present lawsuit is based on the
1994 Oral Contract. Thus, she argues, the determination that she was not a third party
beneficiary of the 2003 Contract does not bar her from suing under the 1994 Oral
Contract.
              The breach of contract cause of action in the first amended complaint in the
prior lawsuit was premised on the 2003 Contract and sought damages based on its breach.
But the 2003 Contract and the 1994 Oral Contract did not create two separate
partnerships; both are part of the same agreement concerning the same partnership. The
stated purpose of the 2003 Contract was to “define the contract” (capitalization omitted)
between Defendant and Phillips regarding the Bluebird Canyon House. The 2003
Contract states that Defendant and Phillips “are in partnership concerning Real Estate
investment made on August 9, 1994 on [the Bluebird Canyon House]” and recites in full
the terms of the 1994 Oral Contract and the 2001 Contract.
              The Complaint in the present lawsuit did not make a distinction between a
partnership created by the 1994 Oral Contract and a partnership created by the 2003
Contract. The Complaint alleged the terms of the 1994 Oral Agreement, the 2001

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Contract, and the 2003 Contract, in precisely the same terms as did the first amended
complaint in the prior lawsuit. In the first cause of action (breach of contract), Plaintiff
alleged she complied with the significant terms of “the Partnership” and Englund failed
to perform the terms of “the Partnership.” Likewise, in the third cause of action (breach
of fiduciary duty), Plaintiff alleged Defendant owed her fiduciary duties “as a partner of
the Partnership.”
              The 2003 Contract and the 1994 Oral Contract, along with the 2001
Contract, are components of a single contract governing the partnership between
Defendant and Phillips. Because the trial court in the prior lawsuit found that Plaintiff
was not a third party beneficiary of the 2003 Contract, she cannot be a third party
beneficiary of the 1994 Oral Contract.
                                      DISPOSITION
              The judgment is affirmed. Respondent shall recover costs on appeal.

                                                   FYBEL, J.

WE CONCUR:

O’LEARY, P. J.

MOORE, J.

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