Third District Gives Direct Collateral Estoppel Impact to Prior Ruling in Convoluted Real Estate Option Dispute.
Here is an interesting decision where the fee ruling in a prior SLAPP proceeding was given direct estoppel effect in a subsequent action. This is how it panned out.
South Sutter, LLC v. LJ Sutter Partners L.P., Case Nos. C058206/C059554 (3d Dist. Mar. 16 2011) (certified for publication) involved a complicated real estate option controversy in which plaintiff’s initial complaint was SLAPPed following an initial dismissal without prejudice, although the lower court also awarded attorney’s fees to the defense in the SLAPP fee motion proceeding. There was then an intervening settlement, but no request by anyone for a stipulated reversal of the judgment. Plaintiff then filed a second complaint for breach of contract based on the same primary right as the first case, although omitting the tort claims. The trial court either SLAPPed or sustained demurrers to the second complaint. Plaintiff appealed.
The Third District, in a very analytical decision penned by Acting Presiding Justice Nicholson for a 3-0 panel, determined that plaintiff’s litigation of the prevailing party issue in the initial fee motion produced a ruling that should be given direct estoppel effect so as to preclude relitigation of the second action. After all, the lower court had to determine if the SLAPP requirements were met before determining that the defense prevailed for purposes of obtaining fee awards. The trial court’s decision on the merits of the anti-SLAPP motion in the first action as part of the attorney’s fees ruling satisfied the threshold requirements for applying the direct estoppel doctrine.