Tuesday, June 26, 2018

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Supreme Court Overturns 153-Year-Old Preclusion Rule

By SHANE PATRICK ETCHISON, Staff Writer

The California Supreme Court, in a departure from its holding in an 1865 case, held yesterday that claim and issue preclusion do not apply to an alternative basis for a trial court’s decision which was not addressed by the Court of Appeal in an affirmance.

Chief Justice Tani Cantil-Sakauye wrote the opinion for a unanimous court.

The opinion overrules the high court’s previous decision in People v. Skidmore, an 1865 case which held that as long as the trial court made its decision on the merits, its determination had preclusive effect even where the appellate court limited its focus to certain contentions.

Cantil-Sakauye’s opinion affirms the Feb 14, 2017 decision by this district’s Court of Appeal in reversing a grant of summary judgment to Burbank dentist Haitham Matar, one of two defendants in the underlying case.

Stewarts’ Decisions

In ruling in Matar’s favor, Los Angeles Superior Court Judge William D. Stewart relied upon a summary judgment previously granted the other defendant, dentist Stephen Nahigian, on the dual grounds that plaintiff Rana Samara’s suit against him was time barred and that he had not caused the alleged injury. That judgment had been affirmed by the Court of Appeal for this district on Nov. 10, 2014—but solely on the basis of the statute of limitations.

Under Skidmore, Stewart found, this meant that the issue of causation was precluded from relitigation with respect to the action against Matar based on vicarious liability for Nahigian’s actions.

Writing for Div. Seven in reversing summary judgment in favor of Matar, Presiding Justice Dennis Perluss reasoned that Skidmore only applied to claim preclusion and because both defendants were part of the same lawsuit, claim preclusion could not apply until the suit came to an end.

Shifting Conceptions

Summarizing the Skidmore decision, Cantil-Sakauye explained that it had “allowed a trial court’s ruling to determine the preclusive effect of the judgment, without regard for whether that ruling was addressed on appeal.”

Rejecting Perluss’s analysis, she noted that this basic effect of Skidmore was not necessarily limited to claim preclusion, and may well be applied to issue preclusion as well, in some cases. At the time Skidmore was decided, the chief justice pointed out, the notion that “the preclusive effect of an affirmed judgment should be determined without regard for the basis of the affirmance” was widely supported.

“However,” the jurist continued, “courts’ understanding of preclusion has evolved in the more than 150 years since Skidmore was decided.”

She said that since at least 1942, with the Restatement First of Judgments, the consensus has been to afford a preclusive effect only to those issues which were actually the final basis for a particular ruling. She wrote:

“Although most of these authorities concern issue rather than claim preclusion, their refusal to afford preclusive significance to a trial court determination that evades appellate review is informative.”

Overruling the Outdated

Cantil-Sakauye found that more recent California opinions were in tension with Skidmore. These cases, she explained, hinged on the appealability of the issue or claim to be precluded.

The chief justice explained:

“The fundamental problem with Skidmore…is that it improperly gave effect to a trial court determination that evaded appellate review….More than a century later, and consistent with the modern approach to preclusion described above, we now conclude that a ground reached by the trial court and properly challenged on appeal, but not embraced by the appellate court’s decision, should not affect the judgment’s preclusive effect.”

Cantil-Sakauye said reasons for not applying the doctrine of stare decisis—contrary authority from other jurisdictions, a departure from the restatements, a lack of rationalization for the older rule—were all present in the instant matter.

Defending Skidmore

Matar put forward several arguments in support of Skidmore, including the idea that a trial court’s decisions should be presumed correct. Cantil-Sakauye wrote that while that presumption applies in guiding appellate review, “an unsatisfied trial court judgment has no preclusive effect until the appellate process is complete.”

The dentist further argued that upholding Skidmore would reduce the amount of litigation and its cost to litigants. The chief justice expressed doubts on both of these notions, and stated that the benefits of a reduction in litigation do not justify the accompanying reduction in “fairness, accuracy, and the integrity of the judicial system” that upholding the case would cause.

Cantil-Sakauye suggested that Matar himself could have greatly reduced costly and time-consuming litigation. She explained:

“For one thing, if Matar had sought summary judgment on causation grounds when Nahigian did, Matar, too, would have had the benefit of the trial court’s decision.…[T]he Court of Appeal would likely have confronted the merits of the trial court’s no-causation ruling. In other words, Matar could have promoted judicial economy and protected himself from the burdens of further litigation simply by timely filing such a motion.”

The case is Samara v. Matar, 2018 S.O.S. 3193

Samara was represented by Alexis Galindo and Tracy Labrusciano of Curd, Galindo & Smith, LLP in Long Beach. Matar’s attorneys on appeal were Katherine M. Harwood of Ford, Walker, Haggerty & Behar, LLP in Long Beach and Neil S. Tardiff of San Luis Obispo.