Friday, November 1, 2019
Court of Appeal:
Majority: Lawsuit Stems From Same Primary Right As Earlier Challenge to Administrative Decision
Dissent: Right to Proper Licensing Procedures and Right to Recompense for Losses Are Discrete
By a MetNews Staff Writer
The Court of Appeal for this district has held, in a 2-1 decision, that a man is barred by issue preclusion from suing for losses incurred during a period when he was wrongfully denied a license because he “could and should” have pursued damages in the same action in which he obtained a writ of administrative mandamus.
Justice Lamar Baker Div. Five wrote the majority opinion, in which Justice Dorothy Kim joined. Presiding Justice Rubin penned a dissent, to which Baker responded, dismissively, in a footnote.
Baker and Kim took the position that an action to upset an administrative decision upholding the denial of a license renewal and a suit for damages caused by the licensee being out of business as a result of that decision stem from the same primary right and cannot be the subject of separate proceedings.
Rubin countered that “the primary right to not have one’s license denied for improper reasons is different from the primary right to be compensated for losses incurred” during the period between the nonrenewal of the license and it being reinstated.
The appellant is Donald Lockwood. In 2012, renewal of his license as a transporter of horses between tracks was denied by the California Horse Racing Board (“CHRB”) based on his 1992 conviction in Kentucky of a felony, sexual abuse in the first degree.
The board had known about that conviction when it granted him a license in 2006 and when it renewed it in 2009.
Lockwood challenged the action in an administrative appeal, which the board denied on Feb. 21, 2014. However, Los Angeles Superior Court Judge Joanne O’Donnell on May 15, 2015, granted his petition for a writ of administrative mandamus, directing the board to vacate its decision.
Suit for Damages
In determining the matter anew, the board reinstated Lockwood’s license. He had been out of business for three years, and on Feb. 25, 2016, Lockwood sued CHRB for damages.
That action came before Los Angeles Superior Court Judge Michelle Williams Court who sustained demurrers without leave to amend. She said:
“The prior final judgment on the merits not only settles issues that were not actually litigated but also every issue that might have been raised and litigated in the first action….It also precludes litigation of the same cause of action on a different legal theory or for different relief….Plaintiff asserts that it could not have asserted its claims in the mandamus action because the claims were not ripe at the time of the mandamus action. To the extent this assertion is based on the issue of causation not being ripe, it is unavailing.”
Lockwood appealed from the April 30, 2018 judgment of dismissal. Affirming that judgment in an unpublished opinion filed Wednesday, Baker said Lockwood “could and should” have sought damages, as permitted by Code of Civil Procedure §1095, in the writ proceeding.
He pointed to the California Supreme Court’s 2002 decision in Mycogen Corp. v. Monsanto Co. There, a company sued for declaratory relief as to the duties to it under a contract, and for specific performance; it later sued for breach of the contract.
“Under the doctrine of res judicata,” then-Justice Carlos Moreno wrote, “if a plaintiff prevails in an action, the cause is merged into the judgment and may not be asserted in a subsequent lawsuit; a judgment for the defendant serves as a bar to further litigation of the same cause of action.”
He said the first action and the second “were based on the violation of the same primary right,” the defendant’s breach of contract, and the second action “is barred under the doctrine of res judicata.”
Lockwood’s Primary Right
Applying the holding in Mycogen to the present appeal, Baker declared:
“The primary right Lockwood seeks to vindicate in this action is at bottom the asserted right to not be deprived of a horse transport license because the CHRB failed to develop mandatory criteria regarding the issuance of licenses to individuals with prior criminal convictions. The same primary right was at issue in Lockwood’s prior mandamus action. The CHRB and Lockwood were both parties to that prior action, which resulted in a final judgment on the merits, and Lockwood could have pled the claims he pursues here in that earlier action.”
“In particular, the damages Lockwood seeks could have been sought along with mandamus relief—even if his damages were to a degree uncertain when he filed the mandamus petition and even though the CHRB had not yet issued him a license at the time. (It was the CHRB’s denial of his application, not its later issuance of a new license, that injured Lockwood.) Lockwood’s suit is therefore barred by claim preclusion principles….”
Supreme Court Decision
Lockwood cited the 1952 Court of Appeal decision in Daugherty v. Board of Trustees. In that case, it was held the a second action was not barred by res judicata.
A teacher left her post, then returned; she taught for two years; she was then told her services would not be needed for the next school year—an action that would have been permissible if, as the school district contended, she had been, since her return, a probationary employee, and would otherwise have been violative of her statutory rights.
She brought a writ proceeding and won, gaining a determination that she must be restored as a permanent employee, and have her salary set at the amount specified in the decision. The teacher later sought and obtained a writ ordering payment of her salary for the time she was barred from teaching.
The district appealed. The opinion says that the first proceeding was aimed at establishing the petitioner’s employment status and the second was brought to compel the district to perform its duty to pay the teacher’s salary.
“The causes of action in the two proceedings were thus separate and distinct, although arising out of the same subject matter,” the opinion sets forth. “Hence a favorable judgment in the first proceeding is not a bar to this proceeding for unpaid salary since no issue was tendered or adjudication had thereon in the first proceeding with respect to the payment of salary.”
Baker observed that the holding there “must yield to our Supreme Court’s later holding in Mycogen.” He added that “even assuming Daugherty remains good law, it is factually inapposite” because the plaintiff in that case “sought to vindicate two separate primary rights” while Lockwood’s “only claims for damages arise from the same injury he complained of in the mandamus action.”
Dissenting, Rubin wrote:
“A primary right is the right to be free from the particular injury suffered….I believe Lockwood’s earlier administrative writ petition implicates one primary right—the right to not have his license renewal improperly denied—and the present lawsuit implicates a second—the right to be compensated for the period during which he was deprived of his license.
“In its effort to uphold the bar of res judicata in this case, the majority states the primary right at issue in this action is ‘the asserted right to not be deprived of a horse transport license because the CHRB failed to develop mandatory criteria regarding the issuance of licenses to individuals with prior criminal convictions.’…I agree that this is a reasonable characterization of the right at issue in the mandamus proceeding, but disagree that it characterizes the right in the present civil action. Lockwood’s claim for damages has nothing to do with the ‘right to not be deprived of a horse transport license’; Lockwood has now been awarded a horse transport license. He seeks a remedy only for CHRB’s temporary refusal to allow him to pursue his chosen profession.”
The presiding justice said the fact situation in Mycogen “is not quite our case, and in my view case law arising out of fact patterns much more analogous to the present appeal is stronger precedent.”
He explained that Daugherty, although it “relied on res judicata authority which did not expressly discuss the doctrine in terms of primary rights” still “provides guidance in considering the primary right doctrine.”
Rubin also cited the 1990 Court of Appeal opinion in Craig v. County of L.A. which, he noted, does discuss the primary rights theory. That case dealt with a man who established, through writ proceedings, his right to hold a position as a harbor patrol officer, then sued for damages based on his wrongful denial of that post.
“[T]the primary right in the mandate actions involved the right to be employed as a harbor patrol officer,” then-Justice Earl Johnson Jr. wrote. “The later action to recover damages because of the denial of that right involves a different primary right.”
“Taken together, Daugherty and Craig establish that the right to be employed in a particular job or classification is a single primary right, while the right to recover damages for denial of the job or classification is a second primary right. Lockwood’s right to a horse transport license is a single primary right; his right to recover damages after the Board reinstated his license is a different primary right.”
He went on to comment:
“The limited nature of an administrative writ proceeding is demonstrated by this very case. Lockwood challenged one basis on which the CHRB refused to renew his license. The court agreed that his challenge had validity, and directed revocation and reconsideration of the license refusal. That is all.”
Implications of Opinion
The dissenter observed:
“The majority seems to be saying that Lockwood should have: (1) filed a claim under the Government Claims Act…, seeking compensation (in an unknown amount) for the (not yet established as improper) refusal to renew his license; (2) obtained denial of that government claim (because there was no legal basis for damages at that time); (3) filed his writ petition and also sought damages under Code of Civil Procedure section 1095; (4) obtained the writ (as he did), but no damages could have been awarded because he still had no license; (5) waited for the CHRB to hold further proceedings or voluntarily issue him a license; and (6) somehow argue that he now had a right to damages—and defeat what would surely be an argument that his claim for damages was barred by res judicata, due to the judgment denying them in the writ proceedings.”
“This cannot be what the law requires.”
In a footnote, Baker responded:
“We find it largely unnecessary to discuss [Presiding] Justice Rubin’s dissenting ruminations. As to his arguments regarding application of settled law regarding the primary rights doctrine, for instance, they are refuted by what we have already written. But with respect to his hedged position that claim preclusion principles should not apply at all in mandate proceedings, two things can be said. First, the authority he musters in support of that view has been persuasively discredited in later precedent….Second, even Lockwood in this appeal has not taken the extreme position Justice Rubin seems to favor. If the Legislature or our Supreme Court is going to take the law in an entirely new direction, it may be wise to wait for a case in which the parties have presented the issue for decision.”
The case is Lockwood v. California Horse Racing Board, B291002.
Lockwood’s lawyer, Carlo Fisco of Culver City, said he is “very heartened to see the Presiding Justice’s dissent which in almost every regard understood the legal nuance of this case far better than the majority,” adding:
“I would hope the Supreme Court of our State would share in the sober and legally powerful remarks found in Presiding Justice Rubin’s dissenting opinion.”
Actress Bo Derek
Among those Lockwood sued was actress Bo Derek. She was one of the members of CHRB between 2008-15.
In light of allegations of federal civil rights violations, CHRB removed the case to the U.S. District Court for the Central District of California. Before remanding the case to the Los Angeles Superior Court, Judge Christina A. Snyder, in a Sept. 29, 2016 order, on stipulation of the parties, dismissed the board members as defendants and excised three causes of action.
Among others dismissed as defendants were constitutional law authority Jesse Choper, a recently retired Boalt Hall professor and former dean, and Charles Winner, a campaign consultant who was a partner in the 1960s of Joe Cerrell, who died in 2010. Cerrell began guiding judicial campaigns in Los Angeles County in 1978 and quickly became recognized as the top expert in the field.
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