Weikel v. TCW Realty Fund II Holding Co.

Citation: 55 Cal. App. 2d 1234Docket: No. D021219

Court: California Court of Appeal; May 22, 1997; California; State Appellate Court

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Lorraine Weikel, both individually and as executor for the estate of Maurice Weikel, has refiled a lawsuit against TCW Realty Fund II Holding Company, Rancho Bernardo Village Associates (RBVA), and Lyman Clark after previous adverse rulings. Weikel contends that her complaint is not barred and has appealed following the sustaining of demurrers by the defendants. 

The dispute centers around a small piece of land known as 'the wedge,' which is located between the Weikel Center, owned by the Weikels, and a shopping center called The Plaza, developed by RBVA. In 1984, TCW purchased The Plaza, which is adjacent to the wedge. The conflict arose from Weikel's intention to develop the wedge, countered by TCW's interest in preserving the aesthetics of Clark's shop located within The Plaza.

The initial phase of the dispute began in 1980 with RBVA's development of The Plaza, during which RBVA installed access points across the common boundary without Weikel's consent. Following Weikel's objections, RBVA agreed to negotiate an 'RBVA agreement,' which included mutual access easements and allowed Weikel to build on the wedge through an encroachment easement. This agreement was finalized by March 1984 and facilitated TCW's purchase of The Plaza by resolving the dispute and ensuring the removal of parking lot barriers. The easements were officially recorded in April 1984, with the sale closing in June 1984. Ultimately, the court affirmed the judgment in favor of the defendants.

In May 1985, Weikel discovered that a building easement would not be approved by the City due to construction straddling a lot boundary. He sought a lot line adjustment from TCW to enable building on a wedge of land, but TCW expressed ongoing concerns regarding the potential negative impact on Clark's shop, particularly regarding the alteration of sight lines and roof canopies. During initial discussions, TCW indicated willingness to cooperate but emphasized the need to avoid any legal disputes stemming from the lot line adjustment. TCW's apprehensions persisted through subsequent meetings and correspondence, notably emphasizing the importance of preserving Clark's windows and roof line.

Weikel's representative, Mr. Cooper, engaged directly with Clark, who threatened to oppose any changes affecting his sight lines or canopy. Cooper assured Clark that no windows or sight lines would be lost and that there would be no construction under the canopy. Despite TCW's repeated requests for detailed plans to assess potential impacts, Weikel hesitated to provide them until negotiations progressed. By late 1987, tensions escalated between Weikel and TCW, yet TCW continued negotiations while seeking clarity on how Weikel's plans might affect Clark.

Ultimately, TCW and Weikel reached the Lot Split Agreement, wherein TCW would transfer land to Weikel and establish new access easements. Key provisions included TCW's obligation to ensure Weikel's construction would preserve Clark's canopies, with Weikel required to submit modification plans for TCW's approval if local regulations necessitated changes. The agreement also stipulated that the lot split must comply with San Diego municipal laws, including setback requirements. Although TCW's counsel drafted the agreement, key exhibits such as the plat map and property descriptions were not attached when the agreement was signed by the parties.

The plat map provided by Cooper established a new boundary line adjacent to Clark's building, infringing upon zoning regulations by not adhering to required setbacks. This change necessitated modifications to Clark's display windows to fire-rated versions due to their proximity to the new property line. Weikel pursued development plans that obscured Clark's shop, but the building department rejected these due to violations of fire safety and zoning codes, including restrictions on structures overhanging property lines. Weikel proposed three alternatives to address the building department's concerns, but all were deemed unacceptable by both Clark and TCW, as they would harm Clark's business and the aesthetic integrity of his shop. Clark warned TCW that he would file a lawsuit if any proposals were enacted. Consultation with the architect revealed that all options would negatively impact Clark's operations and incur significant costs. Consequently, TCW informed Weikel that none of his plans were feasible, leading to the initiation of Weikel's lawsuit. 

Weikel's lawsuit included multiple claims: breach of the RBVA agreement for failing to accommodate his development plans; breach of the lot split agreement; fraud alleging TCW's insincerity in approving his plans; a request for a declaration to rescind the 1988 access easements; an injunction against unreasonable surface water discharges affecting his property; an injunction compelling modifications to Clark's shop due to code violations; and a common count for restitution of the value received from the access easement he had granted.

TCW filed a cross-complaint against Weikel, alleging false representations regarding the preservation of Clark's building and the legality of a lot split, leading to claims of fraud, negligent misrepresentation, and breach of contract. TCW contended that the lot split caused Clark's shop to violate code requirements, enabling rescission of the deed. TCW also sought declaratory relief to validate the 1988 access easements. The court ruled in favor of TCW, determining that the lot split was rescindable due to code violations, which negated Weikel's claims related to the lot split agreement. Additionally, the court affirmed TCW's right to have the original easements reinstated, while limiting Weikel’s rights regarding those easements. Weikel appealed these rulings, and the appellate court largely upheld the trial court's decision but removed language preventing Weikel from unilaterally rescinding the reinstated easements. Following this, Weikel initiated a new lawsuit (Weikel II) against TCW, RBVA, and the Clarks, seeking various forms of relief, including quiet title and damages. TCW and the Clarks demurred, arguing that Weikel's claims were barred by res judicata and statutes of limitations. The court sustained TCW's demurrer without leave to amend and granted the Clarks’ motion for judgment on the pleadings, concluding that the action was barred by res judicata as the issues regarding the 1984 easement should have been raised in the prior case. Judgments of dismissal were entered in favor of TCW and the Clarks. Subsequently, RBVA's default was set aside, and its demurrer was also sustained, leading to a dismissal against RBVA. Weikel appealed the rulings against TCW, the Clarks, and RBVA, and filed a separate notice of appeal regarding attorney fees.

The standard of review for an appeal from a judgment dismissing an action after a demurrer is well established. The reviewing court interprets the complaint reasonably, treating the demurrer as admitting all material, properly pleaded facts, but does not accept the truth of legal conclusions or deductions. A judgment must be upheld if any ground for the demurrer is valid. However, it is erroneous for a trial court to sustain a demurrer if the plaintiff has articulated a cause of action under any conceivable legal theory. Sustaining a demurrer without leave to amend is an abuse of discretion if the plaintiff demonstrates a reasonable possibility that any identified defect could be rectified through amendment.

In the case at hand, the trial court upheld the demurrer of TCW based on res judicata concerning claims in Weikel II, without addressing other grounds such as statutes of limitations or failure to state a cause of action. The discussion highlights that res judicata bars a second suit between the same parties on the same cause of action but does not apply if a judgment was not rendered on the merits. It prevents piecemeal litigation and the relitigation of the same cause on different legal theories. The core issue is whether Weikel II constituted a relitigation of the same cause of action under a different theory, with the doctrine of res judicata requiring that the plaintiff had the opportunity to litigate the issues in the original case, Weikel I. The principle aims to limit litigation by ensuring that once an issue has been decided, it cannot be reopened, promoting judicial efficiency and finality.

The Restatement's approach assumes that there has been a fair opportunity to litigate a claim in the first lawsuit. Once this opportunity is granted, fairness necessitates that the matter be considered resolved. The key inquiry is whether the causes of action resolved in the first case (Weikel I) and those that Weikel had the chance to litigate encompass the claims in the second case (Weikel II). This involves determining the 'primary rights' at stake, as California employs the 'primary rights' theory for identifying causes of action. Under this doctrine, an invasion of one primary right leads to a single cause of action, regardless of the number of legal theories proposed for recovery. A cause of action encompasses three elements: (1) the plaintiff's primary right, (2) the defendant's corresponding duty, and (3) a breach of that right and duty by the defendant. Two actions are deemed a single cause of action if they impact the same primary right. For instance, in Bay Cities Paving, the California Supreme Court ruled that a single injury resulting from a lawyer's multiple negligent actions constituted one cause of action. The focus is on the harm suffered rather than the specific legal theories presented, emphasizing that multiple theories stemming from one injury still yield a single claim for relief. The distinction between 'cause of action' and 'remedy' is also highlighted, noting that a plaintiff may seek various remedies for a single right.

The complaints in Weikel I and Weikel II reveal significant overlap. In Weikel I, the first count alleged breach of the RBVA agreement due to TCW's refusal to modify Clark's shop to accommodate Weikel's building plans, alongside claims of breach of the lot split agreement, fraud regarding TCW's intent to approve development, and multiple counts seeking injunctive relief and restitution related to access easements. Weikel II similarly sought to resolve issues regarding title to the 1984 building easement, damages for ongoing trespass, nuisance abatement related to the Clarks' building, and breach of warranty and covenant claims against RBVA. The complaints from both lawsuits demonstrate substantial identity, particularly in claims of breach of covenant and restitution.

The primary legal issue is whether Weikel II presents any claims that involve a different 'primary right' than those in Weikel I and could not have been litigated previously. The analysis concludes that Weikel's interest in constructing a building constitutes the primary right, with TCW having a duty not to unreasonably interfere; however, TCW is not obligated to dismantle a structure occupied by its tenant, the Clarks, for Weikel's benefit. Weikel's assertion that the 1984 access easements were null at the time of Weikel I and thus did not accrue any cause of action is rejected. It is noted that earlier filings acknowledged the existence of implied rights from the 1984 contract, indicating that the current allegations are barred by res judicata.

Counsel for Weikel limited the scope of Weikel I, yet all rights related to the 1984 instruments could have been litigated, fulfilling the requirements for res judicata. The conflict stems from Weikel's intent to build on a wedge of property versus TCW's interest in preserving the integrity of Clark's shop. The issues raised in Weikel II, which have shifted from a previous 'lot line adjustment' to 'access easements,' do not represent a substantial change in the underlying conflict. Weikel's primary interest, constructing on the wedge, remains unchanged, as does the impediment posed by the retail structure housing Clark's shop. The claims in Weikel II could have been litigated in Weikel I, as established by the primary right theory, which prevents plaintiffs from dividing a primary right across multiple lawsuits. This theory allows a defendant to invoke res judicata when a prior suit has resulted in an adverse judgment on the same primary right, even if the second suit utilizes a different theory or seeks a different remedy. The court affirms that Weikel's attempt to reassert the same primary right in a second proceeding is barred by res judicata. Additionally, public policy favors the resolution of this long-standing litigation, especially since RBVA has not held any interest in the property since 1984, and the Clarks should be free to operate their business without ongoing legal threats.

The rule against splitting a cause of action aims to protect defendants from frivolous litigation and serves public policy by preventing the relitigation of matters already settled. This principle applies to the current case, where it is deemed unreasonable to expect that any additional revenue from a new structure would justify the extensive litigation costs incurred by Weikel. The judicial system is designed for dispute resolution, not for ongoing litigation. Consequently, the court affirms the judgment and allows respondents TCW, RBVA, and the Clarks to recover costs on appeal. The appeal references prior proceedings where Weikel alleged issues with access easements and sought to re-barricade openings between parking lots due to an error in legal descriptions. Evidence suggests TCW was aware of changes to boundary lines affecting the property, but Weikel's arguments did not sufficiently address the appellate review's requirement to view evidence favorably toward the judgment. The case involved discussions on improvements to parking and drainage, as well as landscaping commitments made by RBVA.

The option to preserve Clark’s canopy and display windows was rejected by Weikel due to the requirement of an unsightly fire wall, which would obstruct visibility and customer traffic to neighboring shops. The court ruled in favor of the Clarks after granting their nonsuit motion, determining Weikel lacked the private right to enforce the alleged building code violations. Additionally, the court granted judgment on the pleadings for RBVA, finding the lot split agreement constituted a novation that released RBVA from further liability. Weikel filed three appeals regarding the judgment and attorney fees, while the Clarks also appealed the denial of their attorney fees, although that appeal was later dismissed. The review of the TCW demurrer effectively resolves issues raised by both the Clarks and RBVA. Weikel claimed to have incurred approximately $800,000 in legal expenses as of October 1993. The court noted Weikel's broad range of claims, suggesting a focus on central, meritorious claims to avoid unnecessary complications. It was determined that prior judgments are res judicata concerning matters that were or could have been raised previously. The trial court in Weikel I had previously rejected Weikel's attempt to raise a claim for an injunction, which could have been included in the earlier pleadings. Weikel's claim for "restitution" against TCW was abandoned in the prior appeal and could not be reasserted. Weikel's argument regarding a “change of conditions” was deemed meritless and not addressed. Additionally, references to a prior opinion regarding access easement agreements did not affect the broader issues in Weikel II, and the distinction of “primary rights” cited by Weikel was found to be irrelevant.

Appellant's various recovery theories stem from the same legal issue: respondents’ tortious actions that hindered appellant's ability to collect a judgment. Although some theories share names with those from an earlier case, they represent a different primary right, thus res judicata does not apply. The differences in facts between the current case and Brenelli render it inapplicable, and the same reasoning applies to Sawyer v. First City Financial Corp., which involved distinct causes of action. Consequently, neither Brenelli nor Sawyer affects the current case's resolution. The court finds it unnecessary to consider TCW's alternative defenses regarding statutes of limitation or failure to state a cause of action. However, a brief review of the complaint in Weikel II indicates it is time-barred, and despite arguments presented about tolling, Weikel fails to provide sufficient support for a contrary conclusion.