Opinion
A156416
08-04-2020
JOHN ELKINS, Plaintiff and Appellant, v. JUDITH ANN HAIRE, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Sonoma County Super. Ct. No. SCV261668)
This is the third lawsuit attorney John Elkins has filed against his former client, respondent Judith Haire, seeking to recover a contingency fee he claims to be owed, under the same retention agreement and for the same legal work as in the two prior cases. The work was concluded more than fifteen years ago, in 2003. Haire prevailed in the two prior lawsuits, both in the trial court and on appeal, and Elkins recovered nothing. (See Elkins v. Haire (July 16, 2009, A120845) (Elkins 1); Elkins v. Haire (Aug. 19, 2013, A137342) (Elkins 2).) In the first suit, after the close of plaintiff's evidence in a bench trial, the trial court held Elkins had failed to establish the damages element of his breach of contract claim. In the second suit, it sustained a demurrer, holding his claims were barred by res judicata. We affirmed both decisions.
At the outset of this third case, the trial court granted a motion by Haire pursuant to Code of Civil Procedure section 391.1, declared Elkins to be a vexatious litigant and ordered him to furnish security before the suit could proceed. The statute provides that such a motion "shall be based upon the ground, and supported by a showing, that the plaintiff is a vexatious litigant and that there is not a reasonable probability that he or she will prevail in the litigation against the moving defendant." (§ 391.1, italics added.) Elkins did not post a bond, and now appeals the dismissal of his lawsuit.
Unless otherwise noted, all further statutory references are to the Code of Civil Procedure.
On appeal, he contends the trial court erred in requiring him to post security because Haire's evidence did not satisfy either statutory requirement. He maintains there is insufficient evidence he is a vexatious litigant under either statutory definition of that term that the trial court found he satisfied (see § 391, subd. (b)(2) & (3)), and that even if the vexatious litigant determination is sustained, Haire did not show there is no reasonable probability he will prevail in this case.
Haire not only urges us to affirm the trial court's ruling but has moved (1) for an award of contractual attorney fees on appeal, and (2) for a pre-filing order prohibiting Elkins from filing any new litigation in any court of this state without leave of court.
We affirm the trial court's order requiring Elkins to post security as a vexatious litigant and, since he failed to do so, affirm the dismissal. We address Haire's motions by separate orders, filed concurrently herewith.
BACKGROUND
We presume the parties' familiarity with the facts stated in our prior opinions and summarize them here only briefly, amplified where necessary by the record in this case.
A. The Contingent Fee Dispute
In September 2002, Haire hired Elkins to represent her in a real estate dispute with her brother concerning a Sonoma County property, the Haire Ranch, that had been gifted to them jointly by their mother. (Elkins 1, supra, 2009 WL 2095950, at p. *1.) The previous year, Haire had accepted her brother's offer to buy her half-interest in the ranch for a little over $200,000. She hired Elkins to help her rescind that transaction, after discovering her brother had been in secret negotiations to sell the property to a third-party intermediary (Wildlands) for resale to the San Francisco Airport Authority, (enabling the airport to convert the Haire Ranch into wetlands and, in consideration of that action, be allowed to expand its runways further into San Francisco Bay). (Ibid.)
Elkins' 2002 retention agreement with Haire contained a contingency fee provision that stated in relevant part (italics added):
"12. That all fees to be paid to the attorney by the client . . . shall be contingent upon the amount of recovery in the matter described in paragraph 1. Those fees shall be determined by one of the following methods: [¶] a. The attorney shall receive 10% (TEN PERCENT) of all cash recovered from the matter for the benefit of the client, accomplished by settlement prior to the filing of litigation in a court, and further shall receive 7.5% (SEVEN AND ONE-HALF PERCENT) of the value of all land and personalty recovered for the benefit of the client, accomplished by settlement prior to the filing of litigation in a court; . . . [¶]
"14. That the attorney shall have an attorney's lien on all property of any kind, whether cash or land or personalty, recovered for the benefit of the client in the matter described in paragraph 1, and that lien shall be to the extent necessary to cover all fees and expenses due to be paid by the client under this agreement.
"15. That for purposes of paragraph 12, the phrase 'value of all land and personalty' shall be defined to mean that reasonable and fair market value which is the highest determinable at time of payment of the fee due the attorney under paragraph 12. The fair market value shall be determined either by qualified appraisal, the averaging of any disputed qualified appraisals, or actual bona fide offers to purchase any such land or personalty, which offers are current and pending at the time of payment, whatever method shall render the highest land value; provided that any bona fide offer to purchase such land by the San Francisco Airport Authority must be active and available to the client at the time of payment of the fee and cannot be contingent upon the occurrence of further events beyond the control of the client. The attorney shall at his unilateral option be able to delay payment of any portion of his fee to any time which he desires, provided that this period of time does not extend beyond four years from the date the fee initially accrues and does not act as a cloud on title of any such land which might adversely affect the sale thereof. No interest of any kind shall run on this fee because of any such unilateral delay by the attorney of the election for the client to pay the fee. Client shall have a minimum of one year from the date of accrual of any such fee or portion thereof based on value of land or personalty to pay such fee in any event, except that such payment, if so elected by the attorney, must be made by the client as part of any bona fide sale of the land or personalty at the time of close of escrow in any such transaction. The attorney shall maintain an attorney's lien on any such land or personalty recovered until payment of the due fee is satisfied, and the due contingency fee percentage as specified under paragraph 12, above, shall determine the percentage of the undivided land or personalty to which said lien shall apply. At the expiration of four years from the date of accrual of any fee based on the value of recovered land or personalty, the fee shall be deemed due and shall be paid by the client whether previously elected by the attorney to be paid or not. The fee based on the value of any land or personalty shall in any event, after one year from date of accrual of said fee, be paid to the attorney within six months of his giving to the client written notice of election to be paid the fee."
In October 2003, Elkins negotiated a settlement on Haire's behalf that involved the transfer back to her of a 45.25 percent interest in the ranch. (Elkins 1, supra, 2009 WL 2095950, at p. *1.)
The following year, the Haires entered into a one-year option agreement with Wildlands, giving it the option to buy the ranch for between $9 and $12 million. (Elkins 1, supra, 2009 WL 2095950, at p. *2.)
In December 2004, a little over a year after Elkins had secured the return of Haire's ranch interest through the brother/sister settlement, Elkins gave six months' written notice demanding to be paid a portion of his fee under the 2002 retention agreement by June 28, 2005, claiming the 2004 option agreement with Wildlands had effectively set the value of the ranch at between $9 million and $12 million. (Elkins 1, supra, 2009 WL 2095950, at pp. *2-*3].) Based on that valuation range, he calculated the value of his contingency fee at between $305,437 and $407,250, less $17,000 of previously agreed upon adjustments. His letter demanded $285,000, "representing that portion of the fee equal to 7.5% of the minimal . . . assessed . . . value under the Option Agreement," and stated that "[a]ny remaining portion of my fee would be paid at actual sale of the property based on the sales price."
Several months later, in March 2005, Haire responded through newly retained counsel, acknowledging that the 2002 retention agreement gave Elkins the right to elect to be paid his fee within six months of giving notice, but disputing his valuation. Haire asserted the option agreement was not a valid basis to compute Elkins' fee because it was not a bona fide offer to purchase the property but merely an option. She wrote that "[t]he only determined market value of the property at this point of time" was a $2.245 million appraisal; "Based on this value, the fee due you under the fee agreement is $76,189.69." Her lawyer also added that Haire "is more than willing to pay you 7.5 percent of what she receives on the property. However, that cannot be done until the property is sold."
About a month later, the option agreement expired. (Elkins 1, supra, 2009 WL 2095950, at p. *2.)
B. Elkins' First Lawsuit Against His Former Client
In July 2006, Elkins sued Haire for breach of contract and fraud, seeking payment of his contingency fee. Prior to trial, the parties entered into a "Partial Settlement Agreement" dismissing the fraud claim, limiting the scope of trial to "the amount of the fee due to Elkins pursuant to the contract of employment" (and to one ancillary additional issue not relevant here), and specifying that "Elkins has no other or future claims against Haire for any damages or fee claimed to be due, arising out of the employment contract at issue in the Action, other than those claimed in the first cause of action [for breach of contract]."
The matter then proceeded to a bench trial in 2007, and Elkins lost. (Elkins 1, supra, 2009 WL 2095950, at p. *3.) At the close of his case, Haire brought a motion for judgment under section 631.8, arguing Elkins had failed to establish the market value of the ranch and thus could not prove damages, an essential element of a claim for breach of contract. (Ibid.) The trial court agreed and granted the motion. (Ibid.) It ruled that the testimony offered by Elkins' expert appraiser about the value of the ranch was not supported by the evidence. (Id., at p. *6.) Judgment was entered against Elkins, he appealed and we affirmed the judgment. (Id., at p. *12.) We agreed with Haire's argument that Elkins had "fail[ed] . . . to adduce probative evidence of the 'market value' of the property sufficient to trigger an obligation on the part of [Haire] to pay [Elkins] any more attorney fees than she already had." (Id., at p. *8.)
C. Elkins' Second Lawsuit Against His Former Client
About two years later, in October 2011, Elkins again sued Haire, alleging three causes of action for breach of contract. (Elkins 2, supra, 2013 WL 4451049, at p. *1.) As relevant here, the first and second causes of action asserted that Haire had breached the 2002 retention agreement—the same agreement he sued on in 2007. (Id., at p. *4.) Elkins alleged that she breached the retention agreement by failing to pay him his "due fee of 7.5% of the value of Haire Ranch as proceeds of [the] settlement" obtained four years earlier, which paragraph 15 of the 2002 retention agreement "requires . . . that [Haire] pay . . . within four years of the settlement." The third cause of action alleged Elkins had breached the 2007 partial settlement agreement he and Haire had entered during the 2007 trial, by exceeding the contractual limitations on the scope of issues to be tried and by failing to comply with its confidentiality provision. Elkins also sought declaratory relief that "any release of claims by [Haire] under said agreement is void."
Elkins' second lawsuit against his former client was resolved against him on demurrer at the pleading stage based on the 2007 judgment entered against him in the first lawsuit, under principles of res judicata and related issues of collateral estoppel. And again, we affirmed the judgment. (Elkins 2, supra, 2013 WL 4451049, at p. *1.) We held that Elkins' new complaint "is an attempt to litigate the same issues decided by the superior court in 2007 and affirmed by this court in 2009, i.e., whether Haire owed [Elkins] any monies pursuant to the terms of the 2002 retention agreement." (Id., at p. *5.)
We specifically rejected Elkins' contention that his new complaint was based on a new and different breach of contract than that alleged in the first lawsuit and explained our reasons at great length. (See Elkins 2, supra, 2013 WL 4451049, at pp. *6-*9.) The trial court's statements in support of its ruling against Elkins in the first lawsuit, we observed, "make crystal clear that the trial court was, on October 5, 2007, determining what, if any, monies were due [Elkins] under the 2002 retention agreement. . . . Its answer was, clearly: none." (Id., at p. *7.) The new claims for breach of the retention contract were therefore barred by res judicata. We rejected Elkins' claim under the partial settlement agreement, too, concluding it was barred by res judicata as well because any breach that occurred during trial of the first lawsuit was subsumed by the 2007 judgment. (Id. at p. *10.) Elkins' "proper remedy was to appeal on that specific basis in 2007, and not to file another lawsuit against [Haire] four years later." (Ibid.)
In upholding the trial court's rejection of a proposed amended complaint from Elkins, we specifically concluded our opinion with an admonition: Elkins "should not and cannot be permitted to assert in three successive complaints his right to recover monies from [Haire] under the commitments made in paragraphs 12a and 15 of the 2002 retention agreement between those parties. . . . [A]ll of the theories and alleged bases of recovery from [Haire] regarding the 2002 retention agreement 'could have been litigated' in the 2007 trial. [Citation.] [Elkins] should not and cannot be permitted to relitigate them multiple times." (Elkins 2, supra, 2013 WL 4451049, at p. *10.)
D. This Litigation: Elkins' Third Lawsuit Against His Former Client
Our prior opinion in Elkins 2 was filed in August 2013.
Undeterred, Elkins filed this action about four and a half years later, in December 2017, claiming yet again that Haire still owes him his contingency fee under the 2002 retention agreement.
Alleging a single cause of action for breach of contract, along with related claims for enforcement of an attorney lien, quantum meruit, and common counts, he seeks $238,681 in damages. This time, Elkins alleges Haire owes him his contingency fee because she sold the ranch in December 2013 and received approximately $3.7 million "but has not paid to Plaintiff anything in satisfaction of the contingency fee based on that sales price." The basic theory alleged, in 21 dense pages of pleading (most of them single-spaced), is that the 2002 retention agreement requires Haire to pay him a 7.5 percent contingency fee whenever she sells the ranch based on the sales price, no matter when a sale takes place, even if a sale is beyond four years from the date of the settlement by which he procured the return of her ranch interest. He alleges the agreement calls for multiple payments over time, with a final accounting due at the time of actual sale and contemplates that multiple collection actions might be necessary.
Haire then filed her motion pursuant to section 391.1 for an order requiring Elkins to post security as a vexatious litigant. As noted, that section provides for such relief "upon the ground, and supported by a showing, that the plaintiff is a vexatious litigant and that there is not a reasonable probability that he or she will prevail in the litigation against the moving defendant."
Haire argued Elkins qualified as a "vexatious litigant," a term defined in section 391, on two grounds: under subdivision (b)(2), which defines a vexatious litigant as someone who "[a]fter a litigation has been finally determined against the person, repeatedly relitigates or attempts to relitigate, in propria persona, either (i) the validity of the determination against the same defendant or defendants as to whom the litigation was finally determined or (ii) the cause of action, claim, controversy, or any of the issues of fact or law, determined or concluded by the final determination against the same defendant or defendants as to whom the litigation was finally determined," and under subdivision (b)(3), which defines a vexatious litigant as someone who "[i]n any litigation while acting in propria persona, repeatedly files unmeritorious motions, pleadings, or other papers, conducts unnecessary discovery, or engages in other tactics that are frivolous or solely intended to cause unnecessary delay." (Id., subd. (b)(3).) She further argued Elkins had no reasonable probability of prevailing in this third lawsuit because all his claims were barred by res judicata based on the 2007 judgment against him in the first case.
At the hearing, Haire disputed Elkins' construction of the contract as calling for successive payments or installments which was "simply an inaccurate reading of the contract" that had been addressed in her reply brief. Her reply brief, listed in the register of actions, has not been included in the record on appeal. Haire also disputed Elkins' very narrow view of what the two prior lawsuits were all about, including his contention the issues they involved—damages based on the property's fair market value—were totally different than the issues here. In a nutshell, she argued: "The Court [in the first lawsuit] did not say, you cannot value a property until it is sold. The Court said, you failed to put on evidence of value and, therefore, you do not take anything from Defendant Haire."
The trial court granted Haire's motion in a six-and-a-half-page written order and ordered Elkins to furnish security in the amount of $25,000. The court ruled that Elkins was a vexatious litigant on both grounds asserted. In relevant part, it wrote: "The court finds that Plaintiff fits at least category (b)(2) of [the statutory definition of a] 'vexatious litigant' since he has unequivocally now for the second time tried to relitigate the same claim and controversy, already twice before finally and fully adjudicated against him.
"Moreover, in each of the prior cases he has shown a pattern of repeatedly challenging each decision in the same manner, on the same grounds, up through the court of appeal. He thus appears to fit category (b)(3) as well, while at the very least this merely further supports the propriety of finding him to be a vexatious litigant.
"Plaintiff argues that there was no finding in the first lawsuit that he had filed the action 'frivolously' and that he had established a prima facie claim. These points are material but not dispositive and they do not change the fact that Plaintiff at least in the two prior actions relitigated the same cause. He also asserts that the appeals and other motions do not mean that he has 'relitigated' the same claims. Plaintiff ignores the fact that each of these three successive lawsuits counts as 'relitigating.' "
The court also concluded Elkins had no reasonable probability of prevailing, because "it is almost certain" that his claims were barred by both res judicata and collateral estoppel. In relevant part, it reasoned: "Despite his attempts to word his way around it, Plaintiff raises the same cause of action adjudicated against him in the two prior actions—the claim that Defendant owes him money for the legal services he provided and specifically from a value of the Property. Moreover, both the specific issues of the obligation under the Contract or for the work performed and Plaintiff's claim of entitlement to an interest in, or money from, the Property, were litigated and adjudicated against Plaintiff, all the way through trial in the 2006 Action and through appeal in both actions.
"Plaintiff is correct that the sale of the Property is a 'new' or 'different' event that had not yet taken place at the time of the two prior actions, but it is an immaterial one. Plaintiff only has a basis for recovering payment from this sale if he has a claim for payment. That claim for payment is based on the Contract and the services he rendered to Defendant in the Original Action. This court, affirmed on appeal, found in the 2006 Action that Defendant owed Plaintiff no money under the Contract or for his services and both this court and the court of appeal repeated that determination in the 2011 Action. Plaintiff's complaint makes it expressly clear that the basis for obtaining payment from the sale of the Property now is his claim that Defendant owes him money under the Contract for the legal services he provided, an issue and claim now twice adjudicated finally, and affirmed on appeal, against Plaintiff."
Elkins did not post the security, and now appeals the resulting dismissal of his lawsuit.
DISCUSSION
Our review of the court's ruling on Haire's motion under section 391.1 is highly deferential. " 'A court exercises its discretion in determining whether a person is a vexatious litigant. [Citation.] We uphold the court's ruling if it is supported by substantial evidence. [Citations.] On appeal, we presume the order declaring a litigant vexatious is correct and imply findings necessary to support the judgment. [Citation.]' [Citations.] Similarly, a court's decision that a vexatious litigant does not have a reasonable probability of success is based on an evaluative judgment in which the court is permitted to weigh evidence. [Citation.] A trial court's conclusion that a vexatious litigant must post security does not, as with a demurrer, terminate the action or preclude a trial on the merits. Rather, it merely requires the party to post security. Accordingly, if there is any substantial evidence to support a trial court's conclusion that a vexatious litigant had no reasonable probability of prevailing in the action, it will be upheld.' [Citations.] [¶] To the extent we are called upon to determine the proper interpretation of a statutory provision, we do so independently under a de novo review [standard.]" (Garcia v. Lacey (2014) 231 Cal.App.4th 402, 407-408.)
I.
The Trial Court Did Not Err in Declaring Elkins a Vexatious Litigant
Under Section 391 , Subdivision (b)(2).
Elkins maintains there is insufficient evidence that he is a vexatious litigant under section 391, subdivision (b)(2) because, at most, this is only the second time he has attempted to relitigate a matter that has been finally adjudicated against him, and under Holcomb v. U.S. Bank Nat. Assn. (2005) 129 Cal.App.4th 1494, twice is not enough. We do not agree. He misreads both the law and this record.
Holcomb reversed a finding the plaintiff was a vexatious litigant under section 391, subdivision (b)(2) where the plaintiff had engaged in two attempts to relitigate final adjudications in prior, unrelated matters against different parties. (See Holcomb, supra, 129 Cal.App.4th at pp. 1502-1506.) After filing an unsuccessful motion in federal district court to vacate an arbitration decision in favor of the National Association of Securities Dealers (NASD) resulting in a judgment that had become final, the plaintiff filed (1) a motion for reconsideration of the order, and then (2) initiated a state court lawsuit against the NASD and related parties and against the arbitrator, seeking to recover the same damages he'd been denied in the arbitration. (Id. at pp. 1503-1504.) He then brought an unrelated lawsuit against different parties, suing a bank and others for placing a hold on one of his checks. The defendants moved successfully for an order requiring him to furnish security as a vexatious litigant, and Holcomb reversed. (See id. at p. 1498.) "[B]ased on the record before us," Holcomb held, the plaintiff's two attempts at relitigation alone in the unrelated NASD matters were not sufficient to satisfy the requirement a party "repeatedly" relitigate a matter that has been finally determined against him. (Id. at p. 1504.)
Holcomb rejected a purely numerical standard to assess whether a litigant satisfies the "repeated relitigation" definition of a vexatious litigant under section 391, subdivision (b)(2). In construing the statute, it found the Legislature's use of the word "repeatedly" rather than a specific number in subdivision (b)(2) significant. (Holcomb, supra, 129 Cal.App.4th at p. 1505.) Contrasting that choice of words with the Legislature's use of "specific numerical benchmarks, such as 'five cases,' 'seven years,' and 'two years' " in subdivision (b)(1), it concluded that "[g]iven the specificity in subdivision (b)(1), we may safely presume if the Legislature intended the term 'repeatedly" to simply mean 'more than one time,' the Legislature would have said so." (Ibid.) Instead, construing that subdivision in light of the overall purpose of the vexatious litigant statutory framework, which "seek[s] to prevent future harm based on a litigant's past behavior," Holcomb concluded that the word "repeatedly," as used in subdivision (b)(2), " refer[s] to a past pattern or practice on the part of the litigant that carries the risk of repetition in the case at hand." (Ibid., italics added.)
Section 391, subdivision (b)(1) defines a vexatious litigant as someone who "[i]n the immediately preceding seven-year period has commenced, prosecuted, or maintained in propria persona at least five litigations other than in a small claims court that have been (i) finally determined adversely to the person or (ii) unjustifiably permitted to remain pending at least two years without having been brought to trial or hearing."
Holcomb elaborated: "Of course, the risk of repetition is fairly easy to demonstrate in situations where the defendant seeking security has been the target of previous relitigation attempts or the case involves facts or circumstances similar to those in which the plaintiff sought to relitigate." (Holcomb, supra, 129 Cal.App.4th at p. 1505, italics added.) It explained that "a connection between the previous relitigation attempts and the movant or action in which security is sought . . . would militate heavily in favor of requiring the plaintiff to provide security." (Ibid.)
Holcomb found no risk of relitigation on the record before it. (See Holcomb, supra, 129 Cal.App.4th at p. 1505.) The present lawsuit against the bank for the check hold "shar[ed] no connection" with the arbitration matter that previously had been relitigated, nor had the defendant "demonstrated that [plaintiff] has threated to relitigate the current case, or would likely do so if he does not prevail." (Ibid.) For these reasons, Holcomb concluded that "based on the record before us," the plaintiff's previous motion for reconsideration and superior court action in the arbitration matter were not sufficient evidence to sustain a finding the plaintiff was a vexatious litigant under section 391, subdivision (b)(2) in the present unrelated matter. (Holcomb, at pp. 1505-1506.)
By contrast, the "risk of repetition" standard announced in Holcomb was held to be satisfied in Goodrich v. Sierra Vista Regional Medical Center (2016) 246 Cal.App.4th 1260 (Goodrich), which upheld a finding the plaintiff met the definition of a vexatious litigant under section 391, subdivision (b)(2) on a record somewhat similar to this one. Haire relies on Goodrich, claiming it is controlling.
The plaintiff in Goodrich was a doctor who had filed an administrative mandamus action challenging the defendant's termination of her medical staff privileges, and her petition was denied. (Goodrich, supra, 246 Cal.App.4th at p. 1263.) After the judgment against her had become final, she filed two motions in the same case attempting to challenge the trial court's decision. (Id. at p. 1264.) Both were denied. (Ibid.) After the second motion, the trial court declined to declare her a vexatious litigant but admonished her the issue could be renewed if she made another attempt to file an unsubstantiated motion attacking the judgment. (Ibid.) She then filed a third motion, seeking injunctive relief based on a claim of changed circumstances and attempting to file a cross-complaint. (Ibid.) The trial court denied that motion, too; it also rejected her contention she was not trying to relitigate the writ petition, because it was clear that her new motion was " 'seeking once again to overturn the denial of her reappointment [to the medical staff] and related relief.' " (Ibid.) At that point, the trial court declared her a vexatious litigant and ordered her to post security. It found the matter " 'has reached the point at which [plaintiff] is "repeatedly" relitigating her claims against [defendant], especially in light of this [c]ourt's multiple prior admonitions.' The court determined that her 'actions are unreasonably impacting [defendant] and the [c]ourt, as contemplated by . . . [section] 391[, subdivision] (b)(2) and (3).' " (Ibid.)
The appellate court held the trial court's ruling was supported by substantial evidence. (Goodrich, supra, 246 Cal.App.4th at p. 1263.) It said there was "no question" that, by the time the court declared the plaintiff a vexatious litigant, she satisfied the standard announced in Holcomb, i.e., that "there was 'a past pattern or practice' on her part that carried the risk of repetition." (Id. at p. 1267.) "She already had made two prior relitigation attempts, causing the trial court to admonish that any further attempt could result in a vexatious litigant finding. As Holcomb aptly observed, 'the risk of repetition is fairly easy to demonstrate in situations where the defendant seeking security has been the target of previous relitigation attempts.' " (Ibid.) Goodrich also reasoned that, unlike in Holcomb, the present matter (i.e., the plaintiff's third motion) and her previous relitigation attempts were connected, which is a factor Holcomb said " 'would militate heavily in favor of requiring the plaintiff to provide security.' " "In each instance," the court explained, "Goodrich attempted to relitigate the same issues against the same defendant." (Ibid.) Also significant was the fact the plaintiff had ignored the court's prior warning. (Ibid.) Stressing that "[p]arties are entitled to rely on the finality of a judgment," Goodrich observed there is "no bright-line test" to determine whether a litigant is vexatious and, instead, courts must evaluate the question in light of the underlying statutory purpose. (Ibid.) It thus concluded that the trial court did not err in finding the plaintiff a vexatious litigant under section 391, subdivision (b)(2), because it "logically determined that [plaintiff's] actions in repeatedly relitigating issues previously decided in the judgment unreasonably burdened both [defendant] and the court, which had to expend time and other resources addressing the motions and appearing at unnecessary hearings." (Id. at pp. 1267-1268.)
Judged by these standards, substantial evidence supports the trial court's finding that Elkins is a vexatious litigant. In one sense—that is, from a strictly numerical standpoint—this case falls somewhere between Holcomb (involving two relitigation attempts) and Goodrich (three). Elkins has only attempted to relitigate the "controversy" over payment of his contingency fee under the 2002 retention agreement twice after we affirmed the judgment in his first lawsuit. (§ 391, subd. (b)(2).) He did so in the second lawsuit, and now does so again here. But unlike in Holcomb, his past relitigation attempt is connected to this lawsuit, which "militate[s] heavily in favor of requiring the plaintiff to provide security." (Holcomb, supra, 129 Cal.App.4th at p. 1505.) Moreover, unlike in Holcomb, Elkins' relitigation consists of arguing issues already adjudicated in suits against the same party. And unlike in Goodrich, both of Elkins' relitigation attempts are independent lawsuits, each pursued through appeal, not merely repeated motions in a single suit. While not to minimize the burden and expense that repeated motion practice imposes, the burden and expense of having to defend a lawsuit through judgment and appeal (or as in this case, three lawsuits through judgment and appeal), is usually greater. As is the consumption of judicial resources.
There is no merit to Elkins' argument this lawsuit does not seek to relitigate that same controversy because it involves a different claim of breach, occurring at a later date. Just as we said in Elkins 2 of the two prior lawsuits, this lawsuit and those two prior ones "did indeed involve the same controversy. As the trial court noted in its 2007 verbal statement of decision: 'The issues before the Court were limited by agreement to plaintiff's entitlement to legal fees under his contract [i.e., the 2002 retention agreement] with the defendant . . . .' This statement by the trial court is clearly confirmed by the Partial Settlement Agreement . . . . , specifically paragraph 3(f) thereof, which expressly states: 'Elkins has no other or future claims against Haire for any damages or fee claimed to be due, arising out of the employment contract at issue in the Action, other than those claimed in the first cause of action.' And it was that specific cause of action which was tried before the court on October 2007, a trial resulting in a judgment in favor of respondent." (Elkins 2, supra, 2013 WL 4451049, at p. *8.) We also elaborate further below.
We disagree with Haire's argument that some of Elkins' other filings in prior cases count too (such as post-trial motions and the appeal in the first case). A judgment is not "final" under section 391, subdivision (b)(2) until all avenues for direct appeal have been exhausted. (Childs v. PaineWebber Incorporated (1994) 29 Cal.App.4th 982, 993.) Accordingly, in assessing whether Elkins meets the definition of a "vexatious litigant" under this prong, we look only to whether he attempted to "relitigate" after the initial judgment had become final through the exhaustion of his appeal. (Holcomb, supra, 129 Cal.App.4th at p. 1502 ["plaintiff's attempts at relitigation must be '[a]fter a litigation has been finally determined . . .' "].)
Furthermore, the "repeated relitigator" definition of a vexatious litigant is not limited to just "cause[s] of action," "claim[s]" or "controvers[ies]," it also applies to repeated relitigation of "any . . . issues of fact or law." (§ 391, subd. (b)(2).) So while Elkins is only relitigating the same "controversy" (his right to a contingent fee based on the value of the Haire property) now for a second time after the matter was first finally adjudicated, he's also relitigating at least two specific issues—the meaning of the parties' contract, which was already adjudicated in the first and second actions, and the application of res judicata, which was adjudicated in the second.
Specifically, the first two lawsuits were predicated on an interpretation of the 2002 retention agreement—advanced by Elkins himself—pursuant to which Elkins' contingency fee was due and payable based on an estimate of the property's value within various specified timeframes and a maximum deadline of four years after the settlement. This court's opinion in Elkins 1 was expressly premised on that interpretation of the contract. And so was this court's opinion in Elkins 2. (See Elkins 2, supra, 2013 WL 4451049, at p. *8.)
In the first lawsuit his complaint alleged, for example, the contract required Haire to pay him "7.5% of fair market value of said land," and "provided one year from settlement as a minimum deferral period and an additional six-month notice period so that [Haire] would have adequate time to make financial arrangements either by way of sale or borrowing to pay [Elkins'] fee and to afford time after notice of any election of the fee to work out any differences in alleged value of the land." (Italics added.) In the second lawsuit, his complaint alleged the retention agreement required Haire to pay 7.5 percent of the value of her ranch interest within four years of the settlement. And in his appellate brief to this court in the second appeal, he explained that contract theory as follows: " 'pursuant to Paragraph 15 of the Contract . . . four years after the date of settlement, which occurred on October 3, 2003, the 7.5% contingency fee automatically became due based on the value of the Haire Ranch at that time, October 3, 2007.' " (Elkins 2, supra, 2013 WL 4451049, at p. *7, fn. 6.)
That is, that under Paragraph 15 of the retention agreement, the valuation of his contingency fee is based upon a determination of the "fair market value" of Haire's interest in the ranch, which as we said in Elkins 1, is a term "defined in the second sentence of paragraph 15 of the retention agreement as follows: 'The fair market value shall be determined either by qualified appraisal, the averaging of any disputed qualified appraisals, or actual bona fide offers to purchase any such land or personalty, which offers are current and pending at the time of payment. . . .' " (Elkins 1, supra, 2009 WL 2095950, at p. *8.) The parties stipulated at trial that the date for payment of his attorney fee under Paragraph 15 was June 28, 2005. (Id. at p. *5.) We thus went on to frame the valuation issue as follows: "appellant does not contend that there were either multiple 'disputed qualified appraisals' to be averaged or 'actual bona fide offers to purchase' the ranch (i.e., the second and third definitions of 'fair market value' in paragraph 15). He is thus left with the first definition, 'qualified appraisal,' and argues that the trial court erred in finding that there was no such appraisal establishing the 'fair market value' of the ranch." (Id. at p. *8.) And we concluded that he introduced no substantial evidence of the fair market value of Haire's interest in the ranch "at the critical point in time (2004 or 2005)." (Id. at p. *11.)
The present lawsuit is predicated on a totally different interpretation of the retention agreement: that the contract is analogous to an installment contract, involving multiple different points in time for payment, and that Elkins' final contingency fee is due and payable only upon sale of the property, whenever that might occur no matter how far into the future. In order to prevail on this new contractual theory, he would have to contradict the meaning of the 2002 retention agreement that he advanced and that the trial court adopted, and this court affirmed in both Elkins 1 and Elkins 2.
Elkins also is attempting to relitigate the scope of the 2007 trial, as articulated by this court in Elkins 2. Without belaboring the point, we said in Elkins 2 that it was "crystal clear that the trial court was, on October 5, 2007, determining what, if any, monies were due [Elkins] under the 2002 retention agreement. . . . Its answer was, clearly: none." (See Elkins 2, supra, 2013 WL 4451049, at p. *7.) We could go on; there are undoubtedly subsidiary issues he's seeking to relitigate too, but these examples suffice.
However one tallies the number of Elkins' relitigation attempts under section 391, subdivision (b)(2), this case, which is the third lawsuit litigated through judgment and the third appeal after repeated adjudication of multiple issues all against the same defendant, is well past the facts of Holcomb (and, indeed, even Goodrich). And, this court previously admonished Elkins that he "should not be permitted to assert in three successive complaints his right to recover monies from [Haire] under the commitments made in paragraphs 12a and 15 of the 2002 retention agreement . . . ." (Elkins 2, supra, 2013 WL 4451049, at p. *10; see Goodrich, supra, 246 Cal.App.4th at p. 1267.)
In these circumstances, whether or not the trial court was compelled as a matter of law to declare Elkins a vexatious litigant, it clearly had the discretion to do so even if reasonable minds could differ. The discretion the Legislature has afforded courts in making these assessments cannot be reduced to a simple, "three strikes and you're out" but "two strikes and you're safe" formula, as Elkins posits. Under Holcomb, "[w]hat constitutes 'repeatedly' . . . , in any given case, is left to the sound discretion of the trial court." (Morton v. Wagner (2007) 156 Cal.App.4th 963, 971 [construing § 391, subd. (b)(3) and citing Holcomb by analogy].) As Goodrich explained, Holcomb "based its decision on the record before it and not on the number of relitigation attempts. It determined that since the purpose of the vexatious litigant statutes is to prevent future harm based on a litigant's past behavior, the Legislature's use of the adverb 'repeatedly' refers 'to a past pattern or practice on the part of the litigant that carries the risk of repetition in the case at hand,' " and such a risk was not present on the record in Holcomb. (Goodrich, supra, 246 Cal.App.4th at p. 1267.) Here, as in Goodrich, there is substantial evidence that Elkins' past actions "carr[y] the risk of repetition in the case at hand." (Holcomb, supra, 129 Cal.App.4th at p. 1505.)
Elkins tries to avoid this result, and bring himself within the result in Holcomb, by assuring us in his appellate brief that there is no danger he would seek to relitigate the issue of his contingency fee again if he loses this third lawsuit. No matter that he executed a partial settlement agreement two lawsuits ago, in 2007, promising in black and white that he "has no other or future claims against Haire for any damages or fee claimed to be due, arising out of the employment contract at issue in the Action, other than those claimed in the first cause of action [for breach of contract]." Since then his words have not been matched by his actions, which demonstrate his seemingly limitless capacity to invent new legal theories in unrelenting, and seemingly endless, pursuit of his contingency fee. Simply put, as in Goodrich, the trial court on this record "logically determined that [Elkins'] actions in repeatedly relitigating issues previously decided in the [2007] judgment unreasonably burdened both [Haire] and the court . . . ." (Goodrich, supra, 246 Cal.App.4th at pp. 1267-1268.) This was well within its discretion.
Because the court did not err in finding Elkins met the definition of a vexatious litigant under section 391, subdivision (b)(2), it is unnecessary to address Elkins' challenge to the court's alternative ruling that he also met the definition under subdivision (b)(3).
II.
The Trial Court's Ruling That Elkins Has No Reasonable Probability
of Prevailing Is Supported by Substantial Evidence.
Elkins contends the trial court's finding on the second prerequisite to requiring a bond under section 391.1—that there is no reasonable probability he will prevail—is not supported by substantial evidence. The reason, he contends, is because the court erroneously concluded that this third lawsuit is barred under res judicata principles.
Elkins argues (as he did in Elkins 2, where we rejected a very similar argument) that res judicata, claim preclusion and issue preclusion do not apply because the present lawsuit is based on a different, subsequent breach of the 2002 retention than the breaches at issue in the prior lawsuits. This time, he maintains, "a new breach took place" in 2013 when Haire failed to pay him his fee out of the sale proceeds. He says that is "the breach of a different obligation, expressly stated under the Contract, arising subsequent to the prior two lawsuits, the payment due at the sale of the land, based on a different measure of damages, 7.5 percent of the proceeds from sale paid to [Haire]." He maintains that Haire did not introduce any evidence to contradict the evidence he introduced to prove the 2002 retention agreement calls for multiple payments, and therefore the trial court was required to accept his interpretation when ruling on Haire's motion. He argues this case involves a different primary right than was at issue previously. Analogizing to caselaw involving installment contracts, he contends that the contract creates "severable" obligations and thus res judicata does not bar this subsequent lawsuit because, in effect, the time for payment had not come due by the time of the two prior lawsuits. (He also says the prior lawsuits were brought "prematurely," due to the "failed condition precedent" of his "inability to show the 'fair market value' to prove damages as of the date of breach in the first lawsuit.") There are a number of difficulties with his contentions, but we address only one.
Elkins' analogy to installment contracts, on which his res judicata argument depends, is based on an interpretation of the contract that he is conclusively foreclosed from relitigating. He cannot for a third time relitigate the meaning of the 2002 retention agreement and advance an entirely new and different interpretation of how and when his contingency fee is to be valued than he advanced in the two prior actions. (See pp. 19-21, ante.) The meaning of paragraphs 12 and 15 has been conclusively adjudicated not once, but twice.
In Elkins 1, the key issue, resolved adversely to Elkins, was "whether [Haire] breached her obligation to pay [Elkins'] any attorney fees owed him under paragraphs 12 and 15 of the retention agreement and, more specifically, whether at the time of [Elkins'] demand letter of December 2004, there had been—or even was thereafter—any determination of the 'fair market value' of her interest in the Haire Ranch." (Elkins 1, supra, 2009 WL 2095950, at p. *8, italics added, fn. omitted.) We affirmed the trial court, agreeing with "the premise of its ruling" that Elkins "produced no credible expert testimony establishing the 'fair market value' of [Haire's] interest in the Haire Ranch at the critical point in time (2004 or 2005)." (Id., at p. *11, second italics added.) Elkins did not claim in Elkins 1 that Haire had any additional and continuing obligation to him in the event she sold the property in the future. On the contrary, in the partial settlement agreement, he disclaimed that he had any "other or future claims against Haire for any damages or fee claimed to be due" under the retention agreement besides the claim that went to trial.
Notwithstanding the disclaimer, in Elkins 2 he invoked the same provisions of the retention agreement to argue the then-new theory that Haire breached the contract in 2007, alleging the retention agreement required Haire to pay the contingency fee four years after the date of settlement of the underlying case. (Elkins 2, supra, 2013 WL 4451049, at p. * 7 & fn. 6.) The trial court and this court rejected the contract claims and the new theory on grounds of res judicata because they were based on the same provisions of the same agreement, involved the same controversy and could have been raised in the prior action. (Id., at pp. *6-*9.) As we explained in Elkins 2: "[A]ny and all payments possibly due from [Haire] to [Elkins] under the key paragraphs of the 2002 retention agreement were based on, and only on, the 'value of all land and personalty recovered for the benefit of the client' (paragraph 12a) which is later defined to mean 'the reasonable and fair market value' of that property, to be determined by whichever of several possible methods 'shall render the highest land value' (paragraph 15). But, as noted in the trial court's 2007 decision, affirmed by us in 2009, in the 2007 trial appellant failed to produce any credible evidence regarding the 'fair market value' of the Haire Ranch or any portion of it. It would totally undermine the core philosophy of res judicata to allow [Elkins] to sue [Haire] under the same provisions of the same contract (albeit on allegedly different provisions or clauses thereof) when any cause of action he could allege under any clause or provision of paragraphs 12a and 15 must be premised on the 'fair market value' of the Haire Ranch, a very specific factual issue which he failed to establish at the 2007 trial." (Id., at p. *8, italics added; see also, e.g., Law Offices of Stanley J. Bell v. Shine, Browne & Diamond (1995) 36 Cal.App.4th 1011, 1025-1026 [prior judgment denying attorney's quantum meruit lien claim for attorney fees for failure of proof bars relitigation of fee dispute in separate lawsuit].)
Elkins' latest interpretation of the contract is contrary to both interpretations he previously asserted. Instead of payment of fair market value being due in June 2005 as he asserted in Elkins 1, or in October 2007 as he asserted in Elkins 2, he now claims Haire was required to pay him a percentage of the proceeds of any sale of the property whenever it was sold, which it ultimately was in 2013, even though that sale did not occur until nine years after the settlement of the underlying action. Given our holding in Elkins 2 that it was too late for Elkins to advance a new and different interpretation of the contract in 2009, a fortiori it was too late for him to do so when he filed this suit in 2017, in his third bid to recover compensation under the same provisions of the same agreement.
At oral argument, he suggested that the contract meant there would be a true up whenever the property was sold, such that any amount he previously had received as the measure of fair market value would be adjusted either upward or downward depending on the ultimate sale price.
" 'If the . . . construction of a contract . . . has been adjudicated in one action it is res judicata when it comes again in issue in another action between the same parties' " even if the subject matter of the two actions are different. (Price v. Sixth Dist. Agricultural Assn. (1927) 201 Cal. 502, 510.) Thus, regardless of the fact Elkins argues there is a timing issue that prevented him from bringing suit earlier (i.e., because there had yet been no sale), Elkins is barred from relitigating the meaning of this contract. (See, e.g., Sutphin v. Speik (1940) 15 Cal.2d 195, 205 (per curium) (denying rehearing) [prior judgment that determined defendant's contractual royalty obligations to plaintiff in two oil wells held conclusive, and precluded defendant from asserting in subsequent suit for later-accrued royalties that plaintiff had no contractual right to royalties from a portion of the wells because of events transpiring after conclusion of the first lawsuit; "defendant's contention is that though the prior judgment determined that plaintiff had a right to a specified percentage of the production of oil from any wells on certain land, plaintiff may be compelled to relitigate that right whenever defendant can discover a new theory upon which to attack it. This proposition is without support in principle or authority"]; 7 Witkin, Cal. Procedure, Judgment (5th ed. 2020) § 419 [discussing Sutphin]; see also Murdock v. Eddy (1940) 38 Cal.App.2d 551, 554 [determination in prior suit about meaning of marital settlement agreement held conclusive in later suit between same parties]; Shopoff & Cavallo LLP v. Hyon (2008) 167 Cal.App.4th 1489, 1516-1518 [party held collaterally estopped from recovering contractual contingency fee because contract was held illegal and unenforceable in prior suit].) As in the above-cited cases, the determination in Elkins 1, reiterated in Elkins 2—that under the retention agreement Elkins was required to show the fair market value of the Haire Ranch property at the time he demanded payment in 2004 or 2005, and that absent such a showing there could be no claim for breach—bars Elkins from now claiming that Haire's obligation under the contract continued indefinitely up until she sold the property.
Because we agree with the trial court that Elkins' third lawsuit is barred by res judicata, we need not decide whether his current interpretation would otherwise be meritorious.
DISPOSITION
The judgment is affirmed. Respondent shall recover her appellate costs.
/s/_________
STEWART, J. We concur. /s/_________
RICHMAN, Acting P.J. /s/_________
MILLER, J.