Team Akimoto Racing v. Pilot Automotive CA2/3 (2014) · DecisionDepot
Team Akimoto Racing v. Pilot Automotive CA2/3
California Court of Appeal Mar 5, 2014 No. B246547Unpublished
Filed 3/5/14 Team Akimoto Racing v. Pilot Automotive CA2/3 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
TEAM AKIMOTO RACING, INC., B246547
Plaintiff and Respondent, (Los Angeles County Super. Ct. No. BC473703) v.
PILOT AUTOMOTIVE, INC.,
Defendant and Appellant.
APPEAL from a judgment of the Superior Court of Los Angeles County,
William F. Fahey, Judge. Affirmed.
Law Office of Lawrence P. House and Lawrence P. House for Defendant and
Appellant.
Law Offices of Gerald K. Kitano, Gerald K. Kitano and Michael M. Hirotsu for
Plaintiff and Respondent.
_______________________________________
The trial court entered judgment in favor of Team Akimoto Racing, Inc. (TAR)
and against Pilot Automotive, Inc. (Pilot) in the amount of $169,019.21 pursuant to the
parties’ contract. On appeal, Pilot argues that the trial court erred in concluding that the
contract had not been rescinded. We disagree and affirm.
FACTUAL AND PROCEDURAL BACKGROUND
On December 31, 1998, TAR’s predecessor entered into an agreement to license
its intellectual property to Avanche Corporation (Agreement).1 Pursuant to the
Agreement, Avanche was to pay monthly fees to TAR for at least 40 years. The
Agreement further provided that “[t]he rights or obligations of either party under this
Agreement may not be assigned in whole or in part by operation of law or otherwise
without the prior express written consent of the other party . . . . ”
On February 1, 2008, Avanche assigned its rights and duties under the
Agreement to Pilot (Assignment).2 TAR consented to the Assignment in a contract
signed by TAR, Avanche and Pilot which provided that “[t]his Agreement, the License
1 R.S. Akimoto Co., Ltd. signed the Agreement and later changed its name to TAR. 2 Such assignment provides, in pertinent part, the following: “(1) Assignor hereby transfers, conveys and assigns unto Assignee all of Assignor’s right, title and interest in and to the License. Assignee hereby accepts such assignment and assumes all of Assignor’s duties, covenants and obligations under the License to the same extent and with the same force and effect as if Assignee had executed the License and had been the original Licensee thereunder. . . . [¶] . . . (2)(g) Assignee assumes and agrees to be bound by and perform and comply with, for the benefit of Licensor, each obligation of Assignor under the License. . . . ”
2
and Assignment contain the entire agreement of the parties and cannot be altered
without a writing signed by all parties.”3
1. The Parties’ First Action
Pilot refused to make the required payments under the Agreement on the grounds
that the intellectual property it received under the Assignment was without value. On
December 30, 2009, TAR filed a complaint for breach of the Agreement and
Assignment against Avanche and Pilot alleging that these defendants had failed to pay
the promised monthly fees (2009 Action). The parties settled and the action was
dismissed.
2. The Parties’ Second Action
On August 24, 2010, Pilot filed an action for declaratory relief against TAR,
Avanche, and others seeking rescission of the Assignment on the grounds that Pilot had
only obtained “worthless technology” under the contract (2010 Action). TAR demurred
to the complaint, arguing that Pilot had failed to file a compulsory cross-complaint for
rescission in the 2009 Action, and had therefore waived this claim. The court sustained
TAR’s demurrer without leave to amend and dismissed TAR. Pilot and Avanche
thereafter stipulated that the Assignment was rescinded. The trial court entered an order
“find[ing], adjudg[ing] and decree[ing]” the uncontested facts as stipulated to by the
parties, and dismissed the action (Stipulated Judgment).
3 The terms of this contract made Pilot an obligor of TAR under the Agreement, and Pilot does not make any significant argument disputing this.
3
3. The Parties’ Third Action
On November 21, 2011, TAR filed the underlying complaint against Pilot for
failure to pay amounts due under the Agreement. Pilot demurred and argued that the
Assignment had been rescinded pursuant to the Stipulated Judgment. The court
overruled the demurrer on the grounds that “[TAR] was not a party to the stipulated
judgment, nor is in privity with any party. Collateral Estoppel is not a basis here to
allow a demurrer to be sustained.”
Pilot then filed a cross-complaint against TAR and others seeking a declaration
that the Stipulated Judgment rescinded the Assignment. TAR demurred to the
cross-complaint and argued, as it did in the 2010 Action, that Pilot should have sought
rescission of the Assignment as a compulsory cross-claim in the 2009 Action. The
court once again agreed and sustained the demurrer to the cross-complaint without leave
to amend. On October 22 and 23, 2012, trial was held on TAR’s breach of contract
claim. The trial court entered judgment in favor of TAR in the sum of $169,019.21.
Pilot timely appealed.
CONTENTIONS
Pilot contends that TAR lacked standing to sue on the Agreement because
a different entity, R.S. Akimoto Co., Ltd., signed the contract. Pilot further contends
that the trial court erred in entering judgment in favor of TAR because the Stipulated
4
Judgment rescinded the Assignment, and TAR was collaterally estopped from
challenging the rescission.4
DISCUSSION
1. Standard of Review
Whether collateral estoppel applies is a question of law which we review
de novo. (Jenkins v. County of Riverside (2006) 38 Cal.App.4th 593, 618.)
Furthermore, “we may affirm a trial court judgment on any basis presented by the
record whether or not relied upon by the trial court. [Citation.]” (Day v. Alta Bates
Medical Center (2002) 98 Cal.App.4th 243, 252, fn. 1.)
2. TAR Had Standing to Sue On the Agreement
Pilot contends that TAR lacked standing to sue on the Agreement because
a different entity, “R.S. Akimoto Co., Ltd.,” signed the Agreement. Code of Civil
Procedure section 367 provides that “[e]very action must be prosecuted in the name of
the real party in interest, except as otherwise provided by statute.” “The question for
purposes of standing is not the name used by the party suing but whether the party suing
is the party possessing the right sued upon.” (Doe v. Lincoln Unified School Dist.
(2010) 188 Cal.App.4th 758, 765.) “[A] person may sue or be sued in any name in
which he or she is known and recognized.” (Cabrera v. McMullen (1988)
204 Cal.App.3d 1, 4.) Here, the record shows that R.S. Akimoto Co., Ltd. changed its
4 Pilot also argues that although the Assignment was signed by Sada Akimoto on behalf of Tadashi Akimoto, TAR never produced a writing authorizing Sada to sign on Tadashi’s behalf. Pilot’s failure to raise this argument in the trial court means it has forfeited the argument here. (Kaufman & Broad Communities, Inc. v. Performance Plastering, Inc. (2006) 136 Cal.App.4th 212, 226.)
5
name to TAR after the Agreement was entered into. Furthermore, there was undisputed
testimony by TAR’s secretary at trial that the two names were used interchangeably to
refer to the same company. Accordingly, TAR was the real party in interest here and
could sue on the Agreement.5
3. The Trial Court Did Not Err in Concluding That The Assignment Had Not Been Rescinded
Pilot contends that TAR is bound by the Stipulated Judgment signed by Pilot and
Avanche in the 2010 Action. However, by the time of the 2010 Action, Pilot had
already waived its claim for rescission by failing to assert it in the 2009 Action. “[I]f
a party against whom a complaint has been filed and served fails to allege in
a cross-complaint any related cause of action which . . . he has against the plaintiff, such
party may not thereafter in any other action assert against the plaintiff the related cause
of action not pleaded.” (Code of Civ. Proc., § 426.30, subd. (a).)
Pilot does not dispute, nor could it, that its rescission claim was a compulsory
cross-claim to the 2009 Action, but only argues that the subsequent Stipulated Judgment
was effective at rescinding the Assignment and collaterally estopped TAR from
contesting the issue. Even if Pilot had not waived its claim for rescission in the
2009 Action, the Stipulated Judgment in the 2010 Action still had no effect as
against TAR.
5 Pilot also argues that “Team Akimoto Racing” is improperly referring to itself as “Team Akimoto Racing, Inc.” when it has not registered such an entity with the California Secretary of State. This argument does not demonstrate that the plaintiff here lacks standing (i.e., that the party suing is a different entity than the one that entered into the Agreement). Pilot has not raised any reasonable argument that TAR was not, in fact, the successor in interest to R.S. Akimoto, Ltd.
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“The doctrine [of collateral estoppel], which precludes relitigation of issues
argued and decided in prior proceedings, may only be applied if several threshold
requirements are fulfilled. [Citation.] ‘First, the issue sought to be precluded from
relitigation must be identical to that decided in a former proceeding. Second, this issue
must have been actually litigated in the former proceeding. Third, it must have been
necessarily decided in the former proceeding. Fourth, the decision in the former
proceeding must be final and on the merits. Finally, the party against whom preclusion
is sought must be the same as, or in privity with, the party to the former proceeding.
[Citations.]’ [Citation.] The burden of establishing these requirements rests with the
party asserting the doctrine.” (County of Los Angeles v. Superior Court (2000)
82 Cal.App.4th 819, 829.)
The parties’ dispute centers on whether TAR was a party to the 2010 Action such
that it may be collaterally estopped by the Stipulated Judgment. Pilot insists that TAR
was a party to the 2010 Action at the outset of the case, however, the relevant inquiry is
whether TAR was a party when the Stipulated Judgment was entered. In fact, TAR had
been dismissed from the case before Pilot entered into a stipulation with Avanche and
the court signed off on that stipulation. “The effect of the dismissal as to [a] defendant
[] [is] to prevent any subsequent proceedings in the cause as to him. He [is] thereafter
a stranger to the action.” (Coburg Oil Co. v. Russell (1950) 100 Cal.App.2d 200, 204.)
7
Accordingly, the Stipulated Judgment did not collaterally estop TAR’s later claims
because, when the stipulation was entered, TAR was no longer a party to the action.6
DISPOSITION
The judgment is affirmed. TAR shall recover its costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
CROSKEY, J.
WE CONCUR:
KLEIN, P. J.
KITCHING, J.
6 In the alternative, Pilot contends that TAR’s consent to the rescission of the Assignment was unnecessary because the only parties to the Assignment were Pilot and Avanche. Again, Pilot failed to raise this argument in the trial court below and has therefore forfeited it. (Kaufman & Broad Communities, Inc. v. Performance Plastering, Inc., supra, 136 Cal.App.4th at p. 226.) In addition, Pilot entered into a contract with Avanche and TAR whereby it agreed that “[t]his Agreement, the License and Assignment contain the entire agreement of the parties . . . . ” (Emphasis added.) Accordingly, contrary to Pilot’s claim, the Assignment was incorporated into a contract to which TAR was also a party.
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AI Brief
AI-generated · verify before citing
Holding. The court held that the plaintiff had standing to sue as the successor in interest to the original contracting party and that a stipulated judgment between the defendant and a third party did not collaterally estop the plaintiff from enforcing the contract.
Issues
Did the plaintiff have standing to sue on an agreement signed by its predecessor entity?
Did a stipulated judgment between the defendant and a third party, entered after the plaintiff was dismissed from the action, collaterally estop the plaintiff from enforcing the contract?
Did the defendant waive its claim for rescission by failing to assert it as a compulsory cross-complaint in a prior action?
Disposition. affirmed
Quotations verified verbatim against the opinion
“The question for purposes of standing is not the name used by the party suing but whether the party suing is the party possessing the right sued upon.”
“The Stipulated Judgment did not collaterally estop TAR’s later claims because, when the stipulation was entered, TAR was no longer a party to the action.”