Walker v. Signature Group Holdings CA2/1

Filed 8/27/14 Walker v. Signature Group Holdings CA2/1 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 ONE

KYLE WALKER, B246926

Plaintiff and Respondent, (Los Angeles County Super. Ct. No. SC112970) v.

SIGNATURE GROUP HOLDINGS, INC.,

Defendant and Appellant.

APPEAL from an order of the Superior Court of Los Angeles County. Cesar A. Sarmiento, Judge. Reversed with directions. ______ Ervin Cohen & Jessup, Michael C. Lieb, and Leemore L. Kushner for Defendant and Appellant. Daniels, Fine, Israel, Schonbuch & Lebovits, Moses Lebovits, and Anna Lisa Knafo For Plaintiff and Respondent. ______

Signature Group Holdings, Inc. (Signature) appeals from an order granting Kyle Walker’s motion for new trial after the superior court granted summary judgment in favor of Signature on Walker’s cause of action for breach of contract. We conclude that because of the preclusive effect of an order entered in a parallel bankruptcy proceeding while this appeal was pending, we must reverse the superior court’s order granting the motion for new trial. BACKGROUND From early 2006 until the termination of his employment in 2007, Walker was the president and chief executive officer of Fremont Investment & Loan (FIL). FIL was a depository institution insured by the Federal Deposit Insurance Corporation (FDIC). FIL was a wholly owned subsidiary of Fremont General Credit Corporation (FGCC), which was a wholly owned subsidiary of Fremont General Corporation (FGC). Signature is the successor to FGC, FGCC, and FIL. Walker, FGC, and FIL were parties to a “Management Continuity Agreement” (MCA), which provided that Walker was to receive certain severance benefits if his “employment with the Company [defined as FIL and FGC collectively] terminates within the thirty-six (36) month period following a Company Event.” The MCA defined the term “Company Event” as including the acquisition or control, by a previously unaffiliated third party, of more than 50 percent “of the voting securities or assets of FIL.” Also, if FIL or FGC terminated Walker’s employment for any reason other than disability, the MCA defined the “Termination Date” as “the date on which a notice of termination is given.” On February 26, 2007, the FDIC notified FIL that the FDIC considered FIL to be a “troubled institution.” On March 7, 2007, FGC and FIL stipulated to the FDIC’s issuance of a “cease and desist” order against FIL and its “institution-affiliated parties,” prohibiting them from engaging in certain “unsafe and unsound banking practices and violations of law.” On June 29, 2007, Walker received written notice of termination of his employment with FIL.