Pantazis v. >Oakland> Convention
and Visitors Bureau





















Filed 4/25/13 Pantazis v. Oakland Convention and Visitors Bureau CA1/5















>NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115>.









IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA



FIRST
APPELLATE DISTRICT



DIVISION
FIVE




>

ATHENA PANTAZIS, Plaintiff and Appellant, v. OAKLAND CONVENTION AND VISITORS BUREAU, Defendant and Respondent.

A135256 (Alameda County Super. Ct. No. RG11573958)

In 1993,
while employed by the Oakland Convention and Visitors Bureau (OCVB1), Athena
Pantazis sustained a workplace injury.
She was terminated the following year.
She obtained a workers’ compensation liability award in 1998 on her
complaint for retaliatory termination, and a monetary award in 2003. In the meantime, her employer changed its
name to the Oakland Convention and Visitors Authority. A new corporation was formed under the name
Oakland Convention and Visitors Bureau (OCVB2) in 1999. Pantazis attempted to satisfy her judgment
from the accounts of OCVB2. The Workers’
Compensation Appeals Board (WCAB) concluded that OCVB2 was not the judgment
debtor and this court denied a writ
petition challenging that decision.
Pantazis filed the instant civil action in the superior court in 2011,
seeking to hold OCVB2 liable for the debt under different legal theories. The trial court ruled that the href="http://www.mcmillanlaw.com/">principles of res judicata barred the
instant action. We agree and affirm.

I. Background

The
following facts are taken from WCAB decisions, of which the trial court took
judicial notice.

OCVB1 was
established as a California
corporation in 1979. The purpose of the
corporation was to promote tourism and convention business in the City of Oakland
(City).

OCVB1 hired
Pantazis in June 1993. On November 20, 1993, Pantazis
sustained a foot injury while working as a receptionist and she was terminated
in November 1994.

In July 1995,
OCVB1 changed its name to the Oakland Convention and Visitors Authority
(hereafter OCVB1/OCVA). The name change
reflected a merger of OCVB1’s activities with the operation of the City’s
convention center. OCVB1/OCVA also
operated a parking garage from 1995 to 1998.

In
October 1995, Pantazis filed a workers’ compensation claim alleging
retaliatory termination (in November 1994) in violation of Labor Code
section 132a. She identified her
employer as the “Oakland Convention and Visitors’ Bureau.” In February 1998, a liability award was
issued in Pantazis’s favor and against “Oakland Convention and Visitors
Bureau.”

In
June 1999, a new corporation was formed with the name, “Oakland Convention
and Visitors Bureau” (OCVB2). The stated
purpose of the corporation was similar to OCVB1/OCVA’s purpose, to promote
tourism and convention business in the City, and at least one officer of
OCVB1/OCVA became a director of OCVB2.
However, OCVB2 hired a new executive director and staff, it had a
different funding structure, and it never operated the convention center or
parking garage. The City shifted funding
from OCVB1/OCVA to OCVB2, apparently due to undercapitalization of the former;
however, there was a period during the formation of OCVB2 when the City was
funding both organizations. OCVB1/OCVA
ceased operations in 1998 but the corporation was never formally dissolved.

In
February 2003, a monetary award was issued in Pantazis’s favor in the
amount of $130,426.47, apparently against “Oakland Convention and Visitors
Bureau.” Pantazis obtained a civil
judgment on this award in Alameda County Superior Court and the sheriff levied
on OCVB2’s bank accounts. OCVB2 sought
review by the WCAB on the issue of whether OCVB2 was the proper judgment debtor
in the case.

In
December 2004, the WCAB stayed enforcement of the award and directed the
WCJ to “determine the correct entity that will actually be liable for
[Pantazis’s] . . . award.”
“[T]he real issue comes down to whether the present entity, [OCVB2], is
the same entity that was found to have violated Labor Code
section 132a. If not, there is an
outstanding issue as to whether [OCVB2] has liability under a legal theory,
e.g. contract, alter ego, etc., for
that entity’s violation of section 132a.”

In 2006,
the WCJ conducted an evidentiary hearing and ruled that OCVB1/OCVA and OCVB2
were jointly and severally liable for the award. “There remains sufficient identity of
officers and interest between the 1979 corporation and 1999 corporation to
require satisfaction of the final award by [OCVB2] as an ‘alter ego’ and
successor in interest of the 1979 corporation.”

In
December 2006, the WCAB reversed, ruling that OCVB2 was a separate
organization from OCVB1/OCVA and there was no showing that OCVB2 was formed to
avoid the liabilities of OCVB1/OCVA. The
WCAB rescinded certain aspects of the WCJ’s ruling, and substituted a finding
that “13. The identity of officers and interest between the [OCVB1] and
[OCVB2] is not sufficient to require satisfaction of the final award by [OCVB2]
as ‘alter ego’ and successor in interest of [OCVB1].” The WCAB dismissed OCVB2 as a party
defendant. The WCAB denied Pantazis’s
petition for reconsideration, and in July 2007 this court denied her writ
petition challenging the WCAB decision.href="#_ftn1" name="_ftnref1" title="">[1]

Complaint

On May 3, 2011, Pantazis
filed a complaint against both OCVB1/OCVA and OCVB2. Pantazis alleges that she collected only
$14,585.93 from OCVB1/OCVA and was told there were no more funds available to
satisfy her claim. She alleges
OCVB1/OCVA was for all practical purposes defunct, having been “made insolvent,
property and assets out of which the judgment could be satisfied having been
transferred to [OCVB2] enabling Defendants to avoid [OCVB1] creditors.” She further alleges that “the true extent of
similarity between the membership, directorate and officers, and business
operations of [OCVB1/OCVA], and [OCVB2], was not disclosed by the Bureau
entities” during the workers’ compensation proceedings. “Evidence in those proceedings was limited to
testimony bearing on an issue raised by [OCVB2] under Minton v. Cavaney
(1961) 56 Cal.2d 576.”

Pantazis
states five causes of action:
(1) “Continuation – Surviving Corporation Liable for Predecessor
Debts”; (2) “De Facto Merger – Surviving Corporation Liable for Debts”;
(3) “Fraud on Creditors – Successor Liability for Predecessor Debts and
Obligations”; (4) “Assumption of Liability – Corporate Successor Liable
for Predecessor Liabilities and Obligations”; and (5) “Successorship
Liability – Employment Discrimination.”

Demurrer

OCVB2
demurred to the complaint, arguing all of Pantazis’s claims were barred as res
judicata, having already been litigated in the workers’ compensation
proceedings. Pantazis argued in
opposition that the 2006 WCAB decision “was expressly limited to different
issues, namely, whether the [WCJ] had properly applied the doctrine of alter
ego (piercing the corporate veil) under Minton v. Cavaney (1961)
56 Cal.2d 576 and the responsible party disclosure mandate of Coldiron
v. Compuware Corp. (2002) 67 Cal. Comp. Cases 289. . . . The
issues raised in this case . . . are properly brought in a
post-judgment action seeking to amend the judgment—whether the new OCVB is a
successor to the old OCVB as a continuation or reincarnation
. . . , by virtue of de facto merger . . . , due
to a fraud on creditors . . . , or per the doctrine of
successorship specific to employment discrimination . . . .”

The
trial court ruled that Pantazis’s claims were barred as res judicata. “In this action, [Pantazis] seeks to hold
[OCVB2] liable for a 1998 workers’ compensation award against
[OCVB1/OCVA]. In [Pantazis’s] prior
proceedings before the [WCAB], [she] sought a determination that [OCVB2] was
liable for the award against [OCVB1/OCVA], as [OCVB1/OCVA’s] purported alter
ego and successor. [Citation.] The WCAB determined that [OCVB2] was not the
alter ego or successor of [OCVB1/OCVA], and that determination is final. [Citation.] . . .
[¶] . . . [T]he prior WCAB proceedings and this action involve
the exact same claim, i.e., whether [OCVB2] is liable for the
1998 workers’ compensation award against [OCVB1/OCVA].”

II. Discussion

We review
an order sustaining a demurrer de novo.
(Ortega v. Contra Costa Community
College Dist. (2007) 156 Cal.App.4th 1073, 1080.) “When a demurrer is sustained, we determine
whether the complaint states facts sufficient to constitute a cause of
action. [Citation.] And when it is sustained without leave to
amend, we decide whether there is a reasonable possibility that the defect can
be cured by amendment: if it can be, the
trial court has abused its discretion and we reverse; if not, there has been no
abuse of discretion and we affirm.
[Citations.] The burden of
proving such reasonable possibility is squarely on the plaintiff. [Citation.]”
(Blank v. Kirwan (1985)
39 Cal.3d 311, 318.)

“ ‘Res
judicata’ describes the preclusive effect of a final judgment on the
merits. Res judicata, or claim
preclusion, prevents relitigation of the same cause of action in a second suit
between the same parties or parties in privity with them.” (Mycogen
Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 896 (Mycogen).) “A workers’
compensation judgment can have res judicata effect if it meets all the
doctrine’s other essential elements. (>Unruh v. Truck Insurance Exchange (1972)
7 Cal.3d 616, 633.) . . . [¶] . . . [WCAB] is a
constitutional court in California, and . . . its decisions may thus
. . . be given conclusive effect.
[Citation.]” (>Hughes v. Atlantic Pacific Construction Co.
(1987) 194 Cal.App.3d 987, 1002.)

“A clear
and predictable res judicata doctrine promotes href="http://www.fearnotlaw.com/">judicial economy. Under this doctrine, all claims based on the
same cause of action must be decided in a single suit; if not brought
initially, they may not be raised at a later date. ‘ “Res judicata precludes piecemeal
litigation by splitting a single cause of action or relitigation of the same
cause of action on a different legal theory or for different
relief.” ’ [Citation.] A predictable doctrine of res judicata
benefits both the parties and the courts because it ‘seeks to curtail multiple
litigation causing vexation and expense to the parties and wasted effort and
expense in judicial administration.’
[Citation.]” (>Mycogen, supra, 28 Cal.4th at
p. 897, italics omitted.)

For
purposes of applying the res judicata doctrine, a “cause of action” is
determined under the primary right theory.
“The primary right theory . . . provides that a ‘cause of
action’ is comprised of a ‘primary right’ of the plaintiff, a corresponding
‘primary duty’ of the defendant, and a wrongful act by the defendant
constituting a breach of that duty.
[Citation.] The most salient characteristic
of a primary right is that it is indivisible:
the violation of a single primary right gives rise to but a single cause
of action. [Citation.] . . .
[¶] As far as its content is concerned, the primary right is simply the
plaintiff’s right to be free from the particular injury suffered. [Citation.]
It must therefore be distinguished from the legal theory on which
liability for that injury is premised:
‘Even where there are multiple legal theories upon which recovery might
be predicated, one injury gives rise to only one claim for relief.’ [Citation.]”
(Crowley v. Katleman (1994) 8
Cal.4th 666, 681–682, italics omitted.)

Pantazis
argues the “primary right” adjudicated in the workers’ compensation proceedings
was her right not to be terminated for asserting her rights under the workers’
compensation statutes. Because she is
not asserting that right in the instant action, she argues, the instant action
is not barred as res judicata. Instead,
she is now litigating a different primary right: her right to enforce the workers’
compensation judgment against OCVB2. In
support of this argument, Pantazis cites Brenelli
Amedeo, S.P.A. v. Bakara Furniture, Inc. (1994) 29 Cal.App.4th 1828 (>Brenelli). In Brenelli,
the plaintiff obtained a money judgment against a corporation. (Id.
at p. 1833.) After the corporation
declared bankruptcy and failed to satisfy the judgment, the plaintiff filed a
second action against the corporation and certain individual shareholders,
alleging alter ego liability, fraudulent conveyance, conspiracy to defraud and
other claims. (Ibid.) The court held the
second action was not barred because it involved a different primary
right: “the prior action was for breach
of contract by the respondent corporation. . . . [T]he second suit
seeks to vindicate appellant’s right to be free from the shareholders’ tortious
conduct which unfairly deprived it of the value of its judgment.” (Id.
at p. 1837; see id. at
pp. 1837–1839; see also Taylor v.
Newton (1953) 117 Cal.App.2d 752 [affirming judgment declaring company
alter ego of judgment debtor without addressing res judicata issues]; >McClellan v. Northridge Park Townhome Owners
Assn. (2001) 89 Cal.App.4th 746, 752 [court properly decided alter ego
issue in context of post-judgment motion to modify judgment and add judgment
debtors].)

The
critical difference between Brenelli,
supra, 29 Cal.App.4th 1828 and this case is that enforceability of the
judgment against individual shareholders was not litigated in the first action in Brenelli, whereas the
enforceability of the judgment against OCVB2 was specifically litigated in the prior workers’ compensation
proceedings here. Having already
litigated the issue in the workers’ compensation proceeding, she cannot do so
now. The final judgment in the workers’
compensation action claim is res judicata, foreclosing her instant claim.href="#_ftn2" name="_ftnref2" title="">[2]

Pantazis
argues that res judicata applies only if the identical issue was decided in the
prior action. She argues the current
action is not barred by the doctrine because she raises new theories of OCVB2’s
liability for the workers’ compensation judgment. In support of this argument, Pantazis
primarily cites Eichler Homes, Inc. v.
Anderson (1970) 9 Cal.App.3d 224 (Eichler). Eichler,
however, applies collateral estoppel (issue preclusion), not res judicata
(claim preclusion).href="#_ftn3" name="_ftnref3"
title="">[3] Under the collateral estoppel doctrine, the
identical issue must have been actually litigated in the prior action in order
for a finding on that issue to be binding in the second action. (Id.
at pp. 232–233.) Although the >Eichler court wrote expansively in dicta
that “[i]t is basic to the application of res judicata or collateral estoppel
that the issue of the earlier action be identical
to that in which the application is sought” (id. at p. 233), it is well established that under the res
judicata doctrine all that matters is that the same primary right was adjudicated in the first action. “ ‘[I]f two actions involve the same
injury to the plaintiff and the same wrong by the defendant then the same
primary right is at stake even if in the second suit the plaintiff pleads
different theories of recovery, seeks different forms of relief and/or adds new
facts supporting recovery.’
[Citation.]” (>Brenelli, supra, 29 Cal.App.4th at
p. 1837.) Even remedies, defenses
and issues related to the extent of a defendant’s personal liability may be
barred as res judicata if not raised in the first action. (See Mycogen,
supra, 28 Cal.4th at pp. 893, 896 [first action for declaratory relief
and specific performance barred second action on same primary right but seeking
damages]; Sutphin v. Speik (1940) 15
Cal.2d 195, 200–201 [defense not raised in first action could not be raised in
second action on same primary right]; Carroll
v. Puritan Leasing Co. (1978) 77 Cal.App.3d 481, 487–488 [issue of
whether judgment against married couple could be collected from defendant
wife’s separate property was res judicata even though not raised in first
action because it related to the extent of her personal liability to the
plaintiff].)

In the
workers’ compensation proceedings, the parties litigated Pantazis’s right to
enforce the workers’ compensation judgment against OCVB2 under any legal
theory. The WCAB charged the WCJ to
determine whether OCVB2 was “the same entity that was found to have violated
Labor Code section 132a,” or, if not, “whether [OCVB2] has liability under
a legal theory, e.g., contract, alter ego,
etc., for that entity’s violation of section 132a.” This charge clearly included contractual,
corporate successor, tort, and any other theories of liability. Thus, whether these are conceived as
different legal theories to enforce a single primary right (i.e., Pantazis’s
right to enforce the judgment against OCVB2) or different primary rights (cf. >Brenelli, supra, 29 Cal.App.4th at
pp. 1837–1839 [distinguishing between contract and tort primary rights]),
all were adjudicated in the workers’ compensation proceedings. Indeed, the parties actually presented
evidence and legal arguments regarding the separate formal existence of the
corporations, the separate substantive nature of the corporation (including the
identity of their officers, directors and employees, their purposes and
activities, their contractual relationships with the City, and their sources of
funding), and the bona fide or wrongful purpose of forming the second corporation.

All of
Pantazis’s current claims seek to enforce the same primary right or
rights. Her first cause of action
(“Continuation – Surviving Corporation Liable for Predecessor Debts”) alleges
that OCVB1/OCVA caused the creation of OCVB2 and transferred its assets to
OCVB2 for inadequate consideration; accordingly, Pantazis alleges, OCVB2 must
be deemed a continuation of OCVB1/OCVA that remains liable for its debts. Her second cause of action (“De Facto Merger
– Surviving Corporation Liable for Debts”) alleges based on the same facts that
OCVB2 “was created as a result of a de facto merger” and therefore remains
liable for OCVB1/OCVA’s debts. Her third
cause of action (“Fraud on Creditors – Successor Liability for Predecessor
Debts and Obligations”) alleges the intentional transfer of OCVB1/OCVA’s
business and assets to OCVB2 was a fraud on OCVB1/OCVA’s creditors and OCVB2
should be deemed liable for OCVB1/OCVA’s debts.
Her fourth cause of action (“Assumption of Liability – Corporate
Successor Liable for Predecessor Liabilities and Obligations”) alleges that
representations made by and to the City, OCVB1/OCVA and other parties involved
in the creation of OCVB2 between 1997 and 1999 included implied or express
agreements that OCVB2 would assume the liabilities and obligations of
OCVB1/OCVA. Her fifth cause of action
(“Successorship Liability – Employment Discrimination”) alleges that because of
the continuity between OCVB1/OCVA and OCVB2 and because OCVB2 was on notice of
Pantazis’s claim at the time of its formation, OCVB2 should be required to
satisfy Pantazis’s claim under fairness principles applicable to employment
law. All of these claims seek to enforce
Pantazis’s right to obtain satisfaction of judgment from OCVB2 on theories of
contract, corporate successorship, or tortious conduct. All inferably rely on facts that occurred
before the workers’ compensation proceedings on OCVB2’s liability. Pantazis does not allege anything to the
contrary. Pantazis alleges that relevant
facts were not disclosed by
OCVB1/OCVA or OCVB2 during those proceedings, but she does not allege they were
not discoverable at that time.

Pantazis
argues she was not given a fair opportunity to present these legal theories
during the workers’ compensation proceedings, which she claims were limited to
the alter ego theory discussed in Minton
v. Cavaney (1961) 56 Cal.2d 576 (Minton). (See Branson
v. Sun-Diamond Growers (1994) 24 Cal.App.4th 327, 344 [res judicata
doctrine does not apply when party did not have fair opportunity to litigate
issue in first action].) This argument
is not supported by the record. As
observed ante, the WCAB expressly
charged the WCJ to determine whether OCVB2 was liable on the judgment under any
legal theory. Pantazis cites to a WCJ
order asking for briefing on the Minton
case following the evidentiary hearing
conducted by the WCJ. However, nothing
in that order indicates that the parties were restricted to the Minton
alter ego theory when litigating OCVB2’s potential liability.

>III. Disposition

The
judgment is affirmed. Pantazis must pay
respondents’ costs on appeal.







_________________________

Bruiniers,
J.





We concur:





_________________________

Simons,
Acting P. J.





_________________________

Needham,
J.