California
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Res Judicata
General Principles

Res Judicata-General Principles

B.        Mark’s Claims Are Barred by the Doctrine of Res Judicata

                        As a separate and independent basis for affirming the trial court’s decision, we conclude Mark’s claims are barred by the doctrine of res judicata.  Contesting this conclusion, Mark notes the trial court in the Capelouto action never considered the fee-splitting agreement, and contends the parties’ rights under the agreement represent an issue separate from the Capelouto fee award.  We disagree, for two reasons.

                        First, “‘[t]he doctrine of res judicata rests upon the ground that the party to be affected, or some other with whom he is in privity, has litigated, or had an opportunity to litigate the same matter in a former action in a court of competent jurisdiction . . . .’”  (Roos v. Red (2005) 130 Cal.App.4th 870, 879, italics added.)  As one court noted in the attorney fee context, “the law is clear that actual litigation is not necessary as long as there has been ‘a fair opportunity’ to litigate the claim.”  (Law Offices of Stanley J. Bell v. Shine (1995) 36 Cal.App.4th 1011, 1026, original italics.)  Although the fee-splitting agreement was not considered by the Capelouto court, Mark has alleged no facts demonstrating that he lacked “a fair opportunity” to bring the fee-splitting agreement to the court’s attention when it considered the attorneys’ fee requests.  As noted above, Mark’s ignorance of rule 3.769(b) provides no excuse for his failure to comply with its requirements. 

                        Second, the fee-splitting agreement is not an issue separate from the matters considered by the Capelouto when it made its attorney fee award.  Specifically, courts may not rely solely on a fee distribution agreement to allocate fees between class counsel.  Instead, “an award of attorney fees in class action litigation must be tied to counsel’s actual efforts to benefit the class.”  (Rebney, supra, 220 Cal.App.3d at p. 1142.)  True, fee distribution agreements between counsel need not “‘follow, line by line, the lodestar formula in arriving at an agreement as to fee distribution.’”  (Ibid.)  But “‘the distribution of fees must bear some relationship to the services rendered.’”  (Id. at p. 1143, original italics.)

                        In re Vitamin Cases (2003) 110 Cal.App.4th 1041, illustrates this point.  There, the appellate court reversed a class counsel fee award in part because the trial court failed to consider a term in the settlement agreement providing that “each plaintiff’s counsel’s ‘share of the overall fee award . . . [shall] be determined by the [liaison counsel] in consultation with the Plaintiffs’ Executive committee. . . .’”  (Id. at p. 1056, fn. 10.)  The court explained:  “To be sure, one case has suggested that, in some situations, it might be appropriate to distribute fees a manner that varies from the way in which the fees were calculated.  [Citation.]  However, here, the fact that co-liaison counsel intends to distribute the attorney fees award to the law firms in a manner independent of the loadstar underscores the very concerns we have regarding the value of the services of all of the attorneys and law firms who were involved in these actions.  These issues should be resolved by the trial court before an award of attorney fees, rather than by co-liaison counsel afterwards.”  (Id. at p. 1056, original italics.)  Accordingly, a court may not base its allocation of attorney fees between Mark and Spencer solely on the fee-splitting agreement, but must fully consider the attorneys’ actual efforts to benefit the class members. 

                        The relative entitlement of Mark and Spencer to attorney fees was fully considered and finally determined by the court in the Capelouto action.  For example, at the hearing on the fee petition, the court noted to Spencer:  “I felt Mr. Mark’s records were somewhat short of the mark, and I concluded that perhaps his work on the case was not as significant or valuable as yours and that some of the work that he did on the case might not justify that portion of the claim.  [¶]  I had [little] or virtually no concern about your claim in terms of the hours and the work.  In fact, I think this was a good result on a difficult case.  [¶]  But I do have that concern, and I think it would be reflective when I finally put the final touch on this as a concern for Mr. Mark’s records and Mr. Mark’s work on the case and also the justification for these enhancements.”  Based on the court’s consideration of the attorneys’ respective declarations and its own observations of their efforts in the case, it concluded Spencer was entitled to $401,275.43 and Mark was entitled to $76,470.  

                        “[R]es judicata does not merely bar relitigation of identical claims or causes of action.  Instead, in its collateral estoppel aspect, the doctrine may also preclude a party to prior litigation from redisputing issues therein decided against him, even when those issues bear on different claims raised in a later case.”  (Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 828, second italics added.)  Because the trial court in the Capelouto action fully and finally determined the attorneys’ respective entitlement to attorney fees, the court in the present action correctly concluded the doctrine of res judicata barred Mark’s first amended complaint.

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