Procedural Posture
Plaintiff stockholders sought review of the decision of the Superior Court of Los Angeles County, which held that plaintiff's claim against defendants, corporation and director, was barred by the doctrine of res judicata based on the previous dismissal with prejudice of similar charges by a Nevada court.
Overview:
prejudgment interest california
Plaintiff stockholders alleged that defendant director had fraudulently breached a contract with defendant corporation under which he was to hold property in trust for it and supply funds to assist in the financing of the construction of a hotel in Las Vegas, Nevada. Defendant raised the defense of res judicata by reason of a judgment by a Nevada court. The Nevada court dismissed the cause of action, which made substantially similar charges, with prejudice. The court found that the trial court was justified in concluding that defendant corporation's attorney had authority to commence the earlier action in Nevada court and to dismiss it with prejudice. The court stated that a presumption existed that an attorney had authority to compromise his client's action, which he was prosecuting. The court also stated that a domestic judgment could not be impeached collaterally on the ground that a regularly licensed attorney appearing as such for a party to an action had no authority to act on his behalf. The court affirmed the dismissal on the basis of res judicata.
Outcome
The court affirmed the judgment of the trial court dismissing plaintiff stockholder's claim against defendants, corporation and director, on the premise of res judicata based on the prior dismissal with prejudice of similar claims by a previous court, finding that defendant corporation's attorney had the authority to bring the previous action and dismiss it.
