First Appellate District Division one court of appeal reverses family law order based on federal de novo renew standard.

http://www.courts.ca.gov/opinions/nonpub/A138733.PDF

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION ONE
In re the Marriage of LAURA WELLMAN
and ROBERT ZIINO.
LAURA WELLMAN,
Appellant,
v.
ROBERT ZIINO,
Respondent.
A138733
(Humboldt County
Super. Ct. No. FL020280)
ROBERT ZIINO,
Respondent,
v.
LAURA WELLMAN,
Appellant;
HUMBOLDT COUNTY DEPARTMENT
OF CHILD SUPPORT,
Real Party in Interest.
A139887
(Humboldt County
Super. Ct. No. DR090139)

Robert Ziino seeks to enforce a judgment against Laura Wellman as if it were a
judgment entirely for child support. Ziino contends this characterization of the judgment
was settled in earlier proceedings and Wellman is precluded by res judicata from arguing
otherwise. The family court agreed with Ziino. We view the earlier proceedings
differently and therefore reverse.
2
I. BACKGROUND
Ziino and Wellman were last before this court in 2012. (See Ziino v. Wellman
(May 4, 2012, A131473) [nonpub. opn.].) As we related then, these two lived together
from 1994 through 2002. Although never married, they were romantically involved and
had a child. In 2001, as the two were unwinding their relationship, Wellman gave Ziino
two due-on-demand promissory notes. The notes obligated Wellman to pay Ziino a total
of $800,000 (one note was for $300,000 and the other for $500,000) on a future due date
of Ziino’s choosing, or if Wellman should happen to file for bankruptcy. The notes came
due in short order when Wellman filed for bankruptcy in 2002. (Ibid.)
Our earlier decision addressed whether Ziino could enforce the notes against
Wellman. We agreed with the trial court that an April 2007 bankruptcy court order
allowing Ziino’s creditor’s claim based on the notes was res judicata and established the
notes could be enforced in a breach of contract action. We therefore affirmed the trial
court’s money judgment, in civil case No. DR090139, in favor of Ziino on the notes.
(Ziino v. Wellman, supra, A131473.) Although the purpose of the notes was immaterial
to our decision, we related Ziino’s position that “they were compensation for child
support he would provide and implemented a negotiated division of property.” (Ibid.)
Subsequently, in the parties’ long-running family court matter, case
No. FL020280, Ziino asked the Humboldt County Department of Child Support Services
(Department) to enforce the money judgment in case No. DR090139 as a child support
order.1 In July 2012, the Department filed a notice it was receiving an assignment of
child support and would become the substitute payee.
Wellman perceived the Department’s notice as attributing the entire money
judgment in case No. DR090139 to child support, but believed no determination
regarding child support had ever been made. While the notes, she asserted, were indeed
1 The same judge presided over the family and civil proceedings.
3
given in part for child support, they were also given for property division, and no court
had apportioned the sums due under the notes amongst these two purposes. Concerned
about being burdened with not merely a significant judgment, but one for child support,2
Wellman requested an order from the family court determining child support arrears and
child support.
Ziino and the Department responded that the money judgment was entirely for
support, as the judgment itself stated it was “for child support as set forth in the findings
and final judgment of the Bankruptcy Court.”
The family court, speaking at the hearing on Wellman’s request, stated any issue
of apportionment “should have been litigated a long time ago in the bankruptcy court.” It
further believed the statement in the money judgment that the judgment was “for child
support” was conclusive, could have been challenged on appeal, but had not been. The
court declined to perform any apportionment and filed its order denying Wellman’s
request on March 7, 2013, stating simply “[t]he Judgment in DR090139 is confirmed as
the child support judgment.” Wellman filed a timely notice of appeal of this order (case
No. A138733).
The trial court, in the civil case No. DR090139 then issued, on July 25, 2013, an
order requiring Wellman to pay certain monthly sums toward her child support
arrearages, proceeding as though the entire judgment in case No. DR090139 was for
child support. Wellman also timely appealed this later order (case No. A139887). The
appeals have been consolidated for our review.3
2 Wellman articulates a number of serious consequences of having an unpaid
child support judgment, as opposed to an ordinary judgment. Ziino does not dispute a
child support judgment is more onerous.
3 Ziino does not dispute Wellman’s assertion that the family court’s orders
relating to child support arrears are appealable. (See In re Marriage of Brinkman (2003)
111 Cal.App.4th 1281, 1287 [“ ‘[P]ost-judgment orders relating to child support arrears
are [directly appealable].’ ”].)
4
II. DISCUSSION
On appeal, Wellman asserts no court has ever determined the promissory notes, or
the judgment on them, were solely for child support. Ziino4 does not contend the state
trial court itself (in either the family or civil proceeding) made such a ruling, and we see
nothing in the record showing it did.5 Instead, Ziino argues the bankruptcy court
proceedings were the proper forum to raise the issue of apportionment of the notes
between child support and property division, and Wellman’s failure to raise the issue in
that forum precluded further litigation of the matter under principles of res judicata.
In furtherance of judicial comity, federal law governs the preclusive effect of
federal bankruptcy court orders.6 (Nathanson v. Hecker (2002) 99 Cal.App.4th 1158,
1163; Taylor v. Sturgell (2008) 553 U.S. 880, 891 (Taylor).) “The preclusive effect of a
judgment is defined by claim preclusion and issue preclusion, which are collectively
referred to as ‘res judicata.’ ” (Taylor, supra, 553 U.S. at p. 892.) With “claim
preclusion, a final judgment forecloses ‘successive litigation of the very same claim,
whether or not relitigation of the claim raises the same issues as the earlier suit.’
[Citation.] Issue preclusion, in contrast, bars ‘successive litigation of an issue of fact or
4 As noted, the Department participated in the family court proceedings. It has
not, however, participated on appeal. Only Ziino defends the trial court judgment.
5 To the contrary, in the civil case, the trial court manifestly granted summary
judgment based on res judicata and had no need to assess the purpose of the notes.
Moreover, Ziino’s statement of undisputed facts and the trial court’s order granting
summary judgment both stated the notes were given “in consideration for child support
and property division.” (Italics added.) The judgment entered following summary
judgment merely stated the judgment was one “for child support as set forth in the
findings and final judgment of the bankruptcy court.” (Italics added.) This statement
answers no questions, simply pointing us back to the bankruptcy court proceedings,
which we shall discuss. Based on all this, it is unsurprising the issue of the notes’
purpose never arose during the parties’ previous appeal.
6 The parties all proceed as if California law applies. It does not, but it may
nonetheless inform our analysis under federal law as appropriate, to the extent California
and federal legal standards do not diverge.
5
law actually litigated and resolved in a valid court determination essential to the prior
judgment,’ even if the issue recurs in the context of a different claim.” (Ibid.) “[T]hese
two doctrines protect against ‘the expense and vexation attending multiple lawsuits,
conserv[e] judicial resources, and foste[r] reliance on judicial action by minimizing the
possibility of inconsistent decisions.’ ” (Ibid.; accord, DKN Holdings LLC v. Faerber
(2014) 225 Cal.App.4th 1115, 1121–1122.) Where, as here, preclusion hinges on
interpretation of records in court proceedings and there are no disputed material facts, our
review is de novo. (Littlejohn v. United States (9th Cir. 2003) 321 F.3d 915, 919; accord,
Roos v. Red (2005) 130 Cal.App.4th 870, 878.)
Claim preclusion is inapplicable here—indeed, it does not even appear that Ziino
meaningfully asserts it, as he does not address what “claims” are at issue, let alone how
they are the “very same” (Taylor, supra, 553 U.S. at p. 892). As best we can determine,
Ziino, in the bankruptcy court, pursued a creditor’s claim against Wellman for the value
of the promissory notes, regardless of the notes’ purpose. In the family court, Ziino,
through the Department, sought an order to have those concededly enforceable notes and
the related civil court judgment deemed, and enforced as, a child support obligation. The
two proceedings and claims are fundamentally different.
Under federal law, four factors guide us in assessing whether a later claim is the
same as an earlier one. We ask “(1) whether rights or interests established in the prior
judgment would be destroyed or impaired by prosecution of the second action;
(2) whether substantially the same evidence is presented in the two actions; (3) whether
the two suits involve infringement of the same right; and (4) whether the two suits arise
out of the same transactional nucleus of facts.” (Turtle Island Restoration Network v.
U.S. Dept. of State (9th Cir. 2012) 673 F.3d 914, 918.)7 Here, (1) apportionment of the
7 Although the final factor has been viewed “most important,” no “single criterion
can decide every res judicata question; identity of causes of action ‘cannot be determined
6
notes in the family court will not undermine the bankruptcy court’s determination of the
notes’ validity; (2) no evidence of apportionment was presented in the bankruptcy court;
(3) the right to collect on a debt and the right to have a debt, or portion thereof, deemed
as child support are significantly different; and (4) although both the family court and
bankruptcy proceedings concern the promissory notes, the bankruptcy proceeding did not
arise from a dispute regarding apportionment of the notes or the amount of a child
support obligation. (See Blalock Eddy Ranch v. MCI Telecommunications Corp. (9th Cir.
1992) 982 F.2d 371, 378 [prior suit rejecting MCI’s rights to ranch land under an
easement theory did not preclude MCI from bringing a later proceeding against ranch for
eminent domain to obtain the equivalent land rights]; Andersen v. Chrysler Corp. (7th
Cir. 1996) 99 F.3d 846, 852–853 [noting importance of examining the similarity of
claims at a “sufficient level of specificity”]; accord, Boblitt v. Boblitt (2010)
190 Cal.App.4th 603, 612–613 [although same incident of domestic violence may be
relevant to spousal support claim and various civil tort claims, family law rights and tort
rights do not vindicate the same rights, and there was no claim preclusion]; In re
Marriage of Newman (2000) 80 Cal.App.4th 846, 851 [an out-of-state “decree is entitled
to full faith and credit, and has res judicata effect, on the sole issue it determined:
dissolution of the marriage. It does not, and does not purport to determine the issue of
spousal support.”].)8
Issue preclusion is also inapplicable. “Under this doctrine, a party is precluded
from relitigating an issue if four requirements are met: (1) there was a full and fair
precisely by mechanistic application of a simple test.’ ” (Costantini v. Trans World
Airlines (9th Cir. 1982) 681 F.2d 1199, 1202 & fn. 7.)
8 Takahashi v. Board of Education (1988) 202 Cal.App.3d 1464, which Ziino
cites, is inapposite. There, both the first and later proceedings concerned whether the
plaintiff had been wrongfully terminated in violation of her contractual right to
employment. (Id. at pp. 1468–1473, 1476.) In addition, the case involves California
claim preclusion law, not federal law.
7
opportunity to litigate the issue in the previous action; (2) the issue was actually litigated;
(3) there was final judgment on the merits; and (4) the person against whom [issue
preclusion or] collateral estoppel is asserted was a party to or in privity with a party in the
previous action.” (Wolfson v. Brammer (9th Cir. 2010) 616 F.3d 1045, 1064; accord,
People v. Garcia (2006) 39 Cal.4th 1070, 1077 [enumerating similar factors under
California law].)
Reviewing the bankruptcy court orders in the appellate record, the parties did not
actually litigate, and the court did not decide, the question of apportionment Wellman
sought to have determined in the family court.9
What happened is this: After Wellman’s bankruptcy was underway, Ziino filed an
adversary proceeding to block Wellman’s discharge under title 11 United States Code
section 727(a)(4),10 because she failed to inform the court of her interest in her parents’
trust fund, and to have the debt due under the notes deemed nondischargeable under
former title 11 United States Code sections 523(a)(5) and (a)(15), governing debts to
spouses and former spouses. Following Wellman’s stipulation, the bankruptcy court
entered an order denying Wellman’s discharge based on her nondisclosure under title 11
United States Codes section 727(a)(4). It also ruled, however, Ziino could not establish
the debt due under the notes came within former title 11 United States Code
sections 523(a)(5) or (a)(15), as notably Ziino and Wellman were not spouses.
9 Ziino’s contentions regarding what Wellman previously argued to the
bankruptcy court, without relating those arguments to what the court decided, are
irrelevant. In any case, Wellman, in her arguments to that court, never conceded the
promissory notes were solely for child support. Rather, she repeated Ziino’s contention
the notes were for both division of property and child support. She also argued to the
extent Ziino claimed the notes were given in exchange for child support, that support,
already required by law, could not have been valid consideration for the notes.
10 This section states a court “shall grant the debtor a discharge, unless [¶] . . .
[¶] (4) the debtor knowingly or fraudulently in connection with the case [¶] (A) made a
false oath or account.” (11 U.S.C. § 727(a)(4).)
8
Ziino also filed his creditor’s claim for $800,000 based on the notes, asserting they
were given for “support” and “property division.” Wellman opposed the claim and in
2005 moved for summary judgment. She did not dispute the amount of Ziino’s claim.11
She argued, however, the notes were unsupported by consideration and were not lawful
agreements as to child support or settlement of property division between non-spouses.
The bankruptcy court denied Wellman’s motion. Later, in 2007, Ziino moved for
summary judgment on his creditor’s claim and in April 2007, the bankruptcy court
allowed it.
In its order granting Ziino summary judgment, the bankruptcy court noted “[i]t is
undisputed that the notes are for child support and property division” and concluded, in
the next sentence, “[t]here is clearly consideration supporting the obligations evidenced
by th[e] notes.” It then quoted at length from its 2005 order denying Wellman’s
summary judgment motion, in which it concluded “ ‘a private agreement which does
provide for sufficient support is binding and enforceable.’ ” It then rejected Wellman’s
other asserted defenses, such as inducement, duress, and diminished capacity to contract.
The order made no apportionment of the sums due under the notes between child
support and property division. For instance, the bankruptcy court did not determine the
notes could not have been given, in part, for settlement of division of property. Nor, on
the flip side, did the bankruptcy court worry whether the entire $800,000 sum could have
been in exchange for, and fully demanded for, child support. In fact, it does not appear to
have been necessary for the bankruptcy court to make any apportionment when it allowed
Ziino’s claim, as it was satisfied there was valid consideration “supporting the obligations
evidenced by th[e] notes.” Notably, Ziino does not argue the bankruptcy court performed
11 Ziino argues if the amount of a claim could be contested during the bankruptcy
(see 11 U.S.C. § 502(b)), then Wellman had to bring the apportionment issue then. Not
so. Faced with notes totaling $800,000, the absence of a contest regarding amount is
unsurprising. Moreover, the lack of such a contest does not mean Wellman conceded the
total amount was for any specific purpose.
9
an apportionment, or even had to perform one, to find consideration for the notes, to
allow his claim, or for any other reason.12 (Cf. American Special Risk Ins. Co. v. City of
Centerline (E.D. Mich., June 24, 2002, 97-CV-728974-DT) 2002 WL 1480821, at p. *7
[denying issue preclusion because “the allocation issue before this Court was not actually
litigated in the Westchester action,” where the prior court merely assumed one party
should bear 100 percent of costs].)
Finally, when the Ninth Circuit’s Bankruptcy Appellate Panel affirmed the
bankruptcy court’s claim allowance, it too noted the dual purpose of the notes and
affirmed the bankruptcy court’s conclusion there had been consideration for them.13
In sum, neither aspect of res judicata precludes litigation of the apportionment
issue in the family court case below.14
III. DISPOSITION
Neither the judgment in case No. DR090139, nor the bankruptcy court proceeding,
preclude litigation of apportionment. The order confirming the judgment in case
No. DR090139 as entirely one for child support judgment is vacated. So is the
12 Nor has Ziino argued there are other decisions from the bankruptcy case that
would support his position that an apportionment actually or necessarily occurred.
13 We express no position on whether the bankruptcy court’s ruling, or that of the
appellate panel, was correct or erroneous in any respect.
14 Because we reach this conclusion, we need not and do not address the potential
effect of a recent Florida trial court decision, in a related case, that also concluded no
court has yet reached the apportionment issue. We note it is not clear whether that
decision has been or will be appealed. Nor have the parties addressed the effect of an
appeal of that decision.
We therefore deny Wellman’s related request for judicial notice, filed
February 25, 2014, because the additional Florida court decision it seeks to have us
review is not relevant to our analysis. (See Zelig v. County of Los Angeles (2002)
27 Cal.4th 1112, 1141, fn. 6 [denying request for judicial notice of irrelevant materials].)
10
later order requiring payment of child support arrears. The matter is remanded for further
proceedings on apportionment. Costs to appellant.
_________________________
Banke, J.
We concur:
_________________________
Dondero, P. J.
_________________________
Becton, J.

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