BERKIC v. MOSS MGM UA

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Court of Appeal, Second District, Division 2, California.

Ted BERKIC, Plaintiff and Appellant, v. Marvin MOSS, MGM/UA Entertainment Co., and Michael Crichton, Defendants and Respondents.

Civ. 70049.

Decided: July 20, 1984

David C. Byers, Los Angeles, for plaintiff and appellant. Silverberg, Rosen, Leon & Behr, a Partnership Including Professional Corporations Ronald S. Rosen, Marsha E. Diedrich, Los Angeles, for defendant and respondent Marvin Moss. Edward A. Ruttenberg, Youngman, Hungate & Leopold, A Professional Corp. by Edward A. Ruttenberg, Los Angeles, for defendants and respondents MGM/UA Entertainment Co. and Michael Crichton.

Plaintiff Ted Berkic instituted this action against defendants Moss, et al. to recover damages purportedly arising out of the misappropriation of his unpublished screenplay entitled “Reincarnation, Inc.”   The complaint generally avers that plaintiff's screenplay served as the basis for defendants' book and motion picture, both entitled “Coma”.

Plaintiff's numerous amended complaints variously asserted claims for plagiarism, breach of implied contract, breach of confidence, unfair competition, interference with prospective economic advantage, constructive trust and accounting.

During the course of this litigation, defendants demurred to plaintiff's various causes of action on the grounds that they were time barred by the statute of limitations.   Each of the demurrers were eventually sustained without leave to amend.

On appeal, plaintiff specifically claims that the trial court erred in dismissing his actions for plagiarism, unfair competition, breach of implied contract, and fraud.1

Before notice of appeal to this court was filed, and indeed, before the action below was finally dismissed, plaintiff, on March 3, 1983, filed a complaint in the United States District Court for the Central District of California against the same defendants present in this action.   Plaintiff's claims in the district court were for copyright infringement under the 1976 Copyright Act, 17 U.S.C. sections 101, et seq. and unfair competition under the Lanham Act, 15 U.S.C. section 1125(a).   The district court issued an order granting defendants' motion to dismiss plaintiff's Lanham Act claim for failure to state a cause of action on July 1, 1983, and for summary judgment in favor of defendants upon the copyright infringement claim on December 21, 1983.   A judgment of dismissal was subsequently entered.   In its findings of fact and conclusions of law, the district court found, after applying both “extrinsic” and “intrinsic” tests (see Sid & Marty Krofft Television v. McDonald's Corp. (9th Cir.1977) 562 F.2d 1157;  Jason v. Fonda (C.D.Cal.1981) 526 F.Supp. 774, aff'd (9th Cir.1982) 698 F.2d 966) that there was no substantial similarity between plaintiff's and defendants' work.   Plaintiff appealed from the judgment dismissing the action and that appeal is still pending in federal court.

Plaintiff's notice of appeal to this court was filed April 29, 1983.   The district court's judgment was entered December 21, 1983.   Consequently, judicial notice could not have been taken by the trial court.   On March 8, 1984, this court ordered the parties to submit briefs concerning the possible res judicata or collateral estoppel effect of the federal court judgment upon the instant appeal.2

Under Evidence Code section 459, a reviewing court may, at its discretion, take judicial notice of any matter specified in Evidence Code section 452.   (See People v. Preslie (1977) 70 Cal.App.3d 486, 492, 138 Cal.Rptr. 828;  Smith v. Hatch (1969) 271 Cal.App.2d 39, 49, 76 Cal.Rptr. 350;  Flores v. Arroyo (1961) 56 Cal.2d 492, 496, 15 Cal.Rptr. 87, 364 P.2d 263;  Witkin, Cal.Evidence (2d ed. 1966) Judicial Notice, pp. 148, 170–1.)

Evidence Code section 452 provides in pertinent part:  “Judicial notice may be taken of ․ (d) Records of ․ (2) any court of record of the United States ․ (e) Rules of court of ․ (2) any court of record of the United States.”

 In determining the propriety of taking judicial notice of a matter, the reviewing court has the same power as the trial court under Evidence Code section 454 (Evid.Code, § 459(b)).  (See Jordan v. County of Los Angeles (1968) 267 Cal.App.2d 794, 798, 73 Cal.Rptr. 516;  City of Anaheim v. Workers' Comp. Appeals Bd. (1981) 116 Cal.App.3d 248, 172 Cal.Rptr. 92.)

Evidence Code section 454(a)(1), (2) provides in pertinent part:  “(1) Any source of pertinent information, ․ may be consulted or used, whether or not furnished by a party.  (2) Exclusionary rules of evidence do not apply ․”

 This court, having requested and received all parties' briefs concerning the issue of the effect of the federal court judgment on the present appeal, has afforded the parties “reasonable opportunity to meet such information before judicial notice of the matter ․” has been taken.   (Evid.Code, § 459(d).3  (See Swaffield v. Universal Ecsco Corp. (1969) 271 Cal.App.2d 147, 76 Cal.Rptr. 680.)

As was stated above, the federal court judgment was not entered until after the present appeal was filed.

In Palm Springs Paint Co. v. Arenas (1966) 242 Cal.App.2d 682, 51 Cal.Rptr. 747, the reviewing court took judicial notice of a federal district court judgment where that judgment was entered after the state trial proceedings had concluded and during the pendancy of the state appeal.   There, the court stated:  “Although normally the res judicata effect of a prior judgment must be pleaded or evidence thereof presented to the trial court, where a judgment becomes final while an appeal from a judgment in another action presenting the same issue between the same parties is pending, the first final judgment may be brought to the attention of the appellate court in which the appeal is pending and may be there relied upon as res judicata.”  (Id. at p. 688, 51 Cal.Rptr. 747.)

 As previously noted, the district court judgment granting defendant's motion for summary judgment on the issue of copyright infringement was entered December 21, 1983.   A judgment of dismissal entered subsequent to the order granting summary judgment is “on the merits” for the purposes of res judicata.  (Moore's Federal Practice (1983) (2d ed., vol. 1B) ¶ 0.409 [1.–2], p. 307.)   In federal district court, a judgment is effective upon entry in compliance with federal Rules 58 and 79 (Op.Cit., supra, ¶ 0.409 [1.–1], pp. 301, 305.)

 Plaintiff's notice of appeal was filed on or about March 19, 1984, in the United States Court of Appeals for the Ninth Judicial Circuit.   The effect of a final judgment as res judicata is not affected by the fact that, under the federal rules, a party may, or is in the process of appealing the judgment.   (Moore's Federal Practice, at p. 306;  Hunt v. Liberty Lobby, Inc. (D.C.Cir.1983) 707 F.2d 1493, 1497;  see also Mattson v. City of Costa Mesa (1980) 106 Cal.App.3d 441, 447, fn. 2, 164 Cal.Rptr. 913.)

 Full faith and credit must be given to the judgment of a federal court by the courts of this state.  (Levy v. Cohen (1977) 19 Cal.3d 165, 172, 137 Cal.Rptr. 162, 561 P.2d 252;  Code Civ.Proc. § 1908.)

The California Supreme Court has aptly summarized and stated the law concerning the interrelationship between prior federal judgments and pending state appeals in Calhoun v. Franchise Tax Bd. (1978) 20 Cal.3d 881, 143 Cal.Rptr. 692, 574 P.2d 763, “We note that an appeal from the federal judgment is now pending in the Ninth Circuit Court of Appeals.   The federal rule is that ‘a judgment or order, once rendered, is final for purposes of res judicata until reversed on appeal or modified or set aside in the court of rendition.’  ․   A federal judgment is as final in California courts as it would be in federal courts ․”  (Id. at 887, 143 Cal.Rptr. 692, 574 P.2d 763.)

The Court of Appeal in Merry v. Coast Community College Dist. (1979) 97 Cal.App.3d 214, 158 Cal.Rptr. 603, held that a prior federal court judgment must be given the same effect by state courts that it would have in federal court.  (Id. at p. 222, 158 Cal.Rptr. 603.)

The Restatement Second of Judgments suggests that, in certain instances, it may be advisable for a court considering the application of the effects of res judicata to stay its own proceeding pending the ultimate disposition of the judgment being appealed (in this instance, the federal district court's judgment).   However, the Restatement commends this alternative only where “the disposition will not be long delayed” and where “there is substantial doubt whether the judgment will be upheld.”  (Rest.2d Judgments, § 16, com. b. pp. 146–7.)

 In the interests of justice, we decline to stay this appeal pending the outcome of plaintiff's appeal in federal court.   The state proceedings are already protracted, and there appears to be no substantial doubt that the district court's judgment will be affirmed by the Ninth Circuit.

We will now examine the effect of the federal district court's judgment for the purpose of applying res judicata as to plaintiff's claims in the instant appeal.

Plaintiff, pointing to the case of Teitelbaum Furs, Inc. v. Dominion Ins. Co., Ltd. (1962) 58 Cal.2d 601, 604, 25 Cal.Rptr. 559, 375 P.2d 439, vigorously asserts that he is not collaterally estopped by the federal court judgment as the issues decided in that forum are not identical to those presently before us.   In doing so, however, he places the cart before the horse.   The court in Teitelbaum, supra, initiated its discussion of collateral estoppel by stating:  “The doctrine of res judicata has a double aspect:  (1) it ‘precludes parties or their privies from relitigating a cause of action that has been finally determined by a court of competent jurisdiction.’  (2) ‘Any issue necessarily decided in such litigation is conclusively determined as to parties or their privies if it is involved in a subsequent lawsuit on a different cause of action.’ ”  (Id at p. 604, 25 Cal.Rptr. 559, 375 P.2d 439;  see also Bernhard v. Bank of America (1942) 19 Cal.2d 807, 810, 122 P.2d 892;  Henn v. Henn (1980) 26 Cal.3d 323, 329–333, 161 Cal.Rptr. 502, 605 P.2d 10.)   A discussion of Teitelbaum' s first premise must precede any explication of the second.

Reading Teitelbaum in conjunction with the following authority, it has been well established that the application of the effect of res judicata requires the satisfaction of four elements.   There must be (1) a final judgment, (2) on the merits, (3) between the same parties, and (4) upon the same cause of action.  (Olwell v. Hopkins (1946) 28 Cal.2d 147, 152, 168 P.2d 972;  Chicot County Dist. v. Bank (1940) 308 U.S. 371, 378, 60 S.Ct. 317, 320, 84 L.Ed. 329;  see also Agarwal v. Johnson (1979) 25 Cal.3d 932, 160 Cal.Rptr. 141, 603 P.2d 58;  Slater v. Blackwood (1975) 15 Cal.3d 791, 795, 126 Cal.Rptr. 225, 543 P.2d 593.)

 Once all of the above elements are met, res judicata serves as a bar both to issues that were raised as well as to issues which might have been raised and litigated in the first action.  (Olwell v. Hopkins, supra, 28 Cal.2d at p. 152, 168 P.2d 972;  Merry v. Coast Community College Dist., supra, 97 Cal.App.3d at pp. 222, 224–25, 158 Cal.Rptr. 603.)   Most importantly, it precludes litigation of the same cause of action on a different legal theory or for different relief.  (Mattson, supra, 106 Cal.App.3d at p. 446, 164 Cal.Rptr. 913.)   Since we have already determined that there has been a final judgment on the merits between the same parties, we turn next to a discussion of the term “cause of action” and its relation to the principle of res judicata.

 The way in which a court defines a “cause of action” has significant impact upon the application of the effects of res judicata.   California follows Pomeroy's “primary right theory” 4 (3 Witkin, Cal.Procedure (2d ed. 1971) Pleading, § 22(a), p. 1707;  Panos v. Great Western Pack. Co. (1943) 21 Cal.2d 636, 638, 134 P.2d 242) and its construction of the concept of a cause of action, while the federal courts follow the transactional view of claims espoused by Judge Clark.5  (Rest.2d Judgments, § 24, com. a, p. 196;  Moore's Federal Practice ¶ 0.410 [1], p. 359–60;  Civil Procedure, Fleming James, Jr., § 11.10, p. 553.)

 We wish to note that logic and commentary 6 would dictate that we take a transactional approach in determining the res judicata effect of the federal court judgment upon the present appeal, especially in light of language from several of our own courts mandating that federal judgments be given the same effect by state courts that they would be in federal courts.  (Calhoun, supra, 20 Cal.3d at 887, 143 Cal.Rptr. 692, 574 P.2d 763;  Martin v. Martin (1970), 2 Cal.3d 752, 761, 87 Cal.Rptr. 526, 470 P.2d 662;  Merry, supra, 97 Cal.App.3d at 222, 158 Cal.Rptr. 603.)   The Supreme Court of California as well as the Courts of Appeal, however, when confronted with situations similar to those in the instant appeal, have consistently applied the Pomeroy theory.   (Agarwal v. Johnson (1979) 25 Cal.3d 932, 160 Cal.Rptr. 141, 603 P.2d 58;  Boccardo v. Safeway Stores, Inc. (1982) 134 Cal.App.3d 1037, 184 Cal.Rptr. 903;  Mattson, supra;  Merry, supra.)   The doctrine of stare decisis, therefore compels us to apply Pomeroy.   One commentator, however, has stated “it is not at all clear that [application of either the Pomeroy or the Clark theory] will necessarily compel differences in result ․”  (Fleming James, Jr., Civil Procedure, § 11.10, p. 554.) 7

Professor Witkin has remarked upon the flexibility of the term “cause of action” under California law (Witkin, Cal.Procedure, § 49, p. 1708) while the court in Merry, supra, commented upon its “abstract and elastic” nature as follows “ ‘The concept of ‘cause of action’ may thus be enlarged or narrowed in proportion to the breadth of the particular court's concept of ‘primary right.’ ' ”  (Merry v. Coast Community College Dist., supra, 97 Cal.App.3d at p. 227, fn. 9, 158 Cal.Rptr. 603.)

Two illustrations of this court's expansive view of the concept of cause of action under the primary rights theory are found in Tooke v. Allen (1948) 85 Cal.App.2d 230, 192 P.2d 804 and Mattson v. City of Costa Mesa, supra.

In Tooke v. Allen, supra, plaintiff sued for damages for wrongful eviction from her apartment alleging a series of acts by defendant landlord including interference with the use of her telephone, seizing plaintiff's personal property, locking her out and personal assaults.   Defendant demurred for misjoinder of causes and lack of separate statement, contending that plaintiff should have pleaded separate causes of action.   It was held that a single cause of action was stated, “not for injuries to either person or property in a strict sense, but for interference with her right of peaceful possession.   Interference with a property right is of the essence of such a cause of action and interference with personal rights would not be an unusual consequence, but proof of one or the other, or both would not change the basic nature of the cause of action.”  (Id. 85 Cal.App.2d at 236, 192 P.2d 804.)

In Mattson v. City of Costa Mesa, supra, a state negligence action against a municipality and two police officers, and a federal civil rights action against the same defendants was held to have constituted a single cause of action for the purposes of res judicata where both law suits were based on plaintiff's right to be free from personal injury, from unreasonable arrest, and from invasion of his interest in personal property.  (Id. 106 Cal.App.3d at 447, 164 Cal.Rptr. 913.)

Although the ephemeral nature of the definition of causes of action in relation to the “primary rights” theory has been remarked upon by several courts (see e.g., Mattson, supra, at p. 447, 164 Cal.Rptr. 913;  Merry, supra, 97 Cal.App.3d at p. 227, fn. 9, 158 Cal.Rptr. 603;  City of Los Angeles v. Superior Court (Levy) (1978) 85 Cal.App.3d 143, 153, 149 Cal.Rptr. 320), particularly with regard to determining its effect for the purposes of res judicata, the California Supreme Court has stated that, “The significant factor is the harm suffered.”  (Agarwal, supra, 25 Cal.3d at p. 954, 160 Cal.Rptr. 141, 603 P.2d 58.   This point was emphasized in Mattson, supra, “The singlemost determinative factor is the substantive right of the plaintiff allegedly violated, the harm suffered.  (Id. 106 Cal.App.3d at p. 447, 164 Cal.Rptr. 913;  see also City of Los Angeles, supra, 85 Cal.App.3d at p. 153, 149 Cal.Rptr. 320;  Boccardo, supra, 134 Cal.App.3d at p. 1043, 184 Cal.Rptr. 903.)

In the case at bench plaintiff appeals from demurrers sustained in favor of defendants regarding his claims for (1) plagiarism, (2) unfair competition, (3) breach of implied contract, and (4) fraud.   As to the first three of these claims, the following basic operative facts were alleged.

Plaintiff brought his original unpublished screenplay, entitled “Reincarnation, Inc.” to defendant Moss, a licensed agent, who agreed to represent plaintiff in the sale of the screenplay.   Defendant Moss provided access to the screenplay to defendants Cook, Signet New American Library,8 Crichton and MGM/VA Entertainment Company who in turn copied plaintiff's work in creating their respective works, “Coma,” the book and the film.   Plaintiff was thereafter unable to market his work.   The fourth claim for fraud and deceit added the allegation that defendant Moss had informed plaintiff that his screenplay could not be sold in its current form and suggested to plaintiff that he collaborate with defendant Crichton.   Plaintiff refused such suggestion.   Later, defendant Moss informed plaintiff that he was unable to locate the copy of plaintiff's screenplay given to him by plaintiff and was, therefore, unable to return it.

While the above claims rest upon various legal theories for the purpose of determining the res judicata effect of the district court's judgment upon the state court action we find that they arise from plaintiff's single primary right to be free from an invasion of his interest in personal property.   Indeed, plaintiff argues as much in his brief:  He asserts:  “The basis for plaintiff's other state causes of action are that defendants met without plaintiff and, after making pertinent representations to him, took possession of his product and the plaintiff's secrets contained therein.   Thereafter, they unfairly made use of and resorted to elements of plaintiff's work without his knowledge or consent, and/or dealt with his work in a way that was not revealed to him, ․ and about which he's affirmatively misled and defrauded, thereby damaging him and destroying the value of his work.”

 It is therefore clear that the whole of the damage complained of by plaintiff flows from the misappropriation of his property by defendants.   That property is embodied either in the ideas contained in his screenplay or the screenplay itself.   In essence, plaintiff has stated that but for defendants' actions and the release and exploitation of their book and film, plaintiff's work would be marketable.   Therein lies the harm to plaintiff and the harm, as was stated above, is the determinative factor in the court's evaluation of what comprises a cause of action under California's primary rights theory.   The findings of the district court, however, preclude any notion that defendants have, in any way, affected the marketability of plaintiff's work.

 In finding that plaintiff's and defendants' works were substantially dissimilar, the district court applied the “extrinsic” and “intrinsic” tests enumerated in Sid & Marty Krofft Television v. McDonald's Corp., supra.   The extrinsic test is one which determines whether there is substantial similarity of ideas between two works.   It includes an examination of a list of specific criteria such as type of artwork, material and setting, and is often decided as a matter of law.  (Id. at p. 1164.)   The intrinsic test determines whether there is substantial similarity in the expression of the ideas which comprise the works.   A determination of the latter test rests upon the subjective response of the ordinary reasonable person.  (Id.)  The court found, with regard to the extrinsic idea test that the works were vastly different.   It held, with regard to the intrinsic expression test that no reasonable jury could conclude that “Coma” captured the “total concept and feel” of “Reincarnation, Inc.”  (See Roth Greeting Cards v. United Card Company, 429 F.2d 1106, 1110.) 9

Thus the possibility that plaintiff has been harmed by an invasion to his interest in his personal property, (i.e., the screenplay) by defendants' works has been eliminated by the judgment of the federal district court.   Since it has been adjudged by the employment of both legal and factual standards, that there has been no copying and no misappropriation of ideas by defendants, it is manifest that any actions by defendants which might have constituted “palming off” or sharp business practices, breach of contract, or fraud did not result in any injury to the plaintiff.

The particular elements or proof attending plaintiff's various claims may vary somewhat.   This court is hard pressed to see how plaintiff has a cause of action remaining before us.

In the interests of judicial efficiency and economy as well as that of justice, we hold that the present action is barred by the federal court judgment.   Having held as such, we have no occasion to reach the question of whether plaintiff's various claims are time barred by the statute of limitations.

The judgment is affirmed.

FOOTNOTES

1.   Plaintiff has failed to raise as error the dismissals of the breach of confidence, interference with prospective economic advantage, accounting, and constructive trust causes of action and has therefore, waived any claim to them on appeal.  “It is ․ settled that every point relied on for reversal should be stated and argued in the opening brief, ․”  (Grayson v. Grayson (1955) 132 Cal.App.2d 471, 472, 282 P.2d 565.)

2.   Defendants had previously filed a motion requesting this court to take judicial notice of the district court judgment which we had improvidently denied.   Upon reconsideration of the matter, we ordered the parties to submit their briefs accordingly.

3.   Evidence Code section 459(d) provides:  “In determining the propriety of taking judicial notice of a matter specified in Section 452 or in subdivision (f) of Section 451 that is of substantial consequence to the determination of the action, or the tenor thereof, if the reviewing court resorts to any source of information not received in open court or not included in the record of the action, including the advice of persons learned in the subject matter, the reviewing court shall afford each party reasonable opportunity to meet such information before judicial notice of the matter may be taken.”

4.   “Every judicial action must therefore involve the following elements:  a primary right possessed by the plaintiff, and a corresponding primary duty devolving upon the defendant;  a delict or wrong done by the defendant which consisted in a breach of such primary right and duty;  a remedial right in favor of the plaintiff, and a remedial duty resting on the defendant springing from this delict, and finally the remedy or relief itself․  Of these elements, the primary right and duty and the delict or wrong combined constitute the cause of action ․”  (3 Witkin, Cal.Procedure (2d ed. 1971) Pleading, § 22(a), p. 1707, citing Pomeroy, Code Remedies (5th ed.), p. 528;  emphasis in original.)

5.   “The Federal Rules do not use the term ‘cause of action,’ and their emphasis is on the factual rather than the ‘legal right’ aspects of the cause of action.”  (3 Witkin, Cal.Procedure (2d ed. 1971) Pleading, § 23(b), p. 1708.)“The present trend is to see a claim in factual terms and to make it coterminous with the transaction regardless of the number of substantive theories, or variant forms of relief flowing from those theories, that may be available to the plaintiff;  regardless of the number of primary rights that may have been invaded;  and regardless of the variations in the evidence needed to support the theories or rights.”  (Rest.2d Judgments, § 24, com. a, p. 197.)

6.   “Federal law determines the effects under the rules of res judicata of a judgment of a federal court.”  (Rest.2d Judgments, § 87, p. 314.)  “The rules of res judicata are not easily classifiable for purposes of determining whether a federal rule or a state rule should be used to determine a particular effect of a federal judgment.   Some aspects of the rules of res judicata reflect primarily procedural policies.   Thus, the basic rules of claim and issue preclusion in effect define finality and hence go to the essence of the judicial function ․  These should be determined by a federal rule.”  (Id. at com. b. p. 317;  emphasis added.)

7.   It appears that the two theories conjoin in their basic foundation upon the facts plead, as evidenced by the very words of Professor Pomeroy in elucidating his theory, “ ‘[T]he existence of a legal right in an abstract form is never alleged by the plaintiff;  but, instead thereof, the facts from which that right arises are set forth, and the right itself is inferred therefrom.   The cause of action, as it appears in the complaint when properly pleaded, will therefore always be the facts from which the plaintiff's primary right and defendant's corresponding primary duty have arisen together with the facts which constitute the defendant's delict or act of wrong.’ ”  (3 Witkin, Cal.Procedure (2d ed.) § 22(a) p. 1707, citing Pomeroy, Code Remedies (5th ed.), p. 528, emphasis in original.)   The facts plead by the plaintiff in his federal court action are virtually identical to those plead in the state action.   Hence, while identity of the facts is not dispositive of the issue before us (see Agarwal, supra, 25 Cal.3d at p. 954, 160 Cal.Rptr. 141, 603 P.2d 58) it is necessarily sanguine to the matter.

8.   The disposition of the claims as to defendants Cook and Signet New American Library is unclear from the record of the court below.   Defendants Cook and Signet New American Library are not parties to the instant appeal.

9.   The court in Weitzenkorn v. Lesser (1953) 40 Cal.2d 778, 256 P.2d 947, stated, inter alia, that California follows federal copyright cases on the issue of infringement, and that proofs of plagiarism and breach of contract claims are identical.  (Id., at pp. 779, 775, 256 P.2d 947.)

COMPTON, Associate Justice.

ROTH, P.J., and BEACH, J., concur.