I found the Judge's words on the Signature Stock Transfer Case to be enlightening, since we've seen many claims here that Maciora "won" that case. Now we know for certain he didn't win anything, that MEC's CEO was not a party to the case, or the agreement between SST and Maciora.
This is a Big win for MEC, along with many of the other decisions to date.
Maciora's request for judicial notice of Texas court records is GRANTED. Maciora's further request for judicial notice of a tentative ruling published in another case in this court is DENIED as irrelevant.
In his motion, Maciora argues portions of the SAC should be stricken under the doctrine of collateral estoppel. He argues a Texas judgment was entered in 2016, and the judgment contained a determination that he was the true owner of Plaintiff MyECheck, Inc.'s (MEC) stock. In the current action, MEC alleges Maciora obtained the stock through deception, and that he is not the true owner.
MEC was not a party to the Texas case. (See RJN, Exhs. 1, 2.) The only party other than Maciora was Signature Stock Transfer (SST), MEC's stock transfer agent. It appears a Texas court entered a judgment in Maciora's favor. (RJN, Exh. 1.) It also appears that the judgment was entered pursuant to a stipulation and settlement agreement. (See RJN, Exhs. 1, 2.)
"It should go without saying that to grant a stipulated judgment preclusive effect against a complete stranger to the stipulation would raise grave due process concerns. It would amount to the determination of that person's rights without adjudication or hearing, based on nothing more than the agreement by other persons that his or her rights should be extinguished. Short of trial by ordeal or lottery, it is difficult to conceive of a regime more offensive to fundamental notions of fairness." (Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 541.)
Maciora argues that MEC should be bound by the Texas judgment because, although it was not a party, it was in privity with SST. "Modern conceptions of privity are infused with due process concerns, requiring not only an identity or community of interest, but adequate representation of the party to be bound by the party in the first action." (Id. p. 544, internal quotation marks omitted.) Hence, where a nonparty takes a position in the litigation at odds with its alleged party-privy, a subsequent stipulated judgment will not bind the onparty. (Id.)
Based on the Starrs Affidavit attached to Maciora's request for judicial notice, it appears MEC denied having authorized the issuance of stock in question in the Texas litigation. (See RJN, Exh. 3.) Given this, and given that SST nonetheless stipulated to a judgment in which it issued the stock to Maciora, the court cannot conclude that SST adequately represented MEC's interests for purposes of collateral estoppel.
That MEC was aware of the Texas case and did not intervene does not alter the outcome on demurrer. (See Planning & Conservation League v. Castaic Lake Water Agency (2009) 180 Cal.App.4th 210, 232, fn. 16.)
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