Tenants Beware: Stipulation to Judgment May Be Treated as Res Judicata

This blog is a quick review of Needelman v. DeWolf Realty Company which was entered on July 21, 2015.

The tenant entered into a stipulated judgment that specifically provided that Tenant waived “any claims he may have, which [the lessors] assert do not exist, to bring an attempted wrongful eviction against [the lessors] or any action in any way arising out of or concerned with his tenancy…” and stated that Tenant “agrees that any of his personal property remaining in the unit after he vacates or is evicted therefrom shall be considered abandoned property, and [the lessors] shall be entitled to dispose of it without any notice to Tenant or his attorney.”

The res judicata doctrine is codified under Code of Civil Procedure § 1908. It provides that “a judgment or final order in an action or special proceeding” is conclusive as to “the matter directly adjudged.” It applies to situations where (1) the issues decided in the prior adjudication are identical with those presented in the later action; (2) there was a final judgment on the merits in the prior action; and (3) the party against whom the plea is raised was a party or was in privity with a party to the prior adjudication.

The Court found that the stipulated judgment in the unlawful detainer action had preclusive effect.

Author’s comment: This is an interesting twist as landlords have a lot of power when entering into these stipulations. For example, what if the landlord has the tenant stipulate that it waives any right to the states anti-forfeiture laws or that the property is not necessary to an effective reorganization? Would a bankruptcy judge then be forced to grant a relief from stay motion?

You can read the case here.

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