Successive suits by mortgage borrower based on breach of contract and the Truth in Lending Act are not barred by the merger-and-bar aspect of res judicata, since the primary right sued upon is different—TILA protects a right of disclosure of key loan terms, whereas contract law protects the parties’ agreement. In a first suit, the borrower claimed defendant lender breached the parties’ loan contract by adding unauthorized sums to the loan balance. After the first suit was resolved against the borrower, she filed this second action against the same parties and arising out of the same loan, again based on the supposed addition of the same unauthorized charges. But this time, plaintiff sued for violation of TILA, not breach of contract. This decision holds, that the second suit is not barred by the merger-and-bar aspect of res judicata because the primary right sued upon is different. TILA protects a right of disclosure of key loan terms; whereas, contract law protects the parties’ agreement. Nevertheless, the TILA claim was properly dismissed as time-barred. Plaintiff also alleged a UCL action based on the TILA violations. She had UCL standing as she alleged that due to the TILA violations she paid defendant more than she otherwise would have and was billed for more than she should have owed. However, this claim, too, was time-barred, as was her fraud by concealment claim.
California Court of Appeal, Second District, Division 7 (Perluss, P.J.); March 13, 2017; 2017 WL 958387