Fed. Sec. L. Rep. P 94,512 Herbert T. Brenner v. Mitchum, Jones & Templeton, Inc., a Corporation, and Lee Montgomery

The court below granted summary judgment for defendant-appellee on grounds that plaintiff-appellant’s claim was barred by collateral estoppel and limitations. Since we affirm as to the first of these grounds, we do not reach the second.

The action is founded upon alleged violations of §§ 7 and 10 of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78g and 78j, SEC Regulation T and Rule 10b-5 thereunder, certain rules of the New York Stock Exchange, and common-law fraud.

The facts, stated sufficiently for present purposes, are that in 1968 and 1969, plaintiff was a customer of defendant. When he failed to respond to margin calls, the securities in his account were sold out, leaving a deficiency of some $75,000.

Defendant brought suit for this deficiency in the Superior Court, Los Ange-les County. Plaintiff was duly served and represented by counsel. Prior to the filing of any responsive pleadings by plaintiff (defendant therein), the action was settled, and the present defendant filed a dismissal with prejudice.

The question here is the effect of those proceedings on plaintiff’s maintenance of this action.

It is undisputed that defendant’s claim for the deficiency arose out…