American Broad. Cos., Inc. v. Walter Reade-Sterling, Inc

In American Broad. Cos., Inc. v. Walter Reade-Sterling, Inc., 43 Cal. App. 3d 401, 407-08, 117 Cal. Rptr. 617 (1974), the court considered whether the trial court had erred in entering a judgment of nonsuit against a cross-claim for attorney fees. Under California law, that judgment operated "as an adjudication upon the merits" because the trial judge had not expressly provided otherwise. Id. at 406. That judgment "was founded on the premise that appellants' cause of action was prematurely brought because the payment of the attorney's fees and costs, a condition precedent to recovery, had not been met." Id. at 407. The California Court of Appeals reversed, concluding that the entry of such a preclusive judgment was erroneous.