NOT TO BE PUBLISHED IN OFFICIAL REPORTS

OPINION

IKOLA, J.

Plaintiff Edgart F. Gonzalez appeals from a judgment entered after the court sustained a demurrer without leave to amend. Plaintiff asserts the court wrongly found his quiet title and related claims were barred by res judicata. We disagree. The court correctly found his claims were barred by the prior order of a federal bankruptcy court, even though that order was being appealed. The order was final for res judicata purposes when it was issued — that is the black-letter federal rule, which California courts apply when basing res judicata on a federal order. Accordingly, we affirm.

FACTS

Plaintiff alleged the following facts in a complaint filed in Orange County Superior Court. Plaintiff refinanced his Brea home in August 2005, obtaining loans for $550,000 and $150,000 secured by deeds of trust. The lender gave plaintiff "Notice of Right to Cancel" documents pursuant to disclosure requirements of the Truth in Lending Act (TILA) (15 U.S.C. § 1601 et seq., see also id., § 1635(a)). These documents failed to specify the date by which plaintiff's rescission right would terminate (see 12 C.F.R. § 226.23(b)(1)(v) (2009)), thereby extending the rescission period to three years from the transaction date (id. § 226.23(a)(3)). Plaintiff rescinded the refinance transaction in writing in May 2008. Despite knowledge of the rescission, defendant HSBC Bank USA, National Association (HSBC) bought the property in August 2008 at a trustee's sale after foreclosure. Plaintiff asserted causes of action for quiet title, cancellation of the trustee's deed upon sale, and declaratory relief.

HSBC demurred, contending res judicata barred plaintiff's claims. HSBC asked the court to take judicial notice of pleadings and orders filed in federal bankruptcy court. The bankruptcy court documents judicially noticed by the court showed the following facts.

First, plaintiff had filed for chapter 7 bankruptcy protection, but HSBC obtained relief from the automatic stay in July 2008 to foreclose on plaintiff's property. Plaintiff then filed an adversary proceeding in the bankruptcy court, asserting 19 counts against various lenders regarding six loans totaling more than $2.8 million. Plaintiff alleged he obtained the $550,000 and $150,000 loans on the Brea property from Mandalay Mortgage, LLC (Mandalay), Mandalay failed to include the rescission termination date on his TILA documents, then refused to honor his May 2008 rescission. Plaintiff further alleged HSBC lacked standing to seek relief from the automatic stay because it was not assigned the deeds of trust. Plaintiff sought to rescind the refinance transactions and void the foreclosure and trustee's sale of the Brea property.

Second, the bankruptcy court had granted HSBC's motion to dismiss plaintiff's complaint against it in June 2009. It found plaintiff could not rescind the refinance transactions because "the record indicates [plaintiff] will not be able to tender the amounts loaned." It found HSBC was validly assigned the deed of trust. The bankruptcy court concluded plaintiff failed to state any basis for precluding HSBC from conducting the trustee's sale and evicting plaintiff.

Plaintiff opposed the demurrer. He asserted the bankruptcy court order was not final because he had appealed it to the United States Bankruptcy Appellate Panel for the Ninth Circuit Court of Appeals (BAP). He also contended defendant lacked standing to foreclose and sell the Brea property because it did not produce the note and was not validly assigned the deed of trust.

The superior court sustained the demurrer without leave to amend in January 2010. It found: "Plaintiff & [HSBC] were adverse parties in a prior suit dealing with the same issues as in this case; HSBC prevailed in prior suit — [plaintiff] failed to state a claim under TILA, because rescission is conditioned upon tender which [plaintiff] was unable to do; `. . . a judgment or order, once rendered, is final for purposes of res judicata until reversal on appeal or modified or set aside in the court of rendition[.'] Defendant has demonstrated that the instant action is barred by res judicata."

Plaintiff later applied ex parte for an order staying entry of dismissal. He filed a declaration attaching a December 2009 BAP order dismissing his appeal from the bankruptcy court order. The BAP held the appealed-from order was "interlocutory" and not "final" because it did not dismiss all parties. Plaintiff stated the bankruptcy court had since dismissed all defendants, and he had filed a new appeal that was pending before the BAP. The superior court denied the ex parte application. It entered judgment dismissing the complaint.

DISCUSSION

Res Judicata Barred Plaintiff's Claims

Plaintiff maintains the bankruptcy court order dismissing his adversary claims was not final and thus had no preclusive effect. "`The doctrine of res judicata precludes parties or their privies from relitigating an issue that has been finally determined by a court of competent jurisdiction. [Citation.] "Any issue necessarily decided in such litigation is conclusively determined as to the parties or their privies if it is involved in a subsequent lawsuit on a different cause of action."'" (Nathanson v. Hecker (2002) 99 Cal.App.4th 1158, 1162 (Nathanson).)

"Three elements must be met for res judicata to adhere: `(1) Was the issue decided in the prior adjudication identical with the one presented in the action in question? (2) Was there a final judgment on the merits? (3) Was the party against whom the plea is asserted a party to or in privity with a party to the prior adjudication?'" (Nathanson, supra, 99 Cal.App.4th at p. 1162.)

Plaintiff concedes the first and third elements of res judicata. He does not dispute the bankruptcy court decided the same issues he raised in the superior court action — could he rescind the loan transaction and void the foreclosure and trustee's sale? And he concedes he was a party in the adversary proceeding. Thus, we need only determine whether the bankruptcy court's order was final for purpose of res judicata.

It was "California gives full faith and credit to a final order or judgment of a federal court [citation] by `follow[ing] the rule that the preclusive effect of a prior judgment of a federal court is determined by federal law, at least where the prior judgment was on the basis of federal question jurisdiction.'" (Nathanson, supra, 99 Cal.App.4th at p. 1163; accord Martin v. Martin (1970) 2 Cal.3d 752, 761 (Martin) ["A federal court judgment has the same effect in the courts of this state as it would in a federal court"].)

"The federal rule, applicable to matters decided in bankruptcy [citation], `is that a judgment or order, once rendered, is final for purposes of res judicata until reversed on appeal or modified or set aside in the court of rendition.'" (Nathanson, supra, 99 Cal.App.4th at p. 1163.) "`"California and federal law differ in their definition of finality for purposes of res judicata. The pendency of an appeal precludes finality under California law, but, under federal law and the law of many other states, the pendency of an appeal does not alter the res judicata effect of an otherwise final judgment."'" (Id. at p. 1163, fn. 1; accord Lumpkin v. Jordan (1996) 49 Cal.App.4th 1223, 1231-1232 [despite pending appeal, prior federal judgment precludes identical California claim].)

The federal rule applies here to bar plaintiff's claims. The bankruptcy court order conclusively resolved the merits of plaintiff's adversary claims against defendant, including his rescission and lack of assignment claims. The superior court correctly recognized that order barred plaintiff's claims for quiet title, cancellation, and declaratory relief, each of which depended on the purported rescission and lack of assignment.

Plaintiff unpersuasively maintains the bankruptcy court order was not final because the BAP, in dismissing his appeal, held the order was interlocutory. Plaintiff conflates two senses of finality — finality for appeal and finality for res judicata. Federal law distinguishes the different types of finality: "whether an order is final for appellate review purposes is not dispositive of its finality for res judicata purposes." (EDP Medical Computer Systems, Inc. v. U.S. (2d Cir. 2007) 480 F.3d 621, 626.) The bankruptcy court order was final for res judicata purposes because it resolved plaintiff's rescission and lack of assignment claims and left no issues for further adjudication as to HSBC. The preclusive effect of the order was not diminished under federal law simply because other defendants had not yet been dismissed. (Ibid.)

Here, the bankruptcy court's dismissal obtained preclusive effect when it was rendered on June 4, 2009. Contrary to plaintiff's assertions, his inability to appeal the order immediately does not make it unfair for the superior court to apply res judicata consistent with the federal rule. Even if plaintiff had been allowed to appeal at that time, the federal rule provides the order would have retained preclusive value for res judicata purposes unless reversed — a result plaintiff has not shown. (See Nathanson, supra, 99 Cal.App.4th at p. 1163.) In sustaining the demurrer without leave to amend, the superior court properly disposed of the case by giving the bankruptcy court's dismissal the same preclusive effect it would have in federal court.1 (See Martin, supra, 2 Cal.3d at p. 761.)

DISPOSITION

The judgment is affirmed. HSBC shall recover its costs on appeal.

WE CONCUR:

O'LEARY, ACTING P. J.

FYBEL, J.