What is the test for res judicata?

Levy v. Cohen, supra, 19 Cal.3d 165, 171-172, 137 Cal.Rptr. 162, 561 P.2d 252, sets forth the rules pertaining to the doctrine of res judicata and applies them to the facts before the court as follows:

"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.' (Bernhard v. Bank of America (1942) 19 Cal.2d 807, 810 [122 P.2d 892]....) The application of the doctrine in a given case depends upon an affirmative answer to these three questions: (1) Was the issue decided in the prior 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? [Citations.] Each of the foregoing requirements is met here: