Kurwa v. Kislinger
| Decision Date | 03 October 2013 |
| Docket Number | No. S201619.,S201619. |
| Court | California Supreme Court |
| Parties | Badrudin KURWA, Plaintiff and Appellant, v. Mark B. KISLINGER et al., Defendants and Respondents. |
57 Cal.4th 1097
309 P.3d 838
162 Cal.Rptr.3d 516
Badrudin KURWA, Plaintiff and Appellant,
v.
Mark B. KISLINGER et al., Defendants and Respondents.
No. S201619.
Supreme Court of California
Oct. 3, 2013.
See 9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 121.
Harrington, Foxx, Dubrow & Canter, Dale B. Goldfarb, Carol G. Arnold, Daniel E. Kenney, Los Angeles, and John D. Tullis for Defendants and Respondents.
Robert A. Olson, Jay–Allen Eisen, Sacramento, Jon B. Eisenberg, Dennis A. Fischer, Santa Monica, Robin B. Johansen; Severson & Werson and Jan T. Chilton, San Francisco, for California Academy of Appellate Lawyers as Amicus Curiae.
WERDEGAR, J.
[309 P.3d 839
[57 Cal.4th 1100]Under California's “one final judgment” rule, a judgment that fails to dispose of all the causes of action pending between the parties is generally not appealable. (Code Civ. Proc., § 904.1, subd. (a); 1morehart v. county of santa barbara (1994) 7 CAL.4TH 725, 740–741, 29 Cal.Rptr.2d 804, 872 P.2d 143( Morehart ).) This case poses the question whether an appeal may be taken when the judgment disposes of fewer than all the pled causes of action by dismissal with prejudice, and the parties agree to dismiss the remaining counts without prejudice and waive operation of the statute of limitations on those remaining causes of action. We conclude such a judgment is not appealable. As a line of Court of Appeal decisions beginning with Don Jose's Restaurant, Inc. v. Truck Ins. Exchange (1997) 53 Cal.App.4th 115, 61 Cal.Rptr.2d 370( Don Jose's ) has recognized, the parties' agreement holding some causes of action in abeyance for possible future litigation after an appeal from the trial court's judgment on others renders the judgment interlocutory and precludes an appeal under the one final judgment rule. We therefore reverse the judgment of the Court of Appeal below, which declined to follow Don Jose's and its progeny and entertained an appeal from the interlocutory judgment rendered in the trial court.
Plaintiff Badrudin Kurwa and defendant Mark B. Kislinger, both ophthalmologists, undertook a venture to provide medical services to patients of a health maintenance organization and formed a corporation for that purpose. Several years later, plaintiff's license to practice medicine was suspended. Defendant then notified the health maintenance organization that plaintiff's participation in the enterprise was terminated and that the agreed medical services would henceforth be performed by defendant's medical corporation. The health maintenance organization terminated its agreement with the parties' joint corporation and executed a new agreement with defendant's corporation.
Plaintiff sued defendant for breach of fiduciary duty and defamation, among other claims. Defendant cross-complained for defamation. Ruling for defendant on his pretrial motions, the trial court concluded that once plaintiff and defendant had created a corporation to conduct their business, they owed each other no fiduciary duty. Plaintiff conceded he could not proceed on his cause of action for breach of fiduciary duty and related claims, which would therefore be dismissed with prejudice, as would other counts plaintiff expressly “abandon[ed].”
[57 Cal.4th 1101]The parties, however, agreed to dismiss as well their respective defamation claims without prejudice and to waive the applicable statute of limitations. According to defense counsel, this would allow the parties to “ test the issue” of fiduciary duty and “get a ruling” from the appellate court before disposing of the defamation claims, which were “kind of outside this whole discussion.” The purpose of this agreed disposition, plaintiff's attorney further explained, was to “preserve” both defamation causes of action “for such time as this case may come back from appeal.” The trial court ordered plaintiff's action
[309 P.3d 840]
dismissed with prejudice with the exception of the defamation cause of action, which, together with defendant's cross-complaint, the court dismissed without prejudice. The court then entered judgment in favor of defendant, from which judgment plaintiff appealed.
The Court of Appeal held the judgment final and appealable, reasoning that because the defamation counts had been dismissed, they were no longer pending between the parties and the trial court had no jurisdiction to proceed further on any cause of action. The court acknowledged Don Jose's, supra, 53 Cal.App.4th 115, 61 Cal.Rptr.2d 370, and its progeny were to the contrary, but declined to follow these decisions. On the merits, the Court of Appeal determined the superior court had erred in ruling defendant owed plaintiff no fiduciary duty on the facts pleaded, and reversed the judgment of the superior court.
We granted defendant's petition for review.
Section 904.1, subdivision (a) allows appeal “[f]rom a judgment, except ... an interlocutory judgment....” In Morehart, we explained that the rule codified in this provision, known as the one final judgment rule, precludes an appeal from a judgment disposing of fewer than all the causes of action extant between the parties, even if the remaining causes of action have been severed for trial from those decided by the judgment. “A judgment that disposes of fewer than all of the causes of action framed by the pleadings, however, is necessarily ‘interlocutory’ (Code Civ. Proc., § 904.1, subd. (a)), and not yet final, as to any parties between whom another cause of action remains pending.” [162 Cal.Rptr.3d 519]( Morehart, supra, 7 Cal.4th at p. 741, 29 Cal.Rptr.2d 804, 872 P.2d 143.) The theory of the rule is that “ ‘piecemeal disposition and multiple appeals in a single action would be oppressive and costly, and that a review of intermediate rulings should await the final disposition of the case.’ (9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, § 58, p. 113 [citations].)” ( Griset v. Fair Political Practices Com. (2001) 25 Cal.4th 688, 697, 107 Cal.Rptr.2d 149, 23 P.3d 43.)
Morehart disapproved an exception to the one final judgment rule recognized in [57 Cal.4th 1102]Schonfeld v. City of Vallejo (1975) 50 Cal.App.3d 401, 123 Cal.Rptr. 669( Schonfeld ) and cases following it. The Schonfeld exception allowed an appeal from a judgment that left unresolved some causes of action where the trial court had ordered the unresolved counts to be tried separately—or as some decisions following Schonfeld had stated, where the unresolved counts were both severed for trial and logically separate and independent from those resolved by the judgment. ( Morehart, supra, 7 Cal.4th at pp. 738–740, 29 Cal.Rptr.2d 804, 872 P.2d 143.)
The Schonfeld court had supported its exception by the existence of “unusual” circumstances that would result in “hardship and inconvenience” were the appeal delayed until all causes of action were resolved. ( Schonfeld, supra, 50 Cal.App.3d at p. 418, 123 Cal.Rptr. 669.) In Morehart, we explained that under California procedures such circumstances did not create appealability but could serve to justify review of the interlocutory judgment by petition for writ of mandate, a “more efficient avenue for obtaining a preliminary determination whether unusual circumstances make appellate review of an interlocutory judgment appropriate and, if the determination is affirmative, obtaining the review itself.” ( Morehart, supra, 7 Cal.4th at p. 743, 29 Cal.Rptr.2d 804, 872 P.2d 143.) We concluded that “an appeal cannot be taken from a judgment that fails to complete the disposition of all the causes of action between the parties even if the causes of action disposed of by the judgment have been ordered to be tried separately, or may be characterized as ‘separate and independent’ from those remaining.... A petition for a writ, not an appeal, is the authorized means for obtaining review of judgments and orders that lack the finality required by Code of Civil Procedure section 904.1, subdivision (a).” ( Id. at pp. 743–744, 29 Cal.Rptr.2d 804, 872 P.2d 143.)
With Schonfeld's severance-for-trial exception disapproved, litigants experimented with other techniques to obtain an appellate ruling
[309 P.3d 841]
on some causes of action while preserving others for possible litigation later. In Don Jose's, the trial court granted the defendants' motion for summary adjudication on only two of the plaintiffs' 11 causes of action, and the parties then stipulated that pending plaintiffs' appeal from the order, the remaining counts would be dismissed without prejudice and the defendants would waive all applicable statutes of limitations. ( Don Jose's, supra, 53 Cal.App.4th at p. 117, 61 Cal.Rptr.2d 370.) As the appellate court described it, the parties' agreement provided “that in the event the plaintiffs' appeal ... was successful and the matter was remanded, the action would proceed on all the causes of action set forth in the latest complaint. On the other hand, if the appellate court affirmed the trial court's order, then the plaintiffs agreed to dismiss their remaining causes with prejudice.” ( Ibid.)
The Court of Appeal dismissed the appeal, condemning “the artifice of trying to create an appealable order from an otherwise nonappealable grant of summary adjudication by dismissing the remaining causes of action without [57 Cal.4th 1103]prejudice but with a waiver of applicable time bars.” [162 Cal.Rptr.3d 520]( Don Jose's, supra, 53 Cal.App.4th at p. 116, 61 Cal.Rptr.2d 370.) In substance, the Don Jose's court explained, the proceedings below had...
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