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);
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]."
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, 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.
Morehart disapproved an exception to the one final judgment rule recognized in Schonfeld v. City of Vallejo (1975) 50 Cal.App.3d 401 [123 Cal.Rptr. 669]
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.) 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.) 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.)
With Schonfeld's severance-for-trial exception disapproved, litigants experimented with other techniques to obtain an appellate ruling 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.) 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
In Jackson v. Wells Fargo Bank (1997) 54 Cal.App.4th 240, 242 [62 Cal.Rptr.2d 679], the plaintiff pleaded eight causes of action, but the court granted summary adjudication for the defense on only seven, leaving unresolved a cause of action for malicious prosecution. The parties stipulated that count would be dismissed without prejudice and could be refiled within 90 days of the decision on the plaintiff's appeal, regardless of the statute of limitations; the superior court entered a purported "final judgment" pursuant to the stipulation. (Id. at pp. 242-243.) Following Don Jose's, the Jackson appellate court held the judgment was interlocutory rather than final and hence not appealable. The court observed that "appellant still has his malicious prosecution cause of action, because his dismissal of it was without prejudice and with a waiver of the statute of limitations. Further, he still has his right of appellate review regarding his other seven causes of action — but at the appropriate time and no earlier. What he does not have is the right — even with a willing accomplice in the respondent — to separate those causes of action into two compartments for separate appellate treatment at different points in time." (Jackson, supra, at p. 245.)
Four Point Entertainment, Inc. v. New World Entertainment, Ltd. (1997) 60 Cal.App.4th 79 [70 Cal.Rptr.2d 82] followed Don Jose's and Jackson in similar procedural circumstances: a ruling granting the defendant summary adjudication on the plaintiff's tort causes of action, followed by voluntary dismissal of the plaintiff's contract causes of action, as well as a complaint in intervention and a cross-complaint, with a stipulation that the contemplated appeal "`shall not prejudice either party's future right to prosecute such [dismissed] claims and causes of action ... following the conclusion of the appeal process.'" (Four Point Entertainment, Inc. v. New World Entertainment, Ltd., supra, at pp. 81-82.) The Court of Appeal dismissed the appeal, noting that, as Morehart held, a petition for a writ of mandate is the appropriate means to seek review of an interlocutory order where justified, and that in the "run-of-the-mill procedural course in which a defendant was able to knock out some but not all of the plaintiff's claims," no immediate appellate review is provided: "If we permitted stipulated `final' judgments in every case like this one, we would in effect be permitting the parties to confer jurisdiction upon us where none exists." (Four Point Entertainment, Inc. v. New World Entertainment, Ltd., supra, at p. 83.)
The Don Jose's line of decisions continued in Hoveida v. Scripps Health (2005) 125 Cal.App.4th 1466 [23 Cal.Rptr.3d 667]. The trial court granted summary adjudication for the defense on all but one cause of action, that for breach of contract. The parties then stipulated that the plaintiff would dismiss that count without prejudice to its revival if his appeal on the other counts were successful and that the statute of limitations would be tolled during the appeal's pendency. (Id. at pp. 1467-1468.) Following Don Jose's and its progeny, the Court of Appeal held that "because the judgment does not dispose of all causes of action between the parties," the court lacked jurisdiction to hear the appeal. (Hoveida, supra, at p. 1469.)
Finally, in Abatti v. Imperial Irrigation Dist. (2012) 205 Cal.App.4th 650, 662-667 [140 Cal.Rptr.3d 647] (Abatti), the Court of Appeal analyzed the Don Jose's line of decisions, concluding that what made the judgments in each of those cases nonappealable was the existence of a stipulation allowing for possible future litigation of the unresolved causes of action. Dismissal of some counts without prejudice, by itself, does not deprive a judgment of appealability, as "claims that are dismissed without prejudice are no less final for purposes of the one final judgment rule than are adjudicated claims ...." (Abatti, supra, at p. 665.) But where the parties have reached an agreement that assures the potential for future litigation of the dismissed claims, the judgment "lacks sufficient finality to be appealable pursuant to the one final judgment rule." (Id. at p. 667.) In Abatti itself, the judgment, which adjudicated the plaintiffs' claim under the California Environmental Quality Act (CEQA; Pub. Resources Code, § 21000 et seq.) but not their non-CEQA claims, was appealable because the unadjudicated causes of action had been voluntarily dismissed "without any waiver of the applicable statute of limitations as to the dismissed claims, and without any stipulation that would facilitate the potential future litigation of the dismissed claims." (Abatti, supra, at p. 666.)
Where the dismissed causes of action are to be revived only if the appeal is successful (as was agreed in Don Jose's and Hoveida, but not, at least expressly, in the present case), it might be debated whether the Don Jose's rule is needed to prevent multiple appeals. But, as we have previously recognized, the one final judgment rule can have salutary effects beyond simply reducing the number of appeals: avoiding "`uncertainty and delay in the trial court,'" allowing for the possibility that "`the trial court may completely obviate an appeal by altering the rulings from which an appeal would otherwise have been taken'" or that "`[l]ater actions by the trial court may provide a more complete record which dispels the appearance of error or establishes that it was harmless,'" and giving the reviewing court "`the benefit of a complete adjudication'" upon which it may tailor its remedies "`by giving specific directions rather than remanding for another round of open-ended proceedings.'" (Morehart, supra, 7 Cal.4th at p. 741, fn. 9, quoting Kinoshita v. Horio (1986) 186 Cal.App.3d 959, 966-967 [231 Cal.Rptr. 241].)
Plaintiff, though he adopts some of the lower court's reasoning, refrains from arguing against Don Jose's and its progeny. Instead, plaintiff urges us to apply the rule of those cases only where "the parties' stipulated dismissal without prejudice is endorsed by the trial court and incorporated into the judgment." Because the judgment here did not recite or incorporate the parties' agreement, plaintiff contends, the judgment should be deemed final and appealable.
We are not persuaded that whether the parties' agreement is formally incorporated into the judgment should be dispositive. In the present case, the parties announced their agreement in open court, explaining to the trial court that the dismissal without prejudice and waiver of the statute of limitations was intended to preserve the unresolved defamation counts until plaintiff's appeal on the breach of fiduciary duty issues was resolved; the trial court accepted the agreement, entering the voluntary dismissals in its minute order. That the agreed dismissal of the defamation claims without prejudice was
In an amicus curiae brief, the California Academy of Appellate Lawyers catalogues numerous policy goals this court should consider in deciding appealability, including that a rule of finality should "allow parties as much autonomy and choice as possible" and should promote efficiency at the trial level as well as the appellate level, and more specifically that parties "should not be forced needlessly to try claims simply to obtain an appealable judgment." Some but not all of the academy's members support a rule, similar to the Court of Appeal's below, to the effect that a dismissal without prejudice is a final disposition for appealability purposes even if accompanied by an agreement facilitating the claim's revival.
The judgment of the Court of Appeal is reversed and the matter is remanded to that court with directions to dismiss the appeal.
Cantil-Sakauye, C. J., Kennard, J., Baxter, J., Chin, J., Corrigan, J., and Liu, J., concurred.