Court Opinion

ID: 4229746
Source: CourtListenerOpinion
Date Created: 2017-12-18 18:02:18.849897+00
Date Added: 2024-06-11T14:43:13.674656
License: Public Domain

Filed 12/18/17

      IN THE SUPREME COURT OF CALIFORNIA

BADRUDIN KURWA,                        )
                                       )
           Plaintiff and Appellant,    )
                                       )                            S234617
           v.                          )
                                       )                     Ct.App. 2/5 B264641
MARK B. KISLINGER et al.,              )
                                       )                     Los Angeles County
           Defendants and Respondents. )                   Super. Ct. No. KC045216
____________________________________)

        After the trial court dismissed some of plaintiff’s claims with prejudice, the
parties agreed to dismiss their remaining claims against one another without
prejudice and to waive the applicable statutes of limitations. The evident purpose
of this maneuver was to permit plaintiff to appeal the trial court’s partial order of
dismissal. The plan hit a speed bump, however, when this court held that the trial
court’s judgment was not final and appealable because the parties had effectively
preserved their remaining claims for future litigation. (Kurwa v. Kislinger (2013)
57 Cal. 4th 1097 (Kurwa I).)
        Since then, plaintiff has made several efforts to secure a final and
appealable trial court judgment. He has been blocked at every turn. First the trial
court disclaimed any power to revisit the parties’ agreement. Then, when plaintiff
attempted to finalize the judgment by dismissing his own outstanding claims with
prejudice, the Court of Appeal dismissed the appeal, concluding that no appeal
will lie unless defendant, too, disposes of his outstanding cross-claim. Defendant,

                                           1
who had prevailed in the trial court, of course has shown no inclination to help
plaintiff out of this bind, and the offending cross-claim remains pending. Having
attempted to circumvent the one final judgment rule, plaintiff has now wound up
in a legal cul de sac.
       We agree with the Court of Appeal that the present appeal is not plaintiff’s
way out, though we reach that conclusion for a different reason: While plaintiff
has dismissed his outstanding claim with prejudice, the trial court still has taken no
action to render a final and appealable judgment. But we take this opportunity to
make clear that, contrary to its earlier supposition, the trial court does indeed have
the power to take action. So long as no final and appealable judgment has been
entered in this case, the trial court retains the authority to render one. We
accordingly affirm the judgment of the Court of Appeal and remand to permit the
trial court to exercise its authority to vacate its defective 2010 judgment and the
parties’ underlying stipulation. The parties may then either proceed to judgment
on the outstanding causes of action or dismiss those causes of action with
prejudice. Either way, the trial court can and should enter a final judgment from
which plaintiff can finally appeal.
                                          I.
       In 1992, plaintiff Badrudin Kurwa and defendant Mark B. Kislinger, both
ophthalmologists, formed a corporation that entered into contracts to provide
medical services to patients of a health maintenance organization (HMO). In
2003, Kurwa’s license to practice medicine was suspended for 60 days and he was
placed on probation for five years. Kislinger notified the HMO that Kurwa’s
license had been suspended, that Kurwa would no longer provide medical
services, and that this automatically terminated the HMO’s agreement with the
parties’ joint corporation. Kislinger also informed the HMO that he had formed a
new corporation that would hire substantially all of the employees of the joint

                                          2
corporation. The HMO terminated its agreement with the joint corporation and
executed a new agreement with Kislinger’s corporation.
       In 2004, Kurwa sued Kislinger for breach of fiduciary duty and defamation,
among other things. Kislinger cross-complained for defamation. In 2010, the trial
court concluded in a series of in limine rulings that the parties owed each other no
fiduciary duty once they created a corporation to conduct their business. Kurwa
conceded he could not proceed on his cause of action for breach of fiduciary duty
and related claims, and he abandoned several other causes of action. The trial
court dismissed these claims with prejudice.
       The parties agreed to dismiss their respective defamation claims without
prejudice and waive the applicable statutes of limitations. (See Code Civ. Proc.,
§ 581, subd. (c) [“A plaintiff may dismiss his or her complaint, or any cause of
action asserted in it, in its entirety, or as to any defendant or defendants, with or
without prejudice prior to the actual commencement of trial.”].) The stipulation
provided, in pertinent part: “Neither KURWA nor KISLINGER shall be permitted
to reinstitute their defamation claim unless the Judgment entered in this case as to
all remaining causes of action shall be reversed and remanded for trial. In that
event, either KURWA or KISLINGER may reinstitute their respective defamation
claims, and they shall not be subject to the bar of the 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.’ ” (Kurwa I, supra, 57 Cal.4th at p. 1101.) On August 23,
2010, the trial court entered judgment in favor of Kislinger, and Kurwa appealed.

                                            3
       The Court of Appeal held that the judgment was 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 that Don Jose’s
Restaurant, Inc. v. Truck Ins. Exchange (1997) 53 Cal. App. 4th 115 and its
progeny had reached a contrary conclusion in the face of comparable facts, but it
disagreed with that line of cases. On the merits, the Court of Appeal determined
the trial court had erred in ruling defendant owed plaintiff no fiduciary duty on the
facts pleaded, and it accordingly reversed the trial court’s judgment.
       We granted defendant’s petition for review and reversed the judgment of
the Court of Appeal, ruling that the trial court’s judgment was not appealable.
Relying on Don Jose’s and its progeny, we held that “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.” (Kurwa
I, supra, 57 Cal.4th at p. 1100.) We remanded the matter to the Court of Appeal
“with directions to dismiss the appeal.” (Id. at p. 1108.)
       On remand to the trial court, Kurwa moved to rescind the stipulation
waiving the statute of limitations and asked the court to reconsider its 2010
adverse rulings. The trial court declined to do so, concluding it lacked jurisdiction
to modify the judgment.
       Kurwa then filed a petition for writ of mandate to order the trial court to
rescind the stipulation, which the Court of Appeal denied. The court explained
that “[p]etitioner is not without other means to attempt to make the judgment
reviewable,” although the court did not specify what those means might be. This
court denied review.

                                          4
       Returning to the trial court, Kurwa moved to amend the complaint to add a
cause of action for rescission of the stipulation due to mistake of law. The court
denied Kurwa’s motion and Kurwa again sought a writ of mandate from the Court
of Appeal. The Court of Appeal denied the petition, concluding that the trial court
did not abuse its discretion in denying Kurwa’s “motion to amend to add a
rescission claim related to the stipulation . . . .” Justice Mosk dissented, stating he
would grant an alternative writ of mandate directing the respondent court to vacate
an earlier 2010 order and enter a new order denying the motions in limine, or show
cause why the court should not be so ordered. Noting that the Court of Appeal
had held that the trial court had erred, Justice Mosk described the case as “a
seemingly Kafkaesque situation [in which] petitioner is unable to correct a
miscarriage of justice . . . .” This court again denied review.
       In a final effort that gave rise to the petition for review in this case, Kurwa
filed in the trial court a “Request for Dismissal” with prejudice of his defamation
cause of action, and the court clerk entered that dismissal on April 23, 2015. On
June 1, 2015, plaintiff filed a notice of appeal from the “Judgment, entered herein
. . . on August 23, 2010.” The Court of Appeal dismissed the appeal, holding that
“the 2015 notice of appeal from the 2010 judgment is untimely” and, in any event,
“the problem in Kurwa continues to exist because Kislinger’s defamation cause of
action in the cross-complaint remains outstanding . . . .”
     We granted review.
                                          II.
     To avoid piecemeal appeals, the “one final judgment” rule ordinarily limits
appellate review to trial court judgments that finally dispose of all issues. (Kurwa
I, supra, 57 Cal.4th at p. 1101.) The parties in this case attempted to circumvent
the rule to obtain what was, in effect, interlocutory review of a trial court’s partial
order of dismissal by agreeing to dismiss the remainder of their claims without

                                           5
prejudice and waiving the statutes of limitations. We held in Kurwa I that this
attempt was unavailing. We concluded that the trial court’s judgment dismissing
the remaining claims without prejudice was not a final disposition of those claims,
but instead held them “in abeyance for possible future litigation.” (Id. at p. 1100.)
     In the wake of our decision in Kurwa I, Kurwa has made two attempts to
secure a final and appealable judgment. He first asked the trial court to vacate its
order of dismissal and the underlying stipulation. Failing that, he sought to
dismiss his defamation claim with prejudice, which would finally dispose of the
claim. Kurwa is, however, powerless to require Kislinger to do the same with
respect to the defamation claim raised in the cross-complaint, and Kislinger has no
incentive to assist Kurwa in his efforts to appeal an order that had been entered in
Kislinger’s favor. Kislinger argues (and the Court of Appeal agreed) that unless
and until Kislinger also chooses to dismiss his defamation claim, there can be no
final and appealable judgment.
     For his argument, Kislinger relies on Hill v. City of Clovis (1998) 63
Cal. App. 4th 434, 445 (Hill), in which the Court of Appeal held that a stipulated
judgment was not final and appealable where, much as in this case, two causes of
action in a cross-complaint had been dismissed without prejudice and the statute of
limitation had been tolled. Kurwa, for his part, counters that Kislinger cannot
unilaterally block him from pursuing an appeal of the trial court’s rulings against
him. For this proposition, he relies on a footnote in Vedanta Society of So.
California v. California Quartet, Ltd. (2000) 84 Cal. App. 4th 517, 525, footnote 8,
in which, in contrast to Hill, the Court of Appeal held that the rule that a judgment
is not final if causes of action were dismissed without prejudice has “no
application where the party dismissing causes of action without prejudice is the
respondent on appeal.” (See also Local Motion, Inc. v. Niescher (9th Cir. 1997)
105 F.3d 1278, 1279.)

                                          6
     Ultimately, we have no occasion to resolve the tension between the
approaches taken in Hill and Vedanta Society because Kurwa’s appeal fails for a
more basic reason: There is still no trial court judgment from which Kurwa could
appeal. The 2010 order was not a final judgment because it disposed of less than
all of the causes of action. (Sullivan v. Delta Air Lines, Inc. (1997) 15 Cal. 4th
288, 304 [“ ‘A judgment is final “when it terminates the litigation between the
parties on the merits of the case and leaves nothing to be done but to enforce by
execution what has been determined.” ’ [Citations.] [¶] Finality in this sense not
only makes a judicial determination a judgment, it also makes that judgment
appealable.”]; U.S. Financial v. Sullivan (1974) 37 Cal. App. 3d 5, 11 [it is
improper for the trial court to enter a judgment of dismissal if some causes of
action remain pending].)
     Kurwa’s dismissal with prejudice of his defamation claims was entered on
the docket by the court clerk, without the trial court’s involvement. It did not
result in the entry of a new trial court judgment that finally disposed of all claims
(or at least all of the losing party’s claims) in the action. Nor could Kurwa’s
dismissal have retroactively altered the character of the trial court’s 2010
judgment. And even if Kurwa’s dismissal with prejudice could have retroactively
altered the character of the trial court’s 2010 judgment, the Court of Appeal is
correct that the time for appealing that judgment has long since expired. (Cal.
Rules of Court, rule 8.104(a)(1) [a notice of appeal from a superior court judgment
must be filed within 60 days of the notice of entry of judgment or 180 days after
judgment, whichever is earlier].) To accept Kurwa’s argument would therefore
require us to hold that his dismissal with prejudice not only changed the character
of the trial court’s 2010 judgment, but also delayed the rendering of the trial
court’s judgment until 2015.

                                          7
     There is, as we see it, no way for Kurwa to proceed with his appeal unless
and until the trial court takes action to render a judgment that is actually final and
appealable. Of course, Kurwa has previously asked the trial court to do just that,
and the trial court refused, professing lack of jurisdiction to vacate its earlier order
dismissing the defamation claims without prejudice. We agree with Kurwa that
the trial court was mistaken.
     It stands to reason that if the trial court has not entered a judgment that is
final and appealable, it retains the power to render one. This was the unstated
assumption underlying our disposition in Kurwa I, supra, 57 Cal.4th at page 1107,
in which we directed the Court of Appeal to dismiss plaintiff’s appeal as
premature, without ever suggesting that plaintiff might have lost the right to
appeal altogether. The confusion in this case appears to arise from the fact that the
trial court has already dismissed the claims in question once, albeit without
prejudice. Kislinger argues that this means that the trial court can no longer act in
the case, even to issue a judgment finally disposing of the defamation claim
Kurwa has now dismissed with prejudice. For this unlikely proposition, Kislinger
relies on Harris v. Billings (1993) 16 Cal. App. 4th 1396 (Harris), but Harris lends
no support.
     Harris arose from the parties’ agreement to abate a civil lawsuit that
“provided that appellant would dismiss her complaint ‘without prejudice to its
later reinstitution and/or refiling’ and that all applicable statutes of limitations and
claims of laches would be tolled for four months.” (Harris, supra, 16 Cal.App.4th
at p. 1400.) The plaintiff dismissed the action without prejudice, but when the
parties failed to appear for a scheduled status conference, the superior court “on its
own motion and without notice, vacated the . . . dismissal without prejudice and
caused an order to be entered dismissing the entire action with prejudice” as a
sanction under Code of Civil Procedure section 575.2. (Harris, at p. 1401; id. at

                                           8
p. 1401, fn. 1.) The Court of Appeal reversed, citing the rule that “ ‘[a] voluntary
dismissal of an entire action deprives the court of subject matter jurisdiction as
well as personal jurisdiction of the parties.’ ” (Id. at p. 1405.) The court reasoned
that the superior court “had no jurisdiction to vacate the dismissal without
prejudice, properly entered pursuant to appellant’s request, or to enter a new order
dismissing the action with prejudice.” (Ibid.)
     Regardless of whether Harris was correctly decided—a question we do not
decide here—it is distinguishable. Kurwa did not voluntarily dismiss his entire
complaint, such that nothing was left pending in the trial court but the mere
possibility that the dismissed causes of action might be revived in the future. (Cf.
Harris, supra, 16 Cal.App.4th at p. 1403.) Rather, after the trial court issued its
rulings on the fiduciary duty issue, both parties dismissed their defamation claims
without prejudice, waived the applicable statutes of limitations, and the trial court
issued what this court would later hold was not a final and appealable judgment.
As we said in Kurwa I, “where the parties, by waiver or agreed tolling of the
statute of limitations or a similar agreement, have arranged for those causes of
action to be resurrected upon completion of the appeal, they remain ‘legally alive’
in substance and effect.” (Kurwa I, supra, 57 Cal.4th at p. 1105.) And because
these claims remain “legally alive,” so too do the fiduciary duty claims, since the
trial court’s rulings on those claims have yet to be reduced to a final judgment. So
long as those claims remain pending before the court, neither dismissed nor finally
disposed of, the court necessarily retains the power to act. (Sullivan v. Delta Air
Lines, Inc., supra, 15 Cal.4th at p. 304; U.S. Financial v. Sullivan, supra, 37
Cal.App.3d at p. 11.)

                                          9
     What is more, the Court of Appeal in Harris assumed that the dismissal
without prejudice had “properly” been “entered pursuant to appellant’s request.”
(Harris, supra, 16 Cal.App.4th at p. 1405.) The core of Kurwa’s argument here,
however, is that the agreement to dismiss the claims was faulty because the parties
were under the mistaken impression that the dismissal would enable early
appellate review of the trial court’s fiduciary duty rulings—a mistake that became
clear once this court issued its ruling in Kurwa I. As a general rule, a mistake of
this sort constitutes grounds for unwinding the transaction and giving the parties
the chance to make a new run at the problem. (Cf. Civ. Code, §§ 1550, 1575–
1578; Harris v. Rudin, Richman & Appel (2002) 95 Cal. App. 4th 1332, 1338–1339
[the parties’ lack of knowledge that a crucial statute had been amended could
constitute a mistake of law that would justify rescinding a settlement agreement].)
Harris does not suggest otherwise.
     Confronted with similar circumstances, Courts of Appeal have not, as
Kislinger suggests, treated the parties’ failed appeal attempt as the end of the line
for the litigation. They have instead directed trial courts to vacate their judgments
and the underlying stipulations to allow the cases to proceed to final judgment. In
Four Point Entertainment, Inc. v. New World Entertainment, Ltd. (1997) 60
Cal. App. 4th 79, 81–82, for example, after the superior court granted summary
adjudication of some claims and denied summary adjudication of other claims, the
parties “entered a stipulation for dismissal of all remaining claims and entry of a
‘final judgment,’ reciting that ‘most of the issues necessary to a disposition of the
remaining causes of action have been decided by the trial court, which
adjudication [Four Point] seeks to have reviewed by the Court of Appeal,’ and
expressing their intent ‘that the filing and the prosecution of an appeal in this
action shall not prejudice either party’s future right to prosecute such claims and
causes of action which are being voluntarily dismissed by both parties following

                                          10
the conclusion of the appeal process.’ ” The trial court issued what purported to
be a “ ‘final judgment,’ ” from which Four Point appealed. (Id. at p. 82.) Relying
on Don Jose’s, the Court of Appeal ruled that this judgment was not appealable
because it did not dispose of all of the causes of action between the parties. The
Court of Appeal dismissed the appeal and remanded the case to the trial court
“with directions to vacate the judgment and the stipulation on which it is based.”
(Id. at p. 83.)
     Similarly, in Hill, following a grant of summary adjudication, “the parties
filed an ‘ENTRY OF JUDGMENT ON STIPULATED FACTS,’ along with a ‘SEPARATE
JUDGMENT ON STIPULATED FACTS,’ prepared for the trial court’s signature” that
inadvertently failed to dispose of all of the causes of action. (Hill, supra, 63
Cal.App.4th at p. 439.) The Court of Appeal dismissed the appeal, but noted “the
dismissal of this appeal will not leave appellants without recourse. Because the
stipulated judgment does not decide all issue[s] between the parties, it is not a final
judgment. [Citation.] Appellants may still challenge the trial court’s rejection of
their Government Code section 66462.5 contention if and when Clovis’s first and
third causes of action are adjudicated or otherwise disposed of and appellants file a
timely appeal from the ultimate judgment. . . . Our instructions to the trial court
upon dismissal will eliminate any reason for concern on the part of appellants
about their remedy of appeal from a final judgment in the action.” (Hill, at

                                          11
p. 446.) The Court of Appeal dismissed the appeal, but ordered the trial court to
“vacate the judgment and the stipulation on which it is based.” (Ibid.)1
     Kurwa did not ask us to fashion similar dispositional language in Kurwa I,
and we did not do so. But we agree with the Courts of Appeal that when the
parties, by agreement, make a failed attempt to secure appellate review of a trial
court’s nonfinal judgment, the trial court retains the power to vacate both the
defective judgment and the underlying stipulation—that is, to restore the parties to
the positions they would have been in absent the failed attempt.
     We therefore now make explicit what was implicit in our earlier decision:
Because the trial court did not render a judgment that was final and appealable, it
retains power to act in the case. That power includes the authority to vacate the
defective 2010 judgment and the parties’ underlying stipulation. Once the parties
and the court have disposed of the remaining defamation counts—either by
dismissing them with prejudice (as Kurwa already has for the cause of action in
his complaint) or pursuing them to judgment—the trial court can, and should,
issue a final judgment from which Kurwa can appeal.

1      To the same effect is the dispositional order in Hoveida v. Scripps Health
(2005) 125 Cal. App. 4th 1466, 1470: “The appeal is dismissed, and the matter is
remanded to the trial court with directions to vacate the judgment and stipulation
on which it is based.” All three cases are discussed with approval in Kurwa I,
supra, 57 Cal.4th at pages 1103–1104.

                                         12
                                        III.
     The order of the Court of Appeal dismissing the appeal is affirmed and the
case is remanded for further proceedings consistent with the views expressed in
this opinion.

                                                 KRUGER, J.
WE CONCUR:

CANTIL-SAKAUYE, C. J.
CHIN, J.
CORRIGAN, J.
LIU, J.
CUÉLLAR, J.
McCONNELL, J.*

*      Administrative Presiding Justice of the Court of Appeal, Fourth Appellate
District, Division One, assigned by the Chief Justice pursuant to article VI, section
6 of the California Constitution.

                                         13
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Kurwa v. Kislinger
__________________________________________________________________________________

Unpublished Opinion XXX NP opn. filed 4/7/16 – 2nd Dist., Div. 5
Original Appeal
Original Proceeding
Review Granted
Rehearing Granted

__________________________________________________________________________________

Opinion No. S234617
Date Filed: December 18, 2017
__________________________________________________________________________________

Court: Superior
County: Los Angeles
Judge: Dan T. Oki

__________________________________________________________________________________

Counsel:

Law Offices of Robert S. Gerstein, Robert S. Gerstein; Law Offices of Steven H. Gardner and Steven H.
Gardner for Plaintiff and Appellant.

Jon B. Eisenberg, Margaret A. Grignon, Robin Meadow, Dennis A. Fischer, Robin B. Johansen, Laurie J.
Hepler, Orly Degani, Rex Heinke; Colantuono, Highsmith & Whatley, Michael G. Colantuono and Ryan
Thomas Dunn for California Academy of Appellate Lawyers as Amicus Curiae on behalf of Plaintiff and
Appellant.

Harrington, Foxx, Dubrow & Canter and Dale B. Goldfarb for Defendants and Respondents.
Counsel who argued in Supreme Court (not intended for publication with opinion):

Robert S. Gerstein
Law Offices of Robert S. Gerstein
171 Pier Avenue, #322
Santa Monica, CA 90405
(310) 820-1939

Dale B. Goldfarb
Harrington, Foxx, Dubrow & Canter
1055 W. Seventh Street, 29th Floor
Los Angeles, CA 90017
(213) 489-3222