Daily Blast October 3, 2013

Today, the Supreme Court issued an opinion in Kurwa v. Kislinger (Oct. 3, 2013, S201619) ___ Cal.4th ___ analyzing “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 causes of action by dismissal without prejudice, and waive operation of the statute of limitations on those remaining causes of action.” The Supreme Court concluded that “such a judgment is not appealable.” (Slip opn., p. 1.)

Plaintiff sued the defendant for breach of fiduciary duty and defamation, among other causes of action. Defendant cross-complained for defamation. The trial court dismissed plaintiff’s causes of action for breach of fiduciary duty and other related causes of action with prejudice. The parties agreed to dismiss their respective defamation causes of action without prejudice and waive the applicable statute of limitations. (Slip opn., p. 2.) The trial court entered judgment in favor of the defendant. Plaintiff appealed from the judgment. (Id. at p. 3.) The Court of Appeal held that the judgment was final and appealable. (Ibid.)              

On review, the Supreme Court reversed and concluded 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.” (Slip opn., p. 1.) “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. 7.) In concluding that the judgment was appealable, the Court of Appeal reasoned that “a cause of action which has been dismissed may be pending ‘in the appellate netherworld,’ it is not pending in the trial court, or in any other court, and thus cannot fairly be described as "legally alive." (Id. at p. 8.) The Supreme Court disagreed. According to the Supreme Court, when “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.” (Ibid. citing Hill v. City of Clovis (1998) 63 Cal.App.4th 434, 445.) Therefore, because the parties’ defamation claims were dismissed without prejudice and were effectively preserved for later litigation by an agreement waiving applicable statutes of limitations, the judgment adjudicating other causes of action was not final or appealable. (Slip opn., p. 12.)

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