Creating an appealable judgment

What should you do when the trial court throws out the cause of action or legal theory at the heart of your case, but leaves some other causes of action or theories intact?

The trial court's order probably is not immediately appealable - most prejudgment orders aren't. (Code of Civil Procedure Section 904.1 provides a short list of exceptions.) Instead, interlocutory orders are usually reviewed as part of an appeal from the eventual final judgment that disposes of all causes of action between two parties.

One option is to seek discretionary review by filing a writ petition in the Court of Appeal. Writ petitions are an uphill battle - the Court of Appeal grants them sparingly - but they can provide quick relief if the trial court made a glaring error and if deferring review until the end of the case would prejudice the petitioning party.

Another option is to keep litigating the remaining causes of action, and then to seek review of the adverse ruling as part of an appeal after the case is over. But that option may not be practical: Once the heart of the case is gone, it often does not make economic sense to pursue the rest.

The recent decision in Lamar Central Outdoor LLC v. California Department of Transportation, 2013 DJDAR 15337 (Nov. 22, 2013), highlights a third option: The parties can speed entry of a final, appealable judgment by dismissing all of the remaining causes of action and asking the trial court to enter judgment.

The state Supreme Court imposed some limits on this dismissal strategy earlier this year. In Kurwa v. Kislinger, 57 Cal. 4th 1097 (2013), after the trial court ruled for the defendant on one cause of action, the parties stipulated to voluntarily dismiss all remaining causes of action without prejudice. Not wanting to lose their ability to revive the dismissed claims if the Court of Appeal were to reverse, however, the parties also stipulated to waive the statute of limitations on the dismissed claims. The trial court entered a judgment reflecting the arrangement, and the defendant appealed. Holding that the judgment was not appealable, the Supreme Court ordered the appeal dismissed.

Kurwa emphasized that under the "one final judgment" rule, parties may not "separate [their] causes of action into two compartments for separate appellate treatment at different points in time." The court viewed the parties as attempting to do just that - to obtain an appellate decision on part of their case while putting the rest of the case on hold. It held that the parties' agreement to "effectively preserve[]" their dismissed causes of action by waiving the statute of limitations precluded entry of a final, appealable judgment.

Kurwa establishes that parties cannot pave the way to an appealable judgment by dismissing causes of action pursuant to a tolling agreement or statute of limitations waiver that will facilitate reasserting the causes of action in the future. The court signaled, however, that parties can create an appealable judgment by dismissing causes of action without a tolling agreement or statute of limitations waiver. The 2nd District Court of Appeal, Division 8's decision in Lamar Central confirms that this is a viable route.

Lamar Central was a dispute over a roadside electronic "message center" - essentially a screen that displays rotating ad. After the Department of Transportation denied Lamar's application for a permit for the message center, Lamar petitioned the trial court for a writ of administrative mandate and the department cross-complained for an injunction requiring Lamar to cease using the message center. The trial court ruled that Lamar did not meet its burden of showing that denial of the permit application was unreasonable or legally incorrect. In order to facilitate issuance of a final judgment, the parties stipulated to dismiss Lamar's remaining causes of action and the department's cross-compliant without prejudice. The trial court then entered a final judgment and Lamar appealed.

The Court of Appeal requested briefing on whether the dismissal stipulation prevented the judgment from becoming final. At both parties' urging, the court concluded that there was no barrier to appealability. Its decision emphasized two factors: (1) that there was no "saving language" in the parties' stipulation - that is, no waiver of the statute of limitations or other provision to "facilitate potential future litigation" - and (2) that the department represented that it had no intention of resurrecting the dismissed causes of action. In light of those two factors, the court was "satisfied that no claims are 'legally alive' between the parties" and that there was a final, appealable judgment.

Taken together, Lamar Central and Kurwa thus provide guidance to parties seeking to expedite appellate review of a significant, interlocutory trial court ruling. It won't work to dismiss, but preserve, nonadjudicated causes of action: Under Kurwa, that arrangement does not result in an appealable judgment. But the parties can clear the way to appellate review by voluntarily dismissing all remaining claims without any provision to preserve them for later resurrection. And if the party aggrieved by the interlocutory ruling is not prepared to dismiss its remaining causes of action without that protection, consider the option of petitioning the Court of Appeal to weigh in via a writ of mandate.