Imagine yourself in the following scenario. You represent the plaintiff in a case alleging breach of contract and unfair competition. Shortly before the case is scheduled to go to trial, the defendant files a motion on the pleadings to dismiss the contract claim, arguing that the contract is void under the statute of frauds. The trial court grants the motion, but you are sure the ruling is wrong. Technically, you could still go to trial and prevail on your unfair competition claim, but the contract claim is the basis for most of the damages, and both claims rest on essentially the same evidence. It just doesn’t make economic sense to try the unfair competition claim on its own now, while waiting to litigate the contract claim until after you get the trial court’s ruling reversed on appeal. What can you do? Is there a way to get appellate review of the trial court’s ruling right away?
The recent case of Kurwa v. Kislinger (Kurwa II) provides a glaring example of what not to do. Dr. Badrudin Kurwa, the plaintiff in that case, has now spent over seven years, and two trips to the California Supreme Court, in a fruitless effort to obtain pre-trial appellate review of a trial court ruling.
The ruling in question vitiated Kurwa’s main cause of action, but did not affect either his secondary claim or the defendant’s cross-complaint. Kurwa’s tactic for getting immediate appellate review took the form of a proposal, to which Kislinger agreed, that each of them would each dismiss his remaining claims without prejudice, and waive the statute of limitations on those of the other party. That cleared the way for the trial court to enter what purported to be a judgment in favor of Kislinger.
Kurwa then appealed. The Court of Appeal concluded it had jurisdiction, and ruled in Kurwa’s favor on the underlying issue. Kislinger then petitioned for review, and the California Supreme Court reversed—not on the merits, but on the ground that the Court of Appeal had no jurisdiction over the appeal. The court held that the parties could not circumvent the one final judgment rule by placing their defamation claims on hold while Kurwa appealed the ruling on his fiduciary duty claim. Because the case was still unresolved as to the defamation claims, the purported judgment was not final, and therefore not appealable.
After Kurwa I was decided, the case went back to the trial court. Kurwa then made several unsuccessful attempts to set aside the stipulation and judgment that had started the process. The trial court declined to set aside the judgment, on the ground that it had no jurisdiction to do so. Ultimately, Kurwa gave up on that effort, and filed a request for dismissal with prejudice of his defamation claim. After the clerk entered the dismissal, Kurwa filed a notice of appeal from the original judgment. This time, the Court of Appeal dismissed Kurwa’s appeal, partly because it was untimely, and partly because Kislinger’s defamation cross-claim was still viable.
Finally, just a few weeks ago, Kurwa got some help with his predicament. On Dece. 18, 2017, the Supreme Court unanimously held in Kurwa II that the trial court erred in concluding that it had no jurisdiction to set aside the original purported judgment and allow the case to proceed. The unanimous court reasoned: “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.” This holding will allow Kurwa to go back to the trial court and (eventually) obtain a new judgment, from which he can timely appeal.
But that does not solve the dilemma posed by the original Supreme Court holding in Kurwa I. What viable options remain for trial counsel faced with a trial court ruling that affects a case so fundamentally that it would be a waste of time and money to go to trial unless the ruling is reversed? Listed below are some options to consider.
First, counsel should do the necessary research, or consult knowledgeable appellate counsel, to determine whether their client’s particular situation falls within any statutory exception to the one final judgment rule, such that an immediate appeal is permitted.
Second, if no statutory exception applies, counsel should consider seeking immediate writ review. In most cases, however, this will not be a practical option. Writ review is discretionary, and the petitioner must convince the already overworked Court of Appeal that the stakes are high enough, and the case is meritorious enough, for them to agree to consider it.
Unfortunately, if neither a statutory exception nor a writ petition will resolve the problem, the Kurwa rule means that counsel in California state courts must advise their clients to make the hard choice: either take the remaining portion of their case to trial now, even though that means a second trial will be required if they win on appeal, or abandon their less-important claims permanently in order to facilitate the entry of an immediately appealable judgment.
In marital dissolution cases only, there is another option. Since 1988, Family Code Section 2025 (and its predecessor statute, Civil Code Section 4365) have permitted trial courts in such cases not only to bifurcate a key issue for separate trial, but also to certify that issue for immediate appeal once the trial is completed. The appellate court has discretion to decline to hear the appeal, but with the trial court’s certification in hand, the appellant will presumably have a much easier time persuading the court that an immediate appellate resolution is appropriate.
In an amicus curiae brief in Kurwa II, the California Academy of Appellate Lawyers asserted that even though Kurwa I has been on the books since 2013, some lawyers and trial judges are still trying to use the Kurwa tactic. If so, there is ample reason to question why the procedure available in marital dissolution cases cannot be used in general civil cases as well. After all, the California courts have lived with Family Code Section 2025 for 20 years now, without crumbling under the load. Moreover, the federal equivalent of Family Code Section 2025, i.e., 28 U.S.C. Section 1292(b), applies regardless of the subject matter of the litigation.
In light of the Kurwa cases, there is a strong argument to be made that California, too, should broaden the availability of interim appeal by certification to encompass all civil cases. This would provide an opportunity for litigants and trial courts to obtain appellate guidance on a key interim ruling, without risking the procedural quagmire that entrapped Dr. Kurwa.
On Appeals is a monthly column by the attorneys of the California Appellate Law Group LLP, the largest appellate specialty boutique in Northern California. Sarah Hofstadter is of counsel with the firm and has spent more than a dozen years as a research and staff attorney for jurists on the California Courts of Appeal and the Ninth Circuit. Find out more about Sarah and the California Appellate Law Group LLP at www.calapplaw.com.