Cardiff Equities, Inc. v. Superior Court

Benjamin, Weill & Mazer, Marc S. Mazer, Andrew J. Weill and Kenneth D. Schnur for Real Parties in Interest.

The primary issue before us is whether a plaintiff may dismiss a complaint in the trial court after the case has been ordered into arbitration, but before an arbitration has commenced. We conclude that there is nothing to preclude such a dismissal and that after a dismissal, the trial court no longer has jurisdiction to order the parties to complete the arbitration.

The facts are undisputed. This case involves two separate contracts. The purpose of the first contract was to document an investment in a limited partnership, and the second was a guarantee of the first.

In or around June 2005, petitioner Cardiff Equities, Inc. (Cardiff), a California corporation with a principal place of business in Los Angeles, entered into a contract with Robert W. O'Neel III (O'Neel), a real estate developer, pursuant to which Cardiff made an investment of $1.4 million as a limited partner in the formation of Myrtle Beach Partners, LP (MBP), a Delaware limited partnership, to purchase, fund, and ultimately develop real property located in Myrtle Beach, South Carolina (the…

The primary issue before us is whether a plaintiff may dismiss a complaint in the trial court after the case has been ordered into arbitration, but before an arbitration has commenced. We conclude that there *1544 is nothing to preclude such a dismissal, and that after a dismissal, the trial court no longer has jurisdiction to order the parties to complete the arbitration.

L PROCEDURAL HISTORY AND STATEMENT OF FACTS

The facts are undisputed. This case involves two separate contracts. The purpose of the first contract was to document an investment in a limited partnership, and the second was a guarantee of the first.

In or around June 2005, petitioner Cardiff Equities, Inc. (Cardiff), a California corporation with a principal place of business in Los Angeles, entered into a contract with Robert W. O’Neel III (O’Neel), a real estate developer, pursuant to which Cardiff made an investment of $1.4 million as a limited partner in the formation of Myrtle Beach Partners, LP (MBP), a Delaware limited partnership, to purchase, fund, and ultimately develop real property located in Myrtle Beach, South Carolina (the Partnership Agreement). This agreement contained an arbitration…

I respectfully dissent.

The majority frames the issue before us as “whether a plaintiff may dismiss a complaint in the trial court after the case has been ordered into arbitration, but before an arbitration has commenced.” (Maj. opn., ante, at p. 1543.) The majority has misstated the “primary issue” presented in this petition for writ of mandate. (Maj. opn., ante, at p. 1543.) The critical issue is not whether Cardiff Equities, Inc. (Cardiff), could dismiss case No. BC372414, but whether a plaintiff may circumvent an order compelling arbitration simply by dismissing its complaint and filing a new action based upon the same foundational facts.

Keeping this in mind, I agree with the majority that Cardiff had an absolute right to voluntarily dismiss case No. BC372414 without prejudice pursuant to Code of Civil Procedure section 581, subdivisions (b)(1) and (c) 1 following the trial court’s order compelling arbitration. I also agree that Cardiff’s filing of case No. BC380048 was permissible, subject to the statute of limitations. However, for the reasons set forth below, I disagree with the majority’s conclusion that the trial court’s order staying the litigation in case No.…