ERIKA MIRANDA v. CITIBANK (2010)

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

----------

Erika Miranda filed a complaint against her former employer Citibank, N.A. The trial court granted Citibank's motion to compel arbitration.   Miranda appeals, arguing that the arbitration agreement is unconscionable, the trial court erred in denying her motion for leave to file an amended complaint, and the trial court erred in dismissing the complaint and in denying her motion to vacate the dismissal.   We dismiss the appeal.

BACKGROUND

On March 28, 2008, Miranda filed a complaint against Citibank, her former employer, alleging among other claims that Citibank failed to accommodate her disability (endometriosis) and retaliated against her.   Miranda had signed a form acknowledging receipt of the Citibank Employment Handbook, stating, “I understand that this Handbook contains a policy that requires me to submit employment-related disputes to binding arbitration.”   Citibank filed a motion to compel arbitration and stay proceedings, or in the alternative, requested dismissal of the action.   Miranda opposed the motion, arguing that the arbitration agreement was procedurally and substantively unconscionable, and in the event that the court compelled arbitration, the action should be stayed rather than dismissed.   After briefing and oral argument, on July 16, 2008 the trial court granted the motion to compel and stayed the action under Code of Civil Procedure section 1281.4,¹ retaining jurisdiction to enforce the arbitration agreement and to confirm or vacate any arbitration award.

Miranda filed a substitution of attorney in October 2008.   She then filed a motion for leave to amend her complaint on January 30, 2009.   After a hearing on March 3, 2009,² the trial court declined to rule on the motion, taking it off calendar and concluding that it did not have jurisdiction because the matter was stayed while arbitration was pending.

At a subsequent status conference on June 1, 2009, the parties informed the trial court of the status of the arbitration (the arbitrators had been selected and discovery had begun).   The court asked, “Is there any reason why the court can't dismiss the matter without prejudice and retain jurisdiction to confirm and/or otherwise rule on post-arbitration motions?”   Citibank's counsel replied:  “No, your honor, there is no reason that the court cannot do that.”   Miranda's counsel answered:  “The plaintiff requests the court retain jurisdiction for the duration of the arbitration and enforcement of the award and if there are other issues related to the arbitration.”   The court dismissed the matter without prejudice and retained jurisdiction over all aspects of the arbitration.   The minute order stated that the dismissal was “[p]ursuant to stipulation.”

On June 11, 2009, Miranda moved to vacate the dismissal, arguing that the court dismissed the action sua sponte without notice to the parties, Miranda did not consent to the dismissal, and if counsel's opposition at the hearing was insufficient, that was due to counsel's mistake, surprise, inadvertence, or neglect.   The trial court denied the motion to vacate, and Miranda filed this timely appeal.

DISCUSSION

Miranda's appeal from the order compelling arbitration is premature.   The orders and judgments appealable in proceedings to enforce arbitration agreements include “[a]n order dismissing or denying a petition to compel arbitration” (§ 1294, subd. (a)), but “ ‘[a]n order directing arbitration, not being one of those orders listed in section 1294 ․, is not appealable.’   [Citation.]  Such an order is reviewed on appeal from the judgment entered after the arbitration is completed or in exceptional circumstances, not present here, by writ of mandate.”  (Muao v. Grosvenor Properties, Ltd. (2002) 99 Cal.App.4th 1085, 1088-1089.)   The order compelling arbitration is not appealable even when the trial court has dismissed the action in what is deemed a final appealable judgment.  (Id. at p. 1089.)   The plaintiff “may prevail at the arbitration proceeding.   If [s]he loses, [s]he can challenge the order compelling arbitration on appeal from any judgment entered on the arbitration award.  [Citations.]”  (Ibid.;   see § 1294.2.) We conclude that the order compelling arbitration is not appealable.³

Miranda also appeals from the trial court's refusal to rule on her motion for leave to file an amended complaint.   The order compelling arbitration, however, stayed all proceedings pending the outcome of the arbitration and retained jurisdiction “to enforce the terms of the arbitration agreement and to confirm or vacate any arbitration award.”  Section 1281.4 provides that after a court has ordered arbitration of a controversy, “the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate․”  Having done so, the court retained only minimal jurisdiction over Miranda's claim.  “Once a court grants the petition to compel arbitration and stays the action at law, the action at law sits in the twilight zone of abatement with the trial court retaining merely a vestigial jurisdiction over matters submitted to arbitration.   This vestigial jurisdiction over the action at law consists solely of making the determination, upon conclusion of the arbitration proceedings, of whether there was an award on the merits (in which case the action at law should be dismissed because of the res judicata effects of the arbitration award [citations] ) or not (at which point the action at law may resume to determine the rights of the parties).  [Citations.]”  (Brock v. Kaiser Foundation Hospitals (1992) 10 Cal.App.4th 1790. 1796.) ⁴  “ ‘Absent an agreement to withdraw the controversy from arbitration, however, no judicial act is authorized.   [Citation.]’ ”  (Swab Financial, LLC v. E*Trade Securities, LLC (2007) 150 Cal.App.4th 1181, 1200;  Byerly v. Sale (1988) 204 Cal.App.3d 1312, 1315 [after court relegated complaint to arbitration, “[a]t that point the complaint, ‘having fulfilled [its] purpose, became virtually functus officio.   [Citation.]”].) The trial court, having stayed the action while arbitration proceeded, recognized that it retained jurisdiction “solely” to determine whether there was an award on the merits following the completion of the arbitration.   The trial court properly concluded it lacked jurisdiction to rule on Miranda's motion to amend the complaint.

Miranda also argues, however, that the trial court erred in subsequently dismissing the action without prejudice, while purporting to retain jurisdiction for the “enforcement of the award and other issues related to the arbitration.”   Although the court characterized its dismissal without prejudice as “[p]ursuant to stipulation,” as Miranda points out, there was no written stipulation by the parties.   Miranda's counsel argues that his request at the June 1, 2009 status conference that the court “retain jurisdiction for the duration of the arbitration and enforcement of the award and if there are other issues related to the arbitration” did not constitute a stipulation so as to make the dismissal voluntary.   In any event, a voluntary dismissal without prejudice is generally not appealable as a final judgment on the merits (Syufy Enterprises v. City of Oakland (2002) 104 Cal.App.4th 869, 879), and an involuntary dismissal without prejudice is appealable only when it is clear that the court intended a final judicial determination of the rights of the parties.  (Topa Ins. Co. v. Fireman's Fund Ins. Companies (1995) 39 Cal.App.4th 1331, 1335-1336.)   In this case, the trial court's retention of jurisdiction shows that the court did not intend a final judgment terminating the rights of the parties in the action, and so even if involuntary, the dismissal without prejudice is not an appealable order.

We construe the dismissal without prejudice as a stay, and remand this matter to the trial court to proceed in accordance with our construction.   The appeal is dismissed as premature.

DISPOSITION

The appeal is dismissed as premature.   The June 1, 2009 order dismissing without prejudice is construed as an order staying proceedings, and the matter is remanded to the trial court to proceed in accordance with that construction.   The parties are to bear their own costs on appeal.

NOT TO BE PUBLISHED.

We concur:

FOOTNOTES

FN1. All further statutory references are to the Code of Civil Procedure..  FN1. All further statutory references are to the Code of Civil Procedure.

FN2. At the hearing, the parties informed the trial court that they were in the final phases of setting the arbitration panel..  FN2. At the hearing, the parties informed the trial court that they were in the final phases of setting the arbitration panel.

FN3. Like Miranda, the plaintiff in Muao unsuccessfully opposed the petition to compel arbitration on the basis that the arbitration agreement was procedurally and substantively unconscionable.  (Muao v. Grosvenor Properties, Ltd.,supra, 99 Cal.App.4th at p. 1088.)   We decline Miranda's suggestion, made for the first time in the reply brief, that we exercise our discretion to treat the appeal as a petition for writ of mandate because the circumstances are “unusual.”.  FN3. Like Miranda, the plaintiff in Muao unsuccessfully opposed the petition to compel arbitration on the basis that the arbitration agreement was procedurally and substantively unconscionable.  (Muao v. Grosvenor Properties, Ltd.,supra, 99 Cal.App.4th at p. 1088.)   We decline Miranda's suggestion, made for the first time in the reply brief, that we exercise our discretion to treat the appeal as a petition for writ of mandate because the circumstances are “unusual.”

FN4. Within that vestigial jurisdiction a court may consolidate separate arbitration proceedings (§ 1281.3);  grant a petition to appoint an arbitrator if the parties' method for appointment fails (§ 1281.6);  grant a provisional remedy “upon the ground that the award to which the applicant may be entitled may be rendered ineffectual without provisional relief” (§ 1281.8, subd. (b));  and (as stated above) rule on a petition to confirm, correct, or vacate the arbitration award (§ 1285).  (See Titan/Value Equities Group, Inc. v. Superior Court (1994) 29 Cal.App.4th 482, 487.).  FN4. Within that vestigial jurisdiction a court may consolidate separate arbitration proceedings (§ 1281.3);  grant a petition to appoint an arbitrator if the parties' method for appointment fails (§ 1281.6);  grant a provisional remedy “upon the ground that the award to which the applicant may be entitled may be rendered ineffectual without provisional relief” (§ 1281.8, subd. (b));  and (as stated above) rule on a petition to confirm, correct, or vacate the arbitration award (§ 1285).  (See Titan/Value Equities Group, Inc. v. Superior Court (1994) 29 Cal.App.4th 482, 487.)

ROTHSCHILD, Acting P. J. CHANEY, J.