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■ Lewis C. Nelson & Sons, Inc v. Lynx Iron Corp., No. F055815

Lewis C. Nelson & Sons, Inc. (plaintiff), the general contractor on a school construction project, filed a lawsuit in Fresno County Superior Court against Lynx Iron Corp. (Lynx) and St. Paul Fire and Marine Insurance Company (St. Paul) (jointly, defendants) seeking damages for delays in performance of a subcontract and recovery on a performance bond (the Fresno action).  Thereafter, the parties signed a document that defendants believed was a complete settlement of the Fresno action and, consistent with that belief, defendants filed a motion in the trial court to enforce the settlement and enter judgment in their favor pursuant to Code of Civil Procedure section 664.6.[1]  While that motion was pending, plaintiff voluntarily dismissed the Fresno action without prejudice.  At approximately the same time, plaintiff filed the identical lawsuit in Kern County Superior Court (the Kern action).  Defendants asserted their section 664.6 motion in the Kern action, but the trial court there denied the motion on the rationale that the Kern action was not pending at the time of the purported settlement.  Frustrated by this turn of events, defendants returned to Fresno County Superior Court and moved to vacate plaintiff’s dismissal of the Fresno action on the ground that it was an unfair tactical ploy designed to defeat defendants’ ability to expeditiously enforce the settlement under section 664.6.  The trial court granted defendants’ motion, vacated the dismissal and subsequently heard defendants’ motion to enforce settlement under section 664.6, which it likewise granted.  Plaintiff appeals on the ground that the trial court abused its discretion in setting aside its voluntary dismissal of the Fresno action.  We agree and accordingly reverse.. . . .

 Plaintiff’s appeal followed.  Plaintiff contends the trial court abused its discretion when it (1) vacated plaintiff’s dismissal of the Fresno action, and (2) granted the motion to enforce settlement.  As discussed below, the first ground is correct and fully disposes of this appeal.

DISCUSSION

            The dispositive issue in this case is whether the trial court erred in vacating plaintiff’s voluntary dismissal, without prejudice, of the Fresno action.  We conclude that it did.  In so holding, we note that the facts material to our review are undisputed.  In applying a statute to undisputed facts, our review is de novo.  (Zapanta v. Universal Care, Inc. (2003) 107 Cal.App.4th 1167, 1171.)

            Section 581 allows a plaintiff to voluntarily dismiss an action, with or without prejudice, at any time before the “actual commencement of trial.”  (§ 581, subds. (b)(1), (c).)  As stated by the California Supreme Court:  “Apart from certain … statutory exceptions, a plaintiff’s right to a voluntary dismissal [before commencement of trial pursuant to section 581] appears to be absolute.  [Citation.]  Upon the proper exercise of that right, a trial court would thereafter lack jurisdiction to enter further orders in the dismissed action.”  (Wells v. Marina City Properties, Inc. (1981) 29 Cal.3d 781, 784.)  “Alternatively stated, voluntary dismissal of an entire action deprives the court of both subject matter and personal jurisdiction in that case, except for the limited purpose of awarding costs and … attorney fees.  [Citations.]”  (Gogri v. Jack in the Box, Inc. (2008) 166 Cal.App.4th 255, 261.)

            A plaintiff’s right to voluntarily dismiss an action ceases at the “commencement of trial.”  (§ 581, subds. (b)(1), (c).)  The concept of “trial” in section 581 is “not limited to ‘trial’ in the conventional sense but also includes determinations on matters of law which dispose of the entire case, such as some demurrers and pretrial motions.”  (Kyle v. Carmon (1999) 71 Cal.App.4th 901, 909.)  Therefore, “commencement of trial” under section 581 “includes pretrial procedures that effectively dispose of the case.”  (Gogri v. Jack in the Box, Inc., supra, 166 Cal.App.4th at p. 262.)  For example, a plaintiff’s right to voluntarily dismiss his or her action under section 581 is cut off when a general demurrer is sustained without leave to amend, or when a general demurrer is sustained with leave to amend and the plaintiff fails to amend within the time allowed by the court, even if the trial court has not yet entered a judgment of dismissal on the sustained demurrer.  (Wells v. Marina City Properties, Inc., supra, 29 Cal.3d at pp. 785, 789.)  The California Supreme Court found in these instances that a “trial” had occurred within the meaning of section 581, thereby terminating the plaintiff’s right to file a voluntary dismissal.  (Wells, at p. 785.)  If this were not so, “‘“litigation would become interminable, because a party who was led to suppose a decision would be adverse to him could prevent such decision and begin anew, thus subjecting the defendant to annoying and continuous litigation.”’”  (Ibid., citing Goldtree v. Spreckels (1902) 135 Cal. 666, 671.)

■ Held:

In an action seeking damages for delays in performance of a subcontract and recovery on a performance bond, trial court's grant of defendant's motion to vacate the voluntary dismissal of the earlier action between the parties is reversed where the plaintiff's voluntarily dismissal of the earlier action pursuant to Code of Civ. Pro. sec. 581 was timely as there was no commencement of trial, and thus plaintiff’s right to dismiss under sec. 581 was not cut off.
Lewis C. Nelson etc. v. Lynx Iron-F055815-5/21/09 CA5
Lewis C. Nelson etc. v. Lynx Iron-F055815-5/21/09 CA5-PDF

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