Result: 1st District, Div. 5 Holds That Trial Court Properly Vacated Dismissal and Entered Judgment on Unfavorable Reward
In Lee v. Kwong, 193 Cal.App.4th 1275, 123 Cal.Rptr.3d 633 (2011), plaintiff entered into an agreement to purchase a Chinese restaurant from seller, but seller ended up selling to a third party, leaving buyer with a sour taste. The purchase and sale agreement included an arbitration provision, and judicial arbitration ensued.
The outcome of the arbitration was unfavorable to the buyer, who moved for a trial de novo, and then voluntarily dismissed the complaint without prejudice. As a result, the trial court vacated the dismissal, and entered judgment on the award.
Appellants argued that, since they requested a trial de novo, and since they had only judicially arbitrated, they were entitled to a dismissal without prejudice. Unfortunately for them, precedent was to the contrary: "[A]n arbitration is viewed as a trial on the merits," pursuant to section 581. [citations omitted] Accordingly, appellate courts have uniformly held that a party repudiates its request for a trial de novo after judicial arbitration when it subsequently voluntarily dismisses a complaint. Such action by a party who has received an unfavorable judicial arbitration award triggers finalization of the judicial arbitration award as judgment.”
For a blog post on the other part of the opinion concerning attorney’s fees, see the post on California Attorney’s Fees.