Southern Pac. Transp. Co. v. Mendez Trucking, Inc.

Opinion

Southern Pacific Transportation Company (appellant) appeals the judgment entered on the arbitration award issued in favor of

Facts

Plaintiff Joseph Christopher, an employee of appellant, was injured at work when the vehicle he was operating collided with a truck operated by Adolfo Flores on behalf of respondent. Plaintiff sued appellant, respondent, and Flores for negligence. Appellant cross-complained against respondent, alleging causes of action for contractual indemnity, implied indemnity, breach of an agreement to provide insurance, and declaratory relief. Respondent cross-complained against appellant, alleging causes of action for implied indemnity, equitable contribution, and declaratory relief. The trial court referred the entire action to mandatory judicial arbitration.

The arbitration resulted in the award to plaintiff of $175,000 against the three defendants. The award also denied any recovery for appellant and respondent on their respective cross-complaints. The award made no allocation of fault among the codefendants.

Plaintiff filed a timely request for trial de novo in September 1996. The matter was returned to the civil calendar. Shortly before the scheduled trial date, plaintiff settled his complaint against both appellant and respondent. Thus, plaintiff is no longer a party to this action.

In May 1997, when the matter was assigned for trial, respondent made a motion in limine arguing, among other things, that because appellant had not filed a request for trial de novo in September 1996, the arbitration award constituted a final determination on its cross-complaint against respondent. Relying on Demirgian v. Superior Court (1986) 187 Cal.App.3d 372 [ 231 Cal.Rptr. 698 ], the trial court granted respondent’s motion and dismissed appellant’s cross-complaint. Appellant timely appealed that decision.

Discussion

Any party whose case has been submitted to mandatory judicial arbitration “may elect to have a de novo trial, by court or jury, both as to law and facts.”

Here, a request for trial de novo was filed by plaintiff Christopher, a party to the action. The question presented is whether plaintiff’s action in filing a request for de novo trial returned the entire action, including the cross-complaints, to the civil calendar. We conclude that it did.

The issue before us was first considered by the Court of Appeal in Trump v. Superior Court (1981) 118 Cal.App.3d 411 [ 173 Cal.Rptr. 403 ]. In that case, the plaintiff sued one defendant (Carlino) for breach of a partnership agreement and fraud in inducing the plaintiff to enter into the partnership agreement; two other defendants (the Trumps) for breach of an agreement to purchase a business, fraud in inducing the plaintiff to purchase the business, rescission of the agreement to purchase the business, and restitution; and a fourth defendant (Wetherbee) for trespass. The Trumps cross-complained against plaintiff for breach of the agreement to purchase, while Wetherbee cross-complained for goods sold and delivered.

The action was referred to mandatory judicial arbitration, which resulted in the following decision: Plaintiff was awarded $21,500 against Carlino; the Trumps were awarded $7,500 plus interest against plaintiff; Wetherbee took nothing by his cross-complaint.

Carlino filed a de novo trial request with respect to the award against him on the day before the last day to file such a request. Plaintiff filed a belated request for trial de novo as to the Trumps. The Trumps objected to plaintiff’s request, since it was not filed in the relevant time period. The trial court ultimately ordered the trial to proceed “ ' “as to all parties and all issues.” ’ ” (Trump v. Superior Court, supra, 118 Cal.App.3d at pp. 414-415.)

The Court of Appeal affirmed that ruling. Looking to the statutory language, the court noted that the Legislature did not expressly contemplate the

In Demirgian v. Superior Court, supra, 187 Cal.App.3d 372 , our colleagues in Division Seven of this district were presented with the more persuasive factual situation posited by the Trump court. There, two plaintiffs, a mother and son, sued the defendant for personal injuries. The son entered into a settlement agreement with the defendant. Later, the son was permitted to file a supplemental cause of action alleging that the defendant breached the settlement agreement.

The entire matter was ordered to mandatory arbitration. The arbitrator ruled in favor of the mother on her personal injury cause of action, and in favor of the son on his breach of contract cause of action. The defendant did not file a request for trial de novo as to either cause action. The mother, however, did. When the son moved for an order entering judgment on his arbitration award, the defendant objected, contending that the mother’s request for trial de novo caused the entire matter to be retried in court. The trial court agreed.

The Court of Appeal reversed. It found persuasive the fact that the mother and son had distinct, independent claims against the defendant, the mother for personal injury and the son for breach of contract. As the court put it, “The same judge, jury, or arbitrator—or different judges, juries, or arbitrators—could have found [son]’s claim was valid but his mother’s not, or vice versa.” (Demirgian v. Superior Court, supra, 187 Cal.App.3d at p. 377.)

As we understand the foregoing cases, Trump establishes that a timely request for trial de novo operates to vacate the arbitration award in its entirety, putting the case at large as though no arbitration proceedings had occurred. (Accord, Muega v. Menocal (1996) 50 Cal.App.4th 868 , 876 [ 57

This is not to say that a statute or rule might not be adopted which would require each party who wishes to have the cause tried to a court or jury to file a request for trial de novo or forego the right to a trial, regardless of whether another party to the action has filed such a request. However, unless and until such a rule is promulgated, we conclude that one party’s de novo trial request operates to vacate the entire arbitration award, including an award on a factually and legally related cross-complaint.

Since we reverse the judgment below, respondent is no longer the prevailing party, and thus not entitled to attorney fees pursuant to Civil Code section 1717. Accordingly, the order awarding attorney fees is also reversed.

Disposition

The judgment and order are reversed. Appellant is to recover its costs on appeal.

Turner, P. J., and Grignon, J., concurred.