Imagine that after trying a case to a jury, both parties move for a directed verdict in chambers, and the judge says he is going to grant the defendant’s motion. But before the motion is actually granted, the plaintiff moves to dismiss the case voluntarily without prejudice. Amazingly, the judge goes along with this, allowing the plaintiff to claim the judicial equivalent of what golfers call a mulligan and pretend that the complaint never was filed. Has justice been served or has an outrage occurred?

In addressing precisely this situation in Casner v. Daily News Company, 16 Cal.2d 410 (1940), California Supreme Court Associate Justice Douglas Edmonds wrote that allowing the plaintiff to dismiss with impunity and start all over again would cause “the greatest astonishment among the bench and the bar” and would be an “obvious” and “gross injustice” and a waste of judicial resources. But Justice Edmonds was a lone dissenter.

Things have changed since Casner. Most notably, the dismissal statute was rewritten in 1947 to preclude dismissal after “the actual commencement of trial.” See California Code of Civil Procedure Sections 581(b)(1) and 581(c). But the kind of mischief condemned by Justice Edmonds can just as easily result from a voluntary dismissal before trial. It would disserve justice just as much, for example, to allow a plaintiff to voluntarily dismiss moments before a summary judgment is granted for the defendant. Mindful of this potential unfairness, courts have found other limitations on the right to voluntarily dismiss an action.

And, as three appellate cases decided this year show, the law in this area is still developing, with the basic rule being that plaintiffs should not be able to use a voluntary dismissal to manipulate the system or cause unfairness.

Practically speaking, the absolute right to dismiss without prejudice is foreclosed once the action has proceeded to a determinative adjudication or to a decision that is equal to an adjudication. Harris v. Billings, 16 Cal.App.4th 1396 (1993).

Thus, a plaintiff cannot dismiss without prejudice in any of the following situations:

• After a demurrer is sustained without leave to amend. Wells v. Marina City Properties Inc., 29 Cal.3d 781 (1981).
• After summary judgment is ordered for a defendant. Sweat v. Hollister, 37 Cal.App.4th 603 (1995).
• When a ruling for mandatory dismissal is pending. M&R Properties v. Thomson, 11 Cal.App.4th 899 (1992).
• After the plaintiff has admitted dispositive facts entitling the defendant to judgment. Miller v. Marina Mercy Hospital, 157 Cal.App.3d 765 (1984).
• Where a referee has already issued an opinion after a hearing. Gray v. Superior Court (Hunter), 52 Cal.App.4th 1615 (1997).
• Where the plaintiff has failed to file a timely opposition to a motion for summary judgment. Cravens v. State Board of Equalization, 52 Cal.App.4th 253 (1997).

In Gray, an action to partition real property, the parties stipulated to the appointment of a referee, who presided over a two‑day evidentiary hearing that involved argument and evidence, including testimony from seven witnesses. After the referee issued extensive findings and a recommendation favoring Gray, the losing plaintiff voluntarily dismissed the complaint without prejudice under Section 581, contending that the proceedings before the referee did not amount to the commencement of an actual trial. Gray moved to vacate the dismissal, pointing out that he had already spent more than $50,000 on attorney fees, witness fees and costs, and that allowing plaintiff to drop the suit without prejudice would expose him to another round of duplicative and costly litigation.

Although the trial court denied Gray’s motion to vacate, the Court of Appeal disagreed. That court found that a plaintiff’s right to dismiss without prejudice “at any time before the commencement of trial” is cut off by the commencement of evidentiary proceedings before a referee. Accordingly, the court granted the writ and ordered the trial court to vacate the dismissal and reinstate the complaint.

The fundamental issue is fairness to the defendant. But the integrity of the judicial system is also implicated.

In finding against the voluntary dismissal, the Gray court looked to Herbert Hawkins Realtors Inc. v. Milheiser, 140 Cal.App.3d 334 (1983), where the court of appeal had found that allowing a voluntary dismissal after an unfavorable arbitration would mock the integrity of the arbitration, produce an absurd result, and promote mischievous lawyering. By the same token, the Gray court reasoned, the trial court’s ruling would undermine proceedings before a referee. As the Gray court explained, the fundamental issue is fairness to the defendant. But the integrity of the judicial system is also implicated. Allowing a plaintiff to dismiss after the parties have begun to put forth evidence before a fact finder, or after a pretrial ruling effectively disposes of the case, would be a mockery of the system.

Similar sentiments guided the decision in Cravens, which relied on much of the same authority. After Inez Cravens sued the State Board of Equalization, the board moved for summary judgment. Cravens filed no opposition and did nothing until the day before the hearing, when she requested dismissal without prejudice. Notice of the dismissal did not reach the board or the judge before the hearing, so counsel appeared as scheduled and the judge granted summary judgment for the board. Even after learning of the dismissal, the trial court entered judgment based on its ruling.

The Court of Appeal affirmed, holding that if a plaintiff fails to oppose a properly noticed summary judgment motion and then tries to dismiss after the deadline for opposition has passed, the trial court may still rule on the motion. As the court explained, the right to voluntarily dismiss is not absolute. Recognizing the dismissal would “frustrate the summary judgment statute.”

Just two months after Cravens, the court faced a similar issue in La Galleria Condominium v. Wells Fargo Bank (1997). But there, the court upheld the voluntary dismissal, voiding the trial court’s ruling that had converted it into a dismissal with prejudice.

In La Galleria, a tenant brought two causes of action against its landlord, including a claim relating to rent increases. After the landlord prevailed on summary adjudication of one claim, the parties spent several months negotiating potential resolution of the remaining issues. When the landlord later indicated it would file another dispositive motion, the plaintiff dismissed the case. The court found that the dismissal was not unfair to the defendant and did not undermine the process.

These cases illustrate that where the interests of justice demand it, a plaintiff does not retain an absolute right to dismiss an action, even though an actual trial has not begun in the strictest sense. On the other hand, courts are not attempting to draw a rigid bright line short of trial. Rather, they focus on fairness and the integrity of the judicial process. When the outcome in a case has become clear, a plaintiff will not be able to dismiss without prejudice simply to avoid an adverse result.

Reprinted with permission from Daily Journal.