In Kurwa v. Kislinger (2013) 57 Cal.4th 1097, the California Supreme Court was faced with the issue as to whether "an appeal may be taken when the judgment disposes of fewer than all the pled causes of action by dismissal with prejudice, and the parties agree to dismiss the remaining counts without prejudice and waive operation of the statute of limitations on those remaining causes of action."
This dilemma often arises when the trial court knocks out a plaintiff or cross-complainant's strongest causes of action and the party has to decide whether to proceed on the remaining, but weaker, causes of action before appealing. They may be concerned about possibly getting a poor result in the first trial, appealing, and then going back for a second trial. When faced with this problem, attorneys have often dismissed the weak causes of action without prejudice and then appealed a seemingly "final" judgment.
In Kurwa, the Supreme Court noted that the one final judgment rule precludes an appeal from a judgment disposing of fewer than all causes of action between the parties, "even if the remaining causes of action have been severed for trial from those decided by the judgment." It found that a judgment that disposes of fewer than all causes of action is interlocutory and not yet final. The Court stated:
"When, as here, the trial court has resolved some causes of action and the others are voluntarily dismissed, but the parties have agreed to preserve the voluntarily dismissed counts for potential litigation upon conclusion of the appeal from the judgment rendered, the judgment is one that 'fails to complete the disposition of all the causes of action between the parties.' (Morehart, supra, 7 Cal.4th at p. 743) and is therefore not appealable."
The Supreme Court concluded that while the remaining causes of action are no longer pending before the trial court, the parties have arranged for those causes of action to be "resurrected upon completion of the appeal," thus meaning they are "'legally alive' in substance and effect.' As such, this tactic allows the parties to "evade" the one final judgment rule.
A plaintiff or cross-complainant can voluntarily dismiss a cause of action without prejudice pursuant to trial, pursuant to Code of Civil Procedure section 581(b)(1) and (c), but it is the agreement to waive the statute of limitations that kept the claim alive and allowed for its later revival. And it did not matter to the Supreme Court that the judgment did not incorporate the parties' agreement. Nor would they consider arguments supporting appellate efficiency, noting California law does not provide for a "case-by-case efficiency exception" to the one final judgment rule, and "[w]here unusual circumstances justify it, review of interlocutory judgments may be obtained by petition for writ of mandate, but not by appeal."