Judge: Elaine W. Mandel, Case: SC118236, Date: 2022-10-21 Tentative Ruling

Case Number: SC118236    Hearing Date: October 21, 2022    Dept: P

Tentative Ruling

Natalie Swaim, et al. vs. Top Surgeons, et al., Case No. SC118236

Hearing Date October 21, 2022

Plaintiffs’ Motion to Lift Superior Court Stay

Plaintiffs Swaim sued for medical negligence, lack of informed consent, unfair business practices and loss of consortium arising out of lap band surgery. Claims against certain defendants were sent to arbitration pursuant to an arbitration agreement; doctor defendants Moe and Laughlin, who were not parties to the agreement, were granted a stay of the proceedings in March 2017. See March 15, 2017 Minute Order. The arbitration was stayed in May 2020 due to ongoing criminal proceedings against defendant doctor Omidi. Ex. D to Liberatore Decl. Defendant Omidi was convicted and plans to appeal. Liberatore Decl. ¶8. 

Plaintiffs seek to lift the stay as to defendants Moe and Laughlin. Defendants in arbitration and Omidi, in pro per, oppose. No opposition was filed by defendants Moe and Laughlin.

Code of Civil Procedure §1281.4 requires a stay of litigation when a court orders arbitration of a controversy that is an issue in the litigation. The court in which the litigation is pending is required to “stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.” Id. The purpose of the stay is to protect the jurisdiction of the arbitrator by preserving the status quo until arbitration is resolved. MKIA Inc. v. 123 Fit Financing, LLC, 191 Cal.App.4^th 643, 658. Absent a stay, continuation of the proceedings in the trial court may disrupt the arbitration proceedings and may render them ineffective. Id.; see also Federal Ins. Co. v. Superior Court (1998) 60 Cal.App.4^th 1370, 1374-1375.

In SWAB Financial, LLC v. E*Trade Securities, LLC (2007) 150 Cal.App.4^th 1181, 1200, the Court of Appeal emphasized that, after granting a petition to compel arbitration and staying a lawsuit, the scope of jurisdiction retained by the trial court is narrow: “Once a petition is granted and the lawsuit is stayed, the action at law sits in the twilight zone of abatement with the trial court retaining merely vestigial jurisdiction over matters submitted to arbitration.”  Id. Under certain circumstances, a trial court has jurisdiction to lift a stay. One such circumstance is where lifting the stay will not frustrate the arbitrator’s jurisdiction, such as when “an issue in litigation subject to a stay is removed from the litigation … or the arbitrable controversy is removed from arbitration[.]” MKIA, supra, 191 Cal. App. 4^th at 660-661.

Plaintiffs argue the claims in arbitration are different from the claims before this court, since the claims here arise out of medical negligence, not fraud and deceit. The court finds the remaining issues are interrelated to those in arbitration and granting this motion would frustrate the arbitrator’s jurisdiction. Claims by plaintiff Nick Swaim of loss of consortium by necessity arise out of and are derivative of claims of medical negligence by plaintiff Natalie Swaim.

Additionally, there are issues of potential findings against some defendants, where there may be joint and several liability with defendants in arbitration. Finally, the arbitration defendants will likely file a cross-claim for indemnification from defendants Moe and Laughlin should they be found liable in arbitration. For all these reasons, the motion is DENIED.