Judge: Kristin S. Escalante , Case: 20STCV46019, Date: 2023-03-23 Tentative Ruling
Case Number: 20STCV46019 Hearing Date: March 23, 2023 Dept: 24
MOVING PARTY: Guadalupe Pharmacy, Inc. (Plaintiff);
San Marcos Pharmacy, Inc. (Plaintiff)
RESP. PARTY:
NATURE OF PROCEEDINGS: Hearing on Motion for Order
to Lift Stay
The above-captioned
matters are called for hearing.
The Court has
read the moving papers in the above-captioned motions and announces its
tentative ruling in open Court.
The Motion for Order to Lift Stay; reservation no.:
400596887472 filed by Plaintiffs Guadalupe Pharmacy, Inc. and San Marcos
Pharmacy, Inc. on 02/21/2023 is GRANTED.
Plaintiffs
Guadalupe Pharmacy, Inc. and San Marcos Pharmacy, Inc. (collectively
“Plaintiffs”) move for an order lifting the stay in the present case pursuant
to Code of Civil Procedure section 1281.4. (Motion, at p. 3.)
This is breach
of contract case. On December 2, 2020, Plaintiffs filed suit against various
corporate entities and in May 2021, Plaintiffs filed the operative first
amended complaint (“FAC”). The relationships between the various corporate
defendants as set out in the moving papers are as follows: (a) Elixir Rx
Solutions is the predecessor to Envision Pharmaceutical Services, LLC
(collectively “Elixir Defendants”) and (b) Rx Options, LLC is the predecessor
to Elixir Rx Options LLC (collectively “Rx Defendants”). The FAC alleges four
cases of action against Rx Defendants and Elixir Defendants (collectively
“Defendants”).
In July 2021, Rx Defendants
moved to compel arbitration. The court granted the motion in part, i.e., “to
the extent it seeks to compel Plaintiffs to submit their claims against
Defendant Elixir Rx Options, LLC and to stay the action pending completion of
arbitration.” (Aug.
3, 2021, Minute Order.) The court further stayed
the action against all Defendants. Plaintiffs then arbitrated against Rx
Defendants. (Reply, at p. 3.)
Now, Plaintiff moves to lift
the stay against all Defendants, no doubt, with the intention of proceeding
against the Elixir Defendants. Rx Defendants have separately moved confirm the
arbitration award in Rx Defendants favor against Plaintiffs.
In response to the motion to
lift the stay, Defendants request the court lift the stay for the limited
purpose of confirming the arbitration award. They argue the determinations of
the arbitration proceeding make Plaintiffs ability to proceed against Elixir
Defendants impossible.
If the court has ordered arbitration, then upon motion of a
party, the code of civil procedure required the court 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.” (Code Civ. Proc.,
§ 1281.4.)
Neither party dispute that arbitration has concluded in the
matter against Rx Defendants. Thus, the court may lift the stay to confirm the
arbitration award and for Plaintiffs to proceed with those claims against
Elixir defendants which did not proceed to arbitration. (See Code Civ. Proc.,
§1281.4, see also MKJA, Inc. v. 123 Fit Franchising, LLC (2011) 191 Cal.App.4th
643, 659-61.)
Defendants appear to implicitly argue that the arbitration
determination will be res judicata to Plaintiff’s claims against Elixir
Defendants. However, a “a private arbitration award cannot have nonmutual
collateral estoppel effect unless the arbitral parties so agree.” (Vandenberg
v. Superior Ct. (1999) 21 Cal.4th 815, 836–37.) The parties have not
sufficiently briefed what effect, if any, the arbitration determination would
have on the claims Plaintiffs make against the Elixier Defendants. Further,
Defendants cite no authority for the premise that claims of res judicata, or
collateral estoppel are grounds to deny a motion to lift the stay.
To the extent Defendants implicitly argue that the
arbitration proceedings bar further litigation by Plaintiff under any
circumstances, that is also incorrect. When the court defers court proceedings
while the arbitration proceeds, it may confirm the arbitration award as a
judgment. These proceedings do not affect the viability of the remaining
nonarbitable claims. (Cuevas v. Truline Corp. (2004) 118 Cal.App.4th 56, 60-61
[entry of judgment on arbitration award does not bar remaining claims in pending
(stayed) litigation under single judgment rule].)
Accordingly, having completed
arbitration, the court grants the motion to lift the stay.
Moving party is directed to give notice.