Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from an order of the Superior Court of Los Angeles County Super. Ct. No. BC332373, Conrad Richard Aragon, Judge.
Nick A. Alden for Plaintiff and Appellant.
No appearance for Defendant and Respondent.
VOGEL, J.
Three lawsuits involving the same parties and the same facts were filed -- a shareholder’s derivative action in Delaware, and two in California by a former director of the corporation that is the subject of the derivative action. On the corporation’s motion, the trial court dismissed both California actions without prejudice. On the former director’s unopposed appeal, we reverse with directions to the trial court to stay the California actions until the Delaware action is resolved, then take such further action as is appropriate.
FACTS
A.
In March 2005, in the Delaware Court of Chancery, the Canadian Commercial Workers Industry Pension Plan (CCWIPP), on behalf of Case Financial, Inc., filed a shareholder’s derivative action against Eric Alden, the former president, chief executive officer, and co-chairman of Case Financial, charging Alden with self-dealing in breach of his fiduciary duties, fraud, and other wrongdoing. CCWIPP, a Canadian pension plan, owns about 1.5 million shares in Case Financial, a Delaware corporation.
B.
In April 2005, in Los Angeles, Alden sued CCWIPP, Case Financial, and an individual (Clifford Evans) for breach of contract and fraud, alleging that, by filing the Delaware lawsuit, CCWIPP had breached a June 2004 settlement agreement with Alden. According to Alden, his employment by Case Financial was wrongfully terminated at the behest of CCWIPP after Alden objected to the terms of a loan made by CCWIPP to Case Financial, as a result of which Alden had asserted claims against both CCWIPP and Case Financial. Alden alleges that those claims were settled in June 2004, at which time agreements and mutual releases were executed, thus barring CCWIPP’s Delaware action. Copies of the Delaware complaint and the settlement agreements are attached to Alden’s complaint.
In June 2005, Case Financial filed a motion to stay or, in the alternative, dismiss Alden’s action on the ground that another action between the same parties and concerning the same subject matter was pending in Delaware. The motion explains that, among other things, the Delaware complaint prays for a declaration that the June 2004 release executed by Alden and Case Financial is null and void. CCWIPP then filed a virtually identical motion.
In July 2005, on comity and forum non conveniens grounds, the trial court stayed Alden’s action.
C.
In April 2006, in Los Angeles, Alden filed a second action against CCWIPP, Case Financial, and Evans. In his first amended complaint filed in May, Alden sought damages for intentional interference with his employment contract (against CCWIPP), wrongful termination (against Case Financial), fraud (against both entities), and intentional infliction of emotional distress (against all defendants). The allegations in the 2006 complaint are substantively indistinguishable from the allegations in Alden’s 2005 action.
In July, Case Financial and CCWIPP filed a motion to stay or dismiss Alden’s 2006 action in favor of the Delaware action. The trial court consolidated Alden’s two actions, then granted the motion to dismiss his 2006 action. Confusion arose about whether the order to dismiss covered both actions, and the trial court ultimately issued an order to show cause why Alden’s 2005 action should not also be dismissed and, after a hearing in January 2007, issued an order dismissing both of Alden’s action without prejudice. Alden appeals.
By stipulation, Alden dismissed the appeal as to CCWIPP. Case Financial has not filed a respondent’s brief.
DISCUSSION
In a series of related arguments, Alden contends his lawsuits should not have been dismissed. We agree that the consolidated actions should have been stayed, not dismissed.
A California court may stay or dismiss an action when, in the interest of “wisdom and justice,” the court determines that a stay will avoid a multiplicity of suits, vexatious litigation, conflicting judgments, confusion, or “unseemly controversy” between litigants and courts of different jurisdictions. This is the doctrine of comity. (Simmons v. Superior Court (1950) 96 Cal.App.2d 119, 124-125.) Because there are no disputed questions of law or fact, the only issue on this appeal is whether the trial court abused its discretion (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478-479), and we will reverse only upon a showing of abused discretion (Westside Community for Independent Living, Inc. v. Obledo (1983) 33 Cal.3d 348, 355).
It appears there may be some jurisdictional limitations on Alden’s ability to assert his affirmative claims in the Delaware court. (Del. Const., art. IV, §§ 1, 10; Del. Code Ann., tit. 10, §§ 341, 342.) It also appears that the validity of Alden’s claims depends in substantial part on the resolution of the Delaware action. If CCWIPP prevails in Delaware, that judgment may bar Alden’s claims; but if Alden prevails in Delaware, the claims asserted in his California actions may be viable. We emphasize that this is nothing more than an assumption on our part, and that we are not deciding one way or the other whether the resolution of the Delaware case will, in fact, affect the outcome of the California cases. The point is that it may, not that it will.
The problem with the trial court’s approach -- dismissal of Alden’s actions without prejudice -- is that we do not know how much time it will take to resolve the Delaware action, and thus cannot be certain that Alden would be able to refile his claims within the period of limitations. Under these circumstances, the proper remedy is a stay, not dismissal. (Chang v. Superior Court (1997) 58 Cal.App.4th 1032, 1039-1040 [when the trial court defers an action in favor of another forum, the court should stay the local proceeding, rather than dismiss].)
DISPOSITION
The order of dismissal is reversed, and the cause is remanded to the trial court with directions to enter a new order staying Alden’s consolidated actions pending resolution of the Delaware action, and to thereafter proceed as appropriate. Alden is to pay his own costs of appeal.
We concur: MALLANO, Acting P.J., ROTHSCHILD, J.