When your business files a lawsuit, an early ruling from the judge can change the entire course of the case. If that ruling goes against you, it may be tempting to look for the fastest way to get in front of the Court of Appeal. A recent California Supreme Court decision shows why one shortcut, voluntarily dismissing your case too soon, can cost you the very appeal you’re trying to pursue.

A Shortcut That Can Cost You More Than Time

You’ve spent months preparing your lawsuit. The complaint is filed, the case is moving forward, and then the judge dismisses several of your claims. The judge gives you permission to amend them, but you believe the ruling is legally wrong.

Now you’re faced with a decision. Do you spend more time and money continuing the case, or do you end it now and appeal?

At first glance, dismissing the lawsuit might seem like the quickest route. If the case is over, you should be able to appeal, right?

Not necessarily.

In Maniago v. Desert Cardiology Consultants’ Medical Group, the California Supreme Court made clear that voluntarily dismissing your case before the trial court has finally resolved your claims does not automatically create a right to appeal. In the wrong circumstances, it can do the opposite.

The Shortcut That Didn’t Work

The plaintiffs in Maniago sued a cardiologist and his medical group, alleging multiple causes of action. The trial court sustained demurrers to several claims with leave to amend, meaning the plaintiffs had the opportunity to revise those claims and continue litigating. One negligence claim was still pending, and another claim had not been challenged at all.

Rather than amend the complaint or continue with the remaining claims, the plaintiffs voluntarily dismissed the entire lawsuit before the trial court had entered a final judgment on any claim. They then attempted to appeal the rulings that had gone against them.

The Supreme Court held that this approach did not create an appealable judgment under these circumstances. Because the plaintiffs dismissed the action before the trial court had finally resolved any of their claims, the Court of Appeal did not have jurisdiction to hear the case.

Why the Supreme Court Reached That Result

California generally follows what’s known as the final judgment rule. In most civil cases, an appeal is available only after the trial court has entered a final judgment resolving the case.

The Supreme Court explained that allowing parties to voluntarily dismiss a lawsuit before any claim has been finally decided, simply to obtain immediate appellate review, would undermine that rule and encourage piecemeal appeals. At the same time, the Court emphasized that its decision was limited to the facts before it. It did not decide every situation involving a voluntary dismissal, only the one presented in Maniago.

There Was a Better Option

One of the most useful parts of the decision is what the Court suggested the plaintiffs could have done instead.

Depending on the circumstances, a party may ask an appellate court to review an important issue early by filing a writ petition. Writ review is discretionary, so it is not available in every case, but it is one recognized path to early appellate review.

Another option is to allow the trial court’s rulings to become a final judgment before dismissing any remaining claims. That approach follows California’s normal appellate process and helps preserve the right to appeal.

The lesson is simple: before making a procedural decision that ends your case, make sure you understand how it could affect your appellate rights.

What This Means If You’re Suing to Protect Your Business

Business litigation is full of strategic decisions. Some involve settlement, others involve trial, and some involve deciding when, and how, to appeal.

After Maniago, businesses that bring lawsuits should think carefully before voluntarily dismissing a case after an unfavorable ruling. What looks like a faster path to appellate review could end up closing that door altogether.

If you’re considering an appeal, talk with your attorney before taking any step that could affect the timing of your case. A few extra months in the trial court may be far less costly than losing the opportunity to appeal altogether.

Bottom Line

The Maniago decision shows that litigation strategy is about more than winning or losing individual motions. The procedural choices you make along the way can determine whether an appellate court ever gets the chance to review your case.

If your business is involved in litigation and you’re considering an appeal, it’s important to understand your options before making a move that’s difficult to undo. The right strategy at the trial court level can protect your ability to challenge an unfavorable decision later. An experienced litigation attorney can help you evaluate those options and preserve your rights every step of the way.

The post This Litigation Shortcut Could Cost You Your Right to Appeal appeared first on Horst Legal Counsel.

In Doe v. Marysville Joint Unified School District (Cal. Supreme Ct., July 2, 2026), the Court held that a plaintiff who voluntarily dismisses the same claims twice, the second time in federal court, isn’t barred from bringing those state law claims all over again in California state court. For anyone who tracks litigation exposure, that’s a meaningful gap between what a federal dismissal feels like and what it actually does.

Two dismissals, then a third filing

The plaintiffs are former students who allege a school counselor abused them years ago. Those underlying facts, disturbing as they are, aren’t what the case turned on. The Court set them aside as irrelevant to the legal question. What matters here is the sequence of filings.

The plaintiffs first sued the school district in state court, then voluntarily dismissed, which simply means a plaintiff chooses to drop their own case. The same day, they refiled in federal court, adding federal claims alongside their state law claims. When the district moved to dismiss, the plaintiffs dismissed again, this time under Federal Rule of Civil Procedure 41(a)(1)(A)(i), which lets a plaintiff drop a case early without a judge’s sign-off. Each dismissal was “without prejudice,” meaning the plaintiffs reserved the right to come back. Then they filed a third time, in California state court, raising only their state law claims.

The district saw an opening. Federal Rule 41(a)(1)(B) contains what’s known as the two-dismissal rule: if a plaintiff dismisses the same claim a second time, that dismissal “operates as an adjudication on the merits,” which is legal shorthand for a ruling that treats the claim as decided. The district argued this converted the second dismissal into a final loss, one that should block the state court case under claim preclusion, the doctrine that stops a party from relitigating a claim already resolved. The trial court agreed and threw the case out. A divided Court of Appeal affirmed.

What the Supreme Court actually held

The Supreme Court reversed, and its reasoning is worth understanding because it corrects a common misreading. Leaning on the U.S. Supreme Court’s decision in Semtek Int’l Inc. v. Lockheed Martin Corp., the Court explained that the two-dismissal rule is a rule of federal procedure, not a rule of claim preclusion. “Adjudication on the merits,” as Rule 41 uses the phrase, means only that the plaintiff can’t refile the same claim in the same federal court. That’s a necessary condition for claim preclusion. It is not a sufficient one.

In plain terms, the rule polices the door of the federal courthouse where the dismissals happened. It doesn’t lock every other courthouse in the country. A dismissal that bars a refiling in federal court still doesn’t touch a plaintiff’s ability to press state law claims in state court, where the federal rule has no force at all. California, the Court noted, has no equivalent two-dismissal rule of its own.

Reading the rule any other way would raise real problems. It would push past the limits of the federal Rules Enabling Act, which bars procedural rules from enlarging or shrinking substantive rights, and it would create the very state-federal outcome gap that federalism principles exist to prevent. Because the plaintiffs’ voluntary dismissals weren’t judgments on the merits under either federal or California law, the result came out the same under both the federal and the California rules of claim preclusion.

Why this matters for your litigation strategy

For defendants, the practical lesson is direct. Don’t assume a plaintiff’s repeated dismissals mean the threat is gone. If the claims can stand on state law, they can reappear in California state court, and a federal procedural rule won’t stop them. That possibility belongs in how you evaluate settlement posture, reserves, and overall risk.

For plaintiffs and their counsel, the decision preserves flexibility. A stumble in federal court, or a deliberate retreat from it, doesn’t automatically forfeit state law claims that belonged in state court in the first place.

And for anyone choosing between forums, the case is a reminder that where you file, and where you dismiss, carries consequences that don’t always travel with you. Federal and state litigation run on different rules, and the seams between them are exactly where disputes like this one live.

The Bottom Line

A dismissed case isn’t always a closed case. Doe v. Marysville draws a clean line: the federal two-dismissal rule bars refiling in the same federal court, and nothing more. If you’re weighing whether a matter is truly behind you, or planning your next move across state and federal forums, that line is worth knowing before you lean on it.

Business litigation, appellate strategy, and the procedural questions that decide where a case can be fought are central to Horst Legal Counsel’s practice. If you’re assessing whether a dismissed matter can return, or mapping strategy across state and federal court, we’re glad to talk it through. Contact us here.

The post Dismissed Twice, Still Not Over: California Limits the Two-Dismissal Rule appeared first on Horst Legal Counsel.

The California Supreme Court decided J.O. v. Superior Court on May 28, 2026, in a unanimous opinion authored by Justice Groban. The Court overruled part of a 1977 precedent and held, for the first time, that when a party abuses the judge-disqualification statute to force a particular judge off all of their cases in bad faith, a court can look behind the paperwork and ask what’s really going on. For anyone who litigates in California, and especially for anyone who litigates against an institutional opponent, the rules around judicial disqualification just shifted.

The Tool at the Center of the Case

California’s Code of Civil Procedure section 170.6 gives every litigant a powerful right. By signing an affidavit, or simply stating under oath, that a judge is “prejudiced” against them, a party can force that judge off the case. No proof required. No hearing. The disqualification is automatic, and a new judge gets assigned. The idea behind the rule is sound. Sometimes a litigant has a good-faith belief that a judge is biased but can’t prove it, and the law would rather remove the judge than force a party to litigate in front of someone they distrust.

The problem is what happens when the tool gets weaponized. If a district attorney’s office, a public defender, a county counsel, or even a private firm that handles most of one kind of case decides it wants a particular judge gone, it can file the same challenge in case after case. Done at scale, this isn’t about prejudice in any single case. It’s about removing a judge the office doesn’t like, often because the judge ruled against them once. Courts call this a “blanket challenge.”

What Happened Here

The petitioner, identified only as J.O., is under a conservatorship in San Joaquin County. According to the allegations, after Judge Erin E. Guy Castillo admonished a county counsel attorney for improper conduct, the county counsel’s office began disqualifying her across the board in conservatorship cases. Petitioner’s counsel estimates the office filed roughly 325 section 170.6 challenges against her in under four months. The result, as alleged, was that Judge Guy Castillo got reassigned out of the department handling mental health and conservatorship matters and into one hearing misdemeanors, traffic, and small claims.

The trial court felt its hands were tied. Under the 1977 precedent, Solberg v. Superior Court, blanket challenges were treated as immune from this kind of constitutional objection, so the court rejected the challenge to the practice without ever examining whether it was made in bad faith. The Court of Appeal denied relief. The Supreme Court took the case to decide whether Solberg still held up.

The Big Move

It doesn’t, at least not on this point. The Court explained that the judiciary of 1977 looks nothing like the one operating today. Caseloads have ballooned. In 1977 there were about 54,000 felony filings statewide. In the most recent year measured, there were nearly 180,000. Courts now run specialized calendars for things like conservatorships, family law, and drug and mental health treatment, all of which depend on assigning judges with particular training. Budgets are tighter and judicial vacancies are real. In that environment, letting a party force a specialized judge off an entire category of cases does real damage to the court’s ability to run itself.

That damage, the Court held, is a separation of powers problem. The California Constitution gives the judiciary, through the presiding judge, the authority to assign its own judges. When a litigant uses blanket challenges in bad faith to override those assignments, it lets one party effectively seize a function the Constitution reserves for the courts. So the Court overruled Solberg to the extent it barred courts from examining blanket abuses, while leaving the statute itself, and every good-faith individual challenge, fully intact.

How It Works Now

The Court borrowed the familiar burden-shifting framework from jury-selection challenges. First, the party opposing a section 170.6 motion has to timely object and make a preliminary showing that the other side is lodging bad-faith blanket challenges, often by pointing to a pattern of repeated strikes against the same judge after an adverse ruling. If that showing is made, the burden shifts to the party that filed the challenge to give a genuine, case-specific reason for believing the judge is prejudiced. Then the court decides whether the challenge was made in good faith or as part of a bad-faith blanket policy. A single good-faith challenge is still automatic and still requires no proof. Only the abusive, across-the-board pattern is now open to scrutiny.

One detail worth noting for civil practitioners. The Court made clear this applies to everyone, not just prosecutors. A private law firm that handles the bulk of a particular kind of case in a small county could just as easily abuse the statute to push out the one judge hearing those matters. The constitutional problem comes from the conduct, not the identity of the party.

What This Means for Litigants

If you litigate in California, the integrity of who hears your case just got a little more protected. The practice of quietly running a judge off the bench by paper, which has frustrated courts for decades, now has a check on it. Institutional players who relied on blanket challenges as a strategic tool need to rethink that approach, because the affidavit that used to be unreviewable can now be examined when a pattern of bad faith is shown.

At the same time, the Court was careful about what it did not do. It did not touch the facial validity of section 170.6, and it rejected an amicus proposal to bar government attorneys from using the statute at all, calling that solution a step too far. Your right to disqualify a judge you genuinely believe is biased, in your own case, is exactly where it was. What changed is the ability to weaponize that right across an entire docket.

The Bottom Line

J.O. v. Superior Court restores a piece of authority the courts thought they had lost. For most litigants, the practical takeaway is reassurance that the forum is harder to manipulate. For institutional and high-volume litigants who treated blanket challenges as part of the playbook, the takeaway is a warning. The pattern that used to be invisible is now something a court can be asked to examine, and the time to reassess that strategy is before the objection lands, not after.

If your matter involves questions about judicial assignment, disqualification, or litigating against a repeat institutional opponent in California, this decision may affect how you plan your approach. Reach out to Horst Legal Counsel to talk through what it means for your case.

The post California Courts Can Now Ask Why You Keep Firing the Judge appeared first on Horst Legal Counsel.

Horst Legal Counsel | April 2026

Someone torpedoes your deal. You spend north of a million dollars in court forcing the sale through. You win. Then you sue the people who caused the mess in the first place, and you win again. But the second lawsuit cost you another $841,000 in legal fees. Can you recover those fees too?

The First District Court of Appeal just said no. In Guinnane Construction Co., Inc. v. Chess, the court confirmed that California’s “tort of another” doctrine covers the attorney fees a business is forced to spend litigating against an innocent third party because of someone else’s wrongful conduct. It does not cover the fees spent going after the wrongdoer directly. That distinction sounds technical, but for any business that has been dragged into layered litigation by a bad actor, it is the difference between full recovery and absorbing six figures in legal costs.

What Happened in Guinnane

The dispute started with an 80-acre parcel of land in Livermore. Guinnane Construction held the right to purchase a 50 percent interest in the property through an assigned right of first refusal. Edmund Jin, a prospective buyer, and his real estate agent Stephen Chess knew about that right. They pursued the deal anyway, ultimately convincing the sellers to breach their agreement and sell to Jin for $1.5 million.

Guinnane sued the sellers for specific performance. That case was fully litigated for over a year, culminating in a bench trial. Guinnane prevailed, obtaining a court order directing conveyance of the property interest in exchange for $1.2 million.

Guinnane then turned to the people who had caused the problem. It filed a separate action against Jin and Chess for inducing breach of contract and intentional interference with contractual relations. After years of litigation, including a meritless anti-SLAPP motion by the defendants that this same appellate court had already rejected, the trial court entered judgment in Guinnane’s favor. The compensatory damages totaled $1,798,994, consisting of the attorney fees Guinnane had incurred prosecuting the specific performance action plus prejudgment interest.

So far, the tort of another doctrine was working exactly as designed. The fees Guinnane spent suing the sellers were recoverable as damages against the people whose interference made that lawsuit necessary. The question was what came next.

The Fee Request the Court Denied

After judgment, Guinnane moved for an additional $841,133 in attorney fees: the cost of prosecuting the tort of another action against Jin and Chess. Guinnane argued that without recovering those fees, its judgment would be significantly diluted. It had spent over $800,000 just to collect the damages the defendants’ own conduct caused. If the doctrine existed to make Guinnane whole, shouldn’t it cover the full cost of getting there?

The trial court denied the motion, and the Court of Appeal affirmed. Presiding Justice Stewart, writing for a unanimous panel, traced the doctrine from its 19th-century English common law origins through the California Supreme Court’s foundational decisions in Prentice v. North American Title Guaranty Corp. and Gray v. Don Miller & Associates. The through line was consistent: the tort of another doctrine allows a plaintiff to recover fees spent in litigation with a third party that the defendant’s tortious conduct made necessary. It does not extend to the fees incurred in the action against the tortfeasor.

Why the Court Drew the Line

The court’s reasoning rested on the structural relationship between the tort of another doctrine and the American Rule, codified in Code of Civil Procedure section 1021, which requires each party to bear its own attorney fees absent a statute or contract providing otherwise. The tort of another doctrine is not a general fee-shifting rule. It is a narrow equitable exception that treats certain attorney fees as consequential damages, specifically, the fees a plaintiff was forced to spend because of the defendant’s wrong. Those fees are recoverable as damages “like any other damages,” but the key phrase is “in the action against the third party.”

Gray itself made this distinction. The Supreme Court there remanded for an apportionment of attorney fees, directing the trial court to award only the portion “attributable to [the plaintiff’s] action against the sellers,” not the fees incurred in the fraud action against the broker. Subsequent decisions reinforced the boundary. In Lewis v. Edmonds, this same court rejected a tort of another claim for fees incurred suing the tortfeasor, noting the doctrine “arguably would support a recovery from [the defendant] for the attorney fees incurred in [plaintiffs’] defense of the foreclosure proceeding” but not fees from “the ordinary two-party action” against the wrongdoer. Third Eye Blind, Inc. v. Near North Entertainment drew the same line, distinguishing fees recoverable under the doctrine from “attorney’s fees qua attorney’s fees” incurred in suing the tortfeasor defendant.

Guinnane tried an alternative argument: that “fees on fees” are recoverable under the private attorney general doctrine (Code of Civil Procedure section 1021.5), and the same logic should apply here. The court rejected the analogy. The private attorney general doctrine exists to incentivize enforcement of important public policies. Without fee recovery, such litigation would often be impracticable, and statutory rights would go unenforced. The tort of another doctrine serves a different function. It compensates a plaintiff for a specific economic injury. It does not aim to encourage litigation or deter bad conduct. Those are fundamentally different engines, and extending “fees on fees” from one to the other would require the kind of policy decision that belongs to the Legislature.

The court acknowledged the practical unfairness. Guinnane spent over $841,000 to collect damages that the defendants’ own tortious interference had caused, and the defendants’ aggressive litigation tactics, including a meritless anti-SLAPP motion, made the case more expensive than it needed to be. The opinion closes by noting that sanctions for frivolous litigation tactics exist as a potential remedy, but the bar is high. As for changing the underlying rule, the court said plainly: “this court is not at liberty to depart from current law.”

What This Means for California Businesses

For companies involved in real estate transactions, commercial contracts, or any business relationship where a third party’s interference might trigger cascading litigation, Guinnane offers three practical lessons.

First, budget for the full cost of enforcement. If you are the victim of tortious interference and need to sue both the breaching party and the interfering party, the tort of another doctrine will help you recover the fees from the first lawsuit. It will not help you recover the fees from the second. That reality should inform how you structure your litigation strategy, how you allocate resources, and how you evaluate settlement offers.

Second, look for contractual and statutory fee provisions early. The American Rule applies by default, but contracts can change the calculus. If your agreements include attorney fee provisions that cover disputes arising from interference or breach, you may have an independent basis for fee recovery that the tort of another doctrine does not provide. Review your contracts with this gap in mind.

Third, consider injunctive relief and other early intervention strategies. The cheapest way to deal with cascading litigation is to prevent it. When a third party is actively interfering with a deal, tools like lis pendens, temporary restraining orders, and preliminary injunctions can stop the interference before it metastasizes into years of multi-front litigation. The earlier you involve litigation counsel, the more options you have.

Guinnane Construction v. Chess is a well-reasoned opinion that confirms what practitioners have long suspected about the boundaries of the tort of another doctrine. It is also a reminder that winning on the merits does not always mean recovering every dollar you spent getting there.

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