Upon finding a common issue of law or fact between arbitrable and non-arbitrable claims, a California court is required to grant a motion to stay judicial proceedings on the non-arbitrable claims, according to the California Court of Appeal.

In Heritage Provider Network, Inc. v. Superior Court, No. B201298, 2008 WL 115746 (Cal. Ct. App. Jan. 14, 2008), Heritage engaged in business acquisition discussions with Eastland. After talks broke down, a number of physicians under contract with Eastland entered into contracts with Heritage.

Eastland brought claims against Heritage and affiliated companies for violating a confidentiality agreement executed prior to the purchase discussions, as well as against the physicians newly under contract with Heritage. The physicians had previously signed a physician-provider contract with Eastland containing an arbitration agreement, and the physicians moved to compel arbitration of Eastland's claims against them.

The trial court granted the motion to compel arbitration of Eastland's claims against the physicians. Heritage then moved to stay judicial proceedings regarding Eastland's claims against Heritage. The trial court denied the motion, acknowledging that the claims had a common issue, but holding that one common issue was not sufficient to grant the motion to stay.

On appeal, the Court held that "a single overlapping issue is sufficient to require imposition of a stay." In support of this holding, the Court cited Cal. Civ. Proc. Code § 1280(c), which defines a "controversy" as "any question arising between the parties to an agreement whether such question is one of law or fact or both." According to the Court, the fact that this code provision was not "written in the plural" mandated a stay of proceedings upon finding a common issue.

Since the trial court found at least one common issue between Eastland's claims against Heritage and the physicians, the Court ruled that Heritage's motion to stay was erroneously denied.