What is the legal test for a motion to stay an action brought by investors in a medical malpractice case brought by defendants in an arbitration proceeding?

The investors take the position that the conditions imposed by the trial court are reasonable. Relying on Preston v. Kaiser Foundation Hospitals (1981) 126 Cal.App.3d 402, 178 Cal.Rptr. 882, they argue the court has power to intervene on behalf of parties stalled in arbitration, adding the defendants have breached the arbitration agreement by virtue of their misconduct and the breach entitles the investors to rescind the stipulation to arbitrate. ⁵

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CODE OF CIVIL PROCEDURE SECTION 1281.4⁶ requires a court to stay an action submitted to arbitration pursuant to an agreement of the parties. Beyond that, the court's role is fairly limited. 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." (Brock v. Kaiser Foundation Hospitals (1992) 10 Cal.App.4th 1790, 1796, 13 Cal.Rptr.2d 678.) During that time, under its "vestigial" jurisdiction, a court may; appoint arbitrators if the method selected by the parties fails ( 1281.6); grant a provisional remedy "but only upon the ground that the award to which an applicant may be entitled may be rendered ineffectual without provisional relief" ( 1281.8, subd. (b)); and confirm, correct or vacate the arbitration award ( 1285).

Absent an agreement to withdraw the controversy from arbitration, however, no other judicial act is authorized. (Byerly v. Sale (1988) 204 Cal.App.3d 1312, 1315, 251 Cal.Rptr. 749.)