Aller's Petition, In re

• Decision Date: 19 October 1956
• Citation: 302 P.2d 294,47 Cal.2d 189
• Court: California Supreme Court
• Parties: , 31 Lab.Cas. P 70,288 Petition of Herbert ALLER, Business Representative of Local 659, I.A.T.S.E., for an Order Directing Arbitration and Appointment of an Arbitrator. LOCAL 659, I.A.T.S.E., a California corporation, substituted for Herbert Aller, Business Representative of Local 659, I.A.T.S.E., Petitioner and Appellant, v. COLOR CORPORATION OF AMERICA, Defendant and Respondent. L. A. 24270.

Page 294

302 P.2d 294

47 Cal.2d 189, 31 Lab.Cas. P 70,288

Petition of Herbert ALLER, Business Representative of Local 659, I.A.T.S.E.,

for an Order Directing Arbitration and Appointment of an Arbitrator. LOCAL 659, I.A.T.S.E., a California corporation, substituted for Herbert Aller, Business Representative of Local 659, I.A.T.S.E., Petitioner and Appellant, v. COLOR CORPORATION OF AMERICA, Defendant and Respondent.

L. A. 24270.

Supreme Court of California, In Bank.

Oct. 19, 1956.

Joseph W. Fairfield and Ethelyn F. Black, Los Angeles, for appellant.

Pauline Nightingale and Leon H. Berger, Los Angeles, amici curiae on behalf of appellant.

Irving A. Bernstein, Beverly Hills, for respondent.

CARTER, Justice.

Pursuant to the statutory provisions concerning arbitration, Code Civ.Proc. §§ 1280-1293, Aller, petitioner, the business representative of a union, Local 659, International Alliance of Theatrical Stage Employees & Moving Picture Machine Operators (by stipulation the union was substituted as petitioner in place of Aller), filed against defendant, Color Corporation of America, a corporation (hereinafter referred to as Color), asking that Color be required to arbitrate a dispute under a collective bargaining agreement. Defendant answered, its main claim being that petitioner had lost its right to have the arbitration provision in the collective bargaining agreement enforced because it had repudiated and waived it. After hearing on the petition, the court gave judgment dismissing the proceeding and awarding costs to defendant. Petitioner appeals.

It is not disputed, and the court found, that Color, engaged in the film processing business, had collective bargaining agreements with five other unions in addition to petitioner and all contracts contained the same arbitration clause. The clause provided three steps in grievance procedure for settling disputes with regard to wages, hours or other conditions of employment, and the interpretation of the agreement, the first two being an attempt by representatives of Color, the employer, and the unions to settle the dispute. Failing settlement, the third provides for the appointment of an arbitrator by the parties within 10 days thereafter to settle it. Either party may proceed under the arbitration clause. Any grievance for the payment of dismissal pay not presented under the first step shall be deemed waived unless presented 365 days after the employee becomes entitled to such pay. Under the collective bargaining agreements employees are entitled to 'dismissal pay' but the employer is not liable therefor if the employee was dismissed 'for any other cause or causes beyond the control of the' employer, Color. In 1954, Color closed its plant and dismissed all of its employees, including Krog, Ragin and Moore who were members of petitioner, Local 659. In August, 1954, a dispute arose between Color and the unions as to whether the dismissed union employees should receive dismissal pay inasmuch as Color claimed that under the bargaining agreement the dismissals were for causes beyond their control and the unions contended beyond their control and the union contended petitioner, Local 659, and defendant proceeded with the grievance and arbitration procedure and those proceedings are still pending. Defendant has expended over $300 as expenses of the proceedings.

The trial court also found in addition to the foregoing that defendant is not in 'default' in proceeding with arbitration but petitioner is and hence the instant proceedings should be dismissed; that petitioner has been guilty of unreasonable delay in bringing the proceeding and is estopped to seek enforcement of the arbitration provision; that defendant's demands on petitioner to arbitrate during the grievance procedure by the other unions were refused by petitioner and it wilfully failed and refused to comply with the arbitration provision and instead elected to and did bring proceedings against petitioner before the state labor commissioner to collect dismissal pay.

Petitioner argues that under the law it could not lose its right to have the arbitration provision enforced and under the facts, as a matter of law, it did not. Defendant urges that petitioner lost his right to arbitration and the evidence supports the trial court's finding in this respect. No question is raised as to whether the dispute here involved was subject to arbitration under the arbitration statute and the collective bargaining contract.

The evidence on the subject is by affidavit and letters. In an affidavit by Bernstein, counsel for Color, offered by Color, it is stated: That on August 5 and 12, 1954, he explained defendant's position on the dispute to petitioner's representatives, that is, that it was not liable for dismissal pay. On the 18th, it agreed with counsel for the unions other than petitioner, that grievance and arbitration procedure was necessary; on August 25th, he was advised that the labor commissioner had issued an order (dated August 19th) to appear before him on a charge by petitioner that defendant was invoking section 222 of the Labor Code; ¹ that he explained the arbitration provision to the commissioner; that on September 2nd he met with the commissioner and petitioner's representative Nave and asked Nave to dismiss the complaint before the commissioner and arbitrate under the bargaining agreement but Nave refused; that after some correspondence with the commissioner, Stone, defendant's vice president, on September 22nd, wrote a letter (sending a copy to petitioner) reviewing the matter of arbitration and stating: 'By this action and by the action of IATSE Local 659 (petitioner), you are requiring us to defend our position in court in the face of the fact that our bargaining agreement provides otherwise. We intend to hold both you and Local 659 fully responsible for all consequences resulting from this ill-advised action'; that on September 29th petitioner wrote to Stone stating: 'Our dispute with you is not a matter of interpretation but one of non-payment and we are prepared to show that you have wilfully refused to make such payment and that you were not compelled to go out of business, as you claimed you were in the defense raised in the arbitration proceeding. Even that is not a good defense in the current hearing with the other unions, but since they have elected to take the other course, that is their problem. The best way to settle this matter is to let everyone testify under oath and I would certainly expect you to be very willing to accept this judicial process of settling disputes. After all, when one is under oath, the truth and only the truth will prevail'; that on September 27th the commission advised defendant that petitioner insisted on criminal proceedings and the matter will be referred to the 'city attorney.' Stone's affidavit, offered by defendant, stated that he had a 'great many telephone conversations' with Aller before and after January 11, 1955, and prior to Aller's letter of September 29, 1954, he made 'repeated demands' upon Aller that Local 659 abide by the terms of the bargaining and arbitrate the dispute; that after the receipt of that letter 'and in every subsequent conversation, I informed Mr. Aller that the Company considered his tactics in this whole matter to be reprehensible, that the Company (defendant) chose to consider those tactics and his unequivocal refusal to arbitrate as a repudiation and breach of the contract, and that the Company would no longer consent to an arbitration'; he acknowledged receiving the letters Aller mentions in his affidavit but denies the agreement mentioned by Aller.

Aller in his affidavit on behalf of petitioner stated he denied Local 659 had ever refused to arbitrate the dispute but defendant refused to cooperate and he and Stone agreed to 'hold in abeyance' all disputes until one of the other union's (Local 683) arbitration had been completed; he refers to letters he says he sent to Stone during January, March and April, 1955, demanding arbitration inasmuch as the arbitration with Local 683 had been favorable to that union.

The question thus presented is whether or not there has been a waiver, mutual rescission, repudiation, laches, or estoppel by or on behalf of petitioner in the enforcement of the arbitration clause. We are not concerned here with any question involving the repudiation or violation of the terms of the bargaining agreement other than the arbitration provision. See conflict of authorities on that subject: 3 A.L.R.2d 383. Section 1280 of the Code of Civil Procedure provides that a provision in a written contract to settle by arbitration a controversy arising out of the contract or the refusal to perform the whole or any part thereof 'shall be valid, enforceable and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract'. (Emphasis added.) It is thus indicated that there may be instances in which the right to enforce an arbitration provision is lost. This is further shown by other provisions. A party aggrieved by the failure or refusal of another to perform under a contract providing for arbitration may have the provision enforced by the court; the court shall hear the matter and on being satisfied the failure to comply with the arbitration 'is not in issue' shall order the arbitration to proceed; if 'default' be in issue, that shall be tried. Id., § 1282. If any action be brought on the issue arising out of the contract for arbitration the court shall stay the action upon being satisfied that the issue is referable to arbitration provided the 'applicant for the stay is not in default in proceeding with' the arbitration. Id., § 1284. It is also evident that defendant could have proceeded to enforce the provision for arbitration under the code when petitioner refused to arbitrate.

In harmony with the arbitration statute, supra, it has been held that the arbitration...