Berman v. Renart Sportswear Corp.

• Decision Date: 18 November 1963
• Citation: 222 Cal.App.2d 385,35 Cal.Rptr. 218
• Court: California Court of Appeals Court of Appeals
• Parties: Jack BERMAN, Plaintiff and Respondent, v. RENART SPORTSWEAR CORPORATION, Defendant and Appellant. Div. 27537.

Page 218

35 Cal.Rptr. 218

222 Cal.App.2d 385

Jack BERMAN, Plaintiff and Respondent, v. RENART SPORTSWEAR CORPORATION, Defendant and Appellant.

Div. 27537.

District Court of Appeal, Second District, Division 4, California.

Nov. 18, 1963.

Neiman & Sieroty and Allen I. Neiman, Los Angeles, for plaintiff and respondent.

Selvin & Cohen, and Saul Cohen, Beverly Hills, for defendant and appellant.

KINGSLEY, Justice.

Plaintiff sued appellant, two individuals, and a number of fictitious defendants. His amended complaint alleged, in general, that plaintiff was in partnership with the two individual defendants, that such partnership had an oral agreement with appellant to act as its sales representative for a one year period beginning on October 31, 1962, and that appellant and the two individual defendants had unlawfully excluded plaintiff from the partnership affairs and from the agency.

The first three causes of action are against the alleged copartners only, seeking dissolution of the partnership, an accounting and damages; the fourth and fifth causes of action are against all three named defendants, seeking damages in tort for interference with business expectations; the sixth cause of action is against appellant only, alleging breach of the alleged oral agency agreement; the seventh, also against appellant only, seeks declaratory relief and judicial interpretation of the alleged oral agency agreement. The complaint alleges an earlier, written agreement, expiring on October 31, 1962, which agreement contained an arbitration clause, and alleges, also, that appellant had, in writing, denied the alleged oral agreement.

The allegations of the declaratory relief cause of action are that appellant, while denying any agency agreement for the period after October 31, 1962, contends (a) that if there be such an oral agency agreement it was in the form of an oral extension of the earlier written agreement and (b) that such oral extension included the arbitration clause of the earlier written agreement. ¹ Plaintiff alleges that the denies both of these conditional contentions of appellant.

In this state of the case, appellant, without answering the complaint, filed its petition to stay proceedings and for an order directing arbitration. The petition set forth the original written agreement and its arbitration clause and then alleged that 'A controversy has arisen between the plaintiff and petitioner, arising out of said agreement and certain alleged extensions or renewals thereof.' (Emphasis added.)

The trial court denied the petition, placing its ruling on the ground that appellant had not admitted the existence of the agreement to arbitrate on which it relied. Appellant has appealed from 'the order denying said defendant's Petition of for Order to Compel Arbitration any said defendant's Motion for Order to Stay Further Proceedings.'

I

The order denying the petition for arbitration is appealable. In Sjoberg v. Hastorf (1948) 33 Cal.2d 116, 199 P.2d 668, the Supreme Court held that, while an order denying arbitration, made in a special proceeding under the arbitration statute, was appealable under section 963 of the Code of Civil Procedure as a final judgment, an order such as that herein involved, made in response to a request for arbitration interposed against a complaint for breach of contract, was interlocutory and not appealable. However, the Sjoberg case was decided prior to the 1961 revision of the arbitration act, and at a time when that act provided for appeals only from 'an order confirming, modifying, correcting or vacating an award, or from a judgment entered upon an award.' The present statute, in force at the time of the instant proceedings, provides, in section 1294 of the Code of Civil Procedure:

'An aggrieved party may appeal from:

'(a) An order dismissing or denying a petition to compel arbitration * * *.'

In Smith v. Superior Court (1962) 202 Cal.App.2d 128, 20 Cal.Rptr. 512, this court stated (although without discussion and without reference to the Sjoberg case) that an order such as is herein involved was appealable under the present statute. However, the decision in the Smith case to deny a writ of prohibition rested not on the ground of appealability of the order denying arbitration but on a determination that no arbitrable dispute existed. We have reviewed the question on the present appeal and conclude that the order is appealable under the present law. The order is an interlocutory as it was before 1961; but the decision to make interlocutory orders appealable or not is legislative and the present language seems too clear for doubt. (Cf. Feldman, Arbitration Modernized--The New California Arbitrain Act (1961) 34 So.Cal.L.Rev. 413, 439. ²

We conclude that the order denying a stay of proceedings is also before us. The granting of such a stay, as an incident to an arbitration, is provided for in the act. (Code of Civ.Proc., §§ 1281.4, 1292.8) We are directed in section 1294.2 to review, on an appeal under section 1294, 'the decision and any intermediate ruling, proceeding, order or decision which involves the merits or necessarily affects the order or judgment appealed from, or which substantially affects the rights of a party.' It is clear that, although the order denying a stay is not appealable itself, since it is interlocutory in nature and not expressly made appealable by any language in section 1294, it 'affects the order appealed from' and 'substantially affects the rights' of appellant, and, thus, is reviewable on the appeal from the order denying arbitration.

II

The order denying arbitration was correct.

A party can be compelled to submit a dispute to arbitration only where he was contracted in writing so to do. (Code of Civ.Proc., § 1281 and § 1281.2.) While the statute provides that a "written agreement' shall be deemed to include a written agreement which has been extended or renewed by an oral or implied agreement' (Code of Civ.Proc., § 1280, subd. (f)), the existence of such an oral extension is still an essential prerequisite to arbitration. The California courts have held that, where the existence of an arbitration contract is admitted or found, it is for arbitrators and not the courts to resolve any doubts as to its meaning and extent (Posner v. Grunwald-Marx, Inc. (1961) 56 Cal.2d 169, 14 Cal.Rptr. 297, 363 P.2d 313; O'Malley v. Wilshire Oil Co. (1963) 59 Cal.,2d 482, 30 Cal.Rptr....