Buchwald v. Katz

• Citation: 105 Cal.Rptr. 368,8 Cal.3d 493,503 P.2d 1376
• Decision Date: 19 December 1972
• Docket Number: S.F. 22929
• Court: United States State Supreme Court (California)
• Parties: , 503 P.2d 1376 Marty BUCHWALD et al., Plaintiffs and Respondents, v. Matthew KATZ, Defendant and Appellant. In Bank

Page 368

105 Cal.Rptr. 368

8 Cal.3d 493, 503 P.2d 1376

Marty BUCHWALD et al., Plaintiffs and Respondents, v. Matthew KATZ, Defendant and Appellant.

S.F. 22929.

Supreme Court of California,

In Bank.

Dec. 19, 1972.

Marvin G. Burns; John Petrasich; Fulop, Rolston, Burns & McKittrick, Beverly Hills, Penrod & Himelstein and Mark Himelstein, San Francisco, for defendant and appellant.

Marilyn Shinderman, Gerald Friedman, Arthur Stahl, Lelia H. Jabin, Los Angeles, Howard L. Thaler, Beverly Hills, and Owen J. Sloane, Los Angeles, as amicicuriae on behalf of defendant and appellant.

Maxwell Keith, Philip Keith, William K. Coblentz and Jacobs, Sills & Coblentz, San Francisco, for plaintiffs and respondents.

SULLIVAN, Justice.

Marty Buchwald, Jorma Kaukonen, John Casady, Paul Kantner and Signe Anderson, collectively comprising a professional music group known as 'The Jefferson Airplane,' individually entered into identical 'personal management' contracts with Matthew Katz. The contracts provided that Katz would receive a percentage of each performer's earnings in return for acting as adviser, counselor and manager for each in his professional music career. The agreements explicitly stated that Katz would not obtain bookings or employment for the group. Disputes would be arbitrated in accordance with the rules of the American Arbitration Association.

Within a year a dispute arose and Katz commenced proceedings with the arbitration association. The Jefferson Airplane filed a petition with the Labor Commissioner pursuant to the Artists' Managers Act (Act) (Lab. Code, §§ 1700--1700.46), ¹ claiming that the Labor Commissioner had sole jurisdiction over the matter since Katz was in fact an unlicensed artists' manager within the terms of the Act. When Katz challenged the jurisdiction of the Labor Commissioner, The Jefferson Airplane filed an action against Katz in the superior court seeking a ruling that the Labor Commissioner had sole jurisdiction and an order enjoining the arbitration proceedings. The superior court ordered The Jefferson Airplane to submit to arbitration and to desist from proceeding before the Labor Commissioner.

Upon petition for certiorari, the Court of Appeal (Buchwald v. Superior Court (1967) 254 Cal.App.2d 347, 62 Cal.Rptr. 364) annulled the superior court's orders. The Act provides that an artists' manager ² must obtain a license ³ and must submit all artist-manager contract forms he employs to the Labor Commissioner for approval. ⁴ The Court of Appeal held that the Labor Commissioner had exclusive jurisdiction to determine whether he had jurisdiction over the dispute, first ascertaining whether Katz in fact had acted as an artists' manager in securing employment and bookings pursuant to contract.

The Labor Commissioner, following an evidentiary hearing, found and concluded that: (1) The members of The Jefferson Airplane were 'artists'; (2) Katz had in fact obtained employment and bookings for The Jefferson Airplane; (3) the contract provisions to the contrary were a subterfuge; (4) Katz was an unlicensed artists' manager; and (5) the Labor Commissioner had jurisdiction over the controversy. Upon the merits, the Labor Commissioner made the following award: 'That the management contracts between petitioners . . . and respondent MATTHEW KATZ, are void for failure of respondent to comply with Sections 1700 to 1700.46 of the Labor Code; that the publishing contracts between petitioners and respondents . . . are void for failure of respondent to comply with Sections 1700 to 1700.46 of the Labor Code; that petitioners are not liable to respondent for any sums spent by respondent in furtherance of petitioners' musical careers; and that respondent pay to petitioners the sum of $49,004.88 heretofore received by respondent as commissions.'

Katz appealed to the superior court pursuant to section 1700.44, which, provides in pertinent part: 'In cases of controversy arising under this chapter the parties involved shall refer the matters in dispute to the Labor Commissioner, who shall hear and determine the same, subject to an appeal within 10 days after determination, to the superior court where the same shall be heard de novo. To stay any award for money, the party aggrieved shall execute a bond approved by the superior court in a sum not exceeding twice the amount of the judgment. . . .' The Jefferson Airplane then made a motion asking the superior court to direct the amount of bond to be filed in order to stay execution of the Labor Commissioner's $49,004.88 award, pursuant to section 1700.44.

The superior court 'ORDERED that the motion be granted and that the amount of the undertaking to be executed and filed in this action under State of California Labor Code section 1700.44 be $49,500.00, said undertaking to be filed fifteen days from April 3, 1970 or the appeal to be dismissed.' On motion by Katz, the superior court made an order granting him an additional 10 days from April 17, 1970, to file the undertaking 'or the appeal to be dismissed.' On June 15, 1970, Katz having failed to file the requisite undertaking, the superior court dismissed the appeal. This appeal from that order followed.

Katz contends that section 1700.44 neither conditions in any way the right to appeal to the superior court from a determination and award of the Labor Commissioner upon the filing of a bond nor authorizes the superior court to dismiss the appeal for failure to file a bond, but simply provides that the party appealing may stay execution of an award for money by executing a bond. Therefore, he contends, if the aggrieved party fails to execute a bond in an amount approved by the superior court, his right to appeal is in no way affected. Rather, in that event, the prevailing party may, during the pendency of the appeal, enforce the award of the Labor Commissioner according to established procedures; i.e., the normal enforcement procedures are not 'stayed' absent the execution of a bond by the aggrieved party.

We agree, the plain meaning of section 1700.44 is exactly as urged by Katz: the section first confers jurisdiction upon the Labor Commissioner to hear and decide matters in dispute under the Act 'subject to an appeal within 10 days after determination, to the superior court where the same shall be heard de novo'; after conferring this jurisdiction to determine the dispute and the right to appeal from such determination, the section continues: 'To stay any award for money, the party aggrieved shall execute a bond approved by the superior court in a sum not exceeding twice the amount of the judgment. In all other cases the bond shall be in a sum not less than one thousand dollars ($1,000) and approved by the superior court.' There is no language in the section conditioning the right to appeal upon the filing of a bond. There is no language in the section conferring power to dismiss an appeal under this section for failure to execute a bond. Rather, the section confers upon the aggrieved party two separate rights: first, the right to appeal and second, the right to stay execution of an award and determination of the Labor Commissioner pending appeal by executing a bond approved by the superior court. If the aggrieved party fails to exercise this right by filing the requisite bond, then the prevailing party is free to enforce the Labor Commissioner's award; the aggrieved party's right to appeal remains unaffected.

Bonds to stay executions of money judgments have been uniformly so understood in California, as succinctly summarized in 6 Witkin, California Procedure (1971) page 4159: 'If the undertaking proves insufficient there is no stay, and the judgment creditor can execute. (Citation.) But, though execution is not stayed, the appeal itself is unaffected, and cannot be dismissed.' In Hasendahl v. J. D. Halstead Lumber Co. (1933) 131 Cal.App. 224, 225, 21 P.2d 120, 121, the court denied a motion to dismiss an appeal from a superior court judgment for failure to file a bond staying execution of a money judgment pursuant to former section 942 (now § 917.1) of the Code of Civil Procedure saying: 'The only 'right' obtained by an appellant under section 942 of the Code of Civil Procedure is to have execution stayed on a money judgment against him, and that is the only right he can lose by a failure to file a sufficient bond under section 1057 of the same Code.'

The Jefferson Airplane contends, however, that the superior court had inherent power and discretion to dismiss the appeal for Katz' failure to comply with the court's order that 'said undertaking to be filed ten days from April 17, 1970 or the appeal to be dismissed,' citing cases for the proposition that a court has discretion to 'dismiss the appeal of one who deliberately refuses compliance with a valid order of the trial court.' (Luce v. Clear Lake Water Co. (1968) 266 Cal.App.2d 123, 124, 71 Cal.Rptr. 665, 666; Estate v. Scott (1957) 150 Cal.App.2d 590, 594, 310 P.2d 46.) However, it is clear from the foregoing discussion that section 1700.44 only authorizes the superior court to require a bond in order to 'stay an award of money' and not to require a bond as a condition to appeal. Indeed, if the statute or court were to condition the right to appeal upon the financial ability to furnish a stay bond, there might be grave constitutional problems under the equal protection clause of the Fourteenth Amendment to the United States Constitution. (See Douglas v. California (1963) 372 U.S. 353, 83 S.Ct. 814, 9 L.Ed.2d 811; cf. Boddie v. Connecticut (1971) 401 U.S. 371, 91 S.Ct. 780, 28 L.Ed.2d 113.)

We hold that section 1700.44 only authorizes the superior court to require a bond in order to stay an award, that the superior court erred in requiring the bond in order to prosecute an appeal and that it abused its discretion in dismissing Katz' appeal for failure to post a bond in the amount of $49,500.

However, since Katz did fail to file the...