Charlton Co. v. Aerfab Corp.

• Decision Date: 30 March 1976
• Citation: 56 Cal.App.3d 808,128 Cal.Rptr. 878
• Court: California Court of Appeals Court of Appeals
• Parties: CHARLTON COMPANY OF CALIFORNIA, a California Corporation, Plaintiff and Respondent, v. The AERFAB CORPORATION, a corporation, Defendant and Appellant. Civ. 45634.

Page 878

128 Cal.Rptr. 878

56 Cal.App.3d 808

CHARLTON COMPANY OF CALIFORNIA, a California Corporation, Plaintiff and Respondent, v. The AERFAB CORPORATION, a corporation, Defendant and Appellant.

Civ. 45634.

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

March 30, 1976.

Buchalter, Nemer, Fields & Savitch by Elihu M. Berle, Los Angeles, for defendant and appellant.

Aaronson & Friedman by Orlan S. Friedman, Los Angeles, for plaintiff and respondent

JEFFERSON, Associate Justice.

Plaintiff Charlton Company of California, a California corporation, filed a complaint alleging that defendant, The Aerfab Corporation, had breached an oral settlement agreement. Defendant moved to stay further proceedings in the suit and to compel arbitration of the dispute. (Code Civ.Proc. § 1281.2.) After considering the affidavits, declarations and points and authorities filed by the parties, the trial court entered, in a minute order, its ruling denying defendant's motion. Defendant appeals. ¹

The record before us shows that plaintiff purchased from defendant, a New York corporation, fabric which defendant shipped to plaintiff in California, pursuant to written contracts executed by the parties in 1971 and 1972. The dispute arose because of alleged defects in the fabric, used by plaintiff to upholster furniture. The written contracts all contained an arbitration clause, which provided, in pertinent part, that '(a)ny controversy or claim arising under or in relation to this order or contract, or any modification thereof, shall be settled by arbitration.'

In its complaint, plaintiff made no reference to the written contracts previously executed by the parties, but alleged that the dispute over the fabric had been settled orally by the parties in October, 1972. In opposition to defendant's motion to compel arbitration and stay proceedings, plaintiff filed the declarations of its president, Morris M. Loeb, and an attorney, Robert Weil, asserting that the oral contract had been entered into between Loeb and defendant's president, Goldfarb, in Weil's presence. Defendant filed the affidavit of Goldfarb, denying that any such oral settlement had been made.

We note that the trial court's ruling denying defendant's motion (petition) to compel arbitration is appealable pursuant to Code of Civil Procedure section 1294, subdivision (a). (See Berman v. Renart Sportswear Corp. (1963) 222 Cal.App.2d 385, 35 Cal.Rptr. 218.)

Also applicable to this litigation is Code of Civil Procedure section 1291, which provides: 'Findings of fact and conclusions of law Shall be made by the court whenever an order or judgment, except a special order after final judgment, is made that is appealable under this title.' (Arbitration.) (Emphasis added.)

The record before us contains no findings of fact and conclusions of law. What is before us is a minute order denying defendant relief, without setting forth the basis of the ruling, other than 'upon the grounds presented by plaintiff's points and authorities.' A similar situation confronted the appellate court in A. D. Hoppe Co. v. Fred Katz Constr. Co. (1967), 249 Cal.App.2d 154, 158, 57 Cal.Rptr. 95, 97, in which the court stated: 'Notwithstanding the express statutory requirement that findings of fact and conclusions of law be made, (Code Civ.Proc., §§ 1291, 1294, subd. (a)), this minute order was made and entered without them.' (Fn. omitted.) The court was of the opinion that this alone constituted reversible error, but reversed the decision of the trial court on other grounds.

In Allstate Ins. Co. v. Orlando (1968), 262 Cal.App.2d 858, 867, 69 Cal.Rptr. 702, 709, the court was reviewing the validity of an order vacating an award, and said: 'Section 1291 of the Code of Civil Procedure should be read in the light of section 632 of the same code governing findings of fact in general. Findings are required by section 632 only 'upon the trial of a question of fact.' (Citation.) Where the issue is one of law only, findings of fact are not required. (Citation.)'

Orlando was followed in Johnston v. Security Ins. Co. (1970), 6 Cal.App.3d 839, 844, 86 Cal.Rptr. 133, as standing for the proposition that Code of Civil Procedure section 1291 does not mandate findings when the issue before the trial court is solely one of law, rather than fact.

In Tri-Cor, Inc. v. City of Hawthorne (1970), 8 Cal.App.3d 134, 137, 87 Cal.Rptr. 311, the absence of findings was termed 'not here material' by the appellate court, apparently because the record supported a finding 'necessarily . . . adverse' to the plaintiff therein. The parties, in Tri-Cor, supra, had briefed the findings issue on appeal in terms of the relationship between section 1291, which refers to arbitration matters only, and the general civil statute, Code of Civil Procedure, section 632.

The issue of findings was also raised in San Luis Obispo Properties, Inc. v. Pacific Gas & Elec. Co. (1972), 28 Cal.App.3d 556, 104 Cal.Rptr. 733, but only in the context of the amount of specificity required in making them.

The record before us provides no basis for avoiding the clear, mandatory language of section 1291 concerning the requirement of findings of fact and conclusions of law when orders appealable under the Title 'Arbitration' have been made. The record before us demonstrates the wisdom of making such a requirement. We can only speculate as to the factual basis of the court's ruling; several theories could be advanced in support of it, including that of waiver of the arbitration clause in the written contracts, or that of a novation which did not include provision for arbitration.

In Topanga Assn. for a Scenic Community v. County of Los Angeles (1974), 11 Cal.3d 506, 516, 113 Cal.Rptr. 836, 842, 522 P.2d 12, 18, the California Supreme Court stated: 'Absent such roadsigns (findings), a reviewing court would be forced into unguided and resource-consuming explorations; it would have to grope through the record to determine whether some combination of...