County Coliseum Authority v. Partners

• Decision Date: 27 August 2002
• Docket Number: No. A094859.,A094859.
• Citation: 101 Cal.App.4th 635,124 Cal.Rptr.2d 363
• Court: California Court of Appeals Court of Appeals
• Parties: OAKLAND-ALAMEDA COUNTY COLISEUM AUTHORITY, Plaintiff and Appellant, v. PARTNERS, Defendant and Appellant.

124 Cal.Rptr.2d 363

101 Cal.App.4th 635

OAKLAND-ALAMEDA COUNTY COLISEUM AUTHORITY, Plaintiff and Appellant, v. PARTNERS, Defendant and Appellant.

No. A094859.

Court of Appeal, First District, Division 4.

August 27, 2002.

Review Denied November 20, 2002.^*

Keker & Van Nest, John W. Keker, Jon B. Streeter, Steven A. Hirsch, San Francisco, Wendy J. Thurm, Michael S. Kwun, Counsel for Plaintiff and Appellant.

Adamski Moroski, Steven J. Adamski, San Luis Obispo, John E.D. Nicholson, Kerr & Wagstaffe, San Francisco, James A. Wagstaffe, Counsel for Defendant and Appellant.

KAY, P.J.

CC Partners appeals from a judgment confirming an arbitration award. In its opening brief CC Partners contends: (1) It was required to arbitrate a claim expressly excluded from arbitration by the parties' arbitration agreement; (2) the arbitration agreement is so one-sided as to be unenforceable; and (3) assuming the arbitrator properly heard the claim, he committed errors of law that can be reviewed by this court under the terms of the arbitration agreement. In its reply brief (and in a supplemental brief requested by this court), CC Partners argues the provision in the arbitration agreement allowing judicial review of errors of law renders the arbitration agreement void and unenforceable, based on the recent decision in Crowell v. Downey Community Hospital Foundation (2002) 95 Cal.App.4th 730, 115 Cal.Rptr.2d 810 (Crowell).

We agree with the arbitrator that the parties' dispute fell within the scope of their arbitration agreement. Applying the primary holding in Crowell, we will not review the arbitrator's decision for errors of law. We conclude that the parties' arbitration agreement is valid and enforceable, except to the extent it provides for judicial review of errors of law. We affirm the judgment.

BACKGROUND

The factual findings of the arbitrator are binding on this court. (See Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 11, 10 Cal.Rptr.2d 183, 832 P.2d 899 (Moncharsh).) We therefore take our background facts from the findings of the arbitrator and supplement them as necessary for a full understanding of the case with facts from evidence in the record. Many of the background facts are not disputed.

CC Partners does business as the Golden State Warriors, a professional basketball team. In July 1996, CC Partners entered into a "License Agreement" with respondent Oakland-Alameda County Coliseum Authority (Authority) and Oakland-Alameda County Coliseum, Inc. (County Coliseum, Inc.), in connection with the building of a new arena for Warriors home basketball games. The construction of the new arena, which was to be built within the shell of an existing arena in Oakland, was to be financed, in part, through the issuance of bonds. The License Agreement required CC Partners to pay rent, share certain expenses, and contribute a portion of their revenue to retirement of construction debt.

At the same time CC Partners, the Authority and County Coliseum, Inc., entered into the License Agreement, they entered into separate agreements covering various other aspects of the relationship between the parties ("Arena Agreement," "Retention Agreement," and "Practice Facilities/Office Agreement"). And approximately two weeks later, CC Partners and the Authority entered into an agreement ("Deposit Agreement") with Canadian Imperial Bank of Commerce (Bank) as part of the financing of the construction of the new arena.

The License Agreement contained a broad, detailed arbitration clause. The clause provided for arbitration of "[e]ach dispute, controversy, or claim arising out of or relating to this License Agreement or the relationship established pursuant to this License Agreement ...." Excepted from arbitration under this clause, however, were any disputes arising under the provisions of any other agreements to which the Authority, County Coliseum, Inc., and CC Partners were parties (e.g., the Arena Agreement).¹

After the new arena was built, the Warriors played their first game there on November 8, 1997. By December 1998, the Authority was demanding arbitration to resolve various disputes between it and CC Partners. This appeal concerns only their dispute over CC Partners obligation to pay "Premium Seating Revenues" to the Authority.

Pursuant to the License Agreement, CC Partners agreed to pay up to $7,428,000 of premium seating revenues per year toward the debt incurred for the construction of the new arena and related facilities. Payment of the premium seating revenues was to commence on the first day of the "Term." The License Agreement defined "Term" as the "Initial Term" together with any extensions. The License Agreement states the initial term "shall commence upon the later of (i) delivery by [County Coliseum, Inc.] of the New Arena Ready for Occupancy, and (ii) the beginning of the 1997-1998 Regular Season; ...." "Ready for Occupancy" meant "Substantial Completion" as defined in the Arena Agreement.

The Deposit Agreement contained additional provisions regarding payment of premium seating revenues. Referring to the pertinent sections of the License Agreement, the Deposit Agreement stated the "Warriors" had agreed to modify the timing of the payment of its obligation under the License Agreement to pay premium seating revenues. The Deposit Agreement provided: "With respect to the first year of the License Agreement, the Warriors shall pay to the Authority by the later of November 1 or the date of the first Home Game one hundred percent (100%) of the amount of Estimated Debt Service or, if less, one hundred percent (100%) of the Premium Seating Revenues received by the Warriors for such year."

Notwithstanding the fact that the Warriors moved into the new arena and began playing games there, CC Partners refused to pay the Authority any premium seating revenues. CC Partners asserted the term of the License Agreement had not begun; substantial completion had not occurred.

The arbitrator framed the issue as follows: "When does the obligation of the Warriors to pay Premium Seating Revenue begin?" The arbitrator initially concluded the License Agreement and the Deposit Agreement appeared to differ on when payment of premium seating revenues was triggered. Payment under the License Agreement was tied to substantial completion of the new arena, while the Deposit Agreement provided fixed dates for payment.

The arbitrator heard testimony from a number of witnesses in order "to clarify the parties' intentions in entering into these Agreements." CC Partners, however, objected to the arbitration of any claims involving the Deposit Agreement. CC Partners argued there was no arbitration clause in the Deposit Agreement,² and the arbitration clause in the License Agreement specifically excluded arbitration of claims arising under the provisions of other agreements.

Based on the language of the License and Deposit Agreements and the testimony received, the arbitrator found the dispute over premium seating revenues arose under the License Agreement; therefore, the arbitration clause of that Agreement governed the dispute. The arbitrator noted the License Agreement and Deposit Agreement were uniquely related and dependent on each other and covered the same subject matter: "The Deposit Agreement would have no meaning apart from the License Agreement." The arbitrator also found the provision in the Deposit Agreement exempting the Bank from arbitration would make no sense unless it was read in conjunction with the License Agreement.

After disposing of CC Partners objections to the arbitration, the arbitrator decided the Deposit Agreement modified the trigger for payment of premium seating revenues under the License Agreement. Premium seating revenues therefore became due the date of the first home game, November 8,1997.

After the arbitrator resolved all of the issues raised by the parties and CC Partners stipulated to the amounts it owed under the arbitrator's decisions, CC Partners filed a petition in the superior court to vacate in part and confirm in part the arbitration award. The Authority in turn sought to confirm the arbitration award.

The trial court confirmed the award, specifically finding that the arbitrator acted within his authority in resolving all disputes between the parties, including the dispute over premium seating revenues. At the time the court signed the judgment, CC Partners owed over $17 million in premium seating revenues, including interest.

DISCUSSION

A. Scope of Arbitration

CC Partners contends the arbitration award must be vacated because the arbitrator exceeded his powers by arbitrating a claim arising under the Deposit Agreement.

An arbitration award shall be vacated if the arbitrator exceeded his or her power, and the award cannot be corrected without affecting the merits of the decision. (Code Civ. Proc., § 1286.2, subd. (a)(4).)

We review the trial court's decision concerning whether an arbitrator exceeded his powers de novo, but we give substantial deference to the arbitrator's own assessment of his contractual authority. (Alexander v. Blue Cross of California (2001) 88 Cal.App.4th 1082, 1087, 106 Cal. Rptr.2d 431.) Any doubts as to the meaning or extent of an arbitration agreement are for the arbitrator, not the court to resolve. (Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 372, 36 Cal.Rptr.2d 581, 885 P.2d 994.) "Although [Code of Civil Procedure] section 1286.2 permits the court to vacate an award that exceeds the arbitrator's powers, the deference due an arbitrator's decision on the merits of the controversy requires a court to refrain from substituting its judgment for the arbitrator's in determining the contractual scope of those powers." (Ibid.)

The deference due an arbitrator's decision is compounded in this case by the fact that the arbitrator determined the question of arbitrability based, in part, on testimony presented by the parties. (See Morey v. Vannucci (1998) 64...