Ferrer v. Preston
| Decision Date | 30 November 2006 |
| Docket Number | No. B188997.,B188997. |
| Citation | 51 Cal.Rptr.3d 628,145 Cal.App.4th 440 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Alex E. FERRER, Plaintiff and Respondent, v. Arnold M. PRESTON, Defendant and Appellant. |
Schleimer & Freundlich and Joseph D. Schleimer, Beverly Hills, for Defendant and Appellant.
Mitchell, Silberberg & Knupp, Ronald A. DiNicola, Douglas W. Bordewieck, Kirsten E. Miller and Robert M. Dudnik, Los Angeles, for Plaintiff and Respondent.
The defendant, Arnold M. Preston, appeals from an order denying his motion to compel arbitration and granting a motion by the plaintiff, Alex E. Ferrer, for a preliminary injunction and a stay of the action. We affirm.
Defendant is an attorney who renders services for personnel in the motion picture-television industry. Plaintiff is a former Florida Superior Court Judge, who now works arbitrating legal disputes on the television program, Judge Alex, on the Fox television network. Defendant contends that plaintiff breached a written agreement by failing to pay defendant certain fees based on plaintiffs earnings from his performance in Judge Alex.
On March 7, 2002, plaintiff signed a management contract with defendant, and the contract contained a standard American Arbitration Association (AAA) arbitration clause. On June 10, 2005, defendant initiated an arbitration proceeding against plaintiff, seeking to recover the fees to which he claimed he was entitled. On July 1, 2005, plaintiff filed a motion to stay the arbitration with the arbitrator. Plaintiff also filed a Petition to Determine Controversy (Petition) with the Labor Commissioner (Commissioner) and a motion asking the Commissioner to stay the arbitration. Defendant thereafter filed a motion to dismiss the Petition with the Commissioner. On October 12, 2005, the arbitrator issued an order denying plaintiffs motion to stay the arbitration.
On November 2, 2005, plaintiff filed the instant complaint containing two causes of action, one for a declaration that the dispute involving the validity of the contract is not subject to arbitration, and the second for injunctive relief, seeking to restrain defendant from proceeding with the arbitration. On November 8, 2005, defendant filed a motion with the trial court to compel arbitration. On the same day, the Commissioner denied defendant's motion to dismiss plaintiffs petition. The Commissioner also denied plaintiffs motion to stay the arbitration, "on the grounds that the Labor Commissioner does not have the authority to stay arbitration proceedings." On November 10, 2005, plaintiff filed with the trial court a motion for preliminary injunction, attempting to restrain the defendant from proceeding with the arbitration unless and until the Commissioner determined that he had no further jurisdiction over the parties' dispute.
Plaintiff also filed a motion for reconsideration with the arbitrator. On December 6, 2005, the arbitrator granted the motion for reconsideration and stayed the arbitration pending disposition of the matter before the Commissioner.
On December 7, 2005, the trial court issued its order, denying defendant's motion to compel arbitration and granting plaintiffs motion for a preliminary injunction and staying the action pending final resolution by the Commissioner of the Petition. The defendant has appealed from this order.
The Talent Agencies Act (Act) (Lab. Code, § 1700 et seq.)1 regulates the activities of a "talent agency," i.e., "a person or corporation who engages in the occupation of procuring, offering, promising, or attempting to procure employment or engagements for an artist or artists ...." (§ 1700.4, subd. (a).) Artists include persons rendering professional services in television enterprises. (Id., subd. (b).)
Section 1700.44, subdivision (a), of the Act states that "[i]n 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."
Section 1700.5 of the Act states that "[n]o person shall engage in or carry on the occupation of a talent agency without first procuring a license therefor from the
Labor Commissioner." The plaintiff contends that defendant was an unlicensed talent agent, and therefore their agreement is void and defendant is barred from recovering the compensation he is seeking under the contract. The defendant asserts that he was acting as a personal manager, not as a talent agent, and he is not barred from recovering compensation for his services.
The question before us is who has original jurisdiction to make the determination as to the validity of the parties' contract. Defendant contends that the question of the contract's validity should be determined by the arbitrator, and the trial court therefore erred in refusing to compel arbitration. We disagree.
The parties' contract included a standard AAA arbitration clause, including a stipulation that the parties are to arbitrate any attack on the "validity or legality" of the contract. However, as interpreted by the courts, section 1700.44, subdivision (a), vests exclusive original jurisdiction in the Commissioner to resolve issues arising under the Act—including the issue of whether or not an individual such as defendant is a personal manager or an unlicensed talent agent. In Styne v. Stevens (2001) 26 Cal.4th 42, 109 Cal. Rptr.2d 14, 26 P.3d 343 (Styne), the Supreme Court held that the Commissioner's exclusive original jurisdiction applies even where the Act is first raised by the artist as a defense to a claim for breach of contract by the personal manager/talent agent. (Id. at pp. 58-59, 109 Cal. Rptr.2d 14, 26 P.3d 343.) In the present case, defendant asserted a claim that plaintiff had breached his contract and plaintiff submitted a Petition to Determine Controversy to the Commissioner to determine the issue of whether the contract involved the services of a talent agency. The Commissioner found that plaintiff had raised a "colorable" defense to defendant's claims, based on an alleged violation of the Act. The administrative procedures before the Commissioner must be resolved before resort may be had to another tribunal. Contrary to defendant's suggestion, the fact that plaintiff is a sophisticated individual, with significant legal experience does not alter the decision of Styne or the procedure to follow.
As explained in Styne v. Stevens, supra, 26 Cal.4th at page 58, 109 Cal. Rptr.2d 14, 26 P.3d 343, it is appropriate for the Commissioner to resolve the dispute between the parties, for "[t]he Commissioner's expertise in applying the Act is particularly significant in cases where, as here, the essence of the parties' dispute is whether services performed were by a talent agency for an artist." In addition, "the Commissioner's] ... interpretation of a statute he is charged with enforcing deserves substantial weight." (At p. 53, 109 Cal.Rptr.2d 14, 26 P.3d 343.) In the present case, defendant commenced an arbitration seeking damages for breach of contract. In Styne, the action was initiated in superior court. We find the distinction to be of no consequence.
The trial court here correctly applied Buchwald v. Superior Court (1967) 254 Cal.App.2d 347, 62 Cal.Rptr. 364 (Buchwald) in refusing to order arbitration and staying the proceedings until the Commissioner resolved the question before him. The facts of Buchwald are on point to the case at bar. In Buchwald, the rock band known as "Jefferson Airplane" claimed that section 1700.44 made their contract with their manager, Matthew Katz (Katz), void because the manager had obtained employment for them without being licensed as a talent agent. Katz sought arbitration based upon an arbitration clause in his contract. The band filed a Petition to Determine Controversy with the Commissioner, contending that Katz was an unlicensed talent agent. The band also brought an action in superior court, attempting to prevent Katz from proceeding with arbitration. (Id. at pp. 351-353, 62 Cal.Rptr. 364.) The Court of Appeal held that the Commissioner had exclusive original jurisdiction over the controversy based upon the band's petition, and that the exhaustion doctrine applied. (Id. at p. 359, 62 Cal.Rptr. 364.) In the present case, defendant sought to compel arbitration with plaintiff. Then plaintiff sought an order staying the arbitration and sought to require defendant to exhaust his administrative remedies before the Commissioner. As in Buchwald, the trial court properly granted plaintiffs request.
Defendant is unable to distinguish the facts in the present case from the facts in Buchwald and attempts to argue that Buchwald is no longer good law and has been overruled by Styne. However, the Styne opinion repeatedly cites Buchwald Defendant relies on footnote 9 in Styne in support of the argument that Buchwald has been overruled. Styne at footnote 9 states that (Styne, supra, 26 Cal.4th at p. 59, fn. 9, 109 Cal.Rptr.2d 14, 26 P.3d 343.)
The footnote makes reference to section 1700.45 of the Act, entitled "Contract provision for arbitration; Provisions prerequisite to validity." Styne did not involve a contract containing an arbitration clause, so the Court did not consider whether the prerequisites of section 1700.45 were met.2 To be valid under section 1700.45, the contract must satisfy either subdivisions (a) or (b), and it must also satisfy subdivisions (c) and (d). The contract between plaintiff and defendant does not satisfy subdivisions (c) or ...
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... ... Buckeye, 546 U.S. at 44849, 126 S.Ct. 1204. Two years after Buckeye, in Preston v. Ferrer, 552 U.S. 346, 128 S.Ct. 978, 169 L.Ed.2d 917 (2008), the Court revisited the question of what forum properly decides the validity of a ... ...
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... ... Sonic cites as controlling authority the United States Supreme Court's recent decision in Preston v. Ferrer (2008) 552 U.S. ___ [169 L.Ed.2d 917, 128 S.Ct. 978] ( Preston ), in which the Labor Commissioner's original and exclusive jurisdiction ... ...
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