Graham v. Scissor-Tail

• Decision Date: 05 March 1980
• Docket Number: SCISSOR-TAIL
• Citation: Graham v. Scissor-Tail, 162 Cal.Rptr. 798, 103 Cal.App.3d 115 (Cal. App. 1980)
• Court: California Court of Appeals
• Parties: Bill GRAHAM, Plaintiff and Appellant, v., a corporation et al., Defendants and Respondents. Civ. 53891, Civ. 55436.

Page 798

162 Cal.Rptr. 798

103 Cal.App.3d 115

Bill GRAHAM, Plaintiff and Appellant, v. SCISSOR-TAIL, a corporation et al., Defendants and Respondents.

Civ. 53891, Civ. 55436.

Court of Appeal, Second District, Division 2, California.

March 5, 1980.

For Opinion on Hearing, see 171 Cal.Rptr. 604, 623, P.2d 165.

Mitchell, Silberberg & Knupp, Los Angeles by Thomas P. Lambert, Los Angeles, for plaintiff and appellant.

Fierstein & Sturman Law Corporation by Harvey Fierstein, Los Angeles, for Scissor-Tail, Inc.

Levy & Goldman, Abe F. Levy, Gerald Goldman, Los Angeles, and Elizabeth Garfield, Los Angeles, for amicus curiae, Musicians Union Local 47.

FLEMING, Acting Presiding Justice.

Graham appeals a superior court judgment confirming an arbitration award of $53,290 against him in favor of Scissor-Tail, Inc. At issue is the enforceability by union members against non-union members of an American Federation of Musicians' (AFofM) contract clause which requires all disputes arising out of the contract to be arbitrated before the International Executive Board of the AFofM under the union's by-laws, rules, and regulations.

Facts. Plaintiff Bill Graham is a promoter and producer of musical concerts. Defendant C. Russell Bridges, also known as Leon Russell (Russell), is a performer, recording artist, leader of a musical group, and member of the American Federation of Musicians. Defendant Scissor-Tail, Inc. is Russell's wholly-owned corporation used as the vehicle to market the artistic services of Russell's group. Defendant The David Forest Agency, Ltd. is Scissor-Tail's booking agent.

In June 1973 Scissor-Tail, Inc. undertook to organize Russell's 1973 summer tour, and, acting through its corporate officers Russell and Cordell and its booking agent The David Forest Agency, Ltd., it contracted with Graham for outdoor concerts at Ontario Motor Speedway and at Oakland-Alameda County Stadium. Scissor-Tail agreed to furnish the services of Russell and his group of seven musicians, and Graham agreed to promote the two concerts. Potential gross receipts were estimated at $450,000 for the Ontario concert and.$390,000 for the Oakland concert. For each concert a separate contract was executed. The contract provided that Scissor-Tail would receive union scale or 85 percent of the net profits (gross receipts less expenses and taxes), whichever was greater, but said nothing about who would bear possible losses. In accordance with the requirements of the AFofM's constitution and by-laws, each contract contained the following provision for arbitration:

"In accordance with the Constitution, By-laws Rules and Regulations of the Federation, the parties will submit every claim, dispute, controversy or difference involving the musical services arising out of or connected with this contract and the engagement covered thereby for determination by the International Executive Board of the Federation or a similar board of an appropriate local thereof and such determination shall be conclusive, final and binding upon the parties."

The Ontario concert in July had gross receipts of $173,000 with expenses of $236,000 and lost money, but the Oakland concert in August made a profit. Following the second concert a dispute arose among the parties over who should bear the Ontario concert's loss and whether that loss could be offset against the Oakland concert's profits. In October 1973 Graham filed an action against defendants in the superior court for breach of contract, declaratory relief, and rescission. Scissor-Tail filed a cross-complaint to compel arbitration. In March 1976 the superior court, over Graham's objections, ordered the parties to arbitrate their dispute before the AFofM.

What happened next is described in declarations filed in the superior court by Graham's counsel:

"On or about March 17, 1976, this court entered an order compelling the parties to arbitrate their dispute before the American Federation of Musicians ('A.F.ofM.'). This fact was relayed to the A.F.ofM. by a letter of Mr. Harvey Fierstein, counsel for Leon Russell, dated April 12, 1976.

"As of June, 1976, no arbitration date had yet been set in this matter. As a result, on June 24, 1976, Mr. Fierstein wrote to the A.F.ofM. requesting that a date be set. ( )

"During this time we, on Mr. Graham's side, were awaiting the setting of an arbitration date.

"Rather than set a date for an arbitration, on July 6, 1976, the A.F.ofM. simply entered an arbitration award against Mr. Graham in the amount of $53,290.32. ( ) This arbitration award was entered even though Mr. Graham had never been allowed to present any evidence to the A.F.ofM. and there had been, obviously, no arbitration hearing of any sort.

"As soon as I received a copy of the A.F.ofM.'s award of July 6, 1976, I contacted the office of Thomas Nicastro, the Assistant Secretary of the A.F.ofM. and the office responsible for handling A.F.ofM. arbitration matters. I informed Ms. Titlebaum of that office of the foregoing facts. She, in turn, informed me that it was standard A.F.ofM. procedure to issue arbitration awards even though there had, in fact, not been any arbitration or any arbitration hearing unless the union member (the musician) requested a hearing. Since Mr. Russell, the union member, had not requested a hearing in this matter, the award was entered without a hearing. In other words, under A.F.ofM. procedures, only the union member is entitled to have an arbitration hearing and the other party to the arbitration (if he is a non-union member such as an employer) is left at the mercy of the union member and the union.

"As soon as I discovered these facts, I contacted Mr. Fierstein, counsel for Mr. Russell, and requested of him that he, as attorney for the union member, request that a real arbitration be had. I documented that request in my letter to Mr. Fierstein of July 9, 1976, ( ).

"Subsequent to my conversation with Ms. Titlebaum and my conversation and letter to Mr. Fierstein, on August 10, 1976, the A.F.ofM. purported to put Mr. Graham on its 'defaulters list,' for non-payment of the above-referenced arbitration award. ( ) This defaulter's list is a list of persons who(m) A.F.ofM. members are not allowed to deal with. Effectively, the placing of a concert promoter's name on that list puts a concert promoter out of business.

"Upon receipt of the A.F.ofM. letter of August 10, 1976, I again contacted the office of Mr. Nicastro, the Assistant Secretary of the A.F.ofM., and again reiterated my request for an arbitration hearing. In addition, on August 26, 1976, I wrote a letter to Mr. Nicastro setting forth the position of Mr. Graham in this regard. ( )

"Finally, on September 7, 1976, the A.F.ofM. agreed to reopen this matter and to allow an arbitration to take place.

"In my conversations with the office of Thomas Nicastro ( ) I asked for an explanation of the procedure followed by the A.F.ofM. in selecting a hearing officer. I was informed by Ms. Titlebaum of that office that the hearing officer was selected by the International Executive Board of the A.F.ofM. I asked if Mr. Graham would have any right to participate in this selection process or to consent to any hearing officer selected. I was informed by Ms. Titlebaum that Mr. Graham would have no say in this matter. I protested the unfairness of this procedure but was told that it was standard A.F.ofM. procedure.

"Upon being informed that Mr. Phil Fischer had been named the 'arbitrator' in this matter, I contacted Mr. Fischer to discuss the procedure to be followed with him. Mr. Fischer informed me that he was a former executive officer and long-time member of the A.F.ofM. He had acted as a hearing officer for the A.F.ofM. in many previous matters."

Proceedings at the hearing itself were described by Graham's counsel as follows:

"A hearing was held before an A.F.ofM. hearing officer in this matter on Friday, October 12, 1976 at the western office of the American Federation of Musicians. The hearing officer was Phil Fischer, a member of the A.F.ofM. and, I believe, a retired officer of the A.F.ofM.

"I brought Mr. Donald Holcombe, a certified court reporter, with me to that arbitration. My purpose in bringing Mr. Holcombe was, obviously, to record the events which transpired at that hearing. Mr. Fischer, the hearing officer, refused to allow the court reporter to transcribe that hearing or to be present during that hearing, even though all costs for the court reporter were being borne by Mr. Graham.

"At the hearing, Mr. Graham testified that it was a very common and widely held custom and practice in the popular music concert industry that in so- called '85-15' or '90-10' arrangements, the promoter was understood to bear no risk of loss because of the fact that his potential share of profits is much lower than in a normal concert promotion. In addition to Mr. Graham's testimony on this point, Mr. Steve Wolf, a very well known Los Angeles promoter, also appeared and testified to precisely the same facts. In addition, it was stipulated that Barry Fey, another well known concert promoter, if called, would have testified to these same facts. Moreover, sworn statements of Frank Barcelona, Don Delsener and Jeff Franklin, all of whom are engaged in the popular music concert field and all of whom are well acquainted with the customs and practices in that industry, were admitted into evidence and reaffirmed the testimony given by Mr. Graham and Mr. Wolf.

"No promoters were called by Mr. Russell and, accordingly, absolutely no contrary evidence to this custom and practice was presented by Leon Russell to the hearing officer."

Thereafter, the hearing officer submitted a report to the International Executive Board of the AFofM, and the board again decided in favor of The David Forest Agency, Scissor-Tail, and Russell in the same amount as before. In February 1977 its award of $53,290 was made known to Graham, who was directed to pay that...