Kirk v. Ratner

• Decision Date: 10 February 2022
• Docket Number: B309880
• Citation: 290 Cal.Rptr.3d 207,74 Cal.App.5th 1052
• Parties: Charlotte KIRK et al., Plaintiffs and Appellants, v. Brett RATNER et al., Defendants and Respondents.
• Court: California Court of Appeals Court of Appeals

74 Cal.App.5th 1052

290 Cal.Rptr.3d 207

Charlotte KIRK et al., Plaintiffs and Appellants,

v.Brett RATNER et al., Defendants and Respondents.

B309880

Court of Appeal, Second District, Division 7, California.

Filed February 10, 2022

As Modified on Denial of Rehearing February 23, 2022

Fagelbaum & Heller, Jerold Fagelbaum and Philip Heller, Los Angeles, for Plaintiffs and Appellants Charlotte Kirk and Neil Marshall.

Lavely & Singer, Martin D. Singer, Michael E. Weinsten and Allison S. Hart, Los Angeles, for Defendants and Respondents Brett Ratner, Kevin Tsujihara, James Packer and Avi Lerner.

PERLUSS, P. J.

Charlotte Kirk, an actress, using the pseudonym Melissa Parker, entered into a confidential settlement agreement in August 2017 with four entertainment industry executives, Brett Ratner, Kevin Tsujihara, James Packer and Avi Lerner, using the fictitious names Clark Grandin, Bruce Hamilton, Gregory Kemp and Walter Nelson in the agreement and documents filed in the superior court. The agreement contained an arbitration clause.

The executives filed a demand for arbitration in June 2020, naming Kirk (as Parker) and Neil Marshall (actual name), Kirk's fiancé, and two others as respondents, asserting claims for breach of contract, interference with contract and civil extortion. The executives obtained from an emergency arbitrator a preliminary injunction prohibiting Kirk, Marshall and the other respondents from disclosing confidential information as that term is defined in the settlement agreement, including any disclosures in court documents, and from initiating any lawsuit against the executives in violation of the arbitration provisions in the settlement agreement.

Kirk (as Parker) and Marshall filed a petition in superior court to vacate the preliminary injunction. Because the emergency arbitrator's ruling was not an "award" within the meaning of Code of Civil Procedure section 1283.4,¹ the court dismissed the petition for lack of jurisdiction. For the same reason, we dismiss Kirk and Marshall's appeal as taken from a nonappealable order.²

FACTUAL AND PROCEDURAL BACKGROUND

1. The Confidential Settlement Agreement

Following two days of mediation in August 2017 Kirk, Joshua Newton (using the pseudonym Matthew Waller) and the executives entered into a confidential settlement agreement and mutual release that fully resolved (with no admission of wrongdoing) Kirk's claims of sexual harassment, infliction of emotional distress and defamation. In addition to payment of substantial sums to Kirk, consideration for the settlement and promise of confidentiality included the executives’ agreement to invest in a film project to be written, directed and produced by Newton, starring Kirk as the female lead.

The settlement agreement's confidentiality provision prohibited Kirk and Newton from disclosing, directly or indirectly, "confidential information," as defined in the agreement, to any person or entity, including media organizations or on Internet social media. "Confidential information," as defined, included the facts, circumstances, allegations and contentions giving rise to Kirk's claims against the executives; the facts, circumstances, existence and substance of any encounter or communication between Kirk and any of the executives; and the settlement agreement, its negotiation and terms. The impermissible disclosure of confidential information was to be considered a material breach of the agreement.

The parties agreed to arbitrate "any and all future disputes or controversies of any kind or nature between the Parties, including without limitation any claim [or] disputes regarding validity, interpretation, enforcement or claimed breach of this Agreement, however characterized ... before JAMS under the JAMS Comprehensive Arbitration Rules and Procedures ... or ADR pursuant to its rules, and California law, to the greatest extent permitted by law." Kirk and Newton acknowledged an unauthorized disclosure of confidential information would cause irreparable harm to the executives and agreed that, upon any breach or threatened breach of the confidentiality provision, the executives would be entitled to immediately obtain injunctive relief from the arbitrator (ex parte issuance of a temporary restraining order and a preliminary injunction) preventing the disclosure (or further disclosure) of confidential information pending the outcome of arbitration. Notwithstanding the arbitration provision, the parties further agreed, without waiving their right to arbitration, the executives could seek injunctive relief in court to prevent a breach of the settlement agreement.

Several months after executing the settlement agreement, the parties entered into a confidential amendment agreement in which the executives promised to invest additional sums in the motion picture being developed by Newton and Kirk and Newton reaffirmed the confidentiality and arbitration provisions of the settlement agreement.

2. The Demand for Arbitration and the Preliminary Injunction

Because of ongoing disputes among the parties that allegedly included threats by Kirk and others to disclose confidential information, on June 12, 2020 the executives initiated arbitration with JAMS, asserting claims of breach of contract as to Kirk, Newton and John Cowan, an attorney representing Kirk who had signed a nondisclosure agreement accepting the confidentiality terms of the settlement agreement; intentional interference with contract as to Marshall, who was not a party to the settlement agreement; and civil extortion against all four of them. Contemporaneously with their demand for arbitration the executives filed an ex parte application for a temporary restraining order and order to show cause re preliminary injunction.

Following a telephonic hearing, an emergency arbitrator, appointed pursuant to the JAMS rules identified in the settlement agreement, issued a temporary restraining order prohibiting Kirk, Newton, Cowan and Marshall from disclosing any confidential information as defined in the settlement agreement and from filing a lawsuit in any court against the executives, and ordered Kirk, Newton, Cowan and Marshall to show cause on July 6, 2020 why a preliminary injunction containing the same prohibitions should not issue. Kirk and the other respondents filed opposition papers.

The arbitrator issued a preliminary injunction on July 11, 2020 after a video hearing held several days earlier. The arbitrator's ruling enjoined Kirk, Newton, Cowan and Marshall and any person acting on their behalf from disclosing confidential information, including a disclosure in any document filed in court, and from filing a lawsuit in any court in violation of the arbitration provisions of the settlement agreement, the confidential amendment to the settlement agreement, the confidential nondisclosure agreement or a fourth agreement referred to as the Duchess Agreement. The emergency arbitrator declined to require the executives to post a bond.

3. The Petition To Vacate the Preliminary Injunction

Kirk and Marshall on September 4, 2020 filed a petition to vacate the emergency arbitrator's preliminary injunction, initiating a new action in Los Angeles Superior Court.³ The petition asserted as grounds to vacate the injunction that, prior to issuance of the temporary restraining order, the emergency arbitrator failed to make the full disclosures required by section 1281.9, subdivision (a), and the California Rules of Court, Ethics Standards for Neutral Arbitrators in Contractual Arbitration, standard 7(d)(15) relating to facts that might cause a person to reasonably entertain a doubt that the arbitrator would be able to be impartial; the injunction violated section 1002, subdivision (d), which prohibits enforcement of settlement agreements that prevent disclosure of information regarding claims of sexual harassment and, therefore, was contrary to public policy and exceeded the emergency arbitrator's authority; and, as to Marshall, the arbitrator exceeded her authority because Marshall was not a party to the settlement agreement or a signatory to any other agreement with the executives and could not be compelled to arbitrate any disputes with them.

The executives filed an opposition to the petition, arguing the preliminary injunction did not constitute an "award" within the meaning of section 1283.4 and the superior court thus lacked jurisdiction to consider the petition. They also filed a response to the petition, addressing the merits of Kirk and Marshall's arguments in support of vacating the injunction.

Following receipt of a reply memorandum from Kirk and Marshall and a hearing on October 15, 2020, the superior court ruled it lacked jurisdiction to consider the petition, relying primarily on the decision of our colleagues in Division Two of this court in Lonky v. Patel (2020) 51 Cal.App.5th 831, 265 Cal.Rptr.3d 482 ( Lonky ). The court denied the petition, stating it was "ordered dismissed without prejudice to refiling once a final award is issued."

Kirk and Marshall filed a timely notice of appeal.

DISCUSSION

1. Governing Law and Standard of Review

The parties’ settlement agreement specified arbitration proceedings were to be conducted under California law. Thus, the California Arbitration Act (CAA) (§ 1280 et seq.) governs the issuance of arbitration awards, superior court review of awards and appellate review of superior court orders and judgments approving or disapproving awards.

Section 1283.4 defines an arbitrator's "award" as a written ruling that "include[s] a determination of all the questions submitted to the arbitrators the decision of which is necessary in order to determine the controversy." "The issuance of an ‘award’ is what passes the torch of jurisdiction from the arbitrator to the trial court." ( Lonky , supra , 51 Cal.App.5th at p. 843, 265 Cal.Rptr.3d 482.) Section 1285 authorizes a party to an arbitration "in which an award has been made" to petition the superior court "to confirm,...