Matthau v. Superior Court
| Decision Date | 29 May 2007 |
| Docket Number | No. B194637.,B194637. |
| Citation | 60 Cal.Rptr.3d 93,151 Cal.App.4th 593 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Charles MATTHAU et al., Petitioners, v. The SUPERIOR COURT of Los Angeles County, Respondent; William Morris Agency, LLC, Real Party in Interest. |
Iverson, Yoakum, Papiano & Hatch, Los Angeles, Neil Papiano and Virginia Sanderson for Petitioners.
No appearance for Respondent.
Rintala, Smoot, Jaenicke & Rees, William T. Rintala, Michael B. Garfinkel and Anne S. Cruz, Los Angeles, for Real Party in Interest.
A talent agency represented an actor for forty years, receiving a commission of ten percent of all compensation received by the actor under motion picture employment contracts negotiated or procured by the agency. After the actor's: death, his son, who succeeded to the actor's rights under his motion picture employment contracts, ceased to pay the agency's commission on profit participation payments received under the employment contracts. The talent agency sought to compel arbitration with the actor's son and a "loan out" company through which the actor periodically provided his services. Arbitration was sought under the talent agency's contracts with the deceased actor, and under a collective bargaining agreement between the Screen Actors Guild and the talent agency's trade association. Because neither the son nor the loan out company were parties to any of the agreements under which the talent agency sought arbitration, and because none of the legal principles under which a nonsignatory may be bound to another's agreement to arbitrate applies, the trial court erred in granting the talent agency's petition to compel arbitration.
Real party in interest William Morris Agency is a talent agency which represented actor Walter Matthau from 1960 until his death in 2000. During the early years, their relationship was governed by written contracts, the last of which expired in 1970. Thereafter, the agency relationship continued as before, albeit without a written contract, with William Morris receiving commissions equal to ten percent of the gross compensation received by Matthau under contracts of employment entered into during the agency relationship.
Matthau was a member of the Screen Actors Guild (SAG), and William Morris was and is a member of the Association of Talent Agents (ATA) and its predecessors. The relationship between Matthau and William Morris was governed by a collective bargaining agreement between SAG and ATA. The codification of the collective bargaining agreement is known as SAG's "Rule 16(g)" or "Agency Regulations."
Rule 16(g) includes the basic contract between SAG and ATA, and governs all aspects of the relationship between an actor and the actor's agent, including the form and content of any written contract between actor and agent covering representation in theatrical and television motion pictures. Deviations require the written approval of SAG. The regulations are extensive, and include provisions on compensation to the agent (a percentage of "all moneys or other consideration received by the Actor, directly or indirectly, under contracts of employment ... entered into during the term" of the agency contract, with a cap of ten percent), and many other matters. Rule 16(g), for example, requires all contracts to be in writing, and provides that contracts not in writing or not complying with the regulations are void. The form of contract in Rule 16(g) provides that the agent is entitled to its commission after the expiration of the contract term "for so long a period thereafter as the Actor continues to receive moneys or other consideration under or upon employment contracts entered into by the Actor during the term...."
Rule 16(g) also contains an arbitration clause, providing in pertinent part as follows:
"All disputes and controversies of every kind and nature whatsoever between an agent and his client arising out of or in connection with or under any agency contract between the agent and his client ... as to the existence of such contract, its execution, validity, the right of either party to avoid the same on any grounds, its construction, performance, non-performance, operation, breach, continuance, or termination, shall be submitted to arbitration regardless of whether either party has terminated or purported to terminate the same."
Although Matthau and William Morris had no written agency contract after 1970, Matthau routinely paid William Morris ten percent of his earnings under employment contracts procured and negotiated by William Morris for the next thirty years. Matthau also received compensation through certain "loan out" companies through which he rendered his acting services, and these companies likewise paid William Morris commissions on monies they received for Matthau's acting services. After Walter Matthau's death in 2000, his surviving spouse, Carol Matthau, continued to pay William Morris its ten percent commission on profit participation payments and residual interests received by Matthau's heirs or loan out companies in connection with Matthau's employment contracts. The loan out companies were combined after Matthau's death to form one company, called The Matthau Company (TMC), whose president was the Matthaus' son, Charles Matthau.
In July 2003, Carol Matthau died, and Charles Matthau (Charles) succeeded to her rights in the profit participation payments under Walter Matthau's employment contracts. Charles continued to send William Morris commissions on compensation received under Matthau's employment contracts until January 2004. Thereafter, Charles stopped paying the commissions to William Morris.
In December 2005, William Morris submitted a statement of claim and demand for arbitration to SAG's arbitration tribunal, naming as respondents Charles Matthau,' executor of Walter Matthau's estate, and one of the loan out companies. Charles took the position no valid contract existed under which William Morris could make a claim and declined the arbitration demand.
On June 13, 2006, William Morris filed a petition to compel arbitration between William Morris, on the one hand, and Charles and TMC, on the other, before the SAG arbitration tribunal. After a hearing, the trial court granted William Morris's petition to compel arbitration. Its minute order does not state' the rationale for its decision.1
Charles and TMC filed a petition for a writ of mandate, seeking an order directing the trial court to vacate its order compelling arbitration. This court directed William Morris to file a preliminary response to the petition. After review of the preliminary response and a reply filed by petitioners, we issued an alternative writ, ordering the trial court to vacate its order or show cause why a peremptory writ requiring it to do so should not issue. William Morris filed a written return to the petition, Charles and TMC filed a reply, and the order to show cause was heard on March 28, 2007.
We now grant the writ petition.
William Morris's attempt to compel Charles and TMC to arbitrate William Morris's claim for commissions runs aground on a very simple obstacle. A petition to compel arbitration seeks specific performance of an agreement to arbitrate, and neither Charles nor TMC is a party to any agreement with William Morris. Nor is there any legal principle under which they may be bound by Walter Matthau's agreements to arbitrate disputes with William Morris. Accordingly, the trial court should have denied William Morris's petition to compel arbitration. We first discuss the legal terrain and then address the arguments raised by William Morris.
The applicable legal principles have been stated many times. The right to arbitration depends on a contract, and a party can be compelled to submit a dispute to arbitration only if the party has agreed in writing to do so. Arbitration is a favored method of resolving disputes, but the policy favoring arbitration does not eliminate the need for an agreement to arbitrate and does not extend to persons who are not parties to an agreement to arbitrate. (Boys Club of San Fernando Valley, Inc. v. Fidelity & Deposit Co. (1992) 6 Cal.App.4th 1266, 1271, 8 Cal. Rptr.2d 587 (Boys Club).)
Of course, circumstances exist under which persons who have not signed an agreement to arbitrate are nevertheless bound to do so. Indeed, one court, reviewing the cases, observed that, "in varying circumstances, California courts have repeatedly enforced arbitration agreements against and in favor of persons who never agreed to arbitrate the dispute." (Keller Construction Co. v. Kashani (1990) 220 Cal.App.3d 222, 228, 269 Cal.Rptr. 259 (Keller).) An agent, for example, may have implied authority to agree to arbitration on behalf of its principal. (Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 709, 131 Cal.Rptr. 882, 552 P.2d 1178 [].) A child is bound by a parent's contract to arbitrate medical malpractice claims with a group health plan. (Doyle v. Giuliucci (1965) 62 Cal.2d 606, 607-608, 610, 43 Cal. Rptr. 697, 401 P.2d 1.) A husband contracting for a health plan for himself and his wife has the implied authority to agree for himself and his wife to arbitrate claims arising out of medical malpractice, and the nonsignatory wife is bound by the agreement to arbitrate. (Hawkins v. Superior Court (1979) 89 Cal.App.3d 413, 419, 152 Cal.Rptr. 491.) Adult heirs of a member of a group health plan were bound to arbitrate their claim for the wrongful death of the member, where the member expressly agreed to arbitration of claims by his...
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