Merrick v. Writers Guild of America, West, Inc.

Decision Date25 March 1982
Citation130 Cal.App.3d 212,181 Cal.Rptr. 530
PartiesWRITERS GUILD OF AMERICA, WEST, INC., Petitioner and Appellant, v. David MERRICK, Respondent and Cross-Appellant. Civ. 62697.
CourtCalifornia Court of Appeals Court of Appeals

Selvin & Weiner and Paul P. Selvin, Los Angeles, for petitioner and appellant.

Lawrence Silver, Beverly Hills, for respondent and cross-appellant.

LILLIE, Associate Justice.

Writers Guild of America, West, Inc. (Guild) appeals from an order denying its petition to compel arbitration 1 in an action brought against it by David Merrick; Merrick cross-appeals, requesting review of an order which sustained without leave to amend the demurrer to one of the causes of action of his complaint.

Merrick's action seeks damages for malicious prosecution, abuse of process and "prima facie tort." The complaint alleges: The Guild, pursuant to the 1977 Theatrical and Television Basic Agreement to which Merrick was a signatory, brought to arbitration a claim of two of its members against Merrick for breach of his agreement to compensate them for writing a screenplay; the arbitrator issued an award denying the claim on its merits; the court subsequently made an order confirming the award pursuant to Merrick's petition; in bringing and maintaining the arbitration proceeding against Merrick, the Guild acted maliciously, without justification and for the purpose of inflicting harm upon Merrick by harassing and embarrassing him, impairing his reputation, interfering with his business relationships and causing him to expend his funds and time unnecessarily. The Guild demurred to the complaint. The demurrer was overruled as to the first and second causes of action (malicious prosecution and abuse of process) and sustained without leave to amend as to the third cause of action (prima facie tort).

After answering the complaint, the Guild filed a petition to compel arbitration. 2 (Code Civ.Proc., § 1280 et seq.) The petition alleged: Pursuant to the National Labor Relations Act (29 U.S.C. § 151 et seq.) the Guild is certified as the collective bargaining representative of all writers employed by producers to prepare literary material for motion pictures produced for exhibition on television and in theaters; 3 employers and writers engaged in said television and motion picture industry are engaged in interstate commerce; Merrick is a producer of motion pictures primarily for theatrical exhibition and employs writers who are Guild members; Merrick as a producer and the Guild, as the representative of writers in the motion picture industry, entered into a collective bargaining agreement entitled "Writers Guild of America 1977 Theatrical and Television Basic Agreement" which is presently in force between Merrick and the Guild; articles 10, 11 and 12 of the Basic Agreement govern arbitration of disputes between the parties; such articles preclude a civil action by Merrick and the award of damages to him based upon the Guild's prosecuting in arbitration a claim of its member; the differences between the parties regarding said preclusion constitutes a dispute subject to arbitration under article 10 of the Basic Agreement; the Guild served upon Merrick a notice of claim submitted to arbitration; Merrick refuses to participate in arbitration on the ground that the arbitrator lacks jurisdiction of the claims set forth in the complaint.

The trial court denied the petition to compel arbitration based on its finding that Merrick's claims of malicious prosecution and abuse of process arise out of tort, not contract, and therefore do not come within the scope of the arbitration provisions contained in article 10 of the Basic Agreement.

THE GUILD'S APPEAL

Code of Civil Procedure section 1281.2 provides: "On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists ...." In making that determination the court must examine and, to a limited extent, construe the underlying agreement. (Freeman v. State Farm Mut. Auto. Ins. Co. (1975) 14 Cal.3d 473, 480, 121 Cal.Rptr. 477, 535 P.2d 341.) The interpretation of written instruments is solely a judicial function unless it turns upon the credibility of extrinsic evidence; accordingly, an appellate court is not bound by a trial court's construction of a contract based solely upon the terms of the instrument without the aid of evidence. (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865-866, 44 Cal.Rptr. 767, 402 P.2d 839.) This rule of appellate review applies to arbitration provisions of contracts. (Conejo Valley Unified School Dist. v. William Blurock & Partners, Inc. (1980) 111 Cal.App.3d 983, 987-988, 169 Cal.Rptr. 102.) The trial court's "finding" that the dispute herein is outside the scope of the Basic Agreement's arbitration provisions is not based upon extrinsic evidence and is in reality a conclusion of law. Thus "[w]e are free to make our own independent interpretation of the terms of the contract and its application to the instant dispute." (Berman v. Dean Witter & Co., Inc. (1975) 44 Cal.App.3d 999, 1003, 119 Cal.Rptr. 130.) We turn to the provisions of the Basic Agreement.

Article 10 (entitled "Grievance and Arbitration") provides in part: "A. MATTERS SUBJECT TO GRIEVANCE AND ARBITRATION (GENERAL) [p] Except as otherwise specifically provided in this Article or elsewhere in this Basic Agreement, the following matters shall be submitted to grievance and thereafter to arbitration as hereinafter provided, and no other matters shall be submitted to grievance or arbitration: [p] 1. Any dispute between the Guild and the Company concerning the interpretation of any of the terms of this Basic Agreement and the application and effect of such terms as determined by an interpretation thereof.... [p] C. MATTERS SUBJECT TO ARBITRATION BUT NOT GRIEVANCE [p] Notwithstanding anything elsewhere contained in this Article 10, the following matters shall be submitted to arbitration but not to grievance: [p] 1. Any dispute as to whether the arbitrator has jurisdiction or whether any matter is arbitrable, provided however, that the arbitrator may not order an arbitration of any matter not arbitrable as provided above...." Article 12 (entitled "Court Proceedings") provides in pertinent part: "C. Nothing in this Basic Agreement shall impair, affect or limit the right of the Company, the Guild or any writer to assert and exercise any and all appropriate legal or equitable rights or remedies to which such Company, Guild or writer is entitled in any court of competent jurisdiction as to any dispute which is not subject to grievance or arbitration pursuant to this Basic Agreement...."

The petition to compel arbitration alleges that the employer (Merrick), as a producer of motion pictures for theatrical exhibition, is involved in activities which affect interstate commerce. While this was denied on information and belief by Merrick, there appears to be little distinction in the premises between federal and state law. Thus, in order to determine whether the dispute in question is arbitrable, we interpret the language of the agreement according to the substantive federal law. (Charles J. Rounds Co. v. Joint Council of Teamsters No. 42 (1971) 4 Cal.3d 888, 891-892, 95 Cal.Rptr. 53, 484 P.2d 1397; Butchers' Union Local 229 v. Cudahy Packing Co. (1967) 66 Cal.2d 925, 930, 59 Cal.Rptr. 713, 428 P.2d 849; Northern Cal.Dist. Council of Hod Carriers v. Pennsylvania Pipeline, Inc. (1980) 103 Cal.App.3d 163, 170, 162 Cal.Rptr. 851.) Also, state law, where compatible with the purpose of the federal law, may be resorted to in order to find the rule that will best effectuate the federal policy which favors the settlement of labor-management disputes by grievance and arbitration mechanisms. (See Textile Workers Union v. Lincoln Mills (1957) 353 U.S. 448, 457 [77 S.Ct. 912, 918, 1 L.Ed.2d 972, 981]; Charles J. Rounds Co. v. Joint Council of Teamsters No. 42, supra, 4 Cal.3d at p. 892, 95 Cal.Rptr. 53, 484 P.2d 1397.)

Under federal law, "The function of the court is very limited when the parties have agreed to submit all questions of contract interpretation to the arbitrator. It is confined to ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract. Whether the moving party is right or wrong is a question of contract interpretation for the arbitrator. In these circumstances the moving party should not be deprived of the arbitrator's judgment, when it was his...

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