Mitchum, Jones & Templeton, Inc. v. Chronis

• Citation: 72 Cal.App.3d 596,140 Cal.Rptr. 160
• Court: California Court of Appeals
• Decision Date: 26 April 1977
• Parties: MITCHUM, JONES & TEMPLETON, INC., a corporation, Plaintiff and Appellant, v. Aristotle G. CHRONIS, Respondent. Civ. 48978.

Page 160

140 Cal.Rptr. 160

72 Cal.App.3d 596

MITCHUM, JONES & TEMPLETON, INC., a corporation, Plaintiff and Appellant, v. Aristotle G. CHRONIS, Respondent.

Civ. 48978.

Court of Appeal, Second District, Division 3, California.

April 26, 1977.

Hearing Denied June 30, 1977.

Miller & Stern, Stanley Stern, Los Angeles, for plaintiff and appellant.

Ashen, Chronis, Blau & Schaap, Phillip Chronis, Beverly Hills, for respondent.

ALLPORT, Associate Justice.

Mitchum, Jones & Templeton, Inc., a Corporation, appeals from 'Findings of Fact and Order' filed December 1, 1975, denying its petition to confirm arbitration award. The appeal lies. (Code Civ.Proc., § 1294; Robinson v. Superior Court, 35 Cal.2d 379, 382, 218 P.2d 10.)

It appears without conflict that in August 1970 the Mitchum firm and Aristotle G. Chronis entered into a written employment contract wherein, inter alia, the parties agreed 'that any controversy between me and any member or member organization or affiliate or subsidiary thereof arising out of my employment or the termination of my employment shall be settled by arbitration at the instance of any such party in accordance with the arbitration procedure prescribed in the Constitution and rules then obtaining of the New York Stock Exchange.' This identical arbitration provision was held to be enforceable in Frame v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 20 Cal.App.3d 668, 671--672, 97 Cal.Rptr. 811.

In June of 1973 Mitchum instituted an arbitration of an employment controversy involving Chronis as a result of which a board of arbitrators issued its decision on October 10, 1974, awarding Mitchum the sum of $22,283.23. A hearing was then set in the superior court on Mitchum's petition to confirm the award and on December 1, 1975, the trial court made the following findings of fact and order:

'1. The Court finds that Petitioner has not established that the provisions of the arbitration agreement relied upon in the petition are self-executing;

2. The Court finds that Petitioner did not petition the Court for any order compelling Respondent to participate in an arbitration prior to the hearing thereof;

3. The Court finds that Petitioner was advised prior to the holding of the purported arbitration hearing that Respondent would not participate therein;

4. The Court finds that the arbitration proceeding which Petitioner seeks to confirm was held without the participation of Respondent or his counsel and over the objection of Respondent;

5. The Court finds that the Respondent, ARISTOTLE G. CHRONIS, was notified by letter dated October 22, 1974, of the decision of the arbitrators and said letter enclosed a copy of said decision. Return receipts in the file indicate that Respondent, ARISTOTLE G. CHRONIS, received the arbitration decision on October 29, 1974;

6. The Court finds that Petitioner had filed on October 12, 1973, a plenary legal action in the Superior Court, Los Angeles County, against Respondent, ARISTOTLE G. CHRONIS, relating to the same factual situation which constituted the subject matter of the purported arbitration which Petitioner seeks to confirm;

7. The Court finds that Respondent has filed a verified answer to the verified complaint of Petitioner on file herein and that the matter is at issue;

8. The Court finds that Petitioner has waived any right it may have had to arbitrate its dispute with Respondent by virtue of the filing of said legal action;

9. Upon consideration of the foregoing findings of fact, the petition, declarations, briefs and oral argument of counsel, the Court now hereby denies said petition for confirmation. Counsel for Respondent to give notice within five (5) days.'

From this order Mitchum appeals.

It is contended on appeal that the order denying confirmation should be reversed because of various errors of law indulged in by the trial court in concluding that the award made by the arbitrators was unenforceable. ¹

We conclude that the trial court was in error in denying confirmation of the award for the following reasons. As pointed out Supra, the order denying the petition for confirmation in effect dismisses the proceeding before the court and is tantamount to an order vacating the award. (Robinson v. Superior Court, supra, 35 Cal.2d 379, 382, 218 P.2d 10.) The power of the trial court to vacate the award or dismiss the proceeding under Code of Civil Procedure section 1286 is circumscribed by section 1286.2. (See United Brotherhood of Carpenters etc., Local 642 v. De Mello, 22 Cal.App.3d 838, 100 Cal.Rptr. 564, wherein it was said that, before an arbitration award may be vacated a party must demonstrate that his ground is supported by section 1286.2.)

As we perceive the argument in the instant case, no claim is made that the award was procured by any means condemned by section 1286.2 except that it may be inferred from the total argument that the arbitrators 'exceeded their powers' in making any award at all. Assuming such to be the argument, we must conclude it to be without merit. A written agreement to submit a controversy to arbitration is valid and enforceable (Code Civ.Proc., § 1281) and, if the arbitration clause is self-executing, a prior court order to arbitrate under section 1281.2 is not necessary. (Kustom Kraft Homes v. Leivenstein, 14 Cal.App.3d 805, 810, 92 Cal.Rptr. 650.) In Titan Enterprises, Inc. v. Armo Construction, Inc., 32 Cal.App.3d 828, 832, 108 Cal.Rptr. 456, 458, the procedure employed by Mitchum was given judicial approval, wherein it was said:

'We think that the same policy applies where an arbitration proceeds, under a 'self-executing' agreement, without a preliminary court order. While an objector may, on a sufficient showing, stay the arbitration, the general policy is to require him to proceed with arbitration and then raise his objections either by opposition to a petition to confirm (as here) or by a petition under subdivision (d) of section 1286.2 of the Code of Civil Procedure to vacate the award.'

As pointed out in Frame, supra, 20 Cal.App.3d 668, 97 Cal.Rptr. 811, an arbitration clause such as the one in Chronis' employment contract is valid and enforceable. (See also Ware v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 24 Cal.App.3d 35, 39, 100 Cal.Rptr. 791, affirmed 414 U.S. 117, 94 S.Ct. 383, 38 L.Ed.2d 348.) A 'self-executing' arbitration clause is one which permits and provides for arbitration under rules therein incorporated. (Titan Enterprises, Inc. v. Armo Construction, Inc., supra, 32 Cal.App.3d 828, 830, 108 Cal.Rptr. 456.) In Kustom Kraft Homes v. Leivenstein, supra, 14 Cal.App.3d 805, 811, 92 Cal.Rptr. 650, 654, it was held that an arbitration clause which 'did import into the contract the entire scheme for arbitration as established by the Rules of the American Arbitration Association' was sufficiently comprehensive to be self-executing. The contract in the instant case provided for arbitration in accordance with the arbitration procedure prescribed in the Constitution and Rules of the New York Stock Exchange. The record before us contains a declaration of Daniel A. Miller filed in support of the petition to confirm, to which is attached a copy of this Constitution and these Rules. This declaration establishes that the...