Morris v. Zuckerman

• Citation: 257 Cal.App.2d 91,64 Cal.Rptr. 714
• Parties: Barney R. MORRIS and Estelle Morris, Respondents, v. Edward K. ZUCKERMAN and Ola Zuckerman, Appellants. In the Matter of the Arbitration between Edward K. ZUCKERMAN, E. K. Realty Co., Bruce Realty Co., J. S. Realty Co., Beverly Realty Co, College Land Co., Maryland Land Co. and Penn Land Co., Appellants, and Barney R. MORRIS, Respondent. Civ. 31597.
• Decision Date: 18 December 1967
• Court: California Court of Appeals

Page 714

64 Cal.Rptr. 714

257 Cal.App.2d 91

Barney R. MORRIS and Estelle Morris, Respondents, v. Edward K. ZUCKERMAN and Ola Zuckerman, Appellants.

In the Matter of the Arbitration between Edward K. ZUCKERMAN, E. K. Realty Co., Bruce Realty Co., J. S. Realty Co., Beverly Realty Co, College Land Co., Maryland Land Co. and Penn Land Co., Appellants,

and

Barney R. MORRIS, Respondent.

Civ. 31597.

Court of Appeal, Second District, Division 1, California.

Dec. 18, 1967.

Hearing Denied Feb. 14, 1968.

Musick, Peeler & Garrett and Edward J. Riordan, Los Angeles, for appellants.

Latham & Witkins and Alan N. Halkett, Los Angeles, for respondents.

LILLIE, Associate Justice.

In October of 1965 respondents Morris instituted an action against appellants Zuckerman for judicial partition of certain real property owned by the respective parties as tenants in common. Relying on a written agreement (hereinafter referred to as 'the Agreement') executed by all concerned on December 14, 1962, the Zuckermans by separate defense alleged a waiver by Morris and his wife of their right to partition asserting further that they were estopped to seek relief in view of that agreement; by a further defense they asserted that contrary to the Agreement there had been no prior reference of the alleged dispute concerning partition to Engineering Service Corporation (hereinafter referred to as ESCO) for that company's resolution. When respondents persisted in pursuing the remedy they sought, appellants petitioned the court to order arbitration, and moved for a stay of the partition proceeding. Respondents replied to the petition and a hearing was held at which the court considered the opposing interpretations placed on the scope of the Agreement. Finding against appellants' contentions, the court dismissed the petition to compel arbitration and denied the motion for a stay. The appeal is from this order.

The property is controversy is commonly known as the Cove; comprising approximately 23 acres, it is part of a larger parcel, called Parcel 7, some 130 acres in all, located adjacent to the ocean in the Palos Verdes area. Prior to January of 1963, Parcel 7 was owned by a corporation of which the parties to this proceeding were sole stockholders, the principal corporate activity being real estate subdivision and residential construction. Disagreements having arisen among the stockholders, the corporation was liquidated in January of 1963 and the subject Agreement entered into in anticipation of the pending distribution of Parcel 7 to its new owners. After such distribution was finally accomplished, about 54 acres of the parcel belonged to respondents, approximately 53 acres thereof to appellants or corporations owned by them, and the remaining portion (the Cove) to respondents and appellants (each with a one-half interest) as tenants in common.

The Agreement is captioned 'Agreement of Adjacent Owners--Parcel 7.' The parties' stated purpose is '(the) working out to their mutual advantage (of the) various problems which may occur in the development of their respective tracts.' Accordingly, ESCO is designated to make certain determinations, binding on all parties, relating to the granting of such easements, licenses and rights as are necessary for the orderly development of the various properties; the parties further bound themselves to sign and deliver (to the County of Los Angeles) slope and drainage letters upon certification by ESCO that such action would not substantially burden the orderly development of the property to which such letters pertained. Still other paragraphs of the Agreement relate to coordinated improvement work upon the properties and the sharing of costs incident thereto.

It is then provided in paragraph 14 as follows: 'All determinations herein given by ESCO shall be absolute, final and binding upon all parties hereto. In the event of any disputes or differences between the parties with respect to any provision hereof or any part of the subject matter herein dealt with, such disputes or differences shall be referred to ESCO, whose decision thereon shall likewise be final and binding upon all parties hereto.'

Respondents contended below that under the Agreement as a whole, including the catch-all provisions of paragraph 14, the parties did not consent that any dispute concerning partition of the Cove be submitted to arbitration. With this contention the trial court agreed, holding that while the Agreement in general was one to arbitrate, it did not include the matter now in dispute, to wit, the claimed right of appellants to compel arbitration of the controversy respecting the Cove's partition. ¹ The above determination having been reached without resort to extrinsic evidence, upon appeal the question of the document's interpretation is one of law. (B. L. Metcalf General Contractor, Inc. v. Earl Erne, Inc., 212 Cal.App.2d 689, 693, 28 Cal.Rptr. 382.)

In defense of the order appealed from, respondents point out that an agreement generally to arbitrate one or more disputes does not necessarily mean that every such difference of opinion must be submitted to arbitration; rather, as noted in Grunwald-Marx, Inc. v. Los Angeles Joint Board, Amalgamated Clothing Workers, 192 Cal.App.2d 268, 275, 13 Cal.Rptr. 446, 451, 'The collective agreement must be read as a whole and the grievance and arbitration procedure viewed in the light of its purpose.' According to respondents, the 'purpose' of the agreement was the future development of the property and not the underlying property itself; stated otherwise, such future development (and pertinent language from paragraph 14 is quoted) is assertedly the 'subject matter' dealt with in the subject instrument. Left wholly unanswered by this argument, however, is the possible resolution upon arbitration that a partition of the Cove would indeed affect the future development of the property embraced by the Agreement. In view of settled principles, presently to be discussed and applicable to the claims or facts at bar, we are satisfied that the court's conclusions were erroneous and that the order in question must be reversed.

We consider first respondents' contention, inherent in the point immediately above noted, that as a matter of law partition of the Cove would not affect the future development of the property hence, refusal to proceed to arbitration was proper. However, appellants have consistently urged that such partition would adversely affect the parcels' coordinated development; that being so, it is recognized that the merits of such a controversy are to be settled by the arbitrator and not by the courts. 'General rules relative to arbitration and arbitration agreements and proceedings are provided in section 1280 et seq., Code of Civil Procedure. They reflect the strong legislative policy favoring arbitration. They substantially limit the power of the court over a controversy once it is determined that an agreement to arbitrate exists; thereupon 'an order to arbitrate such controversy may not be refused on the ground that the petitioner's...