Opinion ID: 419680
Heading Depth: 3
Heading Rank: 4

Heading: Arbitrability of claims

Text: 30 In light of our interpretation of the arbitration clause in the Agreement, we must next decide whether the district court properly sent the issues raised by counts 1, 2 and 4 to arbitration. This entails examining MEI's complaint to determine the extent to which the counts against Ssangyong refer to disputes or controversies relating to the interpretation and performance of the contract itself. 31 Counts 1, 2 and 4, alleging breach of the Agreement and breach of the fiduciary duty created by the Agreement, clearly fall within the scope of the arbitration clause and are thus proper subjects for arbitration. However, counts 7, 8 and 9 appear to raise issues that are either primarily or wholly outside the scope of the arbitration clause. 32 Count 7 alleges that Ssangyong induced and conspired to induce breach of the Trac Agency Agreement, a separate and distinct contract. Ssangyong's alleged conduct appears to relate only peripherally to the MEI-Ssangyong Agreement, and could have been accomplished even if the Agreement did not exist. Count 7 therefore alleges activity and raises issues which are predominantly unrelated to the central conflict over the interpretation and performance of the Agreement. 33 Count 8 sets forth a claim in quantum meruit, which by its own terms rests on the theory that services were performed and accepted pursuant to an implied contract or quasi-contract. An action does not lie on an implied contract where there exists between the parties a valid express contract which covers the identical subject matter. Swanson v. Levy, 509 F.2d 859, 861 (9th Cir.1975). Thus, by definition, count 8 does not directly relate to the interpretation and performance of the Agreement itself. 34 Count 9 alleges that Ssangyong converted to its own use and benefit certain prequalification documents delivered by MEI. The Agreement provides only that each of the parties would bear his own costs at the prequalification stage. MEI's claim that Ssangyong misappropriated these documents appears to raise issues largely distinct from the central conflict over the interpretation and performance of the Agreement itself. 35 By sending the issues raised by counts 1, 2 and 4 to arbitration, the district court authorized the arbitrator, in accordance with the expressed intention of the parties, to decide those issues relating to the interpretation and performance of the Agreement. Counts 1, 2 and 4 appear to be completely arbitrable. By deciding those issues necessary to resolve counts 1, 2 and 4, the arbitrator might well decide issues which bear in some way on the court's ultimate disposition of counts 7, 8 and 9. Nothing in the district court's order, or in this opinion, would bar such a result. The arbitrator's award, if it clearly exceeds the scope of his authority by deciding a matter not within the ambit of the arbitration clause, will not be given effect by the court. See Los Angeles Paper Bag Co. v. Printing Specialities and Paper Products Union, 345 F.2d 757, 760 (9th Cir.1965); Lundgren v. Freeman, 307 F.2d 104, 109-10 (9th Cir.1962). See also Davis v. Chevy Chase Financial Ltd., 667 F.2d 160, 165 (D.C.Cir.1981). After the district court receives the results of the arbitration, it should proceed to adjudicate those issues which fall outside the scope of the arbitration clause. 36