Court Opinion

ID: 9745244
Source: CourtListenerOpinion
Date Created: 2023-08-26 22:42:59.956331+00
Date Added: 2024-06-11T07:24:58.076646
License: Public Domain

VOGEL, J., Dissenting.
When a former judge and a lawyer enter a contract in which they agree that any dispute about that contract will be resolved by arbitration, I think they ought to be bound by that agreement.
A.
On March 7, 2002, Arnold M. Preston (a lawyer) and Alex E. Ferrer (a former lawyer and former Florida trial judge who now decides cases for a television series, Judge Alex) signed a six-page “Personal Management Agreement” in which Ferrer agreed to pay Preston 12 percent of his earnings from Judge Alex in consideration for Preston’s services as a personal *449manager, and to arbitrate any dispute about the terms of the contract or its “validity or legality.”1 Although Ferrer modified several of the contract’s provisions (by handwritten interlineations and other markings), he made no changes to the arbitration provision. He initialed every page. In 2005, Ferrer refused to pay Preston’s fees.
On June 10, 2005, Preston filed a demand for arbitration with the American Arbitration Association, seeking damages for breach of contract based on Ferrer’s failure to pay his fees. Ferrer’s lawyer appeared in the arbitration and defended the action for six months, during which he moved (successfully) for the recusal of the arbitrator first assigned to decide the dispute, moved (unsuccessfully) for a stay of the arbitration proceedings,2 and participated in a scheduling conference at which the second arbitrator set the arbitration hearing for January 26, 2006.
On July 5, 2005, Ferrer filed a petition with the Labor Commissioner, alleging among other things that Preston was acting as an unlicensed talent agent in violation of the Talent Agencies Act (Lab. Code, § 1700 et seq.), not as a personal manager, and claiming the contract was void. On the same day, Ferrer (by motion) asked the Commissioner to stay the arbitration proceedings. On November 8, the Commissioner denied the motion on the ground that he lacked jurisdiction to stay an arbitration.
Undeterred, Ferrer filed the superior court action now before us, seeking a declaration that the dispute is not subject to arbitration and an injunction staying the arbitration proceedings. Preston appeared and filed a motion to compel arbitration. Ferrer filed a motion for a preliminary injunction. Ferrer prevailed—the trial court denied Preston’s motion to compel arbitration and issued a preliminary injunction staying the arbitration proceedings.
In none of these proceedings did Ferrer challenge the validity of the arbitration clause.
*450B.
When fully informed parties with equal bargaining power agree to arbitrate any dispute that arises out of their business dealings because arbitration is an efficient, expeditious, economical and fair means of resolving their dispute, their agreement ought to be enforced. (Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 702-703, 706-707 [131 Cal.Rptr. 882, 552 P.2d 1178].) When the arbitration agreement includes a clear, express, and unequivocal agreement that the arbitrator shall decide jurisdictional issues—that is, the “validity” and “legality” of the contract—that agreement ought to be enforced. (Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1249 [45 Cal.Rptr.3d 293] [a court may not consider a claim that an arbitration provision is unenforceable if it is a subterfuge for a challenge to the entire agreement because that contention must be submitted to the arbitrator].) In my view, Styne v. Stevens (2001) 26 Cal.4th 42 [109 Cal.Rptr.2d 14, 26 P.3d 343] supports my interpretation, not the views expressed by my colleagues.
There was no arbitration provision in the Styne contract, and the issue decided there was that, in a lawsuit arising under the Talent Agencies Act, the dispute must be referred to the Labor Commissioner, and the proceedings before the Commissioner must be concluded before the parties can proceed to the superior court. (Styne v. Stevens, supra, 26 Cal.4th at pp. 54—56.) Indeed, the Supreme Court expressly rejected an argument that its holding would undermine similar contracts with arbitration provisions, noting that “[n]othing in [its] reasoning restricts” the parties’ right to provide in their contract that their disputes shall be resolved by private arbitration rather than by the Commissioner. (Id. at p. 59, fn. 9.)
My colleagues, assuming their own conclusion, dismiss this language on the ground that the arbitration provision before us does not conform to the Talent Agencies Act’s requirements as set out in Labor Code section 1700.45. (Maj. opn., ante, p. 446, fn. 2.) Their approach ignores the fact that the parties signed a “Personal Management Contract,” not a Talent Agent’s Contract, and the only reason the Talent Agencies Act is relevant is that Ferrer claims the agreement is not what it appears to be and that Preston was in fact acting as an unlicensed talent agent. Based on the parties’ agreement, this threshold issue—which quite plainly has to do with the “validity” and “legality” of the contract—must be decided by the arbitrator, not the Labor Commissioner or the trial court. (Cf. Buckeye Check Cashing, Inc. v. Cardegna (2006) 546 U.S. 440 [163 L.Ed.2d 1038, 126 S.Ct. 1204, 1210]; Green Tree Financial Corp. v. Bazzle (2003) 539 U.S. 444 [156 L.Ed.2d 414, *451123 S.Ct. 2402].)3 If after an evidentiary hearing the arbitrator agreed that Ferrer had raised a colorable defense (that Preston was wrongfully acting as an unlicensed talent agent), the arbitrator would then determine whether the arbitration provision substantially complied with Labor Code section 1700.45 (keeping in mind that Ferrer has never challenged the validity of the arbitration clause). If the arbitrator found substantial compliance, he would determine the dispute. If not, the arbitrator would dismiss the arbitration proceedings, leaving the parties to exhaust their administrative remedies before the Labor Commissioner, then ultimately resolve their dispute in the superior court.
Instead of the speedy, efficient, and relatively inexpensive procedure contemplated by the parties’ contract, my colleagues have permitted Ferrer to cause a delay of years and triple or quadruple the parties’ expenditures. (Lab. Code, §§ 98.2, 1700.44, subd. (a); Sinnamon v. McKay (1983) 142 Cal.App.3d 847, 850 [191 Cal.Rptr. 295] [the Labor Commissioner’s findings are not binding, and each party has a right to trial de novo in the superior court].) That is not how it is supposed to work.4
*452I would reverse, and direct the trial court to grant Preston’s petition for arbitration and stay both the court proceedings and the proceedings before the Labor Commissioner pending the arbitrator’s decision.
Appellant’s petition for review by the Supreme Court was denied February 14, 2007, S149190.

 As relevant, the arbitration provision provides: “In the event of any dispute under or relating to the terms of this agreement, or the breach, validity, or legality thereof, it is agreed that the same shall be submitted to arbitration to the American Arbitration Association in the city of Los Angeles, California, and in accordance with the rules promulgated by the said association, and judgment upon the award rendered by the arbitrator(s) may be entered into any court having jurisdiction thereof. . . .” (Italics added.)

 The motion for a stay was filed with the arbitrator on July 1, 2005, on the ground that Ferrer intended to—but had not yet—filed a petition asking the Labor Commissioner of the State of California to determine the controversy. The arbitrator denied the motion because its merits could not be determined without an evidentiary hearing.

 Buckeye establishes “three propositions. First, as a matter of substantive federal arbitration law, an arbitration provision is severable from the remainder of the contract. Second, unless the challenge is to the arbitration clause itself, the issue of the contract’s validity is considered by the arbitrator in the first instance. Third, this arbitration law applies in state as well as federal courts. [Because the challenge in this case is to the] Agreement, but not specifically its arbitration provisions, those provisions are enforceable apart from the remainder of the contract. The challenge should therefore be considered by an arbitrator, not a court.” (Buckeye Check Cashing, Inc. v. Cardegna, supra, 126 S.Ct. at p. 1209.) Because it is undisputed (correctly) that the contract before us is governed by the Federal Arbitration Act (Higgins v. Superior Court, supra, 140 Cal.App.4th at p. 1247), it follows necessarily that the arbitrator and not the court must determine file gateway issues. My colleagues’ contrary conclusion— based on the fact that the Buckeye court did not consider whether the issue should go first to a state administrative agency—ignores Buckeye’s holding that its rules trump conflicting state procedures. Buchwald v. Superior Court (1967) 254 Cal.App.2d 347 [62 Cal.Rptr. 364]—a case that is almost 40 years old and based on a different statutory scheme—did not have an arbitration provision that vested the arbitrator with jurisdiction to determine the threshold questions at issue in this case and Buchwald thus provides no authority for the majority’s conclusions. (Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1081, fn. 3 [130 Cal.Rptr.2d 892, 63 P.3d 979] [cases are not authority for propositions not considered].) I also question whether Buchwald survives Buckeye.

 There is yet another reason to reverse. Ferrer established his “colorable” defense under the Talent Agencies Act by argument, not by evidence, and the trial court then relied on the existence of this defense to support its decision to issue a preliminary injunction staying the arbitration proceedings. Put another way, there is no evidence at all to support issuance of the preliminary injunction, and this fact alone requires reversal. (San Francisco Newspaper Printing Co. v. Superior Court (1985) 170 Cal.App.3d 438, 441-442 [216 Cal.Rptr. 462] [a preliminary injunction must be supported by evidence establishing the moving party’s probability of success on the merits]; Higgins v. Superior Court, supra, 140 Cal.App.4th at p. 1249 [the party opposing a petition to compel arbitration bears the burden of proving by a preponderance of evidence any facts necessary to his defense].)