Martinez Typographical Union No. 597 v. Silversun Corp.

This is an appeal by plaintiff Martinez Typographical Union No. 597 from a judgment denying its petition to compel arbitration of an alleged dispute with defendants and cross-complainants Silversun Corporation and Herman Silverman.

Responsive to the pleadings of the parties, the trial court found that the parties’ written collective bargaining agreement expired on February 28, 1963, and was not renewed by the parties; that no substantial amount of “reproduction work’’ had accumulated before the date upon which the agreement terminated, although the contrary was true between the time of termination and the sale of the business; that plaintiff had not requested, from time to time, that defendants comply with its obligation to reproduce such copy ; that sometime prior to November 28, 1963, plaintiff was noti

The court entered judgment denying plaintiff’s petition for arbitration and adjudging, on the cross-complaint, that plaintiff’s right to arbitrate had been waived and that defendants and cross-complainants were not obligated to arbitrate any dispute relating to “reproduction work.”

This action is governed by section 1281.2 of the Code of Civil Procedure, which provides in pertinent part as follows: “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,

In the instant ease, the trial court obviously did not base its judgment upon a finding that the alleged dispute over “reproduction work” was not one which was subject to arbitration under the 1961 collective bargaining agreement. Said agreement expressly provides for the performance of “reproduction work” by defendants’ composing room employees with respect to copy which is received under specified circumstances from other printing establishments. The agreement also provides that “all disputes which may arise as to the construction to be placed upon any clause of the agreement ... or alleged violations thereof, which cannot be settled otherwise” shall be referred to a joint standing committee composed of representatives of plaintiff and of defendants. We agree that an alleged violation of the provision pertaining to “reproduction work” or a dispute pertaining thereto was an arbitrable one under the agreement.

The judgment similarly cannot be upheld upon the theory that plaintiff was, of necessity, precluded from seeking arbitration because no demand for same was made during the life of the 1961 agreement or its alleged oral extension. The question of whether the parties intended an arbitration clause to be applicable to disputes for which no demand was made during the term of an agreement is a question of interpretation which should be left to the arbitrator together with the other problems of interpretation of the agreement. (Swift-Chaplin Productions, Inc. v. Love (1963) 219 Gal.App.2d 110,115-116 [ 32 Cal.Rptr. 758 , 5 A.L.R.2d 1001 ].)

Finally, since section 1281.2 of the Code of Civil Procedure expressly prohibits a court from refusing an order to arbitrate on the ground that the plaintiff’s contentions lack substantive merit, the judgment appealed from may not be upheld on that basis.

In the light of these applicable principles of law, the validity of tlie judgment is entirely dependent upon the correct

Plaintiff has not attempted to demonstrate a lack of evidentiary support for the court’s factual findings relative to the issue of waiver. Plaintiff thus tacitly concedes that there was substantial evidence in support of the court’s findings that prior to December 3, 1963, plaintiff never requested that defendants comply with their alleged obligation to perform “reproduction work,” never submitted the question to the joint standing committee and, although given advance notice of the impending sale of defendants’ printing plants and equipment, waited until after said sale had been consummated before ever asserting its alleged right to the performance of “reproduction work. ’ ’

Plaintiff, to the contrary, takes the approach that these findings, although couched in terms of waiver, actually bear upon the merits of the dispute between the parties and tiras constitute an improper invasion of the arbitrator’s decision-making sphere. In support of this position, plaintiff relies solely upon certain language from John Wiley & Sons v. Livingston (1964) 376 U.S. 543 , 557-558 [ 11 L.Ed.2d 898 , 908-909, 84 S.Ct. 909 ], to the effect that labor disputes cannot easily be broken down into their “substantive” and “procedural” aspects and that certain questions concerning the procedural prerequisites to arbitration cannot be answered without consideration of the merits of the parties’ dispute and should therefore be left to the arbitrator.

Plaintiff’s reliance upon this language is misplaced, when applied to the waiver aspects of this ease, since the court in the very case upon which plaintiff relies expressly pointed out, with regard to the issues which were properly determinable by the courts, that it was not ruling out the possibility “that a union might abandon its right to arbitration by failing to make its claims known,” but noted that that situation was not before it. (John Wiley & Sons v. Livingston, supra, at p. 551 [11 L.Ed.2d at p. 905].) Plaintiff’s contention that waiver must of necessity involve a consideration of the merits of the parties’ dispute also flies directly in the face of the controlling California statute, Code of Civil Procedure, section 1281.2, which, as above noted, expressly reserves to the court the question of waiver while precluding it from denying arbitration on the ground that the plaintiff’s contentions lack substantive merit.

Here, plaintiff does not challenge the sufficiency of the evidence to support the trial court’s factual findings concerning waiver, so plaintiff has, in effect, confined itself to arguing that the facts as found are insufficient as a matter of law to constitute a waiver of plaintiff’s right to compel arbitration. Any such contention is untenable.

Although it is the rule, as above noted, that the failure to demand arbitration during the life of a collective bargaining agreement need not invariably result in the loss of the right to arbitrate, the findings in this matter unquestionably support the conclusion that plaintiff, with full knowledge of the facts, intentionally relinquished its right to arbitrate defendants’ alleged violation of the provision pertaining to “reproduction work.” The crucial findings in the instant ease are that plaintiff received advance notice of the impending sale of defendants’ printing plants and equipment and although it was fully aware of defendants’ obligation to perform “reproduction work” and of its right to seek arbitration in the event of defendants’ refusal to do so, plaintiff nevertheless chose to remain silent until after the sale had been consummated and defendants no longer possessed either the facilities or employees necessary for the performance of such work. The gist of these findings is that plaintiff knowingly and deliberately sat upon its rights while defendants changed their position in reliance upon plaintiff’s apparent abandonment of its right to compel the performance of “reproduction work.” Under such circumstances, the trial court was correct in concluding that plaintiff, having chosen to pursue this course of conduct, created an estoppel and effectively waived its right to arbitrate the ‘1 reproduction work ’ ’ question.

In the light of the' foregoing, the judgment denying- plaintiff’s petition to compel arbitration must be upheld. It may be noted, however, that plaintiff has argued at length the eon

Judgment affirmed.

Agee, J., and Taylor, J., concurred.

Appellant’s petition for a hearing by the Supreme Court was denied January 17, 1968. Tobriner, J., did not participate therein.