Opinion
6-18-1956
Petition of HERBERT ALLER BUSINESS REPRESENTATIVE OF LOCAL 659, I. A. T. S. E., for an Order Directing Arbitration and Appointment of an Arbitrator. LOCAL 659, I. A. T. S. E., a California corporation, substituted for Herbert Aller, Business Representative of Local 659, I. A. T. S. E., Petitioner and Appellant, v. COLOR CORPORATION OF AMERICA, Defendant and Respondent.* Civ. 21580.
Joseph W. Fairfield and Ethelyn F. Black, Los Angeles, for appellant. Irving A. Bernstein, Beverly Hills, for respondent.
Petition of HERBERT ALLER BUSINESS REPRESENTATIVE OF LOCAL 659, I. A. T. S. E., for an Order Directing Arbitration and Appointment of an Arbitrator.
LOCAL 659, I. A. T. S. E., a California corporation, substituted for Herbert Aller, Business Representative of Local 659, I. A. T. S. E., Petitioner and Appellant,
v.
COLOR CORPORATION OF AMERICA, Defendant and Respondent.*
June 18, 1956.
Rehearing Denied July 6, 1956.
Hearing Granted Aug. 16, 1956.
Joseph W. Fairfield and Ethelyn F. Black, Los Angeles, for appellant.
Irving A. Bernstein, Beverly Hills, for respondent.
ASHBURN, Justice.
Local 659 of International Alliance of Theatrical Stage Employees and Moving Picture Machine Operators of the United States and Canada (I.A.T.S.E.), appeals from an order dismissing a petition filed under § 1282, Code of Civil Procedure, which sought an order directing respondent Color Corporation of America to proceed with an arbitration. The proceeding was initiated by Herbert Aller as business representative of said Local and of the International I.A.T.S.E., petition being filed on June 17, 1955. The Local was substituted as petitioner in place of Aller.
Color Corporation of America, a corporation, was engaged in a photographic processing business. It had about 154 union employees, three of whom (Krog, Ragin and Moore) were members of said Local 659, one was a member of Studio Transportation Drivers Local 399 of the International Brotherhood of Teamsters, and each of the others belonged to one of Locals 683, 789, 165 of the I.A.T.S.E. Respondent Color Corporation had a collective bargaining agreement with each of said local unions and the agreements contained identical provisions for dismissal pay and for arbitration of disputes. They provided that the employer would not be liable for dismissal pay if the employee was dismissed 'for any other cause or causes beyond the control of the producer.' During the year 1954 respondent company closed its film processing laboratory and dismissed its entire working force, including said 154 union members. Thereupon a dispute arose between the company and the unions as to whether the former was liable for dismissal pay to the employees so laid off; each union, including 659, demanded that its members be paid, and the company contended that under the terms of the contracts it was not liable because the dismissal was for causes beyond its control. Respondent and all of said unions, except Local 659, promptly proceeded with an arbitration pursuant to the existing agreements.
The grievance procedure provides for three separate steps. The first is an attempt at settlement by the representative of the Local in conference with the studio representative of the employer. If this fails, step two calls for presentation of a written statement of grievance by the I.A.T.S.E. Grievance Committee to the producers. Thereupon another Grievance Committee (composed of the representatives of the union and the employer) endeavors to adjust the dispute in conference with the parties thereto. If this fails, step three calls for designation of an arbitrator and proceeding with an arbitration.
Throughout stages one and two of this grievance procedure respondent's representatives and others requested and demanded that Local 659 join in the pending arbitration as all other unions had done. These efforts began about August 5, 1954, and continued through September, but Local 659 refused to arbitrate. The arbitration with the other unions progressed into step two. Meantime, on or about August 19, 1954, Aller, as business representative of Local 659, filed a complaint with the Labor Commissioner alleging violation of § 222 Labor Code, which makes it a misdemeanor to wilfully or unlawfully withhold from any employee any wage established in or through any collective bargaining agreement. The deputy commissioner demanded payment of the wages claimed by Aller to be due, made a final demand on September 16, and on the 27th advised respondent that: 'Mr. Allen [Aller] of the IATSE, 659, has now requested that we proceed with a criminal complaint. Therefore, we shall refer this to the City Attorney for that purpose.' Respondent's vice-president Stone, by letter dated September 22nd, but apparently written on the 28th, advised the commissioner of the receipt of the letter just quoted and that the matter was one for arbitration, not for criminal procedure. It concluded as follows: 'By this action and by the action of IATSE Local 659, you are requiring us to defend our position in court in the face of the fact that our bargaining agreement provides otherwise. We intend to hold both you and Local 659 fully responsible for all consequences resulting from this ill-advised action.' Copy was sent to Aller and to George Flaherty as international representative of I.A.T.S.E. Thereupon Aller wrote to said vice-president a letter of September 29 reading as follows: 'Our dispute with you is not a matter of interpretation but one of non-payment and we are prepared to show that you have wilfully refused to make such payment and that you were not compelled to go out of business, as you claimed you were in the defense raised in the arbitration proceeding. Even that is not a good defense in the current hearing with the other unions, but since they have elected to take the other course, that is their problem. The best way to settle this matter is to let everyone testify under oath and I would certainly expect you to be very willing to accept this judicial process of settling disputes. After all, when one is under oath, the truth and only the truth will prevail.' Be it noted that the writer himself refers to an election to pursue arbitration or court proceeding (criminal). Prior to receipt of this letter Mr. Stone had made repeated demands upon Aller and the Local that they abide by the terms of the contract and arbitrate the dispute, and each time he met with refusal. His affidavit of July 9, 1955, says: 'After receiving that letter, and in every subsequent conversation, I informed Mr. Aller that the Company considered his tactics in this whole matter to be reprehensible, that the Company chose to consider those tactics and his unequivocal refusal to arbitrate as a repudiation and breach of the contract, and that the Company would no longer consent to an arbitration.' In his affidavit of June 30, 1955, Mr. Bernstein, attorney for respondent, stated that no communication had been received by the company from the Labor Commissioner or the City Attorney since the letter of September 27th, and '[p]resumably, that matter is still pending, and it is not possible to determine what the total expenses of that proceeding will be.' For aught that appears it is still pending.
Not until March 1, 1955, did Aller or Local 659 consent to or demand an immediate arbitration. Aller then advised respondent, as stated in his own affidavit, 'that a decision having been reached in the proceeding instituted by Local 683, Local 659 now desired to proceed with the arbitration and requested that an arbitrator be appointed.' This of course implies a ruling by the arbitrator favorable to the unions. Respondent naturally refused to enter into such a belated arbitration and thereafter continued to refuse. It is plain beyond a peradventure of doubt that Local 659 employed the proceeding before the commissioner and the implied and expressed threats of criminal prosecution as a means of coercing payment by respondent of wages which the latter claimed were not due and were a matter upon which the union had agreed to arbitrate.
The trial judge found that respondent was not in default but that petitioner had defaulted in proceeding with arbitration under the agreement, and concluded that petitioner had waived its right to enforce arbitration and that the proceeding should be dismissed. Accordingly the order of dismissal which forms the subject of this appeal was made.
There can be no serious contention that petitioner did not refuse to arbitrate or that it did not repeatedly do so until after the arbitration with the other unions had been concluded. These refusals, coupled with the concurrent attempt to coerce payment by respondent of wages which were plainly a subject matter for arbitration, amply support the finding of waiver and the dismissal of the belated petition which had been filed on June 17, 1955.
The precedents sustain the ruling. Those cited infra deal principally with the institution of a civil action in preference to an arbitration, but there is no difference in principle between pursuit of a civil or a criminal proceeding in violation of an arbitration agreement. In Case v. Kadota Fig Ass'n, 35 Cal.2d 596, 220 P.2d 912, 917, it appears that the pertinent contract provided: "Should the parties be unable to agree upon any matter involving computation or allocation of costs under this agreement, they shall select an accountant to make such determination." 35 Cal.2d at page 604, 220 P.2d at page 918. The court said, concerning this phase of the case: 'For these reasons, by resorting to litigation, Case-Swayne waived any right it might have had to require the selection of an accountant to make a determination of any matter involving the 'computation or allocation of the costs' under its agreement with Yosemite.' 35 Cal.2d at page 606, 220 P.2d at page 918. To the same general effect are Jones v. Pollock, 34 Cal.2d 863, 867, 215 P.2d 733; Jordan v. Friedman, 72 Cal.App.2d 726, 727, 165 P.2d 728; Pneucrete Corp. v. United States Fidelity & Guaranty Co., 7 Cal.App.2d 733, 46 P.2d 1000; Minton v. Mitchell, 89 Cal.App. 361, 370, 265 P. 271. Knutson v. Lasher, 219 Minn. 594, 18 N.W.2d 688, 693: In this case both parties were held to have waived their right to arbitrate. As to the defendants it is said: 'By withdrawing from the arbitration proceedings and refusing to proceed further thereunder, defendants waived and abandoned the right to arbitrate.' As to plaintiffs: 'Instead of proceeding before the arbitrators and taking an award, as he had a right to do, plaintiff brought and prosecuted this action to enforce a mechanic's lien. The bringing of the action was an election to abandon and waive his right to arbitration and to have a judicial remedy instead--a remedy of an entirely different kind from an award by the arbitrators. * * * It makes no difference whether the action is one for the recovery of a money judgment only * * * or one for the enforcement of a mechanic's lien * * *. In either event, the bringing of the action waives the right to arbitration.' Galion Iron Works & Mfg. Co. v. J. D. Adams Mfg. Co., 7 Cir., 128 F.2d 411, 413: 'Assuming the binding effect of the agreement to arbitrate, plaintiff did not see fit originally to avail itself of that remedy. Rather it brought suit. A right to arbitration arising out of mutual agreement, like any other contractual right, may be waived, amended or altered. * * * Commencement of a suit in court rather than reliance upon arbitration, with answer by opposing party upon the merits, is a waiver of the right to arbitrate by both parties. * * * The plaintiff brought suit to recover unpaid royalties which defendant claimed it did not owe. It had a clear right to have the dispute arbitrated. This right was abandoned by suit * * *. Plaintiff could have sought arbitration but it exercised its option of bringing suit. By its election, it waived its right to arbitration.' Young v. Crescent Development Co., 240 N.Y. 244, 148 N.E. 510, 511: There was a question whether the dispute came within the arbitration clause--'But, passing this, we come to the second and more important question which has been outlined, and I think that the answer to that question must be that the respondents by filing mechanics' liens set out on a course so inconsistent with arbitration that they must be regarded as having decisively elected to waive and abandon their right to that course. We are all agreed that, if respondents by filing these liens abandoned their rights to arbitration of the claims covered thereby, such waiver would also bar their right to arbitration of the claim for damages for breach of contract.' (See also, Annotations in 117 A.L.R. 304, 305; 161 A.L.R. 1426, 1428.)
Assuming arguendo that a right to arbitrate may under some circumstances be revived after a waiver, cf. La Nacional Platanera v. North American Fruit & S. S. Corp., 5 Cir., 84 F.2d 881, 882; contra 3 Am.Jur. § 57, p. 888, this is not such a case. The attempts at collection pursued by appellant were little short of attempted extortion, which depends upon method of collection rather than the merit of the claim to payment. People v. Beggs, 178 Cal. 79, 85, 172 P. 152; Shasta Water Co. v. Croke, 128 Cal.App.2d 760, 764, 276 P.2d 88; Lindenbaum v. State Bar, 26 Cal.2d 565, 573, 160 P.2d 9. Appellant waited until after a decision in the arbitration which it should have embraced initially, and until after respondent had incurred an expense of $315 for reporter's fees and transcripts of the arbitration hearing, as well as attorney fees in a substantial amount. Appellant is estopped to insist that this now be done over because it has changed its mind. Appellant has made a conclusive election. Cf. Steiner v. Rowley, 35 Cal.2d 713, 720, 221 P.2d 9.
Order affirmed.
MOORE, P. J., and FOX, J., concur. --------------- * Opinion vacated 302 P.2d 294.