Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC334616, Helen I. Bendix, Judge.
Law Offices of Charles Morgan, Charles Morgan, Edward J. Horowitz; Law Offices of Bruce Adelstein and Bruce Adelstein for Plaintiff and Appellant.
Lewis Brisbois Bisgaard & Smith, Roy G. Weatherup, Allison A. Arabian; Law Office of Dennis Holahan and Dennis Holahan for Defendant and Respondent.
MOSK, J.
I. INTRODUCTION
Plaintiff, Answar, Ltd., appeals from a September 6, 2006 judgment confirming an arbitration award in favor of defendant, Bold Entertainment, LLC. The arbitrator awarded defendant a $75,000 production fee in connection with the production of an animated film. Plaintiff contends there was no agreement to arbitrate the issue of the $75,000 fee. We affirm the judgment.
II. BACKGROUND
A. The Film’s Production
This case arises from the production of an animated feature film titled Dinotopia: Quest for the Ruby Sunstone (GoodTimes Entertainment 2004) also known as 26 (the film). Plaintiff owned the rights to the film. But plaintiff had never previously produced an animated feature film. Jonathan Dern and Paul Sabella, the principals of S.D. Entertainment, Inc., are experienced animation producers. Plaintiff asked Mr. Dern and Mr. Sabella to produce the film. S.D. Entertainment, Inc. is the primary company of Mr. Dern and Mr. Sabella. They also formed other production companies on an as needed basis to produce specific projects. Defendant is one such production company. Defendant is wholly owned by S.D. Entertainment, Inc. Mr. Dern and Mr. Sabella used defendant to produce the film.
It is undisputed the parties negotiated two written loan-out agreements in connection with the project. The negotiators were Mr. Dern and Mr. Sabella, on one hand, and Larry Levinson, plaintiff’s executive producer, on the other. The existence of a third written agreement—the Animation Production Agreement—is disputed. It is undisputed plaintiff did not sign any of the three written agreements—the two loan-out agreements or the Animation Production Agreement.
Plaintiff prepared the two loan-out agreements. The initial agreements were dated October 15, 2001. The agreements were amended and superseded as of March 20, 2002. The agreements are identical except for the names of the individuals—Mr. Dern and Mr. Sabella—and their respective personal loan-out companies—Dabrad, Inc. and Hole in the Wall Entertainment, Inc. Mr. Dern and Mr. Sabella were each to receive a $175,000 producer’s fee and executive producer credit on the screen titles. The loan-out agreements also provided that S.D. Entertainment, Inc. was to receive “a Company credit” on the screen titles. Both loan-out agreements contain a binding arbitration clause providing in part: “Arbitration. Except as provided in Paragraph IX(c) below, any and all disputes arising out of or in connection with this Agreement or its performance or interpretation shall be exclusively settled by arbitration to be held in Los Angeles, California under the Rules of the American Arbitration Association (the ‘AAA Rules’), except to the extent superseded by the following provisions of this Paragraph IX(b). . . . . The final decision of the arbitrator (the ‘Award’) shall be final and binding . . . .” (Italics added, original underscore.)
The Animation Production Agreement—the disputed agreement—states it was entered into as of March 20, 2002. This is the same date reflected in the loan-out agreements. As discussed below, however, it is undisputed the written Animation Production Agreement—the document itself—was not created until 2003. The agreement is between plaintiff and defendant. It calls for payment of a $75,000 production fee to defendant. The fee is “payable concurrently upon [plaintiff’s] approval of the final answer print” of the film. The arbitration clause of the Animation Production Agreement states: “Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by arbitration, in accordance with the American Arbitration Association (‘AAA’) under its Commercial Arbitration Rules. Judgment upon the award rendered by the arbitrators shall be entered in any court having jurisdiction therefore. The parties agree that the arbitration shall be conducted in the English language in Los Angeles, California, before one arbitrator selected by the AAA.”
The film was completed and delivered to plaintiff on December 31, 2003. Plaintiff released the film on videocassette in 2004 and on digital video disc in 2005. Mr. Dern and Mr. Sabella received executive producer credit on the film. Also, they were paid executive producer fees of $175,000 each. S.D. Entertainment, Inc. received company production credit. Defendant subsequently requested and was awarded in arbitration a $75,000 production company fee.
B. The Arbitration
On April 15, 2005, defendant, represented by Dennis Holahan, filed an arbitration claim with the American Arbitration Association. Defendant sought to recover the $75,000 production company fee under the Animation Production Agreement. In a May 2, 2005 letter, plaintiff’s counsel, Charles Morgan, rejected the demand. Mr. Morgan stated in part, “At no time did [plaintiff] ever agree to the terms of the [Animation Production Agreement] . . . .” On May 10, 2005, Mr. Holahan, representing defendant, responded stating: “The written Animation Production Agreement . . . was fully performed by [defendant], and, like the two other producer agreements between [defendant] entities and [plaintiff] for this film, was never signed by [plaintiff]. . . . The agreement was fully negotiated and the arbitration provision is binding on both parties.” In a subsequent May 25, 2005 letter, Mr. Morgan indicated plaintiff would assert “related, contingent claims” against defendant’s principals, Mr. Dern and Mr. Sabella, together with their loan-out companies. Further, Mr. Morgan indicated plaintiff would rely on the loan-out agreements. Also, the May 25, 2005 letter stated: “[Plaintiff] hereby gives notice that it wishes to assert herein related, contingent claims against the principals of [defendant], Jonathan Dern and Paul Sabella (together with their loan-out companies, DABRAD Entertainment and Hole in the Wall Entertainment, respectively) under agreements executed between them and [plaintiff] by date of March 20, 2002 . . . . [¶] . . . [¶] Each of the two [agreements] with [plaintiff] includes the following arbitration language: [¶] Except as provided in Paragraph IX(c) below, any and all disputes arising out of or in connection with this Agreement or its performance or interpretation shall be exclusively governed by arbitration to be held in Los Angeles, California under the rules of the American Arbitration Association . . . .”
The May 25, 2005 letter more fully states: “[Plaintiff] . . . hereby gives notice that it wishes to assert herein related, contingent claims against [defendant’s principals, Mr. Dern and Mr. Sabella] (together with their loan-out companies . . .) under agreements executed between them and [plaintiff] by date of March 20, 2002 . . . . [¶] . . . [¶] . . . Basically, what [plaintiff] is here claiming is that the rights conveyed to [plaintiff] by the principals in the [loan-out agreements] preclude those principals and any entity controlled by them from having a basis for the claim that [defendant] has asserted in the captioned action [(the arbitration request)] against [plaintiff]. [¶] Alternatively, should any basis for recovery by [defendant’s] principals and against [plaintiff] be found to lie in the captioned [arbitration] claim, then any such recovery must be paid out of the fees which were paid over to said principals by [plaintiff] in the [loan-out agreements], which payments were in the amount of $175,000 each for Mr. Dern and Mr. Sabella. [¶] . . . [¶] None of the above is intended to prejudice in any way [plaintiff’s] contention that it did not execute nor otherwise agree to be bound by the terms of the [Animation Production Agreement]. By copy of this letter, [plaintiff] calls upon counsel for [defendant] and its two principals, Jonathan Dern and Paul Sabella, to agree that arbitration is called for under the [loan-out agreements] in case there is a recovery of any nature in the main action herein. [¶] Should [defendant] and Messrs. Dern and Sabella refuse to agree through their counsel that any recovery in the main action herein would itself be subject to arbitration under the [loan-out agreements], then [plaintiff] will be forced to commence a Superior Court claim to enforce its rights, including for attorney’s fees, all as provided for in the [loan-out agreements].” In addition, Mr. Krutilek declared that in discussions with Mr. Sabella and Mr. Dern, Mr. Levinson had insisted that the S.D. Entertainment, Inc. production company fee be deleted. Mr. Levinson’s declaration was consistent with Mr. Krutilek’s statements. Mr. Levinson declared that after financing was secured, and it became clear S.D. Entertainment, Inc. could not cover the production costs, plaintiff agreed to pay S.D. Entertainment, Inc.’s overhead costs, and Mr. Levinson told Mr. Dern, prior to the final budget, that the production company fee “would have to come out.” Mr. Levinson concluded, “There is no doubt in my mind that Jonathan Dern knew full well at that time that this was the end of a production company fee for his company.” (AA 329-330))~
On June 8, 2005, plaintiff filed the present action for declaratory and injunctive relief. Plaintiff alleges there is no arbitration agreement between the parties with respect to the production company fee dispute. By letter dated June 7, 2005, Mr. Morgan advised Mr. Holahan the complaint was being filed so the issue of whether there was an agreement to arbitrate would be determined by a judge rather than an arbitrator.
C. Defendant’s Motion To Compel Arbitration
Defendant filed a motion to compel arbitration. Defendant relied on the binding arbitration clause in the Animation Production Agreement. However, in the reply to the opposition, defendant argued that in addition to the Animation Production Agreement, the duty to arbitrate arose from the two prior contracts. In other words, the duty to arbitrate arose from all three agreements.
With respect to the production company fee, Mr. Dern declared as follows. S.D. Entertainment, Inc. was to receive production company credit on the film. This was to occur even though the actual production services contract was with defendant. The parties had negotiated payment of the $75,000 production company fee to S.D. Entertainment, Inc. in September 2001. The $75,000 production company fee appeared in the budget throughout production, as well as in weekly costs reports. No third contract for the production company fee was prepared at the time the loan-out agreements were delivered. The Animation Production Agreement was produced by defendant’s in-house counsel, Greg Rose. The Animation Production Agreement was prepared in response to a request for documentation by Gregory Krutilek, plaintiff’s president and chief financial officer. Mr. Dern stated: “When [plaintiff] sent the two [initial October 2001 loan-out] [a]greements, they did not send a third agreement for the production company fee of $75,000. This did not concern me greatly because the two loan out agreements were by far more important (two times $175,000), and the production company fee was entered as part of the budget, so I assumed it was a done deal and we would not have any problem getting paid. The fee had been negotiated, was in the final approved budget and every weekly cost report, and wasn’t due in full until delivery of the Film. As part of the negotiations on fees, Paul and I agreed with Larry Levinson to reduce the production company fee to $75,000 from $100,000, and that figure became part of the approved budget.” In February 2003, Mr. Krutilek demanded the budget be cut. Plaintiff went through the budget line by line and made substantial reductions, but at no time was there any discussion about cutting the $75,000 production company fee.
In 2003, when the film was in post-production, Mr. Dern requested payment of the $75,000 fee. Mr. Krutilek asked for a document justifying the request. Mr. Dern explained that the Animation Production Agreement was generated at that time. On or about December 1, 2003, before the film was completed, Mr. Dern signed the Animation Production Agreement and sent it to plaintiff. Mr. Dern declared: “In addition to responding to [Mr.] Krutilek’s request for documentation, it is always a good idea to have all the documentation done by the end of production, as is typical in the film production business. The [Animation Production Agreement] was dated ‘as of March 20, 2002’ because that was the date of the last version of the loan out agreements. . . . It is a standard production company agreement, and it embodied the terms we agreed upon with Larry Levinson back in September 2001: the $75,000 fee, the delivery terms, the copyright ownership, the cash flow to be handled by [defendant], and the designation of Larry Levinson as a representative of [plaintiff]. Getting all the documents and agreements sent out and executed is part of the normal process of closing out and delivering a film.” As noted above, the completed film was delivered to plaintiff on December 31, 2003. With respect to the arbitration clause in the Animation Production Agreement, Mr. Dern declared, “I included an arbitration provision . . . for the ‘American Arbitration Association under its Commercial Arbitration Rules’ because that provision was in both loan out agreements . . . .” Plaintiff did not object to the Animation Production Agreement. But it also did not pay the $75,000 production company fee.
Mr. Dern wrote to Mr. Krutilek in an undated letter. Mr. Dern explained his purpose in writing the letter, “I wanted to take this opportunity to lay out for you my understanding as to the deal that was reached between myself [sic] and Larry [Levinson] with respect to the S.D. production fee.” Mr. Dern stated: “It was always understood that S.D. [Entertainment, Inc.] was rendering production services, for which it would receive a fee. Section 5(b) of both Paul and my loan-out agreements with [plaintiff] specifically states that S.D. [Entertainment, Inc.] would receive production credit. In addition, in Section 6 of those agreements, our right of first negotiation for subsequent productions is expressly tied to our continued ownership of S.D. [Entertainment, Inc.]—demonstrating an awareness of S.D. [ Entertainment, Inc.]’s role in producing the Film. As further evidence of that understanding, our outside counsel refers to the ‘SD fee’ in an email outlining her conversation on March 20, 2002 with Paul Balelo. [¶] . . . [¶] Greg, I am aware that you were not involved in the initial discussions and see why this is new information for you. S.D. has performed all of its production company obligations and is owed the production fee that was agreed on initially by Larry, as reflected in the budgets and cost reports these past two years. [¶] [Plaintiff]’s assertion that that fee was always assumed to be padding lacks credibility, given the scrutiny of the rest of the budget in [plaintiff’s] quest to decrease the amount being paid for the Film. [¶] . . . [¶] I would be happy to speak directly with Larry to refresh his memory concerning our negotiations on the S.D. [Entertainment, Inc.] fee, or to answer any other questions you might have. Otherwise, I look forward to receiving full and complete payment upon delivery of the Film.”
On January 7, 2004, Mr. Dern wrote to Mr. Levinson stating: “The letter I recently sent to Greg Krutilek clearly demonstrates that both parties understood from the beginning that there would be a fee for S.D. Entertainment[, Inc.]’s production services—a fee that was specifically negotiated and documented in the versions of the budgets previously provided to you. The agreement you and I reached regarding the Production Fee has been manifested in the final, approved budget and in all cost reports. [¶] The absence of a written memorialization of our agreement does not mean there is no agreement. Over the course of several days in September 2001, you and I negotiated and agreed upon the executive producer fees for the individual services of Paul and myself, as well as a specific fee for the production company services of S.D. Entertainment[, Inc.]—services that S.D. Entertainment[, Inc.] has rendered. . . . .”
Mr. Dern wrote a second letter to Mr. Levinson on January 26, 2004. Mr. Dern stated in part: “. . . [¶] It is very troubling . . . that we have not received the S.D. Entertainment[, Inc.] producing fee of $75,000. You, Paul, Debbie and I agreed to this fee when we were finalizing the budget. [¶] . . . [¶] . . . In good faith, we delivered all final film elements a month ago. [¶] . . . We at S.D. Entertainment[, Inc.] would appreciate immediate payment of the fee, as well as the execution of the S.D. Entertainment Production Services Agreement.”
Defendant presented evidence the September 5, 2001 “5th preliminary” budget shows a $100,000 production payment to S.D. Entertainment, Inc. The September 6, 2001 “6th preliminary” budget also reflects a $100,000 production payment to S.D. Entertainment, Inc. The September 10, 2001 “7th preliminary” budget shows a $75,000 payment to S.D. Entertainment, Inc. At Mr. Levinson’s request, Mr. Dern and Mr. Sabella agreed to move the $75,000 fee from the “Producers Unit” to the “Production Staff” category of the budget.
D. Plaintiff’s Opposition To Defendant’s Motion To Compel Arbitration
Plaintiff opposed the motion to compel arbitration. Plaintiff’s president and chief financial officer, Mr. Krutilek, declared the only agreements between the parties were the two loan-out agreements; there was no third contract. Mr. Krutilek explained that had there been a third agreement, it would have been his practice to cross-reference the contracts so that a breach or default under one would have consequences in the other understandings. According to Mr. Krutilek, in late 2003, when the film was in post-production, Mr. Dern submitted a check request form and an original contract both providing for a $75,000 payment to defendant. Prior to that point, Mr. Krutilek had never heard of defendant. Mr. Krutilek called Mr. Dern. Mr. Dern told Mr. Krutilek, “Larry Levinson and the lawyers involved in the negotiation for [the film] knew all about this payment.” Mr. Krutilek requested documentation supporting Mr. Dern’s request. Mr. Krutilek declared that during this conversation, no mention was made of defendant. Mr. Levinson likewise declared there was no other contract in addition to the two loan-out agreements; S.D. Entertainment, Inc. was to receive production company credit; S.D. Entertainment, Inc. did in fact receive that credit; and defendant was never mentioned during negotiations.
At the trial court’s request, Mr. Krutilek filed a lengthy declaration discussing the production company fee’s inclusion in the budget and why there was no agreement to pay S.D. Entertainment, Inc. or defendant the $75,000. Mr. Krutilek explained that, as is usual within the industry, the budgets reflected allowances which are estimates of anticipated but uncategorized costs. The allowances were set forth within specified sub-categories of the master budget. The budgets were prepared by a S.D. Entertainment, Inc. accountant. Mr. Krutilek declared: “Budgets are used solely for forward planning purposes . . ., not to authorize payment of unsubstantiated line items.” The first, second, and third drafts of the budget reflected a payment to S.D. Entertainment, Inc. But the final budget did not show a payment to S.D. Entertainment, Inc. This is because plaintiff had by then agreed to absorb the overhead of S.D. Entertainment, Inc. and, according to Mr. Krutilek, it made no sense to award it an additional fee for services as a production company. The $75,000 allowance for other production staff costs in the final budget was included because Mr. Levinson “had requested a ‘pad’ allowance” for an additional producer. The costs were very difficult to estimate. There was a good chance the film would cost more to produce than the budgeted amount. In discussions with Mr. Sabella and Mr. Dern, Mr. Levinson insisted they reduce their individual fees to $175,000. Mr. Levinson also insisted that the production fee for S.D. Entertainment, Inc. be deleted altogether. A spreadsheet that was prepared contemporaneously with the budget did not include a $75,000 production company fee because there was no agreement to pay it in Mr. Krutilek’s view.
The accountant for S.D. Entertainment was Debbie Nodella. As the project was winding down, Ms. Nodella attempted to disburse a $75,000 fee to S.D. Entertainment, Inc. and charge it as a production allowance. Mr. Krutilek called Mr. Dern to express “surprise and consternation” at Ms. Nodella’s effort to disburse the $75,000 fee. Mr. Dern said, “[H]e felt that he had done a good job under difficult circumstances for us, and therefore, in his opinion, S.D. Entertainment, Inc. deserved to get a bonus production company fee.” Mr. Krutilek had final authority with respect to plaintiff. No producer agreement with S.D. Entertainment, Inc. was ever tendered to him for review.
Mr. Levinson also filed a supplemental declaration. Mr. Levinson stated the budgets were generated in order to secure financing for the film. Further, Mr. Levinson declared: “Once there was a [financing] commitment in place, I took great care to be sure that the budget was something that we could live with. It quickly became apparent that S.D. Entertainment[, Inc.] was going to have difficulties in staying in business under the weight of the costs that the production would require, and accordingly I agreed on behalf of [plaintiff] to pay most of the S.D. Entertainment[, Inc.] overhead costs directly—all the way down to rent, electric bills and the salaries of employees. [¶] . . . It did not make sense to me that S.D. [Entertainment, Inc.] would have its costs paid by [plaintiff] and would still receive a production company fee. In a discussion that I had with Jonathan Dern before the final budget was arrived at, I told him that his own fee and the fee of his partner, Paul Sabella, would have to come down in light of our commitment to paying his overhead, and that the S.D. Entertainment[, Inc.] fee would have to come out altogether. [¶] . . . While the line item was retained under the production staff category of the budget, the designation became ‘other.’ There is no doubt in my mind that Jonathan Dern knew full well at that time that this was the end of a production company fee for his company. In discussions with him as the film was nearing completion, he never brought up the topic, and I felt and feel strongly that there was no topic to bring up.”
E. The Trial Court’s Rulings And The Arbitrator’s Award
The trial court granted defendant’s motion to compel arbitration. The trial court reasoned: “1. [Plaintiff] does not dispute that it entered into, and is bound by, two loan-out agreements relating to production of the same film that is the subject of the Animation Production Agreement containing the arbitration clause, even though [plaintiff] did not sign those loan-out agreements. . . . [¶] 2. The three agreements relate to the same project, to wit, production of film #26. [¶] 3. Both loan-out agreements contain arbitration clauses. . . . [¶] 4. [Plaintiff] does not contest that [it] received the benefit of [defendant’s] services, to wit, production and delivery of film # ‘26.’ . . . [¶] 5. [Plaintiff] complied with the production credit terms in the very agreement [plaintiff] disputes ever having seen before payment of the fee was requested. . . . [¶] 6. The production budgets for the film starting in [September 2001], and continuing through [December 2003], contained a line item for the production fee . . . without any objection from [plaintiff] until the time came years later to pay the fee. . . .”
The arbitrator, Roy G. Rifkin, awarded defendant $75,000 plus interest, attorney’s fees, and costs. On defendant’s petition, the trial court confirmed the arbitration award. This appeal followed.
III. DISCUSSION
A. Late Opposition
Defendant asserts we can affirm the judgment and the trial court’s underlying finding there was an agreement to arbitrate without reaching the merits of the challenged ruling. Defendant contends plaintiff waived the right to contest the motion to compel arbitration because the opposition was not timely filed. (See Cal. Rules of Court, rule 3.1300(d), former rule 317(d).) It is true the trial court found plaintiff’s opposition was untimely. Moreover, the clerk’s minutes state, “[T]he court is inclined to exercise its discretion to strike the late opposition.” However, the trial court orally stated: “I went to the merits anyhow. I read all of your papers.” The trial court allowed plaintiff’s counsel to participate in oral argument. Moreover, the trial court ruled, “Even if the court were to consider the opposing papers, the court finds that defendant . . . has satisfied its burden to show the existence of an arbitration agreement.” Even absent opposition, it was defendant’s burden, as the moving party, to demonstrate the existence of a written agreement to arbitrate. (Code Civ. Proc., § 1281.2, subd. (b); Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.) Under these circumstances, we decline to affirm the judgment on grounds plaintiff failed to timely oppose defendant’s motion to compel arbitration.
B. The United States Arbitration Act
The three written agreements state any controversy between the parties is within the jurisdiction of the laws of the State of California. The loan-out agreements provide, “This Agreement shall be governed by, and construed in accordance with, the laws of the State of California applicable to contracts entered into and to be fully performed therein.” The Animation Production Agreement similarly states, “This Agreement and all matters collateral thereto shall be governed by the laws of the State of California applicable to agreements executed and entirely performed therein.” Therefore, the United States Arbitration Act, title 9 United States Code section 1 et seq., does not apply to this appeal. (Volt Info. Sciences v. Board of Trustees of Leland Stanford Jr. U. (1989) 489 U.S. 468, 470; accord, Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, 380; Larian v. Larian (2004) 123 Cal.App.4th 751, 759; Mount Diablo Medical Center v. Health Net of California, Inc. (2002) 101 Cal.App.4th 711, 714-726.) In any event, whether a valid arbitration agreement exists is determined under state contract law. (Perry v. Thomas (1987) 482 U.S. 483, 492, fn. 9; Bolter v. Superior Court (2001) 87 Cal.App.4th 900, 906.)
C. The Merits
We emphasize at the outset that the question before the trial court on defendant’s motion to compel arbitration was whether the parties had agreed to arbitrate the production company fee dispute. It was undisputed plaintiff had agreed at one time to pay a $75,000 production company fee. The disputed question was whether the parties subsequently eliminated that payment from their agreement. The trial court found the parties had agreed to arbitrate the disagreement over whether plaintiff owed defendant $75,000. The arbitrator found in defendant’s favor and awarded it $75,000. In so doing, the arbitrator necessarily concluded plaintiff had agreed to pay a $75,000 production company fee, and that fee was payable to defendant. The questions of whether plaintiff promised to pay a $75,000 production company fee and whether that amount was payable to defendant are not before this court; they were issues reserved for the arbitrator.
The right to arbitration depends upon the existence of an agreement to arbitrate between the parties. (County of Contra Costa v. Kaiser Foundation Health Plan, Inc. (1996) 47 Cal.App.4th 237, 245; Marsch v. Williams (1994) 23 Cal.App.4th 250, 254-255; Boys Club of San Fernando Valley v. Fidelity & Deposit Co. (1992) 6 Cal.App.4th 1266, 1271; Blatt v. Farley (1990) 226 Cal.App.3d 621, 625.) There is a strong public policy in favor of arbitration; but there is no public policy favoring arbitration of disputes that the parties have not agreed to arbitrate. (Moncharsh v. Heily & Blase (1992)3 Cal.4th 1, 9; Victoria v. Superior Court (1985) 40 Cal.3d 734, 744; Banner Entertainment, Inc. v. Superior Court (Alchemy Filmworks) (1998) 62 Cal.App.4th 348, 356; Boys Club of San Fernando Valley v. Fidelity & Deposit Co., supra, 6 Cal.App.4th at p. 1271; Blatt v. Farley, supra, 226 Cal.App.3d at p. 625.) The party asserting the right to arbitrate has the burden of proving by a preponderance of the evidence the existence of a valid arbitration agreement. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972; Rosenthal v. Great Western Fin. Securities Corp., supra, 14 Cal.4th at p. 413 ; Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144 Cal.App.4th 754, 761; Crippen v. Central Valley RV Outlet (2004) 124 Cal.App.4th 1159, 1164.) Although an agreement to arbitrate must be in writing, it is not mandatory that the contract containing the arbitration clause be signed by the parties. (Banner Entertainment, Inc. v. Superior Court (Alchemy Filmworks), supra, 62 Cal.App.4th at p. 358; see Valero Refining, Inc. v. M/T Lauberhorn (5th Cir. 1987) 813 F.2d 60, 63-64.)
Civil Code section 1642 provides, “Several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together.” It is well established that under Civil Code section 1642, several agreements concerning the same subject matter and made as part of the same transaction must be construed together. (See generally, Reigelsperger v. Siller (2007) 40 Cal.4th 574, 580 [informed consent agreement and arbitration provision signed at the same time should be construed together]; Mayers v. Loew’s Inc. (1950) 35 Cal.2d 822, 826-828 [contract and letter executed and delivered at the same time, and related to same subject matter, construed together]; Symonds v. Sherman (1933) 219 Cal. 249, 253 [“‘It is a general rule that several papers relating to the same subject-matter and executed as parts of substantially one transaction, are to be construed together as one contract’”]; Merkeley v. Fisk (1919) 179 Cal. 748, 754 [quoting Civil Code, section 1642]; Burnett v. Piercy (1906) 149 Cal. 178, 189 [“Where two or more written instruments are executed contemporaneously, with reference to each other, for the purpose of attaining a preconceived object, they must all be construed together . . . .”]; St. Paul Fire and Marine Ins. Co. v. American Dynasty Surplus Lines Inc. Co. (2002) 101 Cal.App.4th 1038, 1057 [additional insured endorsement read together with subcontract requiring insurance]; Brown v. California Pension Administrators & Consultants, Inc. (1996) 45 Cal.App.4th 333, 344-345 [several documents governing self-directed individual retirement accounts read together]; Peterson Development Co. v. Torrey Pines Bank (1991) 233 Cal.App.3d 103, 114 [letter of commitment and construction loan agreement must be read together]; Torrey Pines Bank v. Hoffman (1991) 231 Cal.App.3d 308, 320 [“Pursuant to Civil Code section 1642, the several contracts between the parties [to a development project], relating to the same matters as part of the same transaction, are to be taken together”]; Boyd v. Oscar Fisher Co. (1989) 210 Cal.App.3d 368, 378 [attorney fee provision in invoices read together with dealership contract; “Courts will construe together several documents concerning the same subject and made as part of the same transaction . . . even though the documents were not executed contemporaneously . . . and do not refer to each other”]; BMP Property Development v. Melvin (1988) 198 Cal.App.3d 526, 531-532 [land trade contract and loan agreement part of one transaction]; Superior Motels, Inc. v. Rinn Motor Hotels, Inc. (1987) 195 Cal.App.3d 1032, 1053 [lease and attached exhibit construed as a single contract]; Housing Authority v. Monterey Senior Citizen Park (1985) 164 Cal.App.3d 348, 353-354 [documents executed contemporaneously and pertaining to same subject matter construed as one contract]; Heston v. Farmers Ins. Group (1984) 160 Cal.App.3d 402, 417 [agreement and referenced contract were interrelated and must be read together]; Pacific Employers Ins. Co. v. City of Berkeley (1984) 158 Cal.App.3d 145, 150-151 [contract and performance bond construed together]; Kerivan v. Title Ins. & Trust Co. (1983) 147 Cal.App.3d 225, 230 [note and deed of trust must be read and construed together]; IMO Development Corp. v. Dow Corning Corp. (1982) 135 Cal.App.3d 451, 463 [sales agreement and note part of singe transaction]; Huckell v. Matranga (1979) 99 Cal.App.3d 471, 481 [deed of trust and note part of single transaction]; Nevin v. Salk (1975) 45 Cal.App.3d 331, 338 [“several papers relating to the same subject matter and executed as parts of substantially one transaction, are to be construed together as one contract”]; Goodman v. Severin (1969) 274 Cal.App.2d 885, 895 [“where two or more written instruments are executed contemporaneously, with reference to each other, for the purpose of attaining a preconceived objective, they must all be construed together . . .; and this principle controls whether each of the several instruments was signed by all or only some of the parties to the transaction”]; Klein v. Leatherman (1969) 270 Cal.App.2d 792, 793-794 [conditional sales contract and contemporaneous lease agreement considered together]; J.A. Payton v. Kuhn-Murphy, Inc. (1967) 253 Cal.App.2d 278, 281 [“where one contract specifically refers to the provisions of another contract, the two contracts insofar as there are applicable and controlling provisions must be read together”]; Meier v. Paul X. Smith Corp. (1962) 205 Cal.App.2d 207, 217 [“It is well settled that two or more written instruments relating to the same subject matter and executed as parts of substantially one transaction are to be construed together as one contract”]; Collins v. Home Savings & Loan Assn. (1962) 205 Cal.App.2d 86, 98 [“[I]t is the general rule that ‘Where two or more written instruments are executed contemporaneously, with reference to each other, for the purpose of attaining a preconceived object, they must all be construed together . . . .’”]; Coons v. Henry (1960) 186 Cal.App.2d 512, 517 [two or more separately executed instruments may be considered and construed as one contract when they deal with the same subject matter and reference each other so are interdependent]; Berg Metals Corp. v. Wilson (1959) 170 Cal.App.2d 559, 567-568 [guaranty contract and brokerage agreement, although not executed contemporaneously, taken together]; Swanson v. Thurber (1955) 132 Cal.App.2d 171, 180 [contract of sale and escrow instructions should be read together]; Cadigan v. American Trust Co. (1955) 131 Cal.App.2d 780, 782-787 [letter, promissory note, and deed of trust were part of one transaction and therefore to be taken together]; Margolis v. Margolis (1952) 115 Cal.App.2d 131, 136 [two agreements were related to same matter and executed together, “obviously as one transaction,” and therefore “were properly read together as one agreement”]; Gronenschild v. Ritzenthaler (1947) 81 Cal.App.2d 138, 144 [deed and accompanying options construed as one transaction]; Diggs v. El Royale Corp. (1944) 67 Cal.App.2d 341, 346 [option and management agreements part of one transaction]; Miller & Starr, 1 Cal. Real Estate 3d. § 1:59 [“When two or more documents are executed as part of the same transaction, relating to the same matter and between the same parties, they are interpreted together as one contract even though they were not executed contemporaneously, and they do not refer to each other” (fn. omitted)].)
The agreements subject to Civil Code section 1642 need not be contemporaneous, refer to each other, or contain a signature. (Boyd v. Oscar Fisher Co., supra, 210 Cal.App.3d at p. 378; Goodman v. Severin, supra, 274 Cal.App.2d at p. 895; Meier v. Paul X. Smith Corp., supra, 205 Cal.App.2d at p. 217; Berg Metals Corp. v. Wilson, supra, 170 Cal.App.2d at pp. 567-568; Cadigan v. American Trust Co., supra, 131 Cal.App.2d at pp. 786-787; 14 Pt. 1 Cal.Jur.3d, Contracts, § 190; Miller & Starr, 1 Cal. Real Estate 3d, § 1:59.) In addition, Civil Code section 1642 extends to oral agreements. As noted above, Civil Code section 1642 states, “Several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together.” (Italics added.) Under Civil Code section 1549, “A contract is an agreement to do or not do a certain thing.” Pursuant to Civil Code section 1622, “All contracts may be oral, except such as are specifically required by statute to be in writing.” Therefore “contract,” as used in Civil Code section 1642, includes an oral contract.
The Court of Appeal applied Civil Code section 1642 to an oral agreement in Grunwald-Marx, Inc. v. Los Angeles Joint Bd. Amalgamated Clothing Workers of America, supra, 192 Cal.App.2d at pages 274-277. In Grunwald-Marx, Inc., a union and a company entered into a written collective bargaining agreement. The collective bargaining agreement did not set wage rates. (Id. at p. 272.) It contained a clause stating, “‘All complaints, grievances or disputes arising between the parties relating directly or indirectly to the provisions of this agreement [not settled by negotiations between the union and the company] . . . shall be submitted to arbitration . . . .’” (Id. at p. 272, fn. 2.) The parties subsequently entered into an oral agreement adjusting piecework rates. The question before the Court of Appeal was whether the company could require the union to arbitrate a dispute as to the piecework rates. The Court of Appeal held: the arbitration provision had to be viewed in the light of its purpose; the grievance procedure was designed to cope with wage questions; the collective bargaining agreement called for arbitration of disputes “directly or indirectly” related to the agreement; under Civil Code section 1642, the collective bargaining agreement and the oral piecework rate contract constituted a single integrated contract; and therefore the dispute was subject to arbitration. (Id. at pp. 274-277.)
Moreover, when two or more contracts relate to the same matter and are made as part of substantially one transaction, the agreements are taken together, and an arbitration provision in one governs the related agreement. (Civ. Code, § 1642; Brookwood v. Bank of America (1996) 45 Cal.App.4th 1667, 1675-1676; Grunwald-Marx, Inc. v. Los Angeles Joint Bd. Amalgamated Clothing Workers of America, supra, 192 Cal.App.2d at pp. 275-277.) In Brookwood, the plaintiff was jointly hired by a bank and an investment service. Her agreement with the investment service called for arbitration of any dispute. In addition, the plaintiff was required to be registered with the National Association of Securities Dealers, Inc. That entity’s registration form also called for arbitration of any controversies. The plaintiff’s employment agreement with the bank did not contain an arbitration provision. The Court of Appeal held: there was substantial evidence to support the trial court’s implicit finding the three agreements were substantially one transaction and should be taken together; the arbitration clauses in the securities dealer registration form and the investment service agreement ran between the plaintiff and the bank; and this was true even though there was no specific arbitration provision in the bank employment agreement. (Brookwood v. Bank of America, supra, 45 Cal.App.4th at pp. 1675-1676.)
As discussed above, in Grunwald-Marx, Inc., an arbitration provision in the written collective bargaining agreement stated, “‘All complaints, grievances or disputes arising between the parties relating directly or indirectly to the provisions of this agreement . . . shall in the first instance be taken up for adjustment by a representative of the Union and a representative of the Company. . . . .” (Grunwald-Marx, Inc. v. Los Angeles Joint Bd. Amalgamated Clothing Workers of America, supra, 192 Cal.App.2d at p. 272, fn. 2.) The Court of Appeal held a subsequent oral agreement as to the piecemeal rates was arbitrable under the written collective bargaining agreement’s arbitration clause. The court held the two agreements “constituted a single integrated contract” and enforced the arbitration clause. (Id. at p. 277.)
With respect to the standard of review, the Courts of Appeal have held that whether Civil Code section 1642 applies and several documents should be construed together is generally a question of fact to be resolved by the trier of fact. (Versaci v. Superior Court (2005) 127 Cal.App.4th 805, 815; Brookwood v. Bank of America, supra, 45 Cal.App.4th at p. 1675; Pilcher v. Wheeler (1992) 2 Cal.App.4th 352, 355; Boyd v. Oscar Fisher Co., supra, 210 Cal.App.3d at p. 378; BMP Property Development v. Melvin, supra, 198 Cal.App.3d at p. 531; Nevin v. Salk, supra, 45 Cal.App.3d at p. 338; Kwikset Locks, Inc. v. Stewart Commissaries (1964) 225 Cal.App.2d 146, 148-149; Cadigan v. American Trust Co., supra, 131 Cal.App.2d at p. 786; Torrey v. Shea (1916) 29 Cal.App. 313, 318; 14 pt. 1 Cal.Jur.3d, Contracts, § 190; Miller & Starr, 1 Cal. Real Estate 3d, § 1:59.) The California Supreme Court has held, however, that when the undisputed evidence clearly requires certain agreements be construed together, it is error to conclude otherwise. (Mayers v. Loew’s Inc., supra, 35 Cal.2d at p. 827 [“The conclusion of the trial court that the letter and the bulletin were not part of the formal contract is clearly contrary to the undisputed evidence before it”]; Boyd v. Oscar Fisher Co., supra, 210 Cal.App.3d at p. 378; see Goodman v. Severin, supra, 274 Cal.App.2d at p. 895; Collins v. Home Savings & Loan Assn., supra, 205 Cal.App.2d at p. 98; Cadigan v. American Trust Co., supra, 131 Cal.App.2d at pp. 786-787; Miller & Starr, Cal. Real Estate 3d, § 1:59.) As the Court of Appeal explained in Boyd v. Oscar Fisher Co., supra, 210 Cal.App.3d at page 378: “It is generally a factual question whether several documents were intended to govern the same transaction. ([Cadigan v. American Trust Co., supra, 131 Cal.App.2d at p.] 786; Nevin v. Salk[, supra, ] 45 Cal.App.3d [at p.] 338.) However, ‘[i]nterpretation of a contract presents a question of law unless it depends on conflicting evidence, and an appellate court is not bound by a trial court’s interpretation which does not depend on the credibility of extrinsic evidence.’ (Summit Industrial Equipment, Inc. v. Koll/Wells Bay Area (1986) 186 Cal.App.3d 309, 319[, disapproved on other grounds in Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 376-377]; cf. Gerdlund v. Electronic Dispensers International (1987) 190 Cal.App.3d 263, 270.)”
Given the trial court’s resolution of disputed facts, we conclude the written loan-out contracts and the production company fee agreement were part of substantially one transaction and must be read together; further, the arbitration agreements in the written loan-out contracts extend to the production company fee dispute. (Brookwood v. Bank of America, supra, 45 Cal.App.4th at pp. 1675-1676; Grunwald-Marx, Inc. v. Los Angeles Joint Bd. Amalgamated Clothing Workers of America, supra, 192 Cal.App.2d at pp. 275-277.) Mr. Dern and Mr. Sabella, their loan-out companies, Dabrad, Inc. and Hole in the Wall Entertainment, Inc., S.D. Entertainment, Inc., and defendant were all related to each other and to the project at hand—production of the film. The loan-out contracts governed Mr. Dern’s and Mr. Sabella’s services. S.D. Entertainment, Inc. was their primary company. Defendant, which is wholly owned by S.D. Entertainment, Inc., was used to produce the film. The loan-out contracts for Mr. Dern’s and Mr. Sabella’s services, the contractual obligation to pay each of them a producer’s fee, and the agreement to pay a production company fee, were all part of substantially one transaction whereby plaintiff hired them to produce the film. Therefore, the arbitration clauses in the loan-out agreements governed the entire transaction including the production company fee dispute. (Ibid.) On a separate but related point, it is undisputed and plaintiff concedes the expansive language in the loan-out contracts concerning arbitration (“any and all disputes arising out of or in connection with”) is sufficiently broad to cover the production company fee dispute. (Efund Capital Partners v. Pless (2007) 150 Cal.App.4th 1311, 1322-1326; Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 684-687; Izzi v. Mesquite Country Club (1986) 186 Cal.App.3d 1309, 1315-1317; Berman v. Dean Witter & Co., Inc. (1975) 44 Cal.App.3d 999, 1002-1003.)
IV. DISPOSITION
The judgment is affirmed. Defendant, Bold Entertainment, LLC, is to recover its costs on appeal from plaintiff, Answar, Ltd.
TURNER, P. J.
I concur: ARMSTRONG, J.
MOSK, J., Dissenting
I dissent.
1. The parties did not argue that the agreements in question were subject to the Federal Arbitration Act. (9 U.S.C., § 1, et seq.) If the agreements were subject to that act, the rights and procedures might have been different.
2. Whether or not a written arbitration agreement must be signed to be enforceable has not been determined by any California court. (See Code Civ. Proc., §§ 1281, 1280, subd. (f).) Some cases suggest that such a signature may be required. (Cf. Matthau v. Superior Court (2007) 151 Cal.App.4th 593, 600; Jones v. Déjà vu, Inc. (N.D. Cal. 2005) 419 F.Supp.2d 1146, 1150.) Although, as California law, the Federal Arbitration Act requires an arbitration agreement to be written (9 U.S.C., § 3), cases suggest it does not expressly require the agreement to be signed by the parties. (In re Bunzl USA, Inc. (Tex. 2004) 155 S.W.3d 202, 210.) “Nevertheless, a party seeking to enforce a purported arbitration agreement must establish that the parties agreed to arbitrate the dispute. [Citation.] In the absence of signatures, other evidence has been held sufficient to establish the parties’ assent.” (Ibid.)
3. Here the trial court found, in effect, that plaintiff had agreed to pay the $75,000 production fee. But the uncontradicted evidence was that defendants sent to plaintiff long after the other agreements and when there was a question about payment of the producer’s fee, a lengthy “Animation Production Agreement” that included among the many provisions, an arbitration clause. That agreement was between a new entity called Bold Entertainment LLC (Bold). It was not signed by plaintiff. There was no evidence that plaintiff agreed to arbitration arising under the Bold agreement with Bold.
4. It may be that plaintiff was subject to arbitration clauses in the earlier agreements with Messrs. Dern and Sabella or their loan out companies. But plaintiff never agreed to arbitrate with Bold. The exception to allowing a nonsignatory to an arbitration agreement to compel arbitration is when there is an estoppel. (See Metalclad Corp. v. Ventana Environmental Organizational Partnership (2003) 109 Cal.App.4th 1705; Turtle Ridge Media Group, Inc. v. Pacific Bell Directory (2006) 140 Cal.App.4th 828.) There was no such estoppel established here. Other grounds for allowing a nonsignatory to enforce an arbitration agreement (see Knight, et al., Cal. Practice Guide: Alternative Dispute Resolution (The Rutter Group 2006) ¶ 5:262 et seq., pp. 5-179 to 5-187) are not invoked or applicable.
People establish corporations for a reason. They desire certain benefits—tax or limited liability. Having formed corporations for benefits, they cannot simply ignore the corporate form when it suits their interests. Generally, a party may not pierce or disregard its own corporate veil.
Accordingly, I would hold that there was no valid arbitration agreement, and the arbitration award should be vacated.