Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of San Bernardino County Super.Ct.No. SCVSS138221. Donald R. Alvarez, Judge.
Cowan, DeBaets, Abrahams & Sheppard, Al J. Daniel, Jr., and Mason A. Weisz, for Defendant and Appellant.
Burgee & Abramoff and John G. Burgee for Plaintiff and Respondent.
OPINION
MILLER, J.
INTRODUCTION
This appeal arises out of a dispute between the producer of a road show production of the musical, “Mamma Mia!,” and a theater production company which staged and presented eight performances of the musical at a local venue. The producer, claiming additional compensation is due under its contract with the production company and insisting that the dispute is subject to arbitration pursuant to the contract’s arbitration clause, petitioned the superior court for an order compelling arbitration. Finding there was a dispute as to the existence of a contract and thus no definitive agreement to arbitrate, the court denied the petition. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Theatrical Arts International, Inc. (TAI), a California corporation, is a theatrical production company which stages live theater productions at various Southern California venues, including the California Theater in San Bernardino. The Mamma Mia! USA Tour 2 Limited Partnership (MM), a New York limited partnership, is the producer of the touring company production of “Mamma Mia!” (the musical).
In 2003, TAI, through its booking agent, Harmony Artists, Inc., booked the musical to play during February of 2006 at the California Theater. MM’s agent, The Booking Group, sent a “deal points” memorandum to Harmony to summarize MM’s relationship with TAI. According to the memorandum, MM was to receive a guarantee of $375,000 plus 80 percent of “overages.” The memorandum also provided for a group discount of 10 percent for groups of 20 people or more, excluding Friday and Saturday evenings. It was silent with regard to choice of governing law, or the submission of disputes to arbitration or the place of any arbitration.
“Overages” apparently refers to ticket revenues after deduction of specified expenses.
In January 2006, TAI received a proposed written contract from MM. Early in February, having discovered terms which had not been previously discussed or agreed to, including those pertaining to arbitration and governing law, TAI interlineated changes to reflect terms which had been omitted and terms which had been included though not previously discussed, and returned the document to MM. Among the changes was the addition of a schedule of subscriber ticket pricing. Discussions ensued between the parties’ agents. On February 16, 2006, with just one week remaining before the scheduled performances were to begin, and although issues remained to be resolved, TAI sent to MM an executed copy of the proposed contract subject to the interlineated changes. No further discussions occurred, and MM did not return to TAI a fully executed version of the proposed agreement.
The performances of the musical were presented as scheduled, and TAI paid to MM the guaranteed fee of $375,000, less withholdings.
After the presentation of the third performance, MM contacted TAI, alleging that an amount in excess of $100,000 was due and owing. TAI disputed the claim. In March, at the request of TAI’s counsel, MM’s counsel sent a fully executed version of the proposed contract, which contained changes to the interlineations made by TAI. Among other things, MM struck the schedule of subscriber ticket pricing which TAI had added.
MM persisted with its claim for additional compensation, and its attorney threatened to proceed with arbitration pursuant to the proposed contract if the matter was not amicably resolved. On May 31, 2006, in light of the threat of arbitration, TAI filed a lawsuit in the San Bernardino Superior Court, seeking declaratory and injunctive relief.
On June 27, 2006, apparently without knowledge of TAI’s lawsuit, MM commenced arbitration with the American Arbitration Association in New York. A preliminary conference was held on July 21, 2006. TAI voiced an objection to proceeding with arbitration, and on August 2, 2006, served MM with its complaint.
On August 3, 2006, MM initiated a legal proceeding in New York, seeking an order compelling TAI to arbitrate MM’s claim for lost ticket revenues and enjoining TAI from pursuing the matter through litigation. The New York court denied MM’s request for a temporary restraining order, but scheduled an order to show cause hearing for August 10.
On August 9, 2006, TAI gave notice of its intention to seek ex parte relief in the San Bernardino Superior Court enjoining and restraining MM from pursuing arbitration or from taking action to interfere with TAI’s pending lawsuit. The essence of TAI’s position was that it never agreed to arbitrate a dispute under a contract that did not contain its pricing schedule; thus, it had “raised a tenable and valid objection to the Booking Agreement as a contract between the parties.” That same afternoon, MM sought emergency relief from the New York court, which was apparently denied.
In a declaration in support of TAI’s application, Joseph Henson, TAI’s President, alleged that in January 2006 he received from MM a formal written contract containing many terms which had not been previously discussed or agreed to, including those pertaining to arbitration and governing law. Additionally, the proposed contract had a number of terms which did not match agreed deal points. Henson explained: “In the spirit of cooperation, TAI was willing to accept some of the new terms provided that other terms were corrected to conform to the deal I had made with Mamma Mia! Most importantly, the proposed contract omitted the season subscriber discount in the ticket pricing schedule. This was pricing that had been established over a year and a half prior to the receipt of this proposed contract. I therefore interlineated TAI’s changes to terms to the proposed contract which included the addition of a schedule for subscriber ticket pricing to conform to the agreed deal points. Even though TAI had not agreed to the arbitration, choice of law and venue provisions of the proposed contract, I did not strike those provisions as a gesture of good faith provided the interlineations I did make would be accepted by Mamma Mia! I would not have agreed to these provisions if my corrections of the other terms of the proposed contract, including most importantly the confirmation of the subscriber’s discount ticket pricing, were not accepted.”
Henson’s declaration continued: “TAI returned the proposed contract with its interlineations to Mamma Mia! in early February 2006. I was involved in discussions with Mamma Mia! through our respective agents, concerning TAI’s changes to the contract. The issues raised by my changes to the proposed contract were never raised as a point of litigation from Mamma Mia! Nonetheless, on February 16, 2006, I sent an executed copy of the proposed contract subject to the interlineated terms to Mama Mia! . . . . There were no further discussions regarding the terms of the proposed contract and Mamma Mia! never returned a fully executed version of the proposed agreement. [¶] . . . The Show was presented as scheduled during the week of February 21, 2006. As agreed, TAI paid Mamma Mia! the guaranteed fee for the Show of $375,000 (less withheld taxes). [¶] . . . Three days into the performance, Mamma Mia! contacted TAI alleging that more than an additional $100,000 were owing from the presentation of the Show. I disputed this claim. To support its claim, Mamma Mia!’s counsel sent a fully executed version of the proposed contract to TAI’s counsel on March 22, 2006 . . . . However, the fully executed version of the proposed contract returned by Mamma Mia! contained changes to the interlineations that I had made. Mamma Mia! made their own interlineations and changes to the proposed contract after receiving the signed, interlineated version from TAI, and then executed the proposed contract. Among other things, Mamma Mia! struck out the schedule of subscriber ticket pricing that I had added, agency sales commissions and subscriber sales commissions.”
Henson was emphatic that he had “never agreed to Mamma Mia’s interlineations or modifications of the proposed contract nor did [he] know about such changes to the document until late March 2006. If [he] had prior knowledge of these changes, TAI would have not performed this production.”
On August 14, 2006, an order to show cause hearing was scheduled for August 28 in the San Bernardino Superior Court. On August 17 (the matter having been removed in the interim, upon TAI’s motion, from state court to federal court), the New York District Court declined to compel arbitration in deference to the California action, which had been filed first.
On August 28, 2006, the California court issued a preliminary injunction restraining MM from pursuing arbitration. The court denied the request to stay the federal action, stating that it had no authority to do so. The court noted in its minute order it had been informed that MM was to file a petition for arbitration in lieu of an answer. (Code Civ. Proc., § 1281.7.)
On or about September 1, pursuant to the United States Arbitration Act and in lieu of an answer, MM filed a petition to compel arbitration and to stay TAI’s action. The essence of the petition was that, even though it had admittedly modified TAI’s changes to reflect what it believed to be the parties’ prior agreement and had omitted the schedule purporting to provide for discounted ticket prices, arbitration was required even if the arbitrator were to determine that the contract was null and void, because MM had “made no changes to the arbitration provision.”
In support of its petition, MM submitted declarations of Kara Gebhart, Vice President of Operations for The Booking Group, and Devin M. Keudell, MM’s general manager. Gebhart alleged that Henson’s assertion that the deal encompassed a season subscriber discount in the ticket pricing schedule was false. She also alleged that The Booking Group, through its negotiations, repeatedly informed Harmony that there would be no subscriber discounts on tickets prices “and that this point was a deal breaker.” She added that Harmony repeatedly responded that it understood there would be no subscriber ticket discounts. Keudell also alleged that Henson’s statement was false, insisting he had never agreed on behalf of MM that TAI could sell tickets at a discount. He indicated that MM had another interested theater in the same Southern California area and would have taken the show to that theater if TAI had not agreed there would be no discounts. Keudell insisted that TAI should be ordered to arbitrate MM’s demand for additional compensation due under the agreement in accordance with the agreement’s arbitration provision.
In opposition to the petition, TAI asked the court to take judicial notice of the papers, documents and exhibits filed in support of TAI’s application for temporary restraining order and preliminary injunction filed in August 2006, including the aforementioned declaration of Henson. Further, TAI insisted that MM withdraw its petition, claiming that it was nothing but an unwarranted motion for reconsideration in that the petition “raised the very issue of arbitrability that was determined against Mamma Mia! on August 28.”
TAI renews its position here, arguing the court “had no jurisdiction to hear the petition to compel arbitration since it improperly sought reconsideration of its order for the issuance of a preliminary injunction. TAI is mistaken. At the hearing on TAI’s request for preliminary injunction, the court stated, “I recognize and I think that [MM] was required to bring the Petition to Compel Arbitration and to stay this action in order to avoid waiving its right to compel arbitration in the event that [an] arbitration agreement is found to exist.”
The matter proceeded for hearing on November 16, 2006. After indicating that the issue to be tried was whether a contract was ever made, the court stated “there’s a big dispute as to whether a contract exists.” In response to MM’s counsel’s position that the absence of an attack on the arbitration clause itself signifies there is no dispute as to its validity, the court explained: “I’m drawing a distinction here between cases where the existence of a contract between Party A and Party B [is] undisputed. I’m drawing a distinction between those types of cases and cases where there is a dispute as to whether the contract even exists . . . .”
By order filed January 4, 2007, after considering the papers submitted and the argument of counsel, the court denied the petition “without prejudice to [its] renewal . . . following the completion of the trial on [TAI’s] complaint in this action.”
DISCUSSION
1. The motion to compel arbitration was properly denied because there is a dispute as to whether an agreement containing an arbitration clause was ever actualized.
“A party who claims that there is a written agreement to arbitrate may petition the superior court for an order to compel arbitration. (Code Civ. Proc., § 1281.2.) Such a proceeding is simply a suit in equity seeking specific performance of a contract to arbitrate. [Citation.] It follows, of course, that if there was no valid contract to arbitrate, the petition must be denied. . . . ‘There is no public policy favoring arbitration of disputes which the parties have not agreed to arbitrate. [Citation.]’ [Citation.] (Banner Entertainment, Inc., v. Superior Court (1998) 62 Cal.App.4th 348, 356 (Banner).)
Section 1281.2 states: “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, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists . . . .” (Italics added.)
“Code of Civil Procedure section 1280 et seq. provides a procedure for the summary determination of whether a valid agreement to arbitrate exists, and such summary procedure satisfies both state and federal law (i.e., the Federal Arbitration Act, 9 U.S.C. §[§] 1-6 (FAA)). [Citation.] Under this procedure, the petitioner bears the burden of establishing the existence of a valid agreement to arbitrate, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. [Citation.] The trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court’s discretion, to reach a final determination on the issue of arbitrability. [Citation.] A decision on such issues with respect to a contract governed by the FAA must be made with due regard to the federal policy favoring arbitration. [Citation.] However, even if one of the parties contends that the FAA applies to their agreement to arbitrate, the FAA does not apply until the existence of an enforceable arbitration agreement is established under state law principles involving formation, revocation and enforcement of contracts generally. [Citation.]” (Banner, supra, 62 Cal.App.4th at pp. 356-357.)
Thus, “[t]he existence of an agreement to arbitrate is a condition precedent to enforcement. Therefore, lack of agreement is ground to refuse arbitration: ‘[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.’ [Citations.] [¶] Moreover, the fact a written agreement contains an arbitration clause does not itself determine whether the parties ever entered into a valid contract of which the arbitration clause is a part. [Citation.]” (Knight et al., Cal. Practice Guide: Alternate Dispute Resolution (The Rutter Group 2006) ¶ 5:78, p. 5-57.)
“There is no uniform standard of review for evaluating an order denying a motion to compel arbitration. [Citation.] If the court’s order is based on a decision of fact, then we adopt a substantial evidence standard. [Citations.] Alternatively, if the court’s denial rests solely on a decision of law, then a de novo standard of review is employed. [Citations.]” (Robertson v. Health Net of California, Inc. (2005) 132 Cal.App.4th 1419, 1425.)
Here, the court’s denial of MM’s petition was based on its conclusion, after considering the evidence presented, that the parties had not necessarily entered into a contract. In light of the conflict in that evidence, we apply the substantial evidence standard of review.
Nonetheless, MM takes the position the issue is a legal one. Citing Buckeye Check Cashing, Inc. v. Cardegna (2006) 546 U.S. 440 (Buckeye) and Prima Paint Corp. v. Flood & Conklin Mfg. Co. (1967) 388 U.S. 395 (Prima Paint), MM contends the trial court, in denying its petition, erred as a matter of law because TAI agreed to arbitrate in a “broad arbitration clause” which is separable from the agreement as a whole and from any challenges by TAI to the agreement’s validity. As we shall explain, MM misconstrues the law insofar as it applies to a purported agreement which was never consummated. That is, the rule that an arbitration clause is deemed separable from the remaining provisions of the agreement in which it is contained applies only if there is in fact an existing agreement. Indeed, because a petition to compel arbitration depends upon the existence of a contract, the foundational inquiry is whether the parties have entered into a contract containing an arbitration clause. In this case, the parties do not have a dispute over a term of a contract or even its validity; their dispute focuses on the very existence of a contract.
The issue presented in Buckeye, supra, was whether a claim that a contract is illegal and void ab initio, i.e., that Buckeye charged usurious interest rates and that the contract was criminal on its face, should be resolved by a court or an arbitrator. (Buckeye, supra, 546 U.S. at p. 443.) The trial court ruled it was for the court, and the Florida Court of Appeal reversed, finding that because the party opposing arbitration did not challenge the arbitration provision itself, and instead claimed that the entire contract was void, the agreement to arbitrate was enforceable. The Florida Supreme Court reversed, “reasoning that to enforce an agreement to arbitrate in a contract challenged as unlawful ‘“could breathe life into a contract that not only violates state law, but also is criminal in nature. . . . ”’ [Citation.]” (Ibid.) The United States Supreme Court reversed once more, explaining that “[c]hallenges to the validity of arbitration agreements ‘upon such grounds as exist at law or in equity for the revocation of any contract’ can be divided into two types. One type challenges specifically the validity of the agreement to arbitrate. . . . The other challenges the contract as a whole, either on a ground that directly affects the entire agreement . . . or on the ground that the illegality of one of the contract’s provisions renders the whole contract invalid. Respondents’ claim is of this second type. The crux of the complaint is that the contract as a whole (including its arbitration provision) is rendered invalid by the usurious finance charge.” (Id. at p. 444, fn. omitted.)
In deciding the issue before it, the Buckeye court cited three propositions which had been established by its prior decisions in Prima Paint, supra, and Southland Corp. v. Keating (1984) 465 U.S. 1: “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.” (Buckeye, supra, 546 U.S. at pp. 445-446.) Applying these propositions, the court concluded that because TAI did not specifically challenge the 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.” (Id. at p. 446.)
The case before us presents a somewhat different scenario. Indeed, the dispute between TAI and MM is of a type which, although not expressly addressed by the Buckeye court, was acknowledged in the opinion: “The issue of the contract’s validity is different from the issue of whether any agreement between the alleged obligor and obligee was ever concluded. Our opinion today addresses only the former, and does not speak to the issue decided in the cases cited by respondents (and by the Florida Supreme Court), which hold that it is for courts to decide whether the alleged obligor ever signed the contract, [citation], whether the signor lacked authority to commit the alleged principal, [citation], and whether the signor lacked the mental capacity to assent, [citation.]” (Buckeye, supra, 546 U.S. at p. 444, fn. 1) MM makes much of the fact that the present case does not fit squarely into one of the three types of disputes described in Buckeye. Simply stated, the fact that the court noted only three types of disputes which might require a trial does not mean there are not others. So long as the existence of a contract is in dispute, thereby questioning whether the parties agreed to arbitration, resolution of the dispute is for the court.
The following language from Will-Drill Resources, Inc. v. Samson Resources Co. (2003) 352 F.3d 211, 218-219 (Will-Drill) is instructive: “Where the very existence of any agreement is disputed, it is for the courts to decide at the outset whether an agreement was reached, applying state-law principles of contract. [¶] We reject the argument that where there is a signed document containing an arbitration clause which the parties do not dispute they signed, we must presume that there is a valid contract and send any general attacks on the agreement to the arbitrator. The base point to which the analysis inevitably returns is that the separability doctrine rests on the assumption that there is an underlying agreement. That one of the parties later disputes the enforceability of that agreement does not change the fact that at some point in time, the parties reached an agreement, and that agreement included the decision to arbitrate disputes arising out of the agreement. The existence of this agreement provides the arbitrator with the authority required to decide whether the agreement will continue to exist. Even if the arbitrator concludes that the agreement was void, and the parties are returned to their pre-agreement positions as if the agreement never existed, the agreement existed long enough to give the arbitrator the power to decide the dispute. [¶] In contrast, where the very existence of an agreement is challenged, ordering arbitration could result in an arbitrator deciding that no agreement was ever formed. Such an outcome would be a statement that the arbitrator never had any authority to decide the issue. A presumption that a signed document represents an agreement could lead to this untenable result. We therefore conclude that where a party attacks the very existence of an agreement, as opposed to its continued validity or enforcement, the courts must first resolve that dispute.” (Id. at pp. 218-219, fns. omitted.)
And so it is here. In signing the proposed booking agreement containing an arbitration clause, TAI was essentially agreeing to arbitration in conjunction with the other terms existing in the agreement, including its interlineations, at the time the agreement was signed. It is of no moment that MM signed an agreement which, in its view, “clearly reflected the deal [TAI] had made through its booking agent.” Indeed, because MM signed a version of the agreement which differed from that signed by TAI, the trial court found there was a dispute as to whether a contract exists, and on that basis denied MM’s petition to compel arbitration. Substantial evidence supports that conclusion.
Contrary to MM’s assertion, federal law does not require a different result. MM insists that, because the arbitration clause incorporates American Arbitration Association rules, which make clear that the arbitrator must address all issues regarding the parties’ dispute in the first instance, it is for the arbitrator to decide all threshold issues, including arbitrability and validity of the agreement. MM is mistaken.
2. The doctrine of estoppel is inapplicable here.
MM contends that, wholly apart from its contractual obligation to arbitrate, TAI should be compelled to arbitrate on the basis of estoppel because it knowingly accepted the benefits of the agreement with MM. We reject this theory.
At the outset, we dispose of TAI’s contention that the issue is not properly before us because it was not raised below. To the contrary, in a footnote in its points and authorities in support of its motion to compel arbitration, and without any discussion, MM asserted that TAI “should be estopped from challenging the arbitration provision in the Booking Agreement which it exploited to its benefit . . . .” However, the court did not address the issue, nor did TAI mention it in its opposition. In any event, without deciding whether MM’s mere reference to estoppel in that fashion was sufficient to preserve the issue for appeal, we find that the doctrine is irrelevant here.
We note that TAI contends if estoppel applies at all, it is MM which should be estopped from (1) denying its admitted consent to lower ticket pricing for subscribers and (2) disputing the pricing schedules and subscriber discounts set forth in the agreement as interlineated by TAI, in that MM proceeded with the performances without challenging TAI’s version of the agreement.
“In the arbitration context, [the] principle [of equitable estoppel] has generated two lines of cases[:] [¶] Under the first of these lines, nonsignatories have been held to arbitration clauses where the nonsignatory ‘knowingly exploits the agreement containing the arbitration clause despite having never signed the agreement.’ [Citation.] Under the second line of cases, signatories have been required to arbitrate claims brought by nonsignatories ‘at the nonsignatory’s insistence because of the close relationship between the entities involved.’ [Citation.]” (Comer v. Micor, Inc. (2006) 436 F.3d 1098, 1101 (Comer).)
MM contends TAI should be compelled to arbitrate its claims in that TAI admits (1) that it signed a copy of the agreement containing the arbitration clause and (2) that MM performed its obligations under the agreement signed by TAI. That is, after TAI signed and sent its copy of the agreement to MM in early February 2006, MM’s agent responded by email the following day, stating “I do not believe any [subscriber discounts] have been approved.” Thus, according to MM, TAI, with knowledge that MM would not agree to subscriber discounts, proceeded with the performances during the week of February 21, 2006, and “reaped the financial benefits.” Thus, TAI should be estopped from denying its obligation to arbitrate disputes between the parties. MM’s position is off the mark.
The cases providing for estoppel in the arbitration context do not encompass a situation where, as here, the existence of a contract in the first instance is at issue. In Comer, supra, 436 F.3d 1098 for example, the issuewas whether an ERISA-plan participant could be compelled to arbitrate a claim over investment losses brought on behalf of the plan where the plan, but not the participant, had signed an arbitration agreement. The court rejected the position of the plan’s investment manager that the participant was bound by the arbitration clause as a matter of equitable estoppel, finding there was simply no evidence that the participant knowingly exploited the agreement. (Id. at p. 1102.) “Generally, these cases involve non-signatories who, during the life of the contract, have embraced the contract despite their non-signatory status but then, during litigation, attempt to repudiate the arbitration clause in the contract. [Citations.]” (E.I. Dupont de Nemours & Co. v. Rhone Poulenc Fiber & Resin Intermediates, S.A.S. (3d Cir. 2001) 269 F.3d 187, 200.) That is not this case.
Moreover, even if MM could ultimately prevail against TAI on an estoppel theory to recover the additional compensation which MM claims is due, arbitration of the issue at this juncture would still be inappropriate. As quoted above, “where the very existence of an agreement is challenged, ordering arbitration could result in an arbitrator deciding that no agreement was ever formed. Such an outcome would be a statement that the arbitrator never had any authority to decide the issue.” (Will-Drill, supra, 352 F.3d at p. 219.) Under the circumstances of this case, in the absence of a definitive agreement to arbitrate, applying an estoppel theory to compel arbitration would yield the same untenable result.
Lastly, we note that the court’s order denying MM’s petition to compel arbitration was made “without prejudice to the renewal of the Petition following the completion of the trial on Plaintiff’s complaint in this action.” Thus, should the court eventually determine that the parties did enter into a contract containing an arbitration clause, the matter can then proceed to arbitration.
DISPOSITION
The order denying The Mamma Mia! USA Tour 2 Limited Partnership’s petition to compel arbitration is affirmed. Theatrical Arts International, Inc. is awarded its costs on appeal.
We concur: RAMIREZ, P.J., McKINSTER, J.
True, as stated in AT & T Technologies, Inc. v. Communications Workers of America (1986) 475 U.S. 643, “‘arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.’ [Citations.] This axiom recognizes the fact that arbitrators derive their authority to resolve disputes only because the parties have agreed in advance to submit such grievances to arbitration. [Citation.] [¶] . . . [T]he question of arbitrability—whether a collective-bargaining agreement creates a duty for the parties to arbitrate the particular grievance—is undeniably an issue for judicial determination. Unless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator. [Citations.]” (Id. at pp. 648-649; italics added.) However, MM misses the point.
In this case, the parties have not clearly and unmistakably provided otherwise. Indeed, TAI “den[ies] the existence of the contract[] containing the arbitration provisions. By contending that [it] never entered into such contract[], [TAI] also necessarily contest[s] any agreement[] to arbitrate within the contract[]. To require [TAI] to arbitrate where [it] den[ies] that [it] entered into the contract[] would be inconsistent with the ‘first principle’ of arbitration that ‘a party cannot be required to submit [to arbitration] any dispute which [it] has not agreed so to submit.’ [Citation.]” (Three Valleys Municipal Water Dist. v. E.F. Hutton & Co. (1991) 925 F.2d 1136, 1142.)
The bottom line is this: Regardless of what the arbitration clause may say, unless the parties have a valid contract (which is for the court to decide ab initio), the arbitration clause, which has no life of its own independent of the contract, is a nullity and cannot constitute an agreement of the parties to accord the arbitrator the authority to determine the contract’s existence or validity. And, inasmuch as the arbitration provision therefore is not severable from the underlying agreement, there is no merit to MM’s contention that because TAI did not object to the arbitration clause itself, arbitration cannot be avoided on that basis.