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Parker v. Twentieth Century-Fox Film Corp. - 118 Cal. App. 3d 895, 173 Cal. Rptr. 639 (1981)

Rule:

Cal. Civ. Proc. Code § 1281.2 requires the superior court to determine in advance whether there is a duty to arbitrate the controversy which has arisen. The performance of this duty necessarily requires the court to examine and, to a limited extent, construe the underlying agreement. It is, of course, possible for the parties to agree that the arbitrator may determine the scope of his authority. The arbitrability of a dispute may itself be subject to arbitration if the parties have so provided in their contract. Even then, it is necessary for the court to examine the contract to ascertain whether the parties 'have so provided.

Facts:

Defendants entered a written joint venture agreement with plaintiffs to produce and exploit a television series. Part of the written joint venture contained a provision to arbitrate any disagreements that related to the receipts and proceeds from the distribution of the television series. When things did not work out and the plaintiffs filed 11 causes of action arising from the joint venture, defendants filed a petition to compel arbitration. The trial court denied defendants' petition to compel arbitration because the arbitration clause was too narrow to encompass the issues presented in the case. Defendants appealed. 

Issue:

Was it proper for the trial court to deny the petition to compel arbitration?

Answer:

Yes

Conclusion:

The Court explained that arbitration was based on a contractual agreement to arbitrate and courts were required to look to the wording and scope of the arbitration clause to determine its application. Cal. Civ. Proc. Code § 1281.2(c) provided that if the court determined there were other issues not subject to arbitration between the parties, and that the determination of those issues would make arbitration unnecessary, the court could delay its order to arbitrate. Thus, the court affirmed because the trial court had the authority to determine whether the issues subject to arbitration would be unnecessary, and the trial court could delay its order until the determination of issues that were not subject to arbitration.

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