X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
The full case caption appears at the end of this opinion. I. INTRODUCTION Defendants, the law partnership of Williams, Woolley, Cogswell, Nakazawa & Russell, and individual partners, Reed M. Williams, David E. R. Woolley, Forrest R. Cogswell, Alan Nakazawa, and Thomas A. Russell, appeal from an order denying their petition to compel arbitration of a dispute with plaintiff, Blake W. Larkin. The trial court relied on the decision in Smith v. Superior Court (1962) 202 Cal.App.2d 128, 131-134. We conclude Smith should be limited to its facts and that opinion has no application to the present case which involves an agreement to arbitrate the disputes between the parties. We apply the California Arbitration Act (Code Civ. Proc., � 1280 et seq.) and reverse. [FOOTNOTE 1] II. BACKGROUND Plaintiff filed a complaint for dissolution of the law partnership and an accounting. The complaint alleged one of the partners, Mr. Williams, had breached the partnership agreement by failing to “‘ devote his best efforts and substantially all of his normal business time to serving professionally the [f]irm and its clients’ ” as required by the agreement; further, as a result of Mr. Williams’ s conduct, “ it [was] not reasonably practicable to carry on the business in partnership with [him].” With respect to dissolution of the firm, the written partnership agreement provided, “The Firm may be dissolved only by the affirmative vote, made in writing, of a majority of all of the partners.” Defendants petitioned to compel arbitration based on the following clause of the partnership agreement: “Arbitration. Any controversy or claim arising out of or relating to any provision of this Agreement or the breach thereof shall be settled by arbitration in accordance with the rules then in effect of the American Arbitration Association, and judgment upon any reward rendered may be entered in any Court having jurisdiction thereof.” The trial court denied defendants’ petition to compel arbitration citing Smith v. Superior Court, supra, 202 Cal.App.2d at pages 131-134. v III. DISCUSSION The issue presented is whether the language of the arbitration clause encompasses the dispute reflected in the complaint. The issue before us being solely of construction of unambiguous contractual terms (Messenger v. Messenger (1956) 46 Cal.2d 619, 626; Fox v. Fox (1954) 42 Cal.2d 49, 52), our review of the arbitration clause is de novo. (Vianna v. Doctors’ Management Co. (1994) 27 Cal.App.4th 1186, 1189.) It is well established that under California law there is a strong public policy in favor of arbitration. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 971-972; Board of Education v. Round Valley Teachers Assn. (1996) 13 Cal.4th 269, 275; Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9.) The scope of arbitration is a matter of agreement between the parties. (Moncharsh v. Heily & Blase, supra, 3 Cal.4th at p. 8; Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 323.) A party can be compelled to arbitrate only those issues it has agreed to arbitrate. (Hayes Children Leasing Co. v. NCR Corp. (1995) 37 Cal.App.4th 775, 787; Luster v. Collins (1993) 15 Cal.App.4th 1338, 1346.) However, doubts as to the scope of an agreement to arbitrate are to be resolved in favor of arbitration. (Hayes Children Leasing Co. v. NCR Corp., supra, 37 Cal.App.4th at p. 788; Vianna v. Doctors’ Management Co., supra, 27 Cal.App.4th at p. 1189; United Transportation Union v. Southern Cal. Rapid Transit Dist. (1992) 7 Cal.App.4th 804, 808.) As the Supreme Court has held, “[C]ourts will ‘ ” indulge every intendment to give effect to such proceedings.” ‘ (Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180, 189 [] . . . .)” (Moncharsh v. Heily & Blase, supra, 3 Cal.4th at p. 9.) The arbitration clause at issue is very broad. It extends to “[a]ny controversy or claim arising out of or relating to any provision of this [partnership] [a]greement or the breach thereof . . . .” Plaintiff’ s complaint for dissolution and an accounting clearly arises out of and relates to the partnership agreement. It alleges a breach of the partnership agreement making dissolution necessary. It concerns the provision of the partnership agreement requiring the partners’ best efforts and a breach thereof. The controversy as alleged would not have arisen at all but for the partnership agreement. Plaintiff cites Smith v. Superior Court, supra, 202 Cal.App.2d at pages 131-134, for the proposition that “[w]here a member of a partnership files an action for dissolution of a partnership and an accounting, even though the partnership agreement between the partners has an arbitration provision, the California courts have held that the arbitration provision is inoperative and the action should be resolved by the court.” We disagree with the assertion Smith stands for such a broad proposition. Smith involved a written partnership agreement for the purpose of operating a newsstand. (Smith v. Superior Court, supra, 202 Cal.App.2d at p. 129.) The agreement provided for arbitration “‘ [s]hould a question of difference of opinion arise between the partners which appears incapable of determination between themselves . . . .’ ” (Ibid.) One of two partners filed a complaint to dissolve the partnership, for an accounting, and for the appointment of a receiver. (Id. at p. 130.) The trial court denied a petition to compel arbitration. The Court of Appeal for this appellate district agreed. It held dissolution of the partnership involved something other than a “ difference of opinion” between the partners. (Id. at p. 132.) The Court of Appeal acknowledged the law favored arbitration of business disputes, but concluded it could not construe the clause to encompass the dissolution action. (Id. at pp. 133-134.) The court’ s decision turned on the language of the arbitration provision. Smith did not hold an arbitration clause is never operative in the face of a claim for dissolution of a partnership. Moreover, the arbitration agreement at issue in Smith is distinguishable from the present clause. There the agreement was to arbitrate “‘ a question of difference of opinion.’ ” (Smith v. Superior Court, supra, 202 Cal.App.2d at p. 129.) Here, the arbitration clause is much more broad. It extends to “ [a]ny controversy or claim arising out of or relating to any provision of this Agreement or the breach thereof . . . .” Therefore, Smith, which we limit to its facts, is not controlling. (Cf. Pacific Inv. Co. v. Townsend (1976) 58 Cal.App.3d 1, 11.) An additional argument raised by plaintiff warrants brief comment. Plaintiff argues that an arbitrator would not have jurisdiction to appoint a receiver to administer the partnership. (Marsch v. Williams (1994) 23 Cal.App.4th 238, 245-246.) This issue is premature. The question at issue is whether the arbitration agreement is enforceable. Whether an arbitrator may in the future potentially act beyond her or his powers can be addressed if such ever occurs. It is not a ground to deny defendants the statutorily guaranteed right to litigate the matter in the arbitral forum. IV. DISPOSITION The order denying the petition to compel arbitration is reversed. Defendants, Williams, Woolley, Cogswell, Nakazawa & Russell, David E. R. Woolley, Forrest R. Cogswell, Alan Nakazawa, and Thomas A. Russell, are to recover their costs on appeal from plaintiff, Blake W. Larkin. TURNER, P.J. We concur: ARMSTRONG, J., and GODOY PEREZ, J. :::FOOTNOTES::: FN1 We conclude that the dispute at issue must be arbitrated under the California Arbitration Act. It is therefore unnecessary to consider whether the United States Arbitration Act (9 U.S.C. � 1 et seq.) would also require the present dispute to be arbitrated.
LARKIN v. WILLIAMS, WOOLLEY, COGSWELL, NAKAZAWA & RUSSELL Cite as 99 C.D.O.S. 9061 BLAKE W. LARKIN, Plaintiff and Respondent, v. WILLIAMS, WOOLLEY, COGSWELL, NAKAZAWA & RUSSELL et al., Defendants and Appellants. No. B126368 In the Court of Appeal of the State of California Second Appellate District Division Five (Super. Ct. No. NC020860) APPEAL from an order of the Superior Court of Los Angeles County, Margaret M. Hay, Judge. Reversed. COUNSEL Latham & Watkins, Robert A. Long and Tanya M. Acker for Defendants and Appellants. Law Offices of Patricia Barlow, Patricia Barlow and Donald Johnson for Plaintiff and Respondent. Filed November 15, 1999
 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

Premium Subscription

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now

Team Accounts

Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now

Bundle Subscriptions

Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now

Women, Influence & Power in Law UK Awards 2024

March 06, 2024
London, UK

Women, Influence & Power in Law UK Awards honors women lawyers who have made a remarkable difference in the legal profession.


Learn More

Florida Legal Awards (FLLA) 2024

April 04, 2024
Miami, FL

Daily Business Review honors attorneys and judges who have made a remarkable difference in the legal profession in Florida.


Learn More

Consulting Rising Stars of the Profession 2024

April 11, 2024
Chicago, IL

Consulting magazine is proud to recognize this unique group of movers and shakers at our annual Rising Stars of Profession awards.


Learn More

Associate Attorney


Seeking Estate Administration Attorney for busy boutique office. Huge upside potential and growth opportunity.NYS Bar Admission and relevan...


Apply Now ›

TRUSTS & ESTATES ADMINISTRATION PARALEGAL


COLE SCHOTZ P.C.TRUSTS & ESTATES ADMINISTRATION PARALEGAL - NEW JERSEY, NEW YORK OR FLORIDA OFFICE:Prominent NJ based law firm with mult...


Apply Now ›

Transactional Attorney Needed - Hybrid (4 yrs. min. experience)


Wall Street law firm with diverse business practice seeks transactional attorney with at least 4 years of experience. Must have solid experi...


Apply Now ›

Danaher Lagnese, PC

02/22/2024
Connecticut Law Tribune

Professional Announcement


View Announcement ›

Blume Forte Fried Zerres & Molinari

02/19/2024
New Jersey Law Journal

Frederick D. Miceli has joined the firm as Of Counsel


View Announcement ›

BENCHMARK RESOLUTION SERVICES, LLC

01/29/2024
New Jersey Law Journal

Professional Announcement


View Announcement ›