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Ring Ring, Inc. v. AT&T Mobility II, LLC

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION TWO
Oct 12, 2011
B226584 (Cal. Ct. App. Oct. 12, 2011)

Opinion

B226584

10-12-2011

RING RING, INC., Plaintiff and Respondent. v. AT&T MOBILITY II, LLC, Defendant and Appellant.

Kohut & Kohut, Ronald J. Kohut and Sarah K. Kohut for Defendant and Appellant. Law Office of Sanaz Razi and Sanaz Razi for Plaintiff and Respondent.


NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County Super. Ct. No. BC416285)

APPEAL from a judgment of the Superior Court of Los Angeles County. Ronald M. Sohigian, Judge. Affirmed.

Kohut & Kohut, Ronald J. Kohut and Sarah K. Kohut for Defendant and Appellant.

Law Office of Sanaz Razi and Sanaz Razi for Plaintiff and Respondent.

Defendant and appellant AT&T Mobility II, LLC (AT&T) appeals from a trial court order denying its motion to compel arbitration of the claims asserted against it by plaintiff and respondent Ring Ring, Inc. (Ring Ring). We agree with the trial court's finding that there is no valid arbitration agreement between AT&T and Ring Ring. Accordingly, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

The Relevant Agreements

On August 31, 2005, AT&T's predecessor, Cingular Wireless, LLC (AT&T and its predecessor will be referred to as AT&T), and AA Wireless entered into the Cingular Wireless exclusive dealer agreement (dealer agreement). At paragraph 11.3, the dealer agreement contains an arbitration provision that provides, in relevant part, that "all claims . . . and disputes between [AA Wireless] and [AT&T] must be resolved by submission to binding arbitration."

Seven months later, AA Wireless and Ring Ring entered into an exclusive subdealer's agreement to comply with exclusive master dealer agreement (the subdealer agreement). According to its express terms, the subdealer agreement "is subject to the terms of the [d]ealer [a]greement," and Ring Ring "must comply with all terms and conditions of the" dealer agreement. In fact, the subdealer agreement provides that AA Wireless reviewed the dealer agreement with Ring Ring.

Furthermore, the subdealer agreement indicates that AT&T is a third party beneficiary of the subdealer agreement "and may take any equitable or legal action required to enforce its provisions and the terms and conditions of the [d]ealer [a]greement."

Finally, the subdealer agreement allows AT&T "to obtain any temporary, preliminary, or permanent injunctive relief that may be necessary to prevent any actual or threatened breach of" the subdealer agreement. In fact, AT&T "is further entitled to recover reasonable attorneys' fees and other expenses . . . whether or not suit is commenced."

AT&T's Motion to Compel

A dispute arose, prompting Ring Ring to file a complaint for breach of contract and fraud against AT&T.

Through its counsel, Ring Ring apparently originally agreed to arbitrate its dispute with AT&T. When Ring Ring failed to initiate arbitration proceedings, AT&T filed a motion to compel arbitration. Ring Ring opposed AT&T's motion.

Trial Court Order and Appeal

After entertaining oral argument, the trial court denied AT&T's motion to compel. Citing Code of Civil Procedure section 1281, it found insufficient evidence that Ring Ring entered into an agreement to arbitrate. Aside from the fact that AT&T failed to submit a properly authenticated copy of the dealer agreement, nothing in the dealer agreement or the subdealer agreement indicated that disputes between Ring Ring and AT&T were subject to the arbitration provision contained in the dealer agreement. Thus, Ring Ring could not have "knowingly agreed to the arbitration provision."

Moreover, the trial court found that "the arbitration provision in the dealer agreement [appeared] to me to be contradicted by the language in the . . . [subdealer agreement]." In particular, paragraph 8 of the [subdealer agreement] allows AT&T to "take any equitable or legal action required to enforce" the subdealer agreement, and paragraph 10.3 "expressly contemplate[s] that [AT&T] may commence a lawsuit." Thus, the trial court concluded that "the arbitration provision in the dealer agreement did not apply, was not intended to apply, was not understood to apply to the [subdealer agreement] to which Ring Ring is a party."

AT&T's timely appeal ensued.

DISCUSSION

I. Standard of review

The parties agree that we review this issue de novo. (Brookwood v. Bank of America (1996) 45 Cal.App.4th 1667, 1670 [whether an arbitration agreement applies to a particular controversy is a question of law]; Ben-Zvi v. Edmar Co. (1995) 40 Cal.App.4th 468, 472 [contract interpretation presents a question of law]; Gravillis v. Coldwell Banker Residential Brokerage Co. (2006) 143 Cal.App.4th 761, 771 [when "the language of an arbitration provision is not in dispute, the trial court's decision as to arbitrability is subject to de novo review"].)

II. The trial court properly denied AT&T's motion to compel arbitration

After independently reviewing the dealer agreement and subdealer agreement, we conclude that the trial court did not err in denying AT&T's motion to compel. The subdealer agreement does not contain an arbitration provision. Absent a valid agreement to arbitrate, Ring Ring cannot be forced to arbitrate its dispute with AT&T. (Rhodes v. California Hospital Medical Center (1978) 76 Cal.App.3d 606, 609, superseded by statute on other grounds as stated in Horwich v. Superior Court (1999) 21 Cal.4th 272, 284; Freeman v. State Farm Mut. Auto. Ins. Co. (1975) 14 Cal.3d 473, 481; Baker v. Birnbaum (1988) 202 Cal.App.3d 288, 291.)

On appeal, the parties do not address the trial court's finding that the dealer agreement was not properly authenticated. We express no opinion on this point and assume that the dealer agreement was properly authenticated.

Admittedly, the subdealer agreement is subject to the dealer agreement, which contains an arbitration provision and which we presume Ring Ring read. (Frame v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1971) 20 Cal.App.3d 668, 671.) But the dealer agreement does not indicate that Ring Ring, as a subdealer, would be bound by that arbitration provision. Rather, the arbitration provision applies only to the "Dealer," identified as AA Wireless, and the "Company," identified as AT&T.

In its reply brief, AT&T relies heavily upon Boys Club of San Fernando Valley, Inc. v. Fidelity & Deposit Co. (1992) 6 Cal.App.4th 1266 (Boys Club), a case not mentioned in either AT&T's opening brief or underlying motion papers. That case is readily distinguishable. In Boys Club, the Court of Appeal held that a bond is to be read in the context of the terms of the contract it is guaranteeing. (Boys Club, supra, at pp. 1271-1272.) In other words, a performance bond and the underlying contract must be construed together as "parts of . . . substantially one transaction." (First National Ins. Co. v. Cam Painting, Inc. (2009) 173 Cal.App.4th 1355, 1367.) That principle has no application here; there is no reason for the subdealer agreement to be read as part of one transaction with the dealer agreement.

AT&T argues that the subdealer agreement shows "an express intention for Ring Ring to be bound" by the arbitration clause in the dealer agreement. We cannot agree. As set forth above, the plain language of the arbitration provision applies only to AT&T and AA Wireless. There is nothing either contained in the plain language of the two agreements or presented in extrinsic evidence to suggest that the parties intended Ring Ring to be bound by the arbitration provision of the dealer agreement.

At best for AT&T, the arbitration provision in the dealer agreement is inconsistent with language in the subdealer agreement. After all, the subdealer agreement allows AT&T to "take any equitable or legal action required to enforce" the subdealer agreement, to seek injunctive relief, and to seek attorney fees and other expenses "whether or not suit is commenced." And, notably, the subdealer agreement is silent regarding arbitration. Despite the arguably contradictory language, AT&T did not offer any extrinsic evidence to aid the interpretation of the subdealer agreement. Under these circumstances, we cannot conclude that AT&T met its burden in establishing that an express binding arbitration agreement existed between AT&T and Ring Ring. (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413 [moving party is required to present "prima facie evidence of a written agreement to arbitrate the controversy"].)

AT&T's counsel represented at oral argument that this language is mirrored in the dealer agreement. That is not entirely accurate. The dealer agreement provides in relevant part: "Despite anything to the contrary in this arbitration provision, either party may bring court proceedings to seek an injunction or other equitable relief to enforce any right or obligation under this Agreement." In other words, the dealer agreement allows for equitable actions to be filed. The subdealer agreement is broader and allows for both equitable and legal actions.
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Throughout its opening brief, AT&T references Ring Ring's counsel's alleged agreement to submit this dispute to arbitration and then apparent refusal to follow through. AT&T does not offer any legal authority to support its suggestion that Ring Ring's counsel's alleged stipulation binds Ring Ring to arbitration. (Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 852.)

In light of our conclusion, we need not consider the merits of the parties' discussion regarding the alleged unconscionability of the arbitration provision.

DISPOSITION

The judgment of the trial court is affirmed. Ring Ring is entitled to costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

ASHMANN-GERST, J.

We concur:

BOREN, P. J.

DOI TODD, J.


Summaries of

Ring Ring, Inc. v. AT&T Mobility II, LLC

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION TWO
Oct 12, 2011
B226584 (Cal. Ct. App. Oct. 12, 2011)
Case details for

Ring Ring, Inc. v. AT&T Mobility II, LLC

Case Details

Full title:RING RING, INC., Plaintiff and Respondent. v. AT&T MOBILITY II, LLC…

Court:COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION TWO

Date published: Oct 12, 2011

Citations

B226584 (Cal. Ct. App. Oct. 12, 2011)