Posner v. Grunwald-Marx, Inc. , 56 Cal. 2d 169 ( 1961 )

SCHAUER, J., Dissenting.

In my view the opinion prepared for the District Court of Appeal by Justice Lillie and concurred in by Presiding Justice Wood and Justice Fourt (reported in (Cal.App.) 10 Cal.Rptr. 54) follows the statutory and decisional law of this state. Furthermore, I think it properly upholds the integrity of the contract as specifically agreed upon by the parties and adequately discusses and correctly resolves the questions presented on this appeal. ¹

For the reasons therein stated, I would affirm the judgment of the trial court.

McComb, J., concurred.

1 The essence of the basic ground for the ultimate conclusion in Justice Lillie’s opinion is contained in the following excerpt therefrom (brackets together, in this manner [ ], are used to indicate deletions from the opinion of the District Court of Appeal; see People v. Lyons (1956), 47 Cal.2d 311, 314 [303 P.2d 329]):

[ ] The issue sought to be arbitrated relates to portions of paragraph 9 of the agreement concerning vacations and vacation pay: “ (a) Vacation Period—It is mutually agreed that there shall be a vacation period of one week in each calendar year. The period for computation shall be the period ending with the last pay period in June in each year. The vacation period shall be the first week in July unless the Company and the Union shall mutually agree upon some other period. When the vacation period occurs during a week in which a paid holiday falls, employees now entitled to receive pay for such a holiday shall be paid for such holiday in addition to their vacation pay. (b) Eligibility and Pay—

1. All employees who (1) have been on the payroll of the company for at least nine (9) months prior to the commencement of the vacation period, and (2) are on such payroll at the commencement of the vacation period are eligible for a paid vacation as hereinafter provided.” Another paragraph of the agreement, 11(a), provided for six paid holidays, including Decoration Day (May 30th), eligibility therefor being defined as follows: “In order to be eligible for a paid holiday, employees must work the last working day before the holiday and the first working day following the holiday. If the employee did not work either of these days due to illness or lay-off, he shall be entitled to holiday pay. In ease of illness the company may require proof of illness.”

[ ] On or about May 29, 1957, defendant moved the company plants from Los Angeles County to Phoenix, Arizona; its employees were “terminated.” The petition alleged (and the court found) that at the time of the move and termination there were on the company payroll approximately 175 employees who had been on said payroll at the commencement of the vacation except for the removal of the company’s plants, and that hy reason of said removal the company had failed and refused to pay the employees their vacation pay.

It was further alleged that a dispute had arisen between the parties on or about May 29, 1957, concerning employees who had worked during the week of May 29th, but who were unable to work that day (May 29th) and the day following Decoration Day because of the removal of the company plants; the company, it was alleged, refused and failed to pay holiday pay for Decoration Day, and arbitration of that additional issue was likewise sought.

The trial court denied the petition. Though it found as true all the material allegations of the petition, and various affirmative defenses (save the first), as untrue, the effect of its decision was to find as true the allegations of the first affirmative defense that the petition "fails to state facts sufficient to constitute a cause of action in that it fails to allege that the company acted illegally, arbitrarily or in bad faith in discharging its employees before the employees were eligible for vacation pay. ” [ ] In its conclusion of law, the trial court concluded that while there was an arbitration provision in the bargaining agreement and while the company had refused to arbitrate in accordance therewith, the company was not in default since '‘ The wording of the collective bargaining agreement is without ambiguity as to vacation pay and holiday pay”; implicit in such conclusion is the determination that there was no arbitrable issue. The judgment declared that the defendant was "not in default in proceeding thereunder,” and ordered the proceeding dismissed.

"The question of existence of an agreement to arbitrate and of the scope of the arbitration permissible under that agreement are issues which, in the first instance, the code refers to judicial action.” (Wetsel v. Garibaldi, 159 Cal.App.2d 4, 7 [323 P.2d 524].) " 'When one of the parties [as here] is resisting such an order [to arbitrate], the court must make two principal determinations . . . First, was a valid agreement to arbitrate ever made by the parties and is it still operative? Secondly, does the dispute that now exists fall within the terms of that agreement, reasonably interpreted? . . .’ [citation].” (Local 659, I.A.T.S.E. v. Color Corp. of America, 47 Cal.2d 189, 195 [302 P.2d 294].) Citing United Steel Workers of America v. American Manufacturing Co., 363 U.S. 564 [80 S.Ct. 1343, 1363, 4 L.Ed.2d 1403, 1432], appellant suggests that we reject, as the cited case assertedly does, the "Cutler-Hammer Doctrine” (International Assn. of Machinists v. Cutler-Hammer, Inc., 271 App.Div. 917 [67 N.Y.S.2d 317]); however, it is held in this state that ‘ ‘ ‘ the mere assertion by a party of a meaning of a provision which is clearly contrary to the plain meaning of the words cannot make an arbitrable issue’ [International Assn. of Machinists v. Cutler-Hammer, Inc., supra, p. 318 [67 N.Y.S.2d]].” (Pari-Mutuel Emp. Guild v. Los Angeles Turf Club, 169 Cal.App.2d 571, 579 [337 P.2d 575].) To the same effect is Griggs v. Transocean Air Lines, 176 Cal.App.2d 843, 849 [1 Cal.Rptr. 803]. Pursuant to the plain mandate of section 1282, Code of Civil Procedure, the trial court properly made the required ' ‘ threshold determination of arbitrability” (McCarroll v. Los Angeles County Dist. Council of Carpenters, 49 Cal.2d 45, 65 [315 P.2d 322]); we are of the opinion that it correctly concluded that there was no arbitrable issue as to vacation pay. [ ]