Judge: Kevin C. Brazile, Case: BC635325, Date: 2023-01-10 Tentative Ruling

Hearing Date: January 10, 2023

Case Name: Brandon Farm, LLC v. Screen Media Ventures, LLC

Case No.: 22STCP03468

Matter: Petition to Confirm Arbitration Award

Moving Party: Petitioner Brandon Farm, LLC

Responding Party: Respondent Screen Media Ventures, LLC

Notice: OK

Ruling: The Petition is granted.

Petitioner to give notice.

If counsel do not submit on the tentative, they are strongly 

encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic. 

Petitioner Brandon Farm, LLC seeks to confirm an arbitration award in its favor issued by arbitrator Michael R. Blaha on September 6, 2022.

Code Civ. Proc. § 1285 provides in relevant part, “Any party to an arbitration in which an award has been made may petition the court to confirm, correct or vacate the award.”

Code Civ. Proc. § 1285.4 states, “A petition under this chapter shall: (a) Set forth the substance of or have attached a copy of the agreement to arbitrate unless the petitioner denies the existence of such an agreement. (b) Set forth the names of the arbitrators. (c) Set forth or have attached a copy of the award and the written opinion of the arbitrators, if any.”

Code Civ. Proc. § 1286 states, “If a petition or response under this chapter is duly served and filed, the court shall confirm the award as made, whether rendered in this state or another state, unless in accordance with this chapter it corrects the award and confirms it as corrected, vacates the award or dismisses the proceeding.”

“The trial court has but four courses of conduct once a confirmation proceeding is initiated: 1) to confirm, 2) to correct and confirm, 3) to vacate, 4) to dismiss, where a respondent is not a party to the award or is not bound by the arbitration agreement.” (United Bhd. of Carpenters etc., Loc. 642 v. Demello (1972) 22 Cal.App.3d 838, 840.)

Respondent Screen Media Ventures, LLC seeks to vacate the subject award because (1) the arbitrator didn’t rule on all issues and (2) the arbitrator exceeded his powers.  Respondent contends this is because “the Arbitrator failed to determine and/or rule upon questions related to SMV’s signature defense in this matter—namely, that under the guiding principles of agency law, the monies received by SMV’s subdistributors, as agents of a disclosed principal, are legally monies received by SMV as the disclosed principal.”

Code Civ. Proc. § 1286.2(a) provides in relevant part that “the court shall vacate the award if the court determines any of the following: . . . (4) The arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted . . .” 

Respondent’s arguments lack merit.  The arbitrator rejected Respondent’s subdistributor argument multiple times.  As Petitioner puts it: “Respondent raised this argument in its Arbitration Brief. (See Mallen Decl. ¶ 6; Ex. C.)  Respondent then argued this issue during the arbitration, and again in its Closing Arbitration Brief.  (See Mallen Decl. ¶¶ 8-9; See also Ex. E.)  Following the Arbitrator’s Award, which specifically rejected Respondent’s argument, Respondent then filed a ‘Request for Correction of Arbitration Award.’  (See Mallen Decl. ¶ 14, Ex. H.)  In that brief, Respondent  . . . argued, once again, that its distribution fee should have been calculated based on the amounts collected by its subdistributors.  (Id.)  In its Corrected Final Arbitration Award, the Arbitrator rejected the argument once again.  (See Mallen Decl. ¶ 15, Ex. I.)” 

Indeed, the final award states, “Cases routinely distinguish between subdistributors and agents in various contexts. See, e.g.,In re WorldCom, Inc., 371 B.R. 33, 43-44 (S.D.N.Y. 2007); Cherry River Music Co. v. Simitar Entm't, Inc., 38 F. Supp. 2d 310, 325-326 (S.D.N.Y. 1999); Vestron, Inc. v. National Geographic Soc., 750 F. Supp. 586, 593 (S.D.N.Y. 1990) In re Best Film & Video Corp., 46 B.R. 861, 879 (E.D.N.Y. 1985).”  The award specifically noted Respondent’s argument that “Respondent's subdistributors are its agents, and therefore the monies received by the subdistributors must be equivalent to monies received and retained by Respondent”, and ultimately rejected such contention, stating, “Even if such parole evidence were admissible - which it is not - it would not support the interpretation Respondent is propounding. First, as discussed above . . . the prevailing wisdom appears to be that subdistributors are not agents for their distributors. Even if they are deemed to be agents, that does not alter the plain meaning of the Gross Receipts definition.”

The Petition is granted because Petitioner has attached Blaha’s award, as well as the underlying agreement to arbitrate.  (Mallen Decl., Exhibits A, E; Code Civ. Proc. § 1285.4.)

Petitioner to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.