Unpublished Disposition, 867 F.2d 612 (9th Cir. 1989)

MEMORANDUM^* 

Chaparral Communications Inc. appeals the district court's judgment confirming an arbitration award. Chaparral contends that the district court erred in denying its motion to vacate the arbitration award and to grant a new trial. We affirm.

Cosmos Satellite Antennas Manufacturing, Inc. and Chaparral entered into a Manufacturing Agreement which contained a binding arbitration clause. Subsequently, a dispute arose and Cosmos sued Chaparral in federal district court. Upon Chaparral's motion, the judge ordered arbitration pursuant to the contract. Because the contract provided no details on who should be the arbitrator, or how the arbitration proceedings should be conducted, the parties stipulated that William Harris, a retired California Superior Court judge, would be the arbitrator, and the hearing would be conducted under the California Arbitration Act. See Cal.Civ.Proc. Secs. 1141.10-1141.32 (West Supp.1988); Cal.R.Ct. 1600-1617 (West 1987).¹  Section 1141.20 of the Act, and corresponding Rule 1616, provide that any party to the arbitration may elect to have a de novo trial. The issue is whether the parties' stipulation of the rules to apply to the arbitration included the substantive right to a trial de novo upon request, despite the contract language stating that the arbitration would be binding.

We defer substantially to a trial court's interpretation of stipulations entered in the course of proceedings before it. Likens-Foster Monterey Corp. v. United States, 308 F.2d 595, 599 (9th Cir. 1962). We agree with the district court in finding that the stipulation as to the arbitrator and the rules governing the arbitration did not modify the original contract. The parties agreed in their contract that any arbitration required would be binding. Once arbitration was ordered, the framework for the arbitration had to be established. There was no discussion of whether the arbitration would or would not be binding. There is evidence in the record that all parties, including the district court judge and the arbitrator, believed and agreed that it was.²  The California Arbitration Act was to provide only the procedural framework for the arbitration.

The right to a trial de novo, while part of the California Arbitration Act, was not part of this procedural framework. Several other provisions of the Act, while ostensibly included in the stipulation, were either irrelevant or not applicable to this particular case. For example, several sections of the Act, and corresponding rules, relate to the mandatory nature of arbitration for cases filed in California Superior Court. See Cal.Civ.Proc. Secs. 1141.10-.13; 1141.15 (West Supp.1988); Cal.R.Ct. 1600; 1600.5 (West 1987). Provisions regarding how to determine the amount in controversy, for the purpose of knowing whether arbitration is required under the Act, are not applicable. See Cal.Civ.Proc. Sec. 1141.16 (West Supp.1988). Similarly, provisions regarding the selection of an arbitrator are also not applicable because the parties stipulated to Judge Harris. See Cal.Civ.Proc. Sec. 1141.18 (West 1982); Cal.R.Ct. 1605, 1605.5 (West 1987). Neither party would expect these provisions to pertain to their situation; the same applies to the provision for trial de novo.

It is reasonable to interpret the word "arbitration," as used in the stipulation, to mean the arbitration hearing, or proceedings, and not the entire dispute itself. As a result, the rules that were stipulated to to conduct the "arbitration" would only be those relevant to the conduct of the hearing. The section providing for a trial de novo is thus inapplicable. The district court did not err in ruling that the parties did not intend the rules pertaining to the conduct of the arbitration to alter the original contract by making the result any less binding.

Requests for sanctions by both parties are denied.

AFFIRMED.