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MPAA A
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO
Document Scanning Lead Sheet
Apr-12-2019 11:10 am
Case Number: CPF-19-516542
Filing Date: Apr-12-2019 11:09
Filed by: ROSALLIE GUMPAL
Image: 06765297
ORDER
OAKLAND-ALAMEDA COUNTY COLISEUM AUTHORITY VS. GOLDEN STATE
WARRIORS, LLC
001006765297
Instructions:
Please place this sheet on top of the document to be scanned.oe YW DH Bw DY
Boe Be Be ee Se ee
eo WD WU BR Oo HP HE S
KEKER, VAN NEST & PETERS LLP
JOHN W. KEKER - # 49092
jkeker@keker.com
DANIEL PURCELL - # 191424
dpurcell@keker.com
DAN JACKSON - #216091
djackson@keker.com
EDUARDO E. SANTACANA - # 281668
esantacana@keker.com
LEAH PRANSKY - # 302246
Ipransky@keker.com
633 Battery Street
San Francisco, CA 94111-1809
Telephone: 415 391 5400
Facsimile: 415 397 7188
Attorneys for Counter-Claimant
Superior Court iforni D
County of Ut of California
APR 1-2 2019
CLERK OF THE COUR
OAKLAND-ALAMEDA COUNTY COLISEUM AUTHORITY
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
OAKLAND-ALAMEDA COUNTY Case No. CPF-19-516542
COLISEUM AUTHORITY,
ORDER GRANTING
Respondent/Counter- PETITION TO CONFIRM
Claimant, ARBITRATION AWARD AND DENYING
v.
GOLDEN STATE WARRIORS, LLC,
Claimant/Counter-
Respondent.
PETITION TO VACATE ARBITRATION
AWARD
S8BORCSED] ORDER RE PETITIONS TO CONFIRM AND VACATE.
1326137.v1eC eo IN AH ®F WN
2 Bee ee eR
BRRRRBBEBSSEeBEATRREESHKRES
The Oakland-Alameda County Coliseum Authority’s (“Authority”) petition to confirm the
final arbitration award is granted, and the Golden State Warriors’ (“Warriors”) petition to vacate
the final arbitration award is denied. Pursuant to § 39.3.11 of the parties’ License Agreement, the
Authority is entitled to recover its reasonable attorneys’ fees, disbursements and costs incurred in
connection with these petitions.
Under the parties’ License Agreement, the court conducts de novo review of the
arbitrator’s legal determinations but defers to her factual findings. (Licerise Agreement, §
39.3.11.) Such review of the arbitration award is consistent with the California Arbitration
Act. (See Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 1354-1361.)
The key issue in the underlying arbitration was the meaning of § 6.4 of the License
Agreement. That section states that “[i]f Licensee terminates the License. Agreement for any
reason prior to June 30, 2027 and there is a principal balance remaining on the Project Debt,”
referring to the $140 million in bonds issued by the Authority to finance the renovation of the
Oracle. Arena, then the Warriors would be required to pay the annual debt service subject to an
offset for profits generated by the Authority from continued operation of the Arena, The
Authority contends that the Warriors terminated the license agreement by deciding not to exercise
their option to renew. The arbitrator agreed with that position.
The court finds that the arbitrator did not-err. “A contact must be so interpreted as to give
effect to the mutual intention of the parties as it existed at the time of contracting, so far as the
same is ascertainable and lawful.” (Civ. Code § 1636; see also Code Civ. Proc. § 1859.) “The
mutual intention to which the courts give effect is determined by objective manifestations of the
patties’ intent, including the words used in the agreement, as well as extrinsic evidence of such
objective matters as the surrounding circumstances under which the parties negotiated or entered
into the contract; the object, nature and subject matter of the contract; and the subsequent conduct
of the parties.” (Morey v. Vannucci (1998) 64 Cal.App.4th 904, 912.) “The test of admissibility
of extrinsic evidence to explain the meaning of a written instrument is not whether it appears to
the court to be plain and unambiguous on its face, but whether the offered evidence is relevant to
prove a meaning to which the language of the ingtrument is reasonably susceptible.” (Pacific Gas
@RQPASED] ORDER RE PETITIONS TO CONFIRM AND VACATE
1326137.v1oo em ND HW eB WN
& Electric Co. v. G.W. Thomas Drayage & Rigging Co. (1968) 69 Cal.2d 33, 37.) “If the court
decides, after considering this evidence, that the language of a contract, in the light of all the
circumstances, ‘is fairly susceptible of either one of the two interpretations contended for ...°
[citations], extrinsic evidence relevant to prove either of such meanings is admissible.” (Jd. at 40;
see also, e.g., Morey v. Vannucci (1998) 64 Cal.App.4th 904, 912.) The arbitrator’s
determination that the contract was reasonably susceptible to the Authority’s interpretation is a
legal issue. (Winet y. Price (2015) 4 Cal.App.4th 1159, 1165 [‘The trial court’s ruling on the
threshold determination of ‘ambiguity’ (i.e., whether the proffered evidence is relevant to prove a
meaning to which the language is reasonably susceptible) is a question of law, not of fact.”]; Wolf
v. Superior Court (2004) 114 Cal.App.4th 1343, 1351-1352 [extrinsic evidence was admissible to
determine meaning of term “gross receipts” in agreement, in light of all the circumstances and the
overall context of the contract].)
The arbitrator correctly relied on extrinsic evidence and the Warriors’ conduct to conclude
that they are required to service the renovation project-debt. The extrinsic evidence was used to
explain—not to contradict or vary—the terms of the contract. The evidence shows that the
parties used the-word “terminates” to include a license. termination where the Warriors failed to
exercise the option to renew. The material terms of the MOU were incorporated into the License
Agreement. (MOU, § 1.) § 5.1 of the MOU was the precursor to § 6.4 of the License
Agreement. § 5.1 of the MOU clearly shows that the Warriors would continue to pay the debt if
the Warriors allowed the license to expire. The Authority unilaterally changed the language in §
6.4 even though the lead. negotiators for the parties did not remember any sort of discussion
regarding re-negotiating the payment obligation. (Seaman, RT 226:5-16; 276:7-12; Baggett, RT
120;16-21.) It makes little sense that the parties would have intended to relieve the Warriors of
this obligation where the parties did not discuss it. “If the provisions of the contract as a whole
are susceptible of an interpretation which will give effect to the mutual lawful intention of the
parties as it is thus found to have existed at the time of contracting, the court is bound to give to
them that interpretation.” (Lemm v. Stillwater Land & Cattle Co. (1933) 217 Cal. 474, 48; see
also Winet v. Price, 4 Cal.App.4th at 1168 [We are instructed to consider paro! evidence of the
_SBBOPOSED} ORDER RE PETITIONS TO CONFIRM AND VACATE
1326137.v1oC Oo NY DW FF WN
circumstances which attended the making of the agreement, ‘ . .. including the object, nature and.
subject matter of the writing . , .’ so that the court can ‘place itself in the same situation in which
the parties found themselves at the time of contracting.’”].)
The Warriors focus on the transitive use of the verb “terminates” and argue that they did
not engage in any affirmative conduct to terminate the contract. But a word does not have a
single true meaning (see Pacific Gas & Electric Co. v. G.W. Thomas Drayage & Rigging Co., 69
Cal.2d at 38) and the arbitrator correctly found that the Warriors’ passive termination implicates
the repayment obligation of § 6.4. The Warriors draw too fine a distinction between the term
“terminate” and “expire.” (See Pringle v. Wilson (1909) 156 Cal. 313, 318 [‘Here the phrase
‘expiration of the original term’ is undoubtedly intended to. mean the termination of the original
tern by lapse of time.”].)
The Warriors’ conduct after execution of the License and before the instant controversy
also comports with the Authority’s interpretation. The. Warriors’ former owner acknowledged in
a security agreement with a bank that the debt needed to be paid in full. Such conduct shows that
the contract was reasonably susceptible to the Authority’s interpretation. (See Southern Cal.
Edison Co. v. Superior Court (1995) 37 Cal.App.4th 839, 851 [‘The rule is well settled that in
construing the terms of a contract the construction given it by the acts and conduct of the parties
with knowledge of its terms, and before any controversy has arisen as to its meaning, is
admissible on the issue of the parties’ intent. ... We emphasize the conduct of one party to the
contract is by no means conclusive evidence as to the meaning of the contract. It is relevant,
however, to show the contract is reasonably susceptible to the meaning evidenced by that party's
conduct.” (emphasis in original)].) _~
IT IS SO ORDERED.
patee: Apel [2Z-a019 Eth gu eG rh
he HON. ETHAN P. SCHULMAN
7 Judge of the Superior Court
fPROPRSSED] ORDER RE PETITIONS TO CONFIRM AND VACATE
1326137.v1om ND HW FF WwW
APPROVED AS TO FORM:
Dated: April 11, 2019 MORRISON & FOERSTER LLP
ay dh [ibd
JOSHUA HILL JR.
Attorneys for Counter-Defendant
GOLDEN STATE WARRIORS
CPF-19- Gie542
OhgLawo-pucweDh Coumyy
Jouseuvs pertocar 'S AEN sryepe
Wartors (luc.
1326137.v1
“{PROPOSEDT ORDER RE PETITIONS TO CONFIRM AND VACATE
Preview
fe MPAA A SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO Document Scanning Lead Sheet Apr-12-2019 11:10 am Case Number: CPF-19-516542 Filing Date: Apr-12-2019 11:09 Filed by: ROSALLIE GUMPAL Image: 06765297 ORDER OAKLAND-ALAMEDA COUNTY COLISEUM AUTHORITY VS. GOLDEN STATE WARRIORS, LLC 001006765297 Instructions: Please place this sheet on top of the document to be scanned.oe YW DH Bw DY Boe Be Be ee Se ee eo WD WU BR Oo HP HE S KEKER, VAN NEST & PETERS LLP JOHN W. KEKER - # 49092 jkeker@keker.com DANIEL PURCELL - # 191424 dpurcell@keker.com DAN JACKSON - #216091 djackson@keker.com EDUARDO E. SANTACANA - # 281668 esantacana@keker.com LEAH PRANSKY - # 302246 Ipransky@keker.com 633 Battery Street San Francisco, CA 94111-1809 Telephone: 415 391 5400 Facsimile: 415 397 7188 Attorneys for Counter-Claimant Superior Court iforni D County of Ut of California APR 1-2 2019 CLERK OF THE COUR OAKLAND-ALAMEDA COUNTY COLISEUM AUTHORITY SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO OAKLAND-ALAMEDA COUNTY Case No. CPF-19-516542 COLISEUM AUTHORITY, ORDER GRANTING Respondent/Counter- PETITION TO CONFIRM Claimant, ARBITRATION AWARD AND DENYING v. GOLDEN STATE WARRIORS, LLC, Claimant/Counter- Respondent. PETITION TO VACATE ARBITRATION AWARD S8BORCSED] ORDER RE PETITIONS TO CONFIRM AND VACATE. 1326137.v1eC eo IN AH ®F WN 2 Bee ee eR BRRRRBBEBSSEeBEATRREESHKRES The Oakland-Alameda County Coliseum Authority’s (“Authority”) petition to confirm the final arbitration award is granted, and the Golden State Warriors’ (“Warriors”) petition to vacate the final arbitration award is denied. Pursuant to § 39.3.11 of the parties’ License Agreement, the Authority is entitled to recover its reasonable attorneys’ fees, disbursements and costs incurred in connection with these petitions. Under the parties’ License Agreement, the court conducts de novo review of the arbitrator’s legal determinations but defers to her factual findings. (Licerise Agreement, § 39.3.11.) Such review of the arbitration award is consistent with the California Arbitration Act. (See Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 1354-1361.) The key issue in the underlying arbitration was the meaning of § 6.4 of the License Agreement. That section states that “[i]f Licensee terminates the License. Agreement for any reason prior to June 30, 2027 and there is a principal balance remaining on the Project Debt,” referring to the $140 million in bonds issued by the Authority to finance the renovation of the Oracle. Arena, then the Warriors would be required to pay the annual debt service subject to an offset for profits generated by the Authority from continued operation of the Arena, The Authority contends that the Warriors terminated the license agreement by deciding not to exercise their option to renew. The arbitrator agreed with that position. The court finds that the arbitrator did not-err. “A contact must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful.” (Civ. Code § 1636; see also Code Civ. Proc. § 1859.) “The mutual intention to which the courts give effect is determined by objective manifestations of the patties’ intent, including the words used in the agreement, as well as extrinsic evidence of such objective matters as the surrounding circumstances under which the parties negotiated or entered into the contract; the object, nature and subject matter of the contract; and the subsequent conduct of the parties.” (Morey v. Vannucci (1998) 64 Cal.App.4th 904, 912.) “The test of admissibility of extrinsic evidence to explain the meaning of a written instrument is not whether it appears to the court to be plain and unambiguous on its face, but whether the offered evidence is relevant to prove a meaning to which the language of the ingtrument is reasonably susceptible.” (Pacific Gas @RQPASED] ORDER RE PETITIONS TO CONFIRM AND VACATE 1326137.v1oo em ND HW eB WN & Electric Co. v. G.W. Thomas Drayage & Rigging Co. (1968) 69 Cal.2d 33, 37.) “If the court decides, after considering this evidence, that the language of a contract, in the light of all the circumstances, ‘is fairly susceptible of either one of the two interpretations contended for ...° [citations], extrinsic evidence relevant to prove either of such meanings is admissible.” (Jd. at 40; see also, e.g., Morey v. Vannucci (1998) 64 Cal.App.4th 904, 912.) The arbitrator’s determination that the contract was reasonably susceptible to the Authority’s interpretation is a legal issue. (Winet y. Price (2015) 4 Cal.App.4th 1159, 1165 [‘The trial court’s ruling on the threshold determination of ‘ambiguity’ (i.e., whether the proffered evidence is relevant to prove a meaning to which the language is reasonably susceptible) is a question of law, not of fact.”]; Wolf v. Superior Court (2004) 114 Cal.App.4th 1343, 1351-1352 [extrinsic evidence was admissible to determine meaning of term “gross receipts” in agreement, in light of all the circumstances and the overall context of the contract].) The arbitrator correctly relied on extrinsic evidence and the Warriors’ conduct to conclude that they are required to service the renovation project-debt. The extrinsic evidence was used to explain—not to contradict or vary—the terms of the contract. The evidence shows that the parties used the-word “terminates” to include a license. termination where the Warriors failed to exercise the option to renew. The material terms of the MOU were incorporated into the License Agreement. (MOU, § 1.) § 5.1 of the MOU was the precursor to § 6.4 of the License Agreement. § 5.1 of the MOU clearly shows that the Warriors would continue to pay the debt if the Warriors allowed the license to expire. The Authority unilaterally changed the language in § 6.4 even though the lead. negotiators for the parties did not remember any sort of discussion regarding re-negotiating the payment obligation. (Seaman, RT 226:5-16; 276:7-12; Baggett, RT 120;16-21.) It makes little sense that the parties would have intended to relieve the Warriors of this obligation where the parties did not discuss it. “If the provisions of the contract as a whole are susceptible of an interpretation which will give effect to the mutual lawful intention of the parties as it is thus found to have existed at the time of contracting, the court is bound to give to them that interpretation.” (Lemm v. Stillwater Land & Cattle Co. (1933) 217 Cal. 474, 48; see also Winet v. Price, 4 Cal.App.4th at 1168 [We are instructed to consider paro! evidence of the _SBBOPOSED} ORDER RE PETITIONS TO CONFIRM AND VACATE 1326137.v1oC Oo NY DW FF WN circumstances which attended the making of the agreement, ‘ . .. including the object, nature and. subject matter of the writing . , .’ so that the court can ‘place itself in the same situation in which the parties found themselves at the time of contracting.’”].) The Warriors focus on the transitive use of the verb “terminates” and argue that they did not engage in any affirmative conduct to terminate the contract. But a word does not have a single true meaning (see Pacific Gas & Electric Co. v. G.W. Thomas Drayage & Rigging Co., 69 Cal.2d at 38) and the arbitrator correctly found that the Warriors’ passive termination implicates the repayment obligation of § 6.4. The Warriors draw too fine a distinction between the term “terminate” and “expire.” (See Pringle v. Wilson (1909) 156 Cal. 313, 318 [‘Here the phrase ‘expiration of the original term’ is undoubtedly intended to. mean the termination of the original tern by lapse of time.”].) The Warriors’ conduct after execution of the License and before the instant controversy also comports with the Authority’s interpretation. The. Warriors’ former owner acknowledged in a security agreement with a bank that the debt needed to be paid in full. Such conduct shows that the contract was reasonably susceptible to the Authority’s interpretation. (See Southern Cal. Edison Co. v. Superior Court (1995) 37 Cal.App.4th 839, 851 [‘The rule is well settled that in construing the terms of a contract the construction given it by the acts and conduct of the parties with knowledge of its terms, and before any controversy has arisen as to its meaning, is admissible on the issue of the parties’ intent. ... We emphasize the conduct of one party to the contract is by no means conclusive evidence as to the meaning of the contract. It is relevant, however, to show the contract is reasonably susceptible to the meaning evidenced by that party's conduct.” (emphasis in original)].) _~ IT IS SO ORDERED. patee: Apel [2Z-a019 Eth gu eG rh he HON. ETHAN P. SCHULMAN 7 Judge of the Superior Court fPROPRSSED] ORDER RE PETITIONS TO CONFIRM AND VACATE 1326137.v1om ND HW FF WwW APPROVED AS TO FORM: Dated: April 11, 2019 MORRISON & FOERSTER LLP ay dh [ibd JOSHUA HILL JR. Attorneys for Counter-Defendant GOLDEN STATE WARRIORS CPF-19- Gie542 OhgLawo-pucweDh Coumyy Jouseuvs pertocar 'S AEN sryepe Wartors (luc. 1326137.v1 “{PROPOSEDT ORDER RE PETITIONS TO CONFIRM AND VACATE