TURTLE RIDGE MEDIA GROUP v. PACIFIC BELL DIRECTORY
Filed 6/21/06
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION EIGHT
| TURTLE RIDGE MEDIA GROUP, INC., Plaintiff and Respondent, v. PACIFIC BELL DIRECTORY et al., Defendants and Appellants. | B180324 (Los Angeles County Super. Ct. No. BC322063) |
APPEAL from an order of the Superior Court of Los Angeles County. Maureen Duffy-Lewis, Judge. Reversed with directions.
Bjork Lawrence, Robert K. Lawrence and Robyn D. Roberts for Defendants and Appellants.
Albright, Yee & Schmit, LLP, Clifton W. Albright, Derek S. Yee, Lucien A. Schmit III, and Boris Orlov for Plaintiff and Respondent.
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Pacific Bell Directory doing business as SBC Smart Yellow Pages, SBC Communications, Inc., and SBC Directory Operations appeal from the trial court's order denying their petition to compel. We reverse and direct the court to order arbitration.
FACTS AND PROCEEDINGS[1]
Turtle Ridge Media Group, Inc. is in the business of hand delivering printed advertising media. In the spring of 2002, it made a sales call to the offices of SBC Smart Yellow Pages (SBC) hoping to get some of SBC's business.[2] In the past, SBC had declined to work with Turtle Ridge because the company was too small. In the intervening time, however, SBC had changed its approach to delivering phonebooks and was therefore interested in Turtle Ridge's proposal. SBC suggested Turtle Ridge contact Clientlogic Operating Company, Inc. (Clientlogic), which was also bidding on SBC's phonebook delivery contract. SBC believed that by pooling their resources, Turtle Ridge and Clientlogic might be able to submit a successful bid.
Turtle Ridge and Clientlogic agreed to work together to win SBC's contract, and their efforts prevailed. SBC awarded the contract to Clientlogic and expressly authorized Clientlogic to subcontract work to Turtle Ridge. Accordingly, Clientlogic awarded a subcontract to Turtle Ridge incorporating the contract between SBC and Clientlogic for hand and mail delivery of SBC phonebooks.
According to the complaint, after entering into the subcontract, Turtle Ridge began to discover that many of the phonebooks were undeliverable because their delivery addresses were invalid. Unknown to Turtle Ridge, SBC's request for bids on the contract had deliberately exaggerated the number of phonebooks Clientlogic and Turtle Ridge were to deliver. SBC had inflated the number because it allowed SBC to charge higher advertising rates to advertisers in the phonebook, who paid rates based on the phonebook's circulation. In addition to defrauding advertisers, the inflated number defrauded Turtle Ridge because it had calculated its contract price using that number. Turtle Ridge asked Clientlogic to discuss the exaggerated number with SBC. When Clientlogic did so, SBC attempted to cover up its scheme by terminating Clientlogic's contract. In response, Clientlogic terminated Turtle Ridge's subcontract.
Turtle Ridge sued SBC. It alleged causes of action for fraud and deceit, unlawful conduct by a public utility, unfair business practices, intentional and negligent interference with prospective economic advantage, and quantum meruit.
SBC petitioned to compel arbitration. It argued Turtle Ridge's claims arose from Turtle Ridge's subcontract with Clientlogic, which had incorporated the contract between Clientlogic and SBC. SBC's contract with Clientlogic, SBC observed, contained an arbitration clause covering â€
