Ashbury Heights Capital v. Factset Research Systems CA1/1
A145806
| Cal. Ct. App. | Aug 16, 2016Background
- Ashbury Heights (plaintiff) developed an investment analytics engine and licensed it to Revere (later Bede), with an arbitration clause in the 2010 licensing agreement requiring AAA arbitration for disputes “arising hereunder.”
- A 2011 amendment removed the fee cap and added record-inspection and support terms; parties litigated whether a 2012 follow-on agreement was formed but the court did not decide that here.
- Plaintiff terminated the 2010 Agreement in July 2012, granting a time-limited bridge license, and later alleged Revere (and FactSet, which bought Revere’s assets in 2013) concealed post-termination sales, misreported revenues, and misused plaintiff’s IP.
- Plaintiff’s first amended complaint pleads five claims (breach of contract, fraud, breach of confidence, quantum meruit, promissory estoppel) and expressly limits the first four to conduct after termination of the 2010/2011 Agreements; promissory estoppel concerns the alleged 2012 arrangement.
- Revere and Engmann moved to compel arbitration based on the 2010 arbitration clause; the trial court denied the petition and the court of appeal affirmed, holding the clause did not cover post-termination disputes that plaintiff did not agree to arbitrate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2010 arbitration clause compels arbitration of claims based on post-termination conduct | Ashbury: claims expressly limited to post-termination conduct and any alleged 2012 agreement; therefore not covered by 2010 arbitration clause | Defendants: arbitration clause is broad/catch-all and applies to any dispute between the parties, including post-termination conduct | Held: Arbitration clause does not apply to plaintiff’s post-termination claims; trial court’s denial affirmed |
| Whether catch-all language (“any other matter”) renders arbitration perpetual | Ashbury: clause refers to types of claims arising under agreement, not all future disputes after termination | Defendants: the broad language shows intent to arbitrate all disputes between parties | Held: Court rejects perpetual arbitration; termination ended the parties’ arbitration consent absent new agreement |
| Whether arbitration provision survived termination by “Survival” clause or other terms | Ashbury: survival clause is unspecified and does not show intent to preserve arbitration; termination notice complied with contract | Defendants: survival clause and amendment provisions show arbitration should survive termination | Held: Survival clause insufficient to show arbitration provision continued; termination valid under agreement’s termination clause |
| Whether arbitrability threshold questions must be resolved by arbitrator | Ashbury: threshold whether arbitration applies here is for courts because plaintiff did not consent to arbitrate post-termination disputes | Defendants: incorporation of AAA rules delegates arbitrability/scope to arbitrator | Held: Court decides arbitrability; scope vs. validity distinction means arbitrator cannot force arbitration where parties never agreed to arbitrate the disputed subject matter |
Key Cases Cited
- Brookwood v. Bank of America, 45 Cal.App.4th 1667 (question of whether arbitration applies is a question of law for courts absent extrinsic conflict)
- Volt Info. Sciences v. Leland Stanford Jr. Univ., 489 U.S. 468 (federal policy favors arbitration but consent is required)
- Pinnacle Museum Tower Assn. v. Pinnacle Market Dev., 55 Cal.4th 223 (apply state contract law to determine consent while respecting FAA policy)
- Bruni v. Didion, 160 Cal.App.4th 1272 (distinguishes arbitrability of scope from validity; courts decide whether parties agreed to arbitrate unless clearly and unmistakably delegated)
- Coast Plaza Doctors Hospital v. Blue Cross of California, 83 Cal.App.4th 677 (temporal proximity does not automatically make post-termination claims arise under terminated agreement)
- Ajida Technologies, Inc. v. Roos Instruments, Inc., 87 Cal.App.4th 534 (arbitration obligations may survive in limited circumstances tied to awards or the specific dispute, distinguishable facts)
- Buckhorn v. St. Jude Heritage Medical Group, 121 Cal.App.4th 1401 (tests whether tort claims are rooted in contractual relationship rather than their temporal occurrence)
- Windsor Pacific LLC v. Samwood Co., Inc., 213 Cal.App.4th 263 (certain subsidiary provisions may survive termination for disputes about the original agreement; distinguishable)
- Moncharsh v. Heily & Blase, 3 Cal.4th 1 (arbitrator’s authority to decide fee allocation arising from contract disputes)
- Mleynek v. Headquarters Companies, 165 Cal.App.3d 1133 (interrelated agreements may carry arbitration clause forward when agreements expressly refer to each other)