Berg v. Traylor
148 Cal. App. 4th 809, 56 Cal. Rptr. 3d 140 (2007)
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Rule of Law:
A minor has a statutory right to disaffirm a contract, including one containing an arbitration clause, before reaching the age of majority. Furthermore, a minor can disaffirm a subsequent judgment or arbitration award if they were not represented by a court-appointed guardian ad litem, even after statutory deadlines to challenge the award have passed.
Facts:
- On January 18, 1999, Sharyn Berg entered into an "Artist’s Manager’s Agreement" with Meshiel Cooper Traylor and her 10-year-old son, Craig Lamar Traylor.
- Meshiel signed the agreement on behalf of herself and Craig, who did not personally sign.
- The agreement made Berg the exclusive personal manager for Craig for a three-year term in exchange for a 15% commission on his gross earnings.
- The agreement contained a clause stating that any disaffirmance by Craig would not affect Meshiel's liability for commissions owed to Berg.
- The agreement also stipulated that any disputes would be resolved through binding arbitration.
- On or about June 13, 2001, Craig secured a recurring acting role on the television show 'Malcolm in the Middle.'
- On September 11, 2001, Meshiel sent a letter to Berg terminating her management services, stating they could no longer afford the commission.
Procedural Posture:
- In 2004, Sharyn Berg sued Meshiel and Craig Traylor in a state trial court for breach of contract and other claims.
- In July 2004, the parties stipulated to submit the matter to binding arbitration.
- An arbitration hearing was held on February 7, 2005; Craig did not appear, and the arbitrator treated the matter as a default against him.
- On February 11, 2005, the arbitrator issued an award in favor of Berg against both Meshiel and Craig.
- On July 8, 2005, Berg filed a petition in the trial court to confirm the arbitration award.
- On August 18, 2005, the Traylors filed a petition to vacate the arbitration award, which the trial court denied as untimely.
- The trial court granted Berg's petition and entered a judgment confirming the arbitration award.
- Meshiel and Craig Traylor (appellants) appealed the judgment to the California Court of Appeal. Sharyn Berg is the respondent.
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Issue:
Does a minor have the right to disaffirm an arbitration award and the underlying contract containing the arbitration clause, even after the statutory deadline to vacate the award has passed, when the minor was not represented by a court-appointed guardian ad litem during the proceedings?
Opinions:
Majority - Doi Todd, J.
Yes, a minor has the right to disaffirm both the underlying contract and a subsequent arbitration award under these circumstances. Under California Family Code § 6710, a minor has a statutory right to disaffirm contracts to protect them from their own improvidence and the designs of others. This right is not negated by a parent's signature when the minor is a principal party to the contract, and none of the statutory exceptions, such as contracts for necessities, apply to a personal management agreement. Additionally, under Code of Civil Procedure § 372, a minor who is a party to a lawsuit must be represented by a court-appointed guardian ad litem. The failure to appoint a guardian ad litem, especially where an inherent conflict of interest exists between the parent and the minor, renders the resulting judgment voidable. This right to disaffirm the judgment continues throughout the minor's minority and is not barred by statutory deadlines for challenging an arbitration award.
Analysis:
This decision strongly reaffirms the robust legal protections afforded to minors in both contractual and litigation settings. It clarifies that a parent's signature on a contract where the minor is a principal obligor does not waive the minor's fundamental right to disaffirm. The ruling also underscores the critical, non-waivable requirement for courts to appoint a guardian ad litem to protect a minor's interests in litigation, particularly when a conflict of interest with a parent is present. This precedent serves as a significant caution to those who contract with minors and litigate against them, establishing that procedural deadlines will not cure a fundamental failure to protect a minor's rights, rendering resulting judgments vulnerable to being voided.
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