Metropolitan News-Enterprise


Wednesday, January 2, 2002


Page 1


Court Allows Ex-Aide to Proceed With Suit Against A’s Owner


By a MetNews Staff Writer


A lawyer and former top aide to Oakland Athletics’ co-owner Steve Schott can sue his ex-boss for breach of contract because Schott waited too long to demand arbitration, the First District Court of Appeal has ruled.

The justices Friday rejected Schott’s appeal from an order denying his petition to compel arbitration of one of several causes of action which Edward Alvarez is pursuing in Alameda Superior Court. Justice Timothy Reardon authored the unpublished opinion for Div. Four.

Alvarez is an attorney who has known Schott for 45 years. He began representing Schott in 1981 and left a partnership to work for Schott full-time eight years later.

He helped negotiate the 1995 deal in which Schott and fellow real estate developer Kenneth Hofmann bought the American League franchise for $72 million and was described as Schott’s “right-hand man” before the two had a falling out.

Alvarez claims that Schott reneged on promises of equity interests in two of Schott’s companies—SCS Development Co. and Bay Area Sports Catering, a food service company formed in 1996. He also claims that Schott misrepresented the value of a real estate development project in which Schott bought out his interest in 1997.

Alvarez suit Schott, SCS, Bay Area Sports Catering, and the Athletics in April of last year. In July, defense counsel wrote to Alvarez’s attorney, claiming that the cause of action related to Bay Area Sports Catering was subject to an arbitration agreement signed in 1997.

Schott’s lawyers later pled an affirmative defense based on the arbitration agreement, and petitioned last March to compel arbitration. Alvarez’s counsel responded that Schott waived his right to arbitration, and the trial judge agreed, although Alvarez’s contention that his claim was outside the scope of the arbitration agreement was rejected. 

The appellate panel agreed with the trial judge on both issues.

Schott and Bay Area Sports Catering, Reardon wrote, “engaged in extensive discovery regarding the seventh cause of action while unreasonably delaying seeking to compel arbitration.”

The jurist rejected the contention that Alvarez wasn’t prejudiced, with respect to the Bay Area Sports Catering issues, by the extensive discovery because little of it related to that particular cause of action.

Under California law, Reardon explained, a party that wishes to engage in discovery on non-arbitrable issues must move for arbitration early, waive arbitration, or move to sever the claims.

Nor can Schott avoid application of the general rule on the ground that and much of the discovery was requested by the A’s, rather than by Schott or Bay Area Sports Catering.

“Viewing the complaint as a whole, we again find that the various defendants are intimately intertwined, and for the purposes of this litigation controlled by Schott,” the justice wrote. Having the baseball club, rather than another party, initiate discovery requests was no more than “gamesmanship,” Reardon wrote.

The case is Alvarez v. Bay Sports Catering, LLC, A095372.


Copyright 2002, Metropolitan News Company