NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

CROSKEY, J.

Meir Grubner and SF Sliding Doors Co., LLC (SF Sliding Doors), appeal the denial of their petition to compel arbitration of a complaint by The Sliding Door Company, Inc. (Sliding Door). The complaint relates to a noncompetition agreement executed in connection with a distributorship agreement and a stock purchase agreement. Interpreting the three agreements together, we conclude that the parties did not agree to arbitrate disputes relating to an alleged violation or threatened violation of the noncompetition agreement, such as the counts alleged against Grubner and SF Sliding Doors. We therefore will affirm the order denying the petition to compel arbitration.

FACTUAL AND PROCEDURAL BACKGROUND

1. Factual Background

Sliding Door manufacturers and sells sliding door products. Grubner was a shareholder in Sliding Door and is the founder and owner of SF Sliding Doors.

Sliding Door and Grubner entered into a Stock Purchase Agreement dated October 4, 2006, providing for the sale to Sliding Door of all of Grubner's common stock in Sliding Door. Sliding Door, Grubner, and SF Sliding Doors also entered into a Distribution Agreement on the same date, providing for Grubner and SF Sliding Doors to serve as exclusive distributors of Sliding Door products in Northern California and other areas for a five-year period. The Distribution Agreement also prohibits Grubner and SF Sliding Doors from participating in website sales of sliding door products except as specifically provided in the Covenant Not to Compete.1

Sliding Door, Grubner, and SF Sliding Doors also entered into a Covenant Not to Compete on October 4, 2006, prohibiting Grubner and SF Sliding Doors from engaging in any business activity in competition with Sliding Door for a five-year period. The Covenant Not to Compete also prohibits Grubner and SF Sliding Doors from participating in or assisting "any website relating to the business of the Corporation [Sliding Door]" apart from their use of the Sliding Door website as its distributors.2

The Stock Purchase Agreement contains an arbitration clause, paragraph 12, stating: "In the event that any controversy or claim arising out of this Agreement cannot be settled by the parties, such controversy or claim shall be settled by arbitration in accordance with the then current rules of the American Arbitration Association, and judgment upon the award may be entered in any court having jurisdiction thereof." Paragraph 10 of the Stock Purchase Agreement states, in relevant part, "This Agreement, along with the Distribution Agreement and Covenant Not to Compete executed concurrently herewith, constitute the whole agreement between Buyer and Seller and supersede any prior agreements."

The Distribution Agreement also contains an arbitration clause, paragraph 28, stating: "All claims, disputes between the parties hereto shall be decided by arbitration pursuant to the Commercial Arbitration Rules of the American Arbitration Association in Los Angeles, California. The prevailing party in any such dispute shall recover its actual attorney's fees, expert's fees, arbitration fees and costs and related expenses and fees reasonably incurred in the matter." Paragraph 6 of the Distribution Agreement states, in relevant part, "There are no oral or other agreements or understandings between the parties affecting this Agreement, or related to the selling or servicing of the Products. This Agreement supersedes all previous agreements between the parties." Paragraph 30 of the Distribution Agreement states, in relevant part, "This Agreement supercedes and replaces any prior negotiations, discussions, and writings between the parties hereto, all of whom acknowledge that this Agreement contains all material terms of their Agreement."

The Covenant Not to Compete contains no arbitration clause, but includes a provision for injunctive relief, paragraph 5, stating: "There being no adequate remedy at law for violation of the covenants of Consultant [Grubner and SF Sliding Doors], the Corporation [Sliding Door] shall be entitled to injunctive relief against any violation or threatened violation of said covenants together with such damages as the court shall award for each day during which such violation continues." The Covenant Not to Compete contains no integration clause.

Sliding Door notified Grubner and SF Sliding Doors in November 2009 that Sliding Door was terminating the Distribution Agreement for cause as of December 31, 2009. Sliding Door entered into a letter agreement with SF Sliding Door on January 12, 2010, providing for an assignment of the lease of the San Francisco showroom from Sliding Door to SF Sliding Doors.

2. Trial Court Proceedings

Sliding Door filed a complaint against Grubner, SF Sliding Doors, Chris Obek, and Closets, Doors and Beyond in March 2010. Sliding Door alleges that it discovered in March 2010 that Closets, Doors and Beyond was engaged in the business of selling sliding doors in direct competition with Sliding Door and that SF Sliding Doors had modified its website to direct visitors to a website for Closets, Doors and Beyond. Sliding Door alleges that Grubner and SF Sliding Doors have assisted Closets, Doors and Beyond in selling sliding doors in violation of their obligations under the Covenant Not to Compete. Sliding Door also alleges that Obek founded Closets, Doors and Beyond and that he falsely represented to Sliding Door that the new company would not be engaged in the business of selling sliding doors.

Sliding Door alleges counts for (1) breach of the Covenant Not to Compete, against Grubner and SF Sliding Doors; (2) inducement to breach the Covenant Not to Compete, against Obek and Closets, Doors and Beyond; (3) fraudulent inducement, against Obek and Closets, Doors and Beyond; and (4) unfair business practices (Bus. & Prof. Code, § 17200 et seq.), against all defendants.

All defendants jointly petitioned to compel arbitration. They argued that the Stock Purchase Agreement, Distribution Agreement, and Covenant Not to Compete were interrelated, that the claims alleged in the complaint necessarily would involve all three agreements, that the Stock Purchase Agreement stated that the three agreements "`constitute the whole agreement,'" and that the arbitration clause in the Stock Purchase Agreement therefore should govern. Sliding Door opposed the petition, arguing that the parties never agreed to arbitrate disputes relating to the Covenant Not to Compete.

The trial court stated at the hearing on the petition that the three agreements showed that the parties agreed to arbitrate any disputes in connection with the Stock Purchase Agreement or the Distribution Agreement, but they did not agree to arbitrate disputes in connection with the Covenant Not to Compete. The court stated that the provision for injunctive relief in the Covenant Not to Compete indicated that the parties instead contemplated judicial action in connection with alleged violations of the Covenant Not to Compete.

The court stated further: "Now, I will go a step further. If it is contended that the—that the dispute before me will somehow or another involve disputes that would arise under the other two agreements which do contain arbitration provisions, I decline the invitation to order the matter to arbitration under [Code of Civil Procedure section] 1281.2, subsection (c) because obviously the parties are also parties in litigation in a pending court action under this case, and I decline to enforce an arbitration agreement if it exists for that reason because arbitration will not terminate the dispute or result in a—in an entire resolution of the disputes between the parties."

The trial court entered a minute order on August 10, 2010, denying the petition to compel arbitration. Grubner and SF Sliding Doors timely appealed the order.3 Sliding Door apparently voluntarily dismissed its complaint against Obek and Closets, Doors and Beyond in September 2010.

CONTENTIONS

Grubner and SF Sliding Doors contend (1) the arbitration clauses in the Stock Purchase Agreement and the Distribution Agreement encompass this dispute because the three agreements should be interpreted as a whole; (2) even if the three agreements are not interpreted as a whole, the arbitration clause in the Distribution Agreement encompasses this dispute; (3) there are no grounds to deny the petition to compel arbitration under Code of Civil Procedure section 1281.2, subdivision (c) based on another pending court action; and (4) if the entire dispute is not arbitrable, the arbitrable claims should be severed from the nonarbitrable claims and ordered to arbitration.

DISCUSSION

1. Legal Framework

A court ruling on a petition to compel arbitration must order the parties to arbitrate a controversy if it finds that a valid agreement to arbitrate the controversy exists, unless the court determines that the petitioner has waived the right to compel arbitration, grounds exist for the revocation of the agreement, or a party to the arbitration is also a party to another pending court action or special proceeding with a third party involving the same transaction or series of transactions and there is a possibility of conflicting rulings. (Code Civ. Proc., § 1281.2; Wagner Construction Co. v. Pacific Mechanical Corp. (2007) 41 Cal.4th 19, 26.)

We review the ruling on a petition to compel arbitration de novo to the extent that the decision involves the interpretation of a contract and the interpretation does not depend on the credibility of extrinsic evidence, as here.4 (California Correctional Peace Officers Assn. v. State of California (2006) 142 Cal.App.4th 198, 204; Brookwood v. Bank of America (1996) 45 Cal.App.4th 1667, 1670.)

2. Rules of Contract Interpretation

We interpret a contract so as to give effect to the mutual intention of the contracting parties at the time the contract was formed. (Civ. Code, § 1636.) We ascertain that intention solely from the written contract if possible, but also consider the circumstances under which the contract was made and the matter to which it relates. (Id., §§ 1639, 1647.) We consider the contract as a whole and interpret its language in context so as to give effect to each provision, rather than interpret contractual language in isolation. (Id., § 1641.) We interpret words in accordance with their ordinary and popular sense, unless the words are used in a technical sense or a special meaning is given to them by usage. (Id., § 1644.) If contractual language is clear and explicit and does not involve an absurdity, the plain meaning governs. (Id., § 1638.)

Contractual language is ambiguous if it is susceptible of more than one reasonable interpretation in the context of the contract as a whole. (MacKinnon v. Truck Ins. Exchange (2003) 31 Cal.4th 635, 648.) Contract interpretation, including the resolution of any ambiguity, is solely a judicial function, unless the interpretation turns on the credibility of extrinsic evidence. (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865.)

Civil Code section 1642 is one of several Civil Code sections governing the interpretation of contracts "for the purpose of ascertaining the intention of the parties" (id., § 1637). Section 1642 states, "Several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together." This means that, in the stated circumstances, the several contracts must be interpreted together and their provisions considered in the context of the transaction as a whole. (Reigelsperger v. Siller (2007) 40 Cal.4th 574, 580; Mayers v. Loew's Inc. (1950) 35 Cal.2d 822, 827.) This does not mean, however, that the several contracts become one undifferentiated contract for all purposes. Instead, the provisions must be interpreted in context.

"Civil Code section 1642 is simply a rule to aid in the interpretation of contracts and to allow the construction of two contracts together in pursuit of that purpose. It does not . . . make two contracts one for all purposes." (Hartford Accident & Indemnity Co. v. Sequoia Ins. Co. (1989) 211 Cal.App.3d 1285, 1300.) "While it is the rule that several contracts relating to the same matters are to be construed together (Civ. Code, § 1642), it does not follow that for all purposes they constitute one contract." (Malmstedt v. Stillwell (1930) 110 Cal.App. 393, 398.)

The parties here executed three agreements contemporaneously. Although SF Sliding Doors is not a party to the Stock Purchase Agreement, its interests apparently are substantially identical to those of Grubner, who is a party to all three agreements. The Stock Purchase Agreement expressly references the other two agreements and states that the Stock Purchase Agreement, Distribution Agreement, and Covenant Not to Compete "constitute the whole agreement between Buyer [Sliding Door] and Seller [Grubner] and supersede any prior agreements."5 The Distribution Agreement also refers to the Covenant Not to Compete, which refers to the Stock Purchase Agreement. The three agreements all relate to the same general transaction involving Grubner's divestment from Sliding Door and his operating an independent distributorship. We conclude pursuant to Civil Code section 1642 that the three agreements must be interpreted together, meaning with reference to each other and considering the transaction as a whole.

3. The Parties Did Not Agree to Arbitrate Disputes in Connection with the Covenant Not to Compete

The arbitration clause in the Stock Purchase Agreement is limited to disputes "arising out of this Agreement." The word "Agreement" is used in paragraph 10 and elsewhere in the Stock Purchase Agreement to refer to the Stock Purchase Agreement alone, rather than the three agreements as a whole. We conclude that the word "Agreement" in the arbitration clause has the same meaning and that the arbitration clause is limited to disputes involving an alleged breach or enforcement of the Stock Purchase Agreement.

The arbitration clause in the Distribution Agreement states more broadly, "[a]ll claims, disputes between the parties hereto shall be decided by arbitration." This language is not limited to disputes arising out of the Distribution Agreement. Although this language may appear to suggest that the parties agreed to arbitrate disputes relating to the Covenant Not to Compete, we believe that the injunction provision in the Covenant Not to Compete, quoted ante, indicates otherwise. The injunction provision expressly states that Sliding Door is entitled to injunctive relief against any actual or threatened violation of the Covenant Not to Compete "together with such damages as the court shall award for each day during which such violation continues."

A successful plaintiff in a suit for a permanent injunction is entitled to both an injunction and damages for past injury. (Lemat Corp. v. Barry (1969) 275 Cal.App.2d 671, 679; Harvey v. White (1963) 213 Cal.App.2d 275, 281-282.) We believe that the provision for an award of damages by the court in connection with an injunction indicates that the parties intended that a court would adjudicate both the right to an injunction and any damages award in connection with an injunction.

Sliding Door seeks both an injunction and damages in its counts against Grubner and SF Sliding Doors for breach of the Covenant Not to Compete and unfair business practices. The unfair business practices count is based on alleged breaches of the Covenant Not to Compete. We conclude that the parties expressed their intention that such disputes be adjudicated by the court rather than an arbitrator. To the extent that the alleged conduct also may constitute a violation of the Distribution Agreement, we believe that the parties expressed their intention that disputes relating to an alleged violation or threatened violation of the Covenant Not to Compete be adjudicated in court, regardless of whether such disputes also may arise under some other agreement.

Absent an agreement to arbitrate these disputes, or any part of them, the trial court properly declined to compel arbitration. In light of our conclusion we need not address the contention that there are no grounds to deny the petition to compel arbitration under Code of Civil Procedure section 1281.2, subdivision (c).

DISPOSITION

The order denying the petition to compel arbitration is affirmed. Sliding Door is entitled to recover its costs on appeal.

KLEIN, P. J. and KITCHING, J., concurs.