Opinion
B325024
04-09-2024
ARINA BUILDERS, Plaintiff and Respondent, v. 1999 SYCAMORE, LLC, Defendant and Appellant.
Law Offices of Randy S. Snyder and Randy S. Snyder for Defendant and Appellant. Law Office of Gerald Philip Peters and Gerald P. Peters for Plaintiff and Respondent.
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County No. 20STCV30039 Maurice Leiter, Judge. Affirmed.
Law Offices of Randy S. Snyder and Randy S. Snyder for Defendant and Appellant.
Law Office of Gerald Philip Peters and Gerald P. Peters for Plaintiff and Respondent.
EDMON, P. J.
Defendant 1999 Sycamore, LLC (Sycamore) appeals from an order denying a petition to compel arbitration, solely contending the trial court erred by finding Sycamore had waived the right to arbitrate. Under California law, a party may waive the right to compel arbitration if it unreasonably delays seeking arbitration, engages in conduct inconsistent with an intent to arbitrate, and prejudices its opponent as a result. We affirm because substantial evidence supported the trial court's finding that all three factors were present here.
FACTUAL AND PROCEDURAL BACKGROUND
I. Background.
Plaintiff Arina Builders (Arina) is a licensed general contractor. In May 2016, Arina contracted with Sycamore to construct improvements on Sycamore's commercial property, which contained a restaurant and hotel (the property). Between June 2016 and July 2020, Arina and Sycamore entered into several change order contracts for additional work on the property.
Each of the contracts between Arina and Sycamore contained an identical arbitration clause, which stated as follows: "Any controversy or claim arising out of or relating to this Contract or its alleged breach, which cannot be resolved by mutual agreement, shall be settled by arbitration in accordance with JAMS Rules in effect on the date of the Contract, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction. Owner [Sycamore] and Contractor [Arina] agree that, should Contractor be potentially or actually a party to a lawsuit or arbitration arising out of or connected to this Contract, Owner shall appear in, and be bound by the decision in, that lawsuit or arbitration. The prevailing party in any action or proceeding to enforce this Contract shall recover its reasonable attorney's fees and costs (including expert witnesses) in that action or proceeding."
In August 2020, Arina filed the present action against Sycamore and several associated parties (collectively, efendants). The complaint alleged that the total contract price was $1,051,545, of which Sycamore had paid only $564,859. Sycamore had represented it would pay the past-due balance but never did so. Arina asserted causes of action for intentional misrepresentation and false promise against all defendants, and foreclosure on a mechanic's lien, breach of contract, common counts, and violation of Civil Code section 8800 against Sycamore.
The associated parties are Sycamore's general manager, CSM Sycamore, LLC (CSM); CSM's sole member, Capital Stone Management, Inc. (Capital); and Sycamore agents Robert Haro, R. Douglas Spiro, Freddy Baridy, and Cole Harris.
Arina filed an amended complaint in late August 2020. In October 2020, defendants filed an answer to the amended complaint that asserted a variety of affirmative defenses, but did not assert a right to arbitration. Simultaneously, defendants filed a cross-complaint against Arina for breach of contract.
In December 2020 and August 2021, defendants filed case management statements, and in January, August, and December 2021, they appeared for three case management conferences.
Arina filed the operative second amended complaint (SAC) in January 2022. The SAC named additional defendants and several additional causes of action. Defendants answered the SAC in February 2022, but again did not assert a right to arbitrate.
We do not discuss these additional defendants any further because they are not relevant to any appellate issues.
Arina propounded written discovery on defendants in 2021 and 2022, and had to file six motions to compel responses, to which defendants filed six oppositions. In March 2022, defendants filed a motion to quash subpoenas; in May 2022, the parties stipulated to a trial continuance; in July 2022, the parties participated in an informal discovery conference; and in September 2022, Sycamore stipulated to serve amended discovery responses. In October 2022, defendants filed another motion to quash subpoenas.
II. Petition to compel arbitration.
In October 2022, defendants filed a petition to compel arbitration. As of that time, trial was set for January 9, 2023. Defendants asserted that each of Arina's claims arose out of the contracts between Arina and Sycamore, which required disputes to be resolved by arbitration. They further asserted that CSM, Capital, and the individual defendants would agree to participate in arbitration even though they were not parties to the arbitration agreements. Finally, defendants contended they did not waive the right to arbitrate because the court had not yet resolved the merits of the arbitrable issues, and the delay in seeking arbitration had not prejudiced Arina. Defendants therefore urged the court to order the matter to arbitration or, in the alternative, stay the court action pending the outcome of arbitration.
Arina opposed the petition to compel arbitration. It urged the petition should be denied because (1) defendants had not sought to compel arbitration when they answered the complaint; (2) defendants unreasonably delayed seeking arbitration by filing the petition to compel more than two years after the complaint was filed and just three months before the case was set to go to trial; and (3) Arina would be unfairly prejudiced if the petition were granted. Arina noted that trial was set for January 2023, and compelling arbitration would delay the proceedings. Further, defendants had acted inconsistently with an intent to arbitrate by filing oppositions to Arina's discovery motions, participating in case management conferences, and filing motions to quash subpoenas. Finally, only Sycamore was a party to the arbitration agreement, and thus ordering arbitration would require Arina to simultaneously litigate related claims in two different forums and create a significant risk of inconsistent judgments.
The trial court denied the petition to compel arbitration. It explained: "Plaintiff contends that Defendants have waived their right to arbitrate because they delayed in seeking arbitration and the litigation machinery has been invoked. The Court agrees. As noted, the case was filed in August 2020. Defendants waited more than two years-to October 2022-to bring this petition; Defendants did not seek arbitration in their answers or case management statements; [and] Sycamore filed a cross-complaint against Plaintiff in October 2020. The parties have engaged in extensive litigation. There have been three case management conferences; Defendants opposed six discovery motions brought by Plaintiff; Defendants brought two motions to quash; Defendants participated in an informal discovery conference; and Defendants have responded to or objected to 40 sets of written discovery. Trial had been set for August 2022. In May 2022 the parties stipulated to continue the trial; it is now set for January 9, 2023. [¶] In opposition, Defendant asserts that the delay in bringing this motion was due to continued efforts to settle. Defendant also argues that prejudice is not a factor in determining waiver under the [Federal Arbitration Act (FAA)], citing to Morgan v. Sundance, 142 S.Ct. 1708 (2022). Under the FAA, it is the moving party's conduct that matters. (Id. at 1714.) The Court has considered the St. Agnes Medical Center factors . . . . Defendants' conduct has established waiver."
Sycamore timely appealed from the order denying the petition to compel arbitration.
DISCUSSION
Sycamore contends the trial court erred by denying the petition to compel arbitration because: (1) Sycamore's delay in seeking arbitration did not constitute a waiver; (2) prejudice is irrelevant to a waiver analysis under federal law; and (3) in any event, Arina was not prejudiced by Sycamore's delay. As we discuss, Sycamore's contentions lack merit.
I. Standard of review.
In the arbitration context, "[g]enerally, the determination of waiver is a question of fact, and the trial court's finding, if supported by sufficient evidence, is binding on the appellate court. [Citations.] 'When, however, the facts are undisputed and only one inference may reasonably be drawn, the issue is one of law and the reviewing court is not bound by the trial court's ruling.'" (St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1196 (St. Agnes).)
The parties agree that the foregoing accurately states the applicable standard of review, but they disagree about its application here. Sycamore urges we should independently review the order denying its petition because the relevant facts are not in dispute. Arina contends the substantial evidence standard of review applies, and thus we may reverse only if the facts compel reversal as a matter of law.
Arina is correct. As another appellate court explained in a similar case: "Here, the essential facts may not be in dispute, in the sense that no one doubts that party X did or did not do act Y on date Z. Nevertheless, even if there is no difference in opinion on such events or nonoccurrences, the inferences to be drawn from the essential facts are conflicting. And where conflicting inferences may be drawn, the issue is reduced to whether the trial court's finding of waiver is supported by substantial evidence." (Davis v. Shiekh Shoes, LLC (2022) 84 Cal.App.5th 956, 962-963 (Davis).) Accordingly, we will review the trial court's order for substantial evidence-that is, we will" 'infer all necessary findings supported by substantial evidence [citations] and "construe any reasonable inference in the manner most favorable to the [ruling], resolving all ambiguities to support an affirmance." '" (Id. at p. 963.)
II. Governing Law.
The defendants cited exclusively California law in their petition to compel arbitration, but on appeal Sycamore urges that the FAA applies. We disagree.
A. The FAA does not govern the present dispute.
Until very recently, state and federal law governing arbitration waivers was essential identical. Under the FAA as interpreted by eight federal circuit courts, a party to an arbitration agreement waived the right to arbitrate by both acting inconsistently with the right to arbitrate and prejudicing the other party by its actions. (See generally Morgan v. Sundance, Inc. (2022) 596 U.S. 411, 419 (Morgan) [summarizing cases].) The standard for waiver under the California Arbitration Act (CAA) was adopted from a federal court opinion and is substantially similar. (See St. Agnes, supra, 31 Cal.4th at p. 1195 [state waiver rules "are in accord" with federal rules]; Davis, supra, 84 Cal.App.5th at pp. 964-965 [St. Agnes waiver test "substantially similar to the test adopted by most federal circuit courts"].)
Recently, in Morgan, supra, 596 U.S. at p. 419, the United State Supreme Court held that because the usual federal rule of waiver does not include a prejudice requirement, "prejudice is not a condition of finding that a party, by litigating too long, waived its right to stay litigation or compel arbitration under the FAA." The Supreme Court explained that while federal law favors arbitration, it "does not authorize federal courts to invent special, arbitration-preferring procedural rules." (Id. at p. 418.) Instead, a court "must hold a party to its arbitration contract just as the court would to any other kind." (Ibid.)
The California Supreme Court recently granted review in Quach v. California Commerce Club, Inc. (2022) 78 Cal.App.5th 470 (review granted Aug. 24, 2022, S275121), to consider whether California's test for determining waiver remains valid after the United States Supreme Court's decision in Morgan. Pending a decision in Quach, prejudice remains an element of the arbitration waiver analysis under California law. (See Auto Equity Sales v. Superior Court (1962) 57 Cal.2d 450, 455.)
Sycamore urges that the trial court erred by considering evidence of prejudice to Arina because the FAA governs the present dispute. However, Sycamore has provided no legal or factual support for the suggestion that the FAA applies, and the contention thus is forfeited. (E.g., Save Agoura Cornell Knoll v. City of Agoura Hills (2020) 46 Cal.App.5th 665, 704, fn. 14 [on appeal, party asserting trial court error must present argument and legal authority on each point raised; if appellant raises an issue but fails to support it with reasoned argument and citations to authority," '" 'we treat the point as waived'"' "]; Public Employment Relations Bd. v. Bellflower Unified School Dist. (2018) 29 Cal.App.5th 927, 939 ["absence of cogent legal argument or citation to authority allows this court to treat the contention as waived"].)
Sycamore appears to believe that the federal waiver standard set forth in Morgan is more favorable to its appeal than the state standard set forth in St. Agnes. Precisely the opposite is true: Under St. Agnes, we may affirm the trial court's order denying the petition to compel arbitration only if we find substantial evidence both that Sycamore has made an untimely demand for arbitration and that Arina has thereby been prejudiced, while under Morgan, we may affirm even in the absence of any evidence of prejudice.
Sycamore asserts that Arina has conceded the FAA applies, but the portions of the record it cites do not support that conclusion.
In any event, Sycamore's claim that the FAA applies fails on the merits. By its terms, the FAA governs contractual arbitration in written contracts involving interstate or foreign commerce (9 U.S.C., §§ 1, 2); since arbitration is a matter of contract, the FAA may also apply if an arbitration agreement so states (Davis, supra, 84 Cal.App.5th at p. 963; Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 355). In the present case, Sycamore has not demonstrated that the parties' dispute arises out of interstate commerce. To the contrary, the SAC alleges that both Sycamore and Arina are California entities and that the dispute concerns the construction of improvements on a Los Angeles property. Moreover, none of the contracts have a choice of law provision or reference the FAA. Accordingly, we will evaluate Sycamore's alleged waiver under state law, not the FAA.
B. Waiver principles under CAA.
The CAA (Code Civ. Proc., §§ 1280 et seq.) "sets forth 'a comprehensive statutory scheme regulating private arbitration in this state.' (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9 (Moncharsh).)" (Mendoza v. Trans Valley Transport (2022) 75 Cal.App.5th 748, 761.) Under California law, "[a] written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract." (§ 1281.) On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that, among other things, "[t]he right to compel arbitration has been waived by the petitioner." (§ 1281.2, subd. (a).)
All subsequent undesignated statutory references are to the Code of Civil Procedure.
" 'Although the statute[s and case law] speak[ ] in terms of "waiver," the term is used" 'as a shorthand statement for the conclusion that a contractual right to arbitration has been lost.'" [Citation.] This does not require a voluntary relinquishment of a known right; to the contrary, a party may be said to have "waived" its right to arbitrate by an untimely demand, even without intending to give up the remedy. In this context, waiver is more like a forfeiture arising from the nonperformance of a required act.'" (Lewis v. Fletcher Jones Motor Cars, Inc. (2012) 205 Cal.App.4th 436, 444 (Lewis), quoting Burton v. Cruise (2010) 190 Cal.App.4th 939, 944 (Burton).)
In St. Agnes, supra, 31 Cal.4th at pages 1187, 1195, our Supreme Court held that the following factors are relevant to determining whether a party has waived the right to arbitrate:"' "(1) whether the party's actions are inconsistent with the right to arbitrate; (2) whether 'the litigation machinery has been substantially invoked' and the parties 'were well into preparation of a lawsuit' before the party notified the opposing party of an intent to arbitrate; (3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay; (4) whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings; (5) 'whether important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place'; and (6) whether the delay 'affected, misled, or prejudiced' the opposing party." '" Subsequent appellate cases have collapsed the St. Agnes factors into three general categories: (1) unreasonable delay; (2) conduct inconsistent with an intent to arbitrate, and (3) resulting prejudice. (See Lewis, supra, 205 Cal.App.4th at pp. 445-453; Desert Regional Medical Center, Inc. v. Miller (2022) 87 Cal.App.5th 295, 317-322; Davis, supra, 84 Cal.App.5th at pp. 967-970.)
III. Substantial evidence supports the trial court's conclusion that defendants waived the right to compel arbitration.
A. Unreasonable delay.
Although state law reflects a public policy favoring arbitration as a speedy and relatively inexpensive means of dispute resolution, "a party waives a contractual right to arbitrate by failing to promptly enforce this right after a lawsuit has been brought in court. [Citations.] '[A] party that wishes to pursue arbitration must take" 'active and decided steps to secure that right'" because an arbitration agreement" 'is not . . . self-executing.'" [Citation.] "Mere announcement of the right to compel arbitration is not enough. To properly invoke the right to arbitrate, a party must (1) timely raise the defense and take affirmative steps to implement the process, and (2) participate in conduct consistent with the intent to arbitrate the dispute. Both of these actions must be taken to secure for the participants the benefits of arbitration."' (Fleming Distribution Co. v. Younan (2020) 49 Cal.App.5th 73, 80-81.)" (Leger v. R.A.C. Rolling Hills L.P. (2022) 84 Cal.App.5th 240, 246 (Leger); see also Lewis, supra, 205 Cal.App.4th at pp. 445-446 [party seeking arbitration" 'ha[s] the responsibility to "timely seek relief either to compel arbitration or dispose of the lawsuit, before the parties and the court have wasted valuable resources on ordinary litigation"' "].) Thus," 'a party's unreasonable delay in demanding or seeking arbitration, in and of itself, may constitute a waiver of a right to arbitrate.'" (Lewis, supra, 205 Cal.App.4th at p. 446; see also Davis, supra, 84 Cal.App.5th at p. 967 [defendant's "lengthy delay in moving to compel arbitration cannot be squared with an intent to arbitrate"]; Sobremonte v. Superior Court (1998) 61 Cal.App.4th 980, 992 (Sobremonte) ["a party who does not demand arbitration within a reasonable time is deemed to have waived the right to arbitration"].)
Where no deadline for demanding arbitration is specified in the agreement, what constitutes a reasonable time to demand arbitration"' "is a question of fact, depending on the situation of the parties, the nature of the transaction, and the facts of the particular case." '" (Leger, supra, 84 Cal.App.5th at p. 246; Sobremonte, supra, 61 Cal.App.4th at pp. 992-993.)
Here, more than two years elapsed from the time Arina commenced this action until Sycamore filed its petition to compel arbitration. Courts have found far shorter delays between the filing of a complaint and a petition to compel arbitration to be unreasonable. (E.g., Guess?, Inc. v. Superior Court (2000) 79 Cal.App.4th 553, 556, 557 (Guess) [less than four months between filing of complaint and petition to compel arbitration]; Lewis, supra, 205 Cal.App.4th at p. 446 [four months]; Kaneko Ford Design v. Citipark, Inc. (1988) 202 Cal.App.3d 1220, 1228- 1229 [five and a half months]; Adolph v. Coastal Auto Sales, Inc. (2010) 184 Cal.App.4th 1443, 1451-1452 (Adolph) [six months]; Augusta v. Keehn & Associates (2011) 193 Cal.App.4th 331, 338 [six and a half months]; Hoover v. American Income Life Ins. Co. (2012) 206 Cal.App.4th 1193, 1205 (Hoover) [12 months]; Davis, supra, 84 Cal.App.5th at p. 968 [17 months].) Moreover, Sycamore offered no explanation for its delay in seeking arbitration. (See Augusta, at p. 338 [defendant's failure to offer explanation for delay was relevant to finding that delay was unreasonable]; Lewis, at pp. 446-448 [same].) Substantial evidence thus supported the trial court's conclusion that Sycamore's delay in seeking to compel arbitration was unreasonable.
B. Acts inconsistent with the right to arbitrate.
" 'A waiver of the right to arbitrate may properly be implied from any conduct which is inconsistent with the exercise of that right. [Citation.] Partial or piecemeal litigation of issues in dispute, through pretrial procedures, may in many instances justify a finding of waiver . . . .' [Citation.] 'The trial court must . . . view the litigation as a whole and determine if the parties' conduct is inconsistent with a desire to arbitrate.'" (Lewis, supra, 205 Cal.App.4th at pp. 448-449.) Thus, "[a]though participation in litigation of an arbitrable claim does not itself waive a party's right later to seek arbitration, at some point, litigation of the issues in dispute justifies a finding of waiver." (Hoover, supra, 206 Cal.App.4th at p. 1204, italics added.)
In Lewis, supra, 205 Cal.App.4th at page 449, the court held that the defendant acted inconsistently with an intent to arbitrate by demurring to the plaintiff's complaint, responding to plaintiff's discovery requests without raising the arbitration provision, and forcing the plaintiff to file motions to compel in order to obtain adequate discovery responses. Similarly, in Adolph, supra, 184 Cal.App.4th at page 1451, the court found the defendant's conduct inconsistent with an intent to arbitrate where it filed two demurrers, accepted and contested discovery requests, and engaged in efforts to schedule discovery. And, in Guess, supra, 79 Cal.App.4th at pages 558-559, the court found the defendant's conduct inconsistent with the right to arbitrate where the defendant objected to the plaintiff's interrogatories and demands for document production on a variety of grounds but did not plead its purported right to arbitrate as an affirmative defense, thus "remain[ing] mute on the subject of arbitration but vocal, in court and out, on the subject of its other objections to Guess's discovery demands."
Defendants' litigation conduct in the present case is analogous to that of the defendants in Lewis, Adolph, and Guess. During the 26 months between Arina's filing of the complaint and the filing of the petition to compel arbitration, defendants filed a cross-complaint against Arina for breach of contract; filed answers to Arina's first and second amended complaints without asserting a right to arbitrate; filed motions to quash subpoenas; forced Arina to file six discovery motions to obtain complete discovery responses; and filed oppositions to Arina's discovery motions. In short, as in the cases discussed above, defendants used the machinery of litigation to assert their own claims against Arina and to oppose Arina's discovery requests while "remain[ing] mute on the subject of arbitration." (Guess, supra, 79 Cal.App.4th at p. 558.)
Sycamore asserts that Arina's evidence in opposition to the petition to compel arbitration was too conclusory to support a finding in its favor, but we do not agree. Contrary to Sycamore's contention, Arina did not rely exclusively on the declaration of Jeff Davani in opposition to the petition to compel arbitration-it also submitted the declaration of attorney Theresa Becerra, which described in detail the parties' filings and discovery disputes and authenticated six exhibits.
Citing Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180, Sycamore suggests that the only litigation conduct sufficient to waive the right to arbitrate is "going to trial." Doers did not so hold. To the contrary, Doers held that "the mere filing of a lawsuit does not waive contractual arbitration rights." (Id. at p. 188.) That holding has no application here, where the trial court did not find waiver based on the filing of an action by Sycamore, but instead considered Sycamore's conduct over the course of 26 months, of which filing a cross-complaint was just one factor.
For the foregoing reasons, therefore, substantial evidence supported the trial court's conclusion that Sycamore's conduct was inconsistent with an intent to arbitrate.
C. Prejudice.
"' "In California, whether or not litigation results in prejudice also is critical in waiver determinations." [Citation.] "The moving party's mere participation in litigation is not enough; the party who seeks to establish waiver must show that some prejudice has resulted from the other party's delay in seeking arbitration." '" (Lewis, supra, 205 Cal.App.4th at p. 451.)
" '[C]ourts assess prejudice with the recognition that California's arbitration statutes reflect" 'a strong public policy in favor of arbitration as a speedy and relatively inexpensive means of dispute resolution'" and are intended" 'to encourage persons who wish to avoid delays incident to a civil action to obtain an adjustment of their differences by a tribunal of their own choosing.'" [Citation.] Prejudice typically is found only where the petitioning party's conduct has substantially undermined this important public policy or substantially impaired the other side's ability to take advantage of the benefits and efficiencies of arbitration.' (St. Agnes, supra, 31 Cal.4th at p. 1204.) . . . '[A] petitioning party's conduct in stretching out the litigation process itself may cause prejudice by depriving the other party of the advantages of arbitration as an 'expedient, efficient and cost-effective method to resolve disputes."' (Burton, supra, 190 Cal.App.4th at p. 948.)" (Lewis, supra, 205 Cal.App.4th at p. 452.)
Substantial evidence supports the trial court's conclusion that defendants' delay in seeking arbitration prejudiced Arina by denying it of the speed and efficiency of arbitration. Notably, the JAMS arbitration rules provide for prompt and voluntary exchanges of discovery-that is:
• "The parties shall cooperate in good faith in the voluntary and informal exchange of all non-privileged documents and other information . . . relevant to the dispute or claim immediately after commencement of the Arbitration" (Rule 17(a));
• "As they become aware of new documents or information, including experts who may be called upon to testify, all Parties continue to be obligated to provide relevant, non-privileged documents to supplement their identification of witnesses and experts" (Rule 17(c)); and
• If a dispute exists regarding discovery issues, "[a] conference shall be arranged with the Arbitrator, either by telephone or in person, and the Arbitrator shall decide the dispute" (Rule 17(d)). (<https://www.jamsadr.com/rules-comprehensive-arbitration/#Rule-1 [as of April 5, 2024], archived at <https://perma.cc/CJ4W-XNSP>.)
Had arbitration been initiated promptly, therefore, Arina would have been entitled to obtain discovery from defendants without propounding discovery requests, and it could have sought to have discovery disputes resolved informally by the arbitrator, without the need to file repeated motions. Instead, because of defendants' delay in seeking arbitration, Arina had to propound formal discovery requests, and when defendants' responses proved inadequate, to file motions to deem requests for admissions admitted and motions to compel responses to interrogatories and requests for production, all of which defendants opposed. Arina then had to appear at four hearings and one informal discovery conference in connection with these motions. In total, resolution of these discovery disputes spanned approximately a year, from October 2021 to October 2022, significantly delaying the resolution of this litigation.
As other courts have noted," '[t]he critical factor in demonstrating prejudice is whether the party opposing arbitration has been substantially deprived of the advantages of arbitration as a"' "speedy and relatively inexpensive" '" means of dispute resolution. [Citation.]' (Burton, supra, 190 Cal.App.4th at p. 948.)" (Lewis, supra, 205 Cal.App.4th at p. 452.) The trial court did not err by concluding that defendants' litigation conduct-and specifically its responses to Arina's discovery requests-deprived Arina of that right.
Sycamore asserts that the trial court's finding of prejudice is inconsistent with the Supreme Court's holding in St. Agnes, where the Supreme Court reversed the trial court's finding that the defendant had waived its right to contractual arbitration. Not so. In St. Agnes, the defendant filed a petition to compel arbitration just three months after the plaintiff filed its complaint, and four months after the defendant filed its own complaint against the plaintiff. (St. Agnes, supra, 31 Cal.4th at p. 1193.) The court held that "the mere filing of a lawsuit does not waive contractual arbitration rights," and the defendant could not establish prejudice because no discovery had yet occurred and the parties had not litigated the substance of the claims. (Id. at p. 1200, italics added; see also id. at p. 1204.) Here, in contrast, more than two years elapsed between the filing of the action and defendants' petition to compel arbitration, and by Sycamore's own admission, "significant written discovery has been propounded and responded to." The trial court's finding here does not run afoul of the Supreme Court's holding in St. Agnes.
DISPOSITION
The order denying the petition to compel arbitration is affirmed. Arina is awarded its appellate costs.
We concur: LAVIN, J., ADAMS, J.