St. Agnes Factors Weighted In Favor of Finding of a Waiver
The leading California case for determining whether a waiver of the right to arbitrate has occurred is St. Agnes Medical Center v. PacifiCare of California, 31 Cal.4th 1187 (2003). St. Agnes provides a multi-factor test that the court handily applied in Alspaugh v. Dunham, Case No. D09673 (4th Dist. Div. 1 June 14, 2012) (McDonald, J.) (author) (not for publication).
In Alspaugh, Plaintiffs sued Defendants claiming investment fraud. Defendants moved to compel arbitration, losing that motion in the trial court. Defendants appealed the denial, claiming the trial court erred by finding they were not required to arbitrate pursuant to the written agreements, and that they had waived any rights to enforce arbitration.
What were the critical facts resulting in a finding of waiver? Plaintiffs filed their case in February, 2009. Defendants did not file their motion to compel arbitration and stay litigation until March 23, 2011, and their actions were inconsistent with arbitration. Defendants filed multiple substitutions of attorney, bankruptcy filings, requests to continue trial, counter claims, multiple demurrers, took 40 depositions, and propounded thousands of discovery requests.
True, St. Agnes states that “the party seeking to establish a waiver bears a heavy burden of proof.” 31 Cal.4th at 1195. But a finding of waiver will usually be fact-based. Therefore, the standard of review will be whether there is substantial evidence to support the trial court’s finding of waiver.
Here, the Court of Appeal affirmed the order based on the trial court’s finding of waiver. Therefore, the court did not need to address the merits of alternative grounds for the order denying defendants’ motion to compel arbitration.
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