Suggestion: Don't Wait Two Years To Bring A Motion To Compel Arbitration.
The Court of Appeal affirmed the trial court's order denying Appellants' motion to compel arbitration. Akira Kokubu, Plaintiff, Cross-defendant and Respondent, v. Takashi Sudo et al, Defendants, Cross-defendants and Respondents; Park Rolling Hills, LLC, et al., Defendants, Cross-complainants and Appellants, No. B310220 (2/8 3/30/22) (Harutunian, Grimes, Stratton).
The leading case for determining whether a party has waived the right to arbitrate is St. Agnes Medical Center v. PacifiCare of California, 31 Cal. 4th 1187 (2003). St. Agnes (the case, that is), sets forth a six-factor test for determining whether a party has waived its right to arbitrate, and also explains that no single test delineates the conduct that will constitute a waiver of the right to arbitrate.
Appellants seemed to be urging that the Court of Appeal collapse the St. Agnes factors into a single "prejudice" test, but the Court of Appeal was having none of that. St. Agnes is a California Supreme Court case. And in any case, the court had no trouble finding prejudice as a result of appellants' conduct.
Appellants took actions inconsistent with seeking the right to arbitrate. The lawsuit was filed in November 2018. The demand to arbitrate was first made in July 2019, at which time appellants also filed a cross-complaint without seeking a stay. Then they withdrew their demand to arbitrate. Not until December 2020 did they file a motion to compel arbitration. And they participated in the litigation process, including a case management conference, motion procedure, seeking ex parte relief, and participating in discovery. While there is no single test for waiver, "you snooze, you lose," might be a good place to begin.
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