Filed 11/13/15 Edwards v. J.K. Residential Services CA2/1
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                  DIVISION ONE


DEBRA EDWARDS,                                                       B258799

         Plaintiff and Respondent,                                   (Los Angeles County
                                                                     Super. Ct. No. BC500655)
         v.

J.K. RESIDENTIAL SERVICES, INC.,

         Defendant and Appellant.



         APPEAL from an order of the Superior Court of Los Angeles County. Yvette M.
Palazuelos, Judge. Affirmed.
         Law Offices of Kevin B. Jones, Kevin B. Jones and Karen E. Nakon for Defendant
and Appellant.
         Eisenberg & Associates, Michael B. Eisenberg and Joseph Socher for Plaintiff and
Respondent.
                                 _________________________________
       J.K. Residential Services, Inc. (J.K.) appeals from the trial court’s order denying
its petition to compel arbitration, which it filed 17 months after plaintiff Debra Edwards
filed suit and 16 months after it was served with process and began litigating the action.
The trial court concluded J.K. waived its right to arbitration. We affirm.
                                      BACKGROUND
       J.K. employed Edwards as a property manager at one of its apartment complexes
in Los Angeles from May 24, 2010, through May 24, 2011. Edwards was then promoted
to a supervisory position with responsibility for multiple complexes. In June of 2012, she
took pregnancy leave. When she attempted to return to work in October of 2012, J.K.
assigned her to a position in San Bernardino, then terminated her.
       Edwards filed suit on February 6, 2013, alleging, inter alia, pregnancy
discrimination and retaliation for requesting and using pregnancy leave. On March 14,
2013, J.K. filed a peremptory challenge to the assigned judge pursuant to Code of Civil
Procedure section 170.6 and a motion to quash service. J.K. filed its answer to the
complaint on April 19, 2013, pleading 22 affirmative defenses, the second of which
asserted that a contractual provision required arbitration.
       On July 19, 2013, J.K. posted jury fees. On July 22, 2013, and then again on
August 16, 2013, J.K. filed case management statements in which it requested a jury trial
and estimated the trial would last five to seven days. J.K.’s case management statement
further indicated that J.K. planned to complete discovery by April 2014 and planned to
file a motion for summary judgment. J.K. did not check any boxes pertaining to
arbitration in the section of the form pertaining to alternative dispute resolution, but it did
check boxes indicating it was amenable to mediation and a settlement conference.
Nothing on J.K.’s case management statement indicated in any way that J.K. wanted to
arbitrate Edwards’s claims.
       On August 28, 2013, J.K. participated in a case management conference and
agreed to a trial date of September 8, 2014. J.K. does not claim, and the record does not




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suggest, that it informed the court during the conference it planned to invoke a
contractual right to arbitrate.
       Thereafter, according to the declaration of Edwards’s attorney filed with her
opposition to the motion to compel arbitration, J.K. “served several sets of written
discovery, took Plaintiff’s deposition, and served a request for a medical examination;
[J.K.] responded to several sets of Plaintiff’s discovery requests and . . . appeared for 3
depositions of [its] own employees; [J.K.] opposed Plaintiff’s motion to compel over a
number of [its] interrogatory responses; [J.K.] served a number [of] subpoenas and
participated in the motion process related to those subpoenas by opposing Plaintiff’s
motion to quash.” The declaration also states, “In none of [J.K.’s] discovery responses or
opposition documents filed did [it] ever assert that [it was] objecting due to any alleged
arbitration agreement.” J.K. does not dispute the accuracy of these statements. Los
Angeles County Superior Court case summary printouts submitted in each party’s
appellate appendix reflect that in April and June of 2014, J.K. filed written oppositions,
including separate statements, to Edwards’s motions to compel further responses to
special interrogatories and motion to quash subpoenas.
       On July 17, 2014, J.K. filed a motion to compel arbitration, set for hearing on
August 26, 2014, on the basis of two different arbitration provisions in employment-
related forms Edwards signed, the first when she began working for J.K. in 2010 and the
second in 2011 after J.K. changed “employer services” administrators. The terms of the
two arbitration provisions differ, yet J.K.’s motion did not indicate which it wanted to
enforce. Even on appeal, J.K. has not elected between them.
       One week after filing its motion to compel arbitration, J.K. applied ex parte to
advance the hearing date on its motion to compel arbitration to August 8, 2014, the
motion cutoff date, and to continue the trial date by 60 days. Edwards opposed the
application, which the court granted in part by vacating the trial date and scheduling a
trial setting conference on July 31, 2014. At that trial setting conference, the court set a
new trial date of May 4, 2015.



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       Edwards opposed the motion to compel arbitration on the grounds J.K. waived its
right to arbitrate by actively litigating the action for so long and both agreements were
unconscionable.
       The trial court found J.K. had waived its right to arbitration and therefore denied
J.K.’s motion on that ground, without addressing unconscionability. The court explained
that J.K.’s “actions since the filing of the lawsuit,” including serving and responding to
discovery, posting jury fees, and participating “in a case management conference at
which it agreed to a trial date,” were inconsistent with the right to arbitrate and instead
demonstrated that J.K. was “preparing for litigation and trial, not arbitration.” The court
noted J.K. had not explained why it “waited 17 . . . months to move to compel
arbitration.” For the same reasons, the court concluded “the ‘litigation machinery’ in this
matter has been substantially invoked and the parties are well into preparation of this
lawsuit,” and J.K. “delayed requesting arbitration for a long period” and “filed this
[motion] less than two months before the original trial date of September 8, 2014.” The
trial court also found that both parties had engaged in discovery “not normally available
in arbitration,” and “[a]s a result, Plaintiff may have disclosed trial tactics and other
strategies that she would not have been required to disclose in arbitration.” It further
noted, “The extent of discovery taken weighs in favor of a finding of waiver.” Finally,
the trial court concluded Edwards was prejudiced by J.K.’s conduct and delay because it
necessitated continuing the trial date and J.K. had used judicial discovery processes to
gain information about Edwards’s case that it could not have gained in arbitration.
       J.K. filed a timely appeal.
                                       DISCUSSION
1.     Denial of motion to compel arbitration
       a.     Principles regarding waiver of arbitration
       A party to an arbitration agreement may petition the trial court to compel
arbitration where another party to the arbitration agreement refuses to arbitrate a
controversy. (Code Civ. Proc., § 1281.2.) The trial court “shall order the petitioner and



                                               4
the respondent to arbitrate the controversy if it determines that an agreement to arbitrate
the controversy exists, unless it determines that: [¶] (a) The right to compel arbitration
has been waived by the petitioner . . . .” (Ibid.)
       “[N]o single test delineates the nature of the conduct that will constitute a waiver
of arbitration.” (Saint Agnes Medical Center v. PacifiCare of California (2003)
31 Cal.4th 1187, 1195 (Saint Agnes).) Nonetheless, courts can consider the following
factors: “‘(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.’” (Sobremonte v. Superior Court
(1998) 61 Cal.App.4th 980, 992 (Sobremonte), quoted with approval in Saint Agnes, at
p. 1196.) “‘The trial court must . . . view the litigation as a whole and determine if the
parties’ conduct is inconsistent with a desire to arbitrate.’” (Lewis v. Fletcher Jones
Motor Cars, Inc. (2012) 205 Cal.App.4th 436, 449 (Lewis).)
       “[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.” (Saint Agnes, supra, 31 Cal.4th at p. 1204.)




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       “Whether a party to an arbitration agreement has waived the right to arbitrate is a
question of fact, and a trial court’s determination on that matter will not be disturbed on
appeal if supported by substantial evidence.” (Sobremonte, supra, 61 Cal.App.4th at
p. 991.) “We infer all necessary findings supported by substantial evidence [citations]
and ‘construe any reasonable inference in the manner most favorable to the judgment,
resolving all ambiguities to support an affirmance.’” (Lewis, supra, 205 Cal.App.4th at
p. 443.) Although the party seeking to establish waiver bears a heavy burden of proof,
with all doubts resolved in favor of arbitration, “these higher burdens guide the trial
court’s determination, but do not alter the standard of review on appeal.” (Burton v.
Cruise (2010) 190 Cal.App.4th 939, 945–946 (Burton).)
       b.     The trial court’s finding of waiver is supported by substantial evidence
              (1)    Conduct inconsistent with the right to arbitrate, participating in
the litigation process, delay, proximity to trial date, and use of judicial discovery
procedures
       J.K. began litigating this action on March 14, 2013, when it challenged the
assigned judge and filed a motion to quash service. J.K. then waited 16 months to file its
motion to compel arbitration. In the interim, it not only filed an answer, propounded and
responded to discovery, and opposed two discovery-related motions by Edwards, it also
demonstrated an intent to have the claims tried, not arbitrated, by requesting a jury trial,
posting jury fees, participating in a case management conference in which the date for
trial was set, and declaring an intent to file a motion for summary judgment. At no time
did J.K. object to the discovery or setting of a trial date on the ground Edwards’s
employment contract required that her claims be arbitrated. When J.K. finally filed its
motion to compel, it did so just 53 days before trial. The motion was filed so late that it
could not be set for hearing before the motion cutoff date, prompting J.K. to apply
ex parte to shorten time for the hearing or continue the trial date. Moreover, the trial date
had been set for almost 11 months when J.K. filed its motion.




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       “‘[A] demand for arbitration must not be unreasonably delayed. When an
arbitration agreement does not specify the time within which arbitration must be
demanded, a reasonable time is allowed; a party who does not demand arbitration within
a reasonable time is deemed to have waived the right to arbitration.’” (Sobremonte,
supra, 61 Cal.App.4th at p. 992.) J.K. “had 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.’” (Id. at pp. 993–994.) J.K. actively
litigated this case for 16 months before seeking to compel arbitration and has never even
attempted to justify the delay. J.K. led Edwards and the trial court to believe it intended
to litigate, not arbitrate, by participating in discovery, law and motion, requesting a jury
trial, posting jury fees, and agreeing to a trial date. This conduct was completely
inconsistent with an intent to arbitrate and constituted a substantial invocation of “the
litigation machinery” and preparation for trial. Important intervening steps had occurred,
J.K. delayed for a long period, and it filed its motion to compel very close to the trial
date. Thus, substantial evidence supported the trial court’s conclusion that the first
through third and fifth factors set forth in Sobremonte, supra, 61 Cal.App.4th at page
992, supported a finding of waiver.
       J.K. argues, in opposition to a finding of waiver, that it raised the contractual
arbitration provision in its answer to the complaint. Mere assertion of a right to arbitrate
as an affirmative defense, however, does not preclude a finding that subsequent conduct
constituted a waiver of that right. (Sobremonte, supra, 61 Cal.App.4th at p. 993
[pleading right to contractual arbitration in answer insufficient to avoid waiver].) “‘“A
right to compel arbitration is not, unless expressly provided for in the agreement, self-
executing. If a party wishes to compel arbitration, he must take active and decided steps
to secure that right . . . .”’” (Ibid.) J.K. did not take any steps within a reasonable time to
enforce its contractual right to arbitrate, and its delay and conduct during the course of
the action before filing that motion support the trial court’s waiver finding.




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                  (2)   Effect upon Edwards
       Although the parties and trial court discussed the final Sobremonte/Saint Agnes
factor solely as prejudice, the actual formulation is “‘whether the delay “affected, misled,
or prejudiced” the opposing party.’” (Sobremonte, supra, 61 Cal.App.4th at p. 992; Saint
Agnes, supra, 31 Cal.4th at p. 1196.) Here, substantial evidence demonstrated J.K.’s
conduct and delay affected, misled, and prejudiced Edwards. First, Edwards spent 15 or
more months preparing her case for the full jury trial J.K. had demanded, for which J.K.
had deposited jury fees, and for which J.K. had agreed to a trial date. Edwards’s
preparation included engaging in fairly extensive discovery, both propounding her own
discovery and responding to J.K.’s discovery. The discovery J.K. propounded afforded
J.K. the opportunity to “‘learn [Edwards’s] strategies, evidence, and witnesses and to pin
[her] down to a particular version of the facts.’” (Sobremonte, supra, 61 Cal.App.4th at
p. 995, quoting Davis v. Continental Airlines, Inc. (1997) 59 Cal.App.4th 205, 213.) In
addition, the judicial discovery actually conducted may well have been more extensive
and/or more expensive than the parties would have conducted or been allowed to conduct
in arbitration.
       In addition, at a minimum, J.K.’s failure to timely demand arbitration adversely
affected Edwards by causing her to attend the case management conference and prepare
and file her case management statement, appear for J.K.’s ex parte application to shorten
time for its motion to compel arbitration or continue the trial date, appear at the trial
setting conference following the vacating of the trial date due to J.K.’s late motion to
compel, and respond to the instant appeal. Had J.K. successfully moved to compel
arbitration soon after it was served with this action, none of the aforementioned filings
and appearances would have been required. Where, as here, “the delay was unreasonable
or unjustified,” “the expenditure of time and money are relevant to the prejudice
analysis.” (Oregel v. PacPizza, LLC (2015) 237 Cal.App.4th 342, 361.)
       Furthermore, J.K.’s late motion caused an extremely lengthy delay of the trial and
of Edwards’s opportunity to recover damages from J.K. if she prevails on her claims.



                                               8
Because J.K. filed the motion so late that it could not be heard before the motion cutoff
date without severely shortening Edwards’s time to respond, the trial court continued the
trial for eight months. J.K.’s appeal has caused a further, lengthy, unwarranted delay of
the trial date.
       Finally, “[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.’ [Citation.]
Arbitration loses much, if not all, of its value if undue time and money is lost in the
litigation process preceding a last-minute petition to compel.” (Burton, supra, 190
Cal.App.4th at p. 948.) Here, J.K.’s lengthy delay in seeking to compel arbitration,
during which the parties actively litigated this case and prepared for trial, obliterated
Edwards’s opportunity and ability to benefit from the expediency, efficiency, and cost-
effectiveness of arbitration. “By litigating rather than arbitrating until the time of trial,
[J.K.] has circumvented the expected benefits to be achieved from a speedy and relatively
inexpensive arbitral forum. Depriving a party of the benefits of his or her bargain is the
epitome of prejudice.” (Id. at p. 949.) “‘Starting anew in an arbitral forum at [this] late
date would delay resolution of the dispute, not advance it.’” (Ibid.)
       For all of these reasons, substantial evidence supports a finding J.K.’s delay and
conduct affected, misled, and prejudiced Edwards. Accordingly, substantial evidence
supports the trial court’s finding that J.K. waived its right to arbitrate. We need not
address unconscionability.
2.     Motion for sanctions for frivolous appeal
       Edwards asks this court to sanction J.K. $17,100 for filing a frivolous appeal.
(Code Civ. Proc., § 907; Cal. Rules of Court, rule 8.276; In re Marriage of Flaherty
(1982) 31 Cal.3d 637, 646.) Although J.K.’s arguments on appeal lack merit, we decline
to find that they are so egregious as to warrant the imposition of sanctions. (Flaherty,
supra, at p. 650 [“An appeal that is simply without merit is not by definition frivolous
and should not incur sanctions”].) We therefore deny Edwards’s motion.



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                                  DISPOSITION
     The order is affirmed. Respondent is awarded her costs on appeal.
     NOT TO BE PUBLISHED.


                                             LUI, J.
We concur:


     CHANEY, Acting P. J.


     JOHNSON, J.




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