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 1        IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

 2   CHARLES HARVEY; LADONNA GIRON;
 3   TERRY HERTZ; BRYAN MARTINEZ and
 4   ADELITA MARTINEZ; LAURA SANCHEZ;
 5   AURELIO SANTANA and TARAH SANTANA;
 6   JESUS SEDILLOS and JOYCE SEDILLOS;
 7   DEPAAK SHAH; DANNY WEST and
 8   MARSHA WEST;

 9          Plaintiffs-Appellees,

10 v.                                                            No. 35,685

11 BILL E. HOOTEN,

12          Defendant-Appellant,

13 and

14   JAMES ARIAS; CB & DEVELOPMENT CORPORATION;
15   CHARTER BUILDING AND DEVELOPMENT
16   CORPORATION; CHARTER HOMES, INC.;
17   CURB SOUTH, LLC; LOS JEFES 1-10, owners and
18   officers/directors of CHARTER; LOS HOMBRES 1-10,
19   owners and officers/directors of CURB SOUTH, LLC;
20   SALLS BROTHERS CONSTRUCTION, INC.;
21   VINYARD & ASSOCIATES, INC.; and
22   STAN STRICKMAN;

23          Defendants,

24 and
 1   BILL E. HOOTEN; CHARTER BUILDING AND
 2   DEVELOPMENT CORPORATION;
 3   CHARTER HOMES, INC.; JAMES ARIAS;
 4   and CB & DEVELOPMENT CORPORATION;

 5        Cross-Plaintiffs,

 6 v.

 7 CURB SOUTH, LLC,

 8        Cross-Defendant,

 9 and

10 JAMES ARIAS; CB & DEVELOPMENT
11 CORPORATION; and CURB SOUTH, LLC;

12        Third-Party Plaintiffs,

13 v.

14   SALLS BROTHERS CONSTRUCTION, INC.;
15   VINYARD & ASSOCIATES, INC.;
16   CHARLES M. WALKER COMPANY, INC.;
17   HBW SERVICES, LLC; JAMAR INDUSTRIES, INC.;
18   KEN’S PLUMBING AND HEATING, INC.; and
19   NATIONAL HOME INSURANCE COMPANY;

20        Third-Party Defendants.

21 APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
22 Valerie A. Huling, District Judge

23   The Roehl Law Firm, P.C.
24   Jerrald J. Roehl
25   Katherine Channing Roehl
26   Albuquerque, NM

                                    2
 1 for Appellee



 2   Sheehan & Sheehan, P.A.
 3   Leah M. Stevens-Block
 4   David P. Gorman
 5   Albuquerque, NM

 6 for Appellant

 7                             MEMORANDUM OPINION

 8 VANZI, Chief Judge.

 9   {1}   Defendant Bill E. Hooten appeals from the district court’s order denying his

10 motion to dismiss and to compel arbitration. This Court issued a notice proposing

11 summary affirmance. Hooten filed a memorandum in opposition to this Court’s notice

12 of proposed disposition, which we have duly considered. Remaining unpersuaded, we

13 affirm.

14   {2}   Hooten raised four issues in his docketing statement: (1) the district court erred

15 in failing to determine, as a threshold matter, whether it—or the arbitrator—had the

16 authority to decide Plaintiffs’ challenges to the arbitration agreement’s enforceability

17 where the arbitration agreement contained a delegation clause; (2) the district court’s

18 order compelling arbitration of Plaintiffs’ claims against Defendants Charter Homes,

19 Inc., Charter Building and Development Corp., CB & Development Corp.

20 (collectively, the Charter Entities), and James Arias, encompassed Plaintiffs’ claims


                                               3
 1 against Hooten as well; (3) Hooten could not waive his right to arbitrate, where the

 2 Charter Entities successfully invoked their right to arbitrate; and (4) the district court

 3 erred in determining that Hooten waived his right to arbitration. [CN 4]

 4   {3}   We initially note that Hooten, in his memorandum in opposition, does not

 5 address our proposed disposition as to issues (2) and (3). [See generally MIO 4-11]

 6 Accordingly, these issues are deemed abandoned. See State v. Johnson, 1988-NMCA-

 7 029, ¶ 8, 107 N.M. 356, 758 P.2d 306 (stating that when a case is decided on the

 8 summary calendar, an issue is deemed abandoned where a party fails to respond to the

 9 proposed disposition of the issue); cf. Hennessy v. Duryea, 1998-NMCA-036, ¶ 24,

10 124 N.M. 754, 955 P.2d 683 (“Our courts have repeatedly held that, in summary

11 calendar cases, the burden is on the party opposing the proposed disposition to clearly

12 point out errors in fact or law.”).

13   {4}   With respect to Hooten’s first issue—that pursuant to the delegation clause, the

14 arbitrator, as opposed to the district court, should have decided whether he waived

15 arbitration—we suggested in our calendar notice that this issue did not appear to have

16 been preserved for appellate review. [CN 4-6] Specifically, we noted that Hooten did

17 not indicate to us in his docketing statement that he invoked a ruling from the district

18 court with respect to the delegation clause. See Benz v. Town Ctr. Land, LLC, 2013-

19 NMCA-111, ¶ 24, 314 P.3d 688 (“To preserve an issue for review on appeal, it must

20 appear that appellant fairly invoked a ruling of the trial court on the same grounds

                                               4
 1 argued in the appellate court.” (internal quotation marks and citation omitted)). [CN

 2 5] We further noted that we reviewed Hooten’s reply in support of his motion to

 3 dismiss and to compel arbitration, wherein he made several arguments in response to

 4 Plaintiffs’ assertion that he waived his right to arbitration but made no mention of the

 5 delegation clause. [CN 5] Notably, in his reply in support of his motion, Hooten put

 6 forth his arguments for why the district court should determine that he did not waive

 7 arbitration. [CN 5] In light of our inability to locate any indication of preservation, we

 8 urged Hooten, if he chose to file a memorandum in opposition, to point out exactly

 9 where—in the eighteen-volume record proper—this issue was preserved for appellate

10 review. [CN 5-6] See Crutchfield v. N.M. Dep’t of Taxation & Revenue, 2005-NMCA-

11 022, ¶ 14, 137 N.M. 26, 106 P.3d 1273 (“[O]n appeal, the party must specifically

12 point out where, in the record, the party invoked the court’s ruling on the issue.

13 Absent that citation to the record or any obvious preservation, we will not consider the

14 issue.”).

15   {5}   In his memorandum in opposition, Hooten does not point us to evidence of

16 preservation, nor does he challenge our proposed disposition that he failed to preserve

17 the delegation clause issue. See Hennessy, 1998-NMCA-036, ¶ 24. Instead, Hooten

18 argues that the delegation clause “implicates the district court’s subject matter

19 jurisdiction over issues of arbitrability” and that he may raise the issue for the first

20 time on appeal. [MIO 5 (citing Chavez v. Cty. of Valencia, 1974-NMSC-035, ¶ 15, 86

                                               5
 1 N.M. 205, 521 P.2d 1154 (stating that an objection to the district court’s subject

 2 matter jurisdiction may be raised at any time during the proceedings and may be raised

 3 for the first time on appeal.))]

 4   {6}   In support of his position, Hooten cites to Felts v. CLK Mgmt., Inc., 2011-

 5 NMCA-062, ¶ 18, 149 N.M. 681, 254 P.3d 124, for the proposition that “the parties

 6 can agree to have an arbitrator, rather than a court, decide gateway questions of

 7 arbitrability in addition to deciding the parties’ underlying claims.” [MIO 6] Hooten

 8 also cites to Horne v. Los Alamos Nat. Sec., LLC, 2013-NMSC-004, ¶ 23, 296 P.3d

 9 478, which looked to the arbitration agreement and determined that the parties

10 contractually agreed to give the arbitrator authority to resolve disputes over the

11 interpretation and scope of the arbitration agreement. [MIO 6-7]

12   {7}   We are not convinced, however, that these cases support Hooten’s contention

13 that a delegation clause divests the district court of subject matter jurisdiction. See

14 State ex rel. Foy v. Austin Capital Mgmt., 2015-NMSC-025, ¶ 7, 355 P.3d 1 (stating

15 that “New Mexico district courts are courts of general jurisdiction having the power

16 to hear all matters not excepted by the [C]onstitution and those matters conferred by

17 law). Instead, as Felts recognized, a delegation provision is “simply an additional,

18 antecedent agreement the party seeking arbitration asks the . . . court to enforce[.]”

19 2011-NMCA-062, ¶ 18 (quoting Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 70

20 (2010)). It stands to reason, then, that a delegation clause, like an arbitration clause,

                                               6
 1 is subject to waiver. See Ruppelt v. Laurel Healthcare Providers, LLC, 2013-NMCA-

 2 014, ¶ 8, 293 P.3d 902 (determining under similar circumstances that the defendants

 3 waived any delegation argument by voluntarily addressing the issue in the district

 4 court and by “never even suggest[ing] that the court did not have authority to address

 5 the issue”). Thus, in the absence of any challenge below to the district court’s

 6 authority to determine whether Hooten waived arbitration—and in fact, in light of

 7 Hooten’s apparent acquiescence to the district court’s authority on the waiver

 8 issue—we conclude that Hooten waived any delegation argument that the arbitrator

 9 should determine whether he waived arbitration. Consequently, because the delegation

10 clause issue was not preserved for appellate review and because we are not convinced

11 that the delegation clause affects the district court’s subject matter jurisdiction, we do

12 not address this issue. See id. ¶ 9 (stating that the delegation clause issue was not

13 preserved where the defendants “did not address or even mention the question of

14 authority to decide arbitrability during arguments to the district court” and refusing

15 to address the issue further).

16   {8}   We therefore need only address Hooten’s contention that the district court erred

17 in its determination that he waived arbitration. [MIO 8-11] In our calendar notice, we

18 recognized that three principles govern our review of the district court’s waiver

19 finding in the context of a motion to compel arbitration: (1) the strong public policy

20 preference in favor of arbitration, (2) “relief [should] only be granted upon a showing

                                               7
 1 of prejudice to the party opposing arbitration[,]” and (3) “the extent to which the party

 2 now urging arbitration has previously invoked the machinery of the judicial system.”

 3 [CN 8] Bd. of Educ. Taos Mun. Sch. v. The Architects, 1985-NMSC-102, ¶¶ 7-10, 103

 4 N.M. 462, 709 P.2d 184.

 5   {9}    Our analysis thus begins with a presumption in favor of arbitration and against

 6 waiver; that presumption is so strong that “all doubts as to whether there is a waiver

 7 must be resolved in favor of arbitration.” Am. Fed’n of State, Cty. & Mun. Emps. v.

 8 City of Albuquerque (AFSCME), 2013-NMCA-049, ¶ 10, 299 P.3d 441 (internal

 9 quotation marks and citation omitted). The party opposing arbitration will only be

10 granted relief if it can show it was prejudiced by the other party’s actions; the type of

11 prejudice involved normally consists of trial preparation that is undertaken due to the

12 belief that the other party does not intend to make a demand for arbitration. Id. ¶¶ 10,

13 20. A primary consideration is the extent to which the party now seeking arbitration

14 had already invoked the machinery of the judicial system, and in doing so, provoked

15 reliance by the other party on the fact that the case would be litigated in court rather

16 than arbitrated. Id. ¶¶ 10-12, 17-19.

17   {10}   In Wood v. Millers Nat’l Ins. Co., 1981-NMSC-086, ¶ 7, 96 N.M. 525, 632 P.2d

18 1163, our Supreme Court held that a “point of no return” is reached if the party

19 wishing to compel arbitration invokes the district court’s discretionary power on a

20 question other than the arbitration issue. That point may also be reached where a party

                                               8
 1 extensively utilizes discovery procedures that are not available in the arbitration

 2 process, and only demands arbitration after the desired discovery has been obtained.

 3 See The Architects, 1985-NMSC-102, ¶ 13. Instances in which a party has been found

 4 to have waived arbitration by invoking the judicial machinery include cases in which

 5 the party unsuccessfully filed a motion to dismiss and only then demanded arbitration,

 6 see Wood, 1981-NMSC-086, ¶¶ 6-7; engaged in extensive discovery over a period of

 7 several months, when the scope of discovery would have been much more limited in

 8 arbitration, see The Architects, 1985-NMSC-102, ¶ 13, and requested a preliminary

 9 injunction and unsuccessfully litigated that request through the hearing stage, see

10 AFSCME, 2013-NMCA-049, ¶ 19. On the other hand, where nothing of consequence

11 occurred in the litigation prior to the demand for arbitration, and the “judicial waters

12 had not been tested” because no hearings had been held and the case was not at issue,

13 our Supreme Court held that arbitration had not been waived. Bernalillo Cty. Med.

14 Ctr. Emps’ Ass’n v. Cancelosi, 1978-NMSC-086, ¶¶ 7, 12, 92 N.M. 307, 587 P.2d

15 960.

16   {11}   In our calendar notice, we observed that the district court made a number of

17 factual findings in its order denying Hooten’s motion to compel arbitration with

18 respect to waiver. [CN 8] These findings include: Hooten was a named defendant in

19 Plaintiffs’ original complaint, filed in August 2013, and in each subsequent amended

20 complaint; Hooten did not assert arbitration as an affirmative defense, nor did he

                                              9
 1 challenge the jurisdiction of the court, in any of his answers to the complaints; Hooten

 2 filed a motion to dismiss, pursuant to Rule 1-012(B)(6) NMRA, and following a

 3 hearing on the motion, the motion was denied; Hooten served two sets of written

 4 discovery on Plaintiffs; the Charter Entities filed a motion to compel arbitration on

 5 July 15, 2015, and after a hearing, the district court granted the motion and issued an

 6 order on January 29, 2016, compelling arbitration of the claims between the Charter

 7 Entities and all Plaintiffs (except Shah and Martinez); Hooten did not join the Charter

 8 Entities’ motion to compel; this matter was set for trial in October 2016; in response

 9 to the district court’s request for proposals regarding how trial should proceed, Hooten

10 submitted a letter on April 6, 2016, suggesting a phased approach to trial; and in his

11 letter, Hooten indicated his intent to request that the stay pending arbitration granted

12 to the Charter Entities be extended to him, but did not indicate an intent to invoke his

13 right to arbitrate. [CN 8-9]

14   {12}   In our calendar notice, we suggested that the facts of this case appear to be

15 much more akin to those presented by The Architects, Wood, and AFSCME than to the

16 facts of Cancelosi. [CN 11-12] In the two years and eight months that passed from the

17 time Plaintiffs filed their first complaint against Hooten to the time Hooten filed his

18 motion to compel arbitration, Hooten passed the point of no return and tested the

19 judicial waters by filing a substantive a Rule 1-012(B)(6) motion and requesting

20 substantive relief from the district court, and it also appears that Hooten engaged in

                                              10
 1 discovery directed at Plaintiffs and made recommendations to the district court as to

 2 how the trial should proceed. Further, it does not appear that Hooten raised arbitration

 3 in any of his answers to the complaints filed by Plaintiffs in 2013 and 2014, nor does

 4 it appear that he joined in the Charter Entities’ motion to compel arbitration filed in

 5 July 2015. Finally, it does not appear that Hooten otherwise indicated to Plaintiffs

 6 until April 2016—six months prior to trial—that he intended to seek arbitration. [CN

 7 11-12] On these facts, we suggested in our calendar notice that we could find no error

 8 with the district court’s conclusion that Hooten “exhibited a course of conduct

 9 inconsistent with an intent to arbitrate.” [15 RP 3434; CN 12]

10   {13}   The second important consideration in addressing claims of waiver is the extent

11 to which the party opposing arbitration has been prejudiced by the other party’s delay

12 in invoking the arbitration clause. AFSCME, 2013-NMCA-049, ¶¶ 10, 20. As we

13 pointed out above, this prejudice most commonly takes the form of efforts that have

14 been taken to prepare for trial under the assumption that the arbitration provision will

15 not be invoked. Id. We noted in our calendar notice that the district court determined

16 that Plaintiffs in this case were prejudiced, based on its finding that “trial preparations

17 [were] well under way” as a result of Plaintiffs’ reliance on Hooten’s “objective

18 manifestation of an intent to litigate rather than arbitrate[.]” [15 RP 3435; CN 12] We

19 further observed that Hooten—in his docketing statement—did not specifically

20 challenge the district court’s finding of prejudice. [CN 12] We suggested, based upon

                                               11
 1 the district court’s unchallenged finding that Plaintiffs were engaged in trial

 2 preparations at the time Hooten moved to compel arbitration—two years and eight

 3 months after the complaint was filed and six months prior to the scheduled trial—that

 4 the prejudice prong of the waiver-of-arbitration analysis had been met. [CN 12-13]

 5 See Seipert v. Johnson, 2003-NMCA-119, ¶ 26, 134 N.M. 394, 77 P.3d 298 (“An

 6 unchallenged finding of the trial court is binding on appeal.”).

 7   {14}   In his memorandum in opposition, Hooten “maintain[s] that Plaintiffs have

 8 suffered no prejudice.” [MIO 8] Hooten takes particular issue with the district court’s

 9 finding that Plaintiffs were prejudiced by their ongoing trial preparations, arguing that

10 because Plaintiffs were in litigation with Defendants Curb South, LLC; Vinyard &

11 Associates, Inc.; and Stan Strickman—and because Plaintiffs Shah and Martinez were

12 in ongoing litigation with Hooten, the Charter Entities, and James Arias—Plaintiffs

13 would have been in trial preparations regardless of whether Hooten’s motion to

14 compel arbitration was granted. [MIO 8-10] Hooten acknowledges, however, that

15 Plaintiffs hired experts to offer opinions regarding his conduct. [MIO 9] Although

16 Hooten contends that these experts’ opinions “would have still been necessary and

17 relevant” with respect to Plaintiffs Shah and Martinez [MIO 10], there is no indication

18 in the memorandum in opposition that it would have been necessary for Plaintiffs,

19 aside from Shah and Martinez, to hire the experts had their claims against Hooten

20 gone to arbitration. Consequently, we are not convinced that the district court erred

                                              12
 1 in determining that Plaintiffs were prejudiced by Hooten’s delay in asserting his

 2 intention to arbitrate.

 3   {15}   Furthermore, the prejudice stemming from trial preparation served only to

 4 compound the prejudice that inured from Hooten’s extensive participation in

 5 litigation, including his testing of the judicial waters through the filing of a dispositive

 6 Rule 1-012(B)(6) motion. As our Supreme Court held in Wood, “[t]he point of no

 7 return is reached when the party seeking to compel arbitration invokes the court’s

 8 discretionary power” and arbitration is thereby waived when that point is reached.

 9 1981-NMSC-086, ¶ 7. “To hold otherwise would permit a party to resort to court

10 action until an unfavorable result is reached and then switch to arbitration.” Id.

11 Notably, Hooten’s memorandum in opposition makes no mention of his passing the

12 point of no return, nor does it address the two year and eight month delay between the

13 filing of Plaintiffs’ first complaint against him to the time he filed his motion to

14 compel arbitration. Consequently, we are not convinced that the district court erred.

15 See The Architects, 1985-NMSC-102, ¶ 16 (stating that “timing is all when the

16 question is one of waiver”).

17   {16}   In summary, we conclude that the district court did not err when it determined

18 that Hooten, by his extensive participation in litigation over the course of two years

19 and eight months, waived any right that he had to compel arbitration of the claims

20 against him.

                                                13
1   {17}   Accordingly, for the reasons stated in this opinion, as well as those provided in

2 our notice of proposed disposition, we affirm.

3   {18}   IT IS SO ORDERED.

4                                           __________________________________
5                                           LINDA M. VANZI, Chief Judge

6 WE CONCUR:


7 _________________________________
8 JAMES J. WECHSLER, Judge


 9 _________________________________
10 STEPHEN G. FRENCH, Judge




                                              14
