The California Supreme Court will review a surprising appellate court holding from earlier this year that held that a defendant did not waive the right to arbitrate, even though the defendant had answered the complaint, served multiple sets of discovery, took the employee-plaintiff’s deposition, and otherwise happily litigated for 13 months before finally moving to compel arbitration.
The majority in Quach v. Calif. Commerce Club, Inc. (D2d1 Apr. 14, 2022 no. B310458) 78 Cal.App.5th 470 found that these facts, as a matter of law, do not waive arbitration. The court noted that the California Supreme Court in Saint Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1203, had held that mere participation in litigation, and merely driving up court costs and expenses, are not enough to establish waiver of the right to arbitrate.
The dissent would have found a waiver because “all benefits of a speedy resolution [Quach] could have obtained through arbitration [have] been lost.”
David Ettinger notes that the opinion was filed less than two weeks before the U.S. Supreme Court held prejudice to the other side is not essential to finding an arbitration waiver in federal courts. (Morgan v. Sundance, Inc. (2022) 142 S.Ct. 1708.)
Blog Note: The Quach opinion was originally unpublished until I filed an amicus request for publication.