Filed 9/30/21 Villalobos v. Mike’s Auto Group CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication

or ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

CUAUHTEMOC DELA MORA 

VILLALOBOS et al.,

 Plaintiffs and Appellants,

v.

MIKE’S AUTO GROUP, INC., et al.,

 Defendants and Respondents.

 G060400

 (Super. Ct. No. 17CV000386)

 O P I N I O N

Appeal from a judgment of the Superior Court of Monterey County, Marla 

O. Anderson, Judge. Affirmed.

Rosner, Barry & Babbitt, Christopher P. Barry and Arlyn L. Escalante for 

Plaintiffs and Appellants.

No appearance for Defendants and Respondents.

* * *
2

 After the trial court confirmed an arbitration award against Cuauhtemoc 

Dela Mora Villalobos and Azucena Ponce, they appeal from the order compelling the 

parties to arbitration. Appellants contend that respondent Mike’s Auto Group, Inc.

(Mike’s Auto), waived its right to seek arbitration, and that the trial court improperly 

appointed the arbitrator in violation of Code of Civil Procedure section 1281.6. As 

discussed below, appellants have not shown reversible error. Accordingly, we affirm. 

I

FACTUAL AND PROCEDURAL BACKGROUND

A. Complaint and Mediation

On January 27, 2017, appellants filed a complaint against Mike’s Auto and 

Bay Federal Credit Union (Bay FCU), alleging they had purchased a used 2014 Lexus 

vehicle by means of an installment sale contract, which Mike’s Auto later assigned to 

Bay FCU. The complaint alleged the vehicle had substantial preexisting damage, and it 

sought recission of the sale contract and various other remedies. The complaint noted the 

contract contained a permissive arbitration clause, and stated that plaintiffs elected to 

initiate the instant court action, “but will agree to stipulate to arbitration through JAMS, if 

Defendants wish to resolve this dispute in arbitration.” 

In March 2017, Mike’s Auto and Bay FCU filed answers, generally 

denying the allegations and raising numerous affirmative defenses, but did not plead 

arbitration as an affirmative defense. 

The court appointed a mediator on June 6, 2017, and on August 24, 2017, 

the parties participated in a mediation, which did not result in an agreement. 

B. Motion to Compel Arbitration

On September 18, 2017, Mike’s Auto filed a case management statement 

providing notice it would bring a motion to compel arbitration. The case management

statement also acknowledged the vehicle had been inspected. 
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On October 3, 2017, Mike’s Auto filed its motion to compel arbitration. 

The motion argued the arbitration clause in the sale contract was enforceable, and it 

requested arbitration before AAA. The motion also stated Mike’s Auto would pay 

appellants’ arbitral fees. 

Appellants opposed the motion to compel arbitration, arguing Mike’s Auto 

waived its right to seek arbitration by actively participating in litigation for almost a year 

before requesting arbitration. Appellants stated that Mike’s Auto did not assert binding 

arbitration as an affirmative defense in its answer, and that Mike’s Auto responded to 

plaintiffs’ discovery requests in May 2017, noticed a vehicle inspection on May 23, 2017, 

and participated in court-ordered mediation in August 2017. 

Appellants asserted that if the court were to order arbitration, they would 

select JAMS as the arbitration provider, not AAA. They also requested that a single 

arbitrator be appointed, and that the court appoint the single arbitrator pursuant to Code 

of Civil Procedure section 1281.6, 1if the parties failed to agree on the arbitration 

provider. 

In response, Mike’s Auto argued its limited actions did not show waiver, 

and asserted that inspecting the vehicle and responding to discovery requests would have 

occurred in the arbitration in any event. It also renewed its request for arbitration before 

AAA. 

 At the hearing on the motion to compel arbitration, the trial court ordered 

the parties to arbitration. After discussing the process of appointing an arbitrator with the 

parties, the court further ordered the parties to “[w]ithin ten days submit five names each”

and “then the Court will go ahead and select an arbitrator.” Neither party objected to this 

procedure.

1

All further citations are to the Code of Civil Procedure, unless stated otherwise.
4

Appellants submitted their list of arbitrators on November 13, 2017. 

Respondents submitted a different list of five arbitrators on November 13, 2017, and also 

submitted a proposed order with those arbitrator’s names. In response to the proposed 

order, appellants submitted their own proposed order listing all ten arbitrators. On 

November 18, 2017, the trial court selected George J. Kovacevich from Mike’s Auto’s

lists of arbitrators, after noting that it had reviewed the “joint list submitted by Plaintiff.” 

C. Arbitration and Appeal

Arbitrator Kovacevich granted respondents’ motion for summary 

disposition on appellants’ claims, and dismissed the matter with prejudice. He denied 

respondents’ fees and costs. Appellants then filed a petition to confirm the arbitration 

award. On April 22, 2019, the trial court entered a judgment confirming the arbitration 

award. Appellants noticed an appeal from the judgment, and all interim and preceding 

orders, including the order granting the motion to compel arbitration. 

II

DISCUSSION

Appellants contend the judgment confirming the arbitration award must be 

reversed because Mike’s Auto waived its right to seek arbitration and the trial court erred 

in selecting the arbitrator. 

A. Mike’s Auto Did Not Waive Its Arbitration Rights

As our Supreme Court has stated: “State law. . . reflects a strong policy 

favoring arbitration agreements and requires close judicial scrutiny of waiver claims. 

[Citation.] Although a court may deny a petition to compel arbitration on the ground of 

waiver [citation], waivers are not to be lightly inferred and the party seeking to establish a 

waiver bears a heavy burden of proof.” (St. Agnes Medical Center v. PacifiCare of 

California (2003) 31 Cal.4th 1187, 1195 (St. Agnes).) “‘In determining waiver, a court 

can consider “(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 
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‘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.”’” (Id. at p. 1196.) “No one of these 

factors predominates and each case must be examined in context.” (Lewis v. Fletcher 

Jones Motor Cars, Inc. (2012) 205 Cal.App.4th 436, 444 (Lewis).) 

“The question of waiver is generally a question of fact, and the trial court’s 

finding [on] waiver is binding on us if it is supported by substantial evidence. [Citation.] 

‘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.”’ [Citation.] Reversal is not justified 

simply because the trial court could have potentially reached a different conclusion on the 

question of waiver.” (Bower v. Inter-Con Security Systems, Inc. (2014) 232 Cal.App.4th 

1035, 1043.)

Here, the trial court, in ordering arbitration, rejected appellants’ argument 

that Mike’s Auto had waived its right to seek arbitration. Appellants contend the 

evidence does not support this result because Mike’s Auto (1) acted inconsistently with 

the right to arbitrate by failing to plead arbitration as an affirmative defense in its answer, 

responding to appellants’ discovery requests, conducting a vehicle inspection and 

participating in court-ordered mediation, and (2) unreasonably delayed demanding 

arbitration until 10 months after the complaint was filed. 

While appellants are correct that the failure to plead arbitration as an 

affirmative defense in an answer has been found to be inconsistent with the later assertion 

of a right to arbitrate (Guess?, Inc. v. Superior Court (2000) 79 Cal.App.4th 553, 557-
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558), it is merely one factor in the determination and is not dispositive on the issue of 

waiver. Mike’s Auto could have moved at any time to amend its answer to include this 

defense, even at this late stage. (See Ramos v. City of Santa Clara (1973) 35 Cal.App.3d 

93, 95 [“A trial court has discretion to allow amendment of any pleading at any stage of 

the proceedings.”].) 

The remaining factors appellants cite do not provide a basis to reverse the 

trial court’s finding that there had been no waiver. Participation in an insignificant 

amount of discovery initiated by other parties is not inconsistent with arbitration. 

(Zamora v. Lehman (2010) 186 Cal.App.4th 1, 19.) Likewise, mediation is not generally 

inconsistent with arbitration. (Id. at p. 20 [“attempt to settle the action was not 

inconsistent with the right to arbitrate”].) As to the vehicle inspection, appellants did not 

show that conducting a vehicle inspection is a discovery procedure not available in 

arbitration. 

Appellants also argue on appeal that they revealed their litigation strategy 

through discovery, but never made this argument at the trial court. They have, as a result,

forfeited the argument. Even if they had not, the record does not establish that any 

litigation strategy was revealed. 

As to the delay in demanding arbitration, appellants have not shown the 

delay was unreasonable. While Mike’s Auto waited nearly 10 months before moving to 

compel arbitration, that 10-month period included nearly two months when the parties 

were in mediation. More important, “a delay is found unreasonable only when it is 

combined with the attempt by the party asserting a right to arbitrate to obtain an 

advantageous litigation position during the delay.” (Gloster v. Sonic Automotive, Inc.

(2014) 226 Cal.App.4th 438, 449.) For example, in Sobremonte v. Superior Court (1998) 

61 Cal.App.4th 980, 996, the defendant delayed 10 months before moving to compel 

arbitration but also filed demurrers and engaged in expansive discovery during that time 

period. In Davis v. Continental Airlines, Inc. (1997) 59 Cal.App.4th 205, 213, 217, the 
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defendant delayed six months before moving to compel arbitration but also used court 

discovery procedures not available in arbitration to obtain 1,600 pages of documents 

from plaintiff, and took plaintiff’s two-day deposition. In Lewis, supra, 205 Cal.App.4th 

at p. 446, the defendant delayed five months before moving to compel arbitration, but 

also filed multiple demurrers and motions to strike and participated in discovery. In 

Guess?, Inc. v. Superior Court, supra 79 Cal.App.4th at p. 558, the defendant delayed 

three months before moving to compel arbitration but fully participated in the discovery 

process, including sending two sets of lawyers to third party depositions and taking full 

advantage of every opportunity to cross-examine deponents. The appellate court also 

noted that Guess?, Inc., spent over $150,000 in litigating the case, and four third party 

depositions were taken, with another 11 arranged. (Id. at p. 559, fn. 2.) 

Here, in contrast, Mike’s Auto did not take significant affirmative action to 

litigate the case. It did not file demurrers or other motions, did not initiate discovery

except for a vehicle inspection, and merely responded to appellants’ written discovery 

requests as the law requires (§ 2030.210). The record shows Mike’s Auto’s responses 

totaled 14 pages, not including produced documents. 

In sum, while there was some evidence that could support a finding of 

waiver, appellants did not meet their “heavy burden of proof” to show Mike’s Auto 

waived its right to arbitration. (St. Agnes, supra, 31 Cal.4th at p. 1195.) The trial court 

found no waiver, and the record does not establish waiver as a matter of law. 

Accordingly, we must affirm the trial court’s waiver ruling. (Lewis, supra, 

205 Cal.App.4th at p. 453 [“It is not enough the trial court potentially could have reached 

a different conclusion; rather, we may reverse the trial court’s waiver finding only if the 

record establishes a . . . waiver as a matter of law.”].)

B. The Trial Court Did Not Commit Reversible Error in Its Selection of the Arbitrator

Section 1281.6 provides: “If the arbitration agreement provides a method 

of appointing an arbitrator, that method shall be followed. If the arbitration agreement 
8

does not provide a method for appointing an arbitrator, the parties to the agreement who 

seek arbitration and against whom arbitration is sought may agree on a method of 

appointing an arbitrator and that method shall be followed. In the absence of an agreed 

method, or if the agreed method fails or for any reason cannot be followed, or when an 

arbitrator appointed fails to act and his or her successor has not been appointed, the court, 

on petition of a party to the arbitration agreement, shall appoint the arbitrator.

“When a petition is made to the court to appoint a neutral arbitrator, the 

court shall nominate five persons from lists of persons supplied jointly by the parties to 

the arbitration or obtained from a governmental agency concerned with arbitration or 

private disinterested association concerned with arbitration. The parties to the agreement 

who seek arbitration and against whom arbitration is sought may within five days of 

receipt of notice of the nominees from the court jointly select the arbitrator whether or 

not the arbitrator is among the nominees. If the parties fail to select an arbitrator within 

the five-day period, the court shall appoint the arbitrator from the nominees.” (§ 1281.6)

Appellants contend the selection of Kovacevich as the arbitrator failed to 

conform with the mandatory requirements of section 1281.6 because the trial court did 

not nominate five persons and allow the parties to jointly select the arbitrator. However, 

the record demonstrates that, at the hearing on the motion to compel arbitration, the trial 

court discussed the arbitrator selection process it intended to follow with the parties. 

Both parties agreed to this selection process, and the court’s selection of Kovacevich was 

consistent with the agreement. Although appellants objected to Mike’s Auto’s proposed 

arbitrator appointment order, the record does not show any objection to the court’s order 

appointing Kovacevich as the arbitrator. Thus, appellants forfeited any challenge to the 

arbitrator selection process because they agreed to that process and never objected below 

to the trial court order selecting Kovacevich. (See, e.g., K.C. Multimedia, Inc. v. Bank of 

America Technology & Operations, Inc. (2009) 171 Cal.App.4th 939, 948 [“appellant 

forfeited its challenge to the propriety of the pretrial procedure by failing to object 
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below”]; In re Wilford J. (2005) 131 Cal.App.4th 742, 754 [“An appellate court 

ordinarily will not consider challenges based on procedural defects or erroneous rulings 

where an objection could have been but was not made in the trial court”].)

III

DISPOSITION

The judgment is affirmed. Because respondent did not participate in the 

appeal, no costs are awarded.

ZELON, J.*

WE CONCUR:

O’LEARY, P. J.

BEDSWORTH, J.

*Retired Justice of the Court of Appeal, Second Appellate District, assigned by the Chief 

Justice pursuant to article VI, section 6 of the California Constitution.