UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

________________ _________________ D. RAY STRONG, as Liquidating Trustee of the Consolidated Legacy Debtors Liquidating Trust, the Castle Arch Opportunity Partners I, LLC Liquidating Trust and the Castle Arch Opportunity Partners II, LLC Li quidating Trust, Plaintiff - Appellee,

v. WILLIAM H. DAVIDSON, Defendant - Appellant, and JEFF AUSTIN; AUSTIN CAPITAL SOLUTIONS; ROBERT CLAWSON; HYBRID ADVISOR GROUP, Defendants. No. 17-4085 (D.C. No. 2:14-CV-00788-TC-EJF) (D. Utah)

________________ _________________ ORDER AND JUDGMENT *

________________ _________________ Before LUCERO , BALDOCK , and BACHARACH , Circuit Judges.

* After examining the briefs and appellate record, th is panel has determined unanimously to honor the parties’ request for a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore submitted without oral argument. This or der and judgment is not binding precedent, except under the doctrines of la w of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. FILED United States Court of Appeals Tenth Circuit 

### May 16, 2018
Elisabeth A. Shumaker Clerk of Court2 ________________ _________________ Four months after a multi-p arty arbitration proceeding was terminated because some of the other defendant s did not pay their deposits, William H. Davidson moved to stay the court proceedings and to compel arbitration of the claims against him. The district court found that Mr. Davidson waived his right to arbitrate and denied his motions. Exercising jurisd iction under 9 U.S.C. § 16(a)(1), 1 we affirm.
I. Background This case has been lingering for years. A real estate inve stment company and some of its special-purpose subsidiaries filed voluntary chapter 11 petitions in the United States Bankruptcy Court for the Dist rict of Utah in 2011. The bankruptcy court appointed D. Ray Strong (“the Trustee”) to act as the post-confirmation estate representative of several debtors and as th e liquidating trustee of several trusts. The Trustee filed this lawsuit on behalf of those debtors and trusts in October 2014— alleging that certain officers and direct ors engaged in securities fraud and other misconduct, which led to the loss of millio ns of dollars of i nvestors’ funds. The individual defendants include Mr. Davids on, Jeff Austin, and Austin Capital Solutions.

1 The Federal Arbitration Act authorizes an interlocutory appeal of an order refusing to stay court proceed ings pending arbitration or to compel arbitration. See 9 U.S.C. § 16(a)(1)(A), (B) ( “An appeal may be taken from . . . an order . . . refusing a stay of any action under section 3 of th is title . . . [or] de nying a petition under section 4 of this title to order arbitration to pr oceed . . . .”); Jacks v. CMH Homes, Inc., 856 F.3d 1301, 13 04 (10th Cir. 2017).3 In January 2015, Mr. Austin and Aus tin Capital Solutions (the Austin defendants) filed a motion to stay the litiga tion and to compel arbitration of two of the nineteen claims. This motion spurred limited discove ry as to which investors signed an agreement that incorporated an arbitration clause, which in turn led the Austin defendants to move to compel arbitr ation of additional clai ms. Ultimately, the district court sent the entir e case to arbitration in Au gust 2015, without opposition from the Trustee. The partie s selected the American Ar bitration Association (AAA) to arbitrate the dispute. In October 2015, the Trustee f iled the demand for arbitration against a number of defendants, who were apparently separa ted into five groups for financial purposes, and paid the requisite $9,100 filing fee. AAA appointed a panel
of three arbitrators. On August 9, 2016, AAA advised that it had billed $3,787.50 per defendant (or group of defendants) for “an initial arbitrator compen sation and expenses deposit” due on August 23. Aplt. App. at 293. All parties including Mr. Davidson paid their deposits, except for the Austin defendants (t he parties who first sought to compel arbitration) and the group of defendants re ferred to as the “C hild Van Wagoner” associates. AAA followed up with a noti ce on October 18, warning that if the missing deposits were not paid by October 25, it would tell the arbitrators which parties had not paid and would present th em with “a number of options,” including:  The arbitrators may proceed with wo rk on this matter, without full deposits. As arbitrator compensati on and expenses are incurred, the AAA will distribute the share of payment owed from the deposits received and will continue our e fforts to collect any outstanding balance.4  The arbitrators may choose to resi gn, in which case the AAA will fill the vacancy(s).  The arbitrators may suspe nd or terminate the case. Alternatively, and in accordance with the Commercial Arbitration Rules, any party may make a depos it on behalf of the non-paying parties to avoid any possible inte rruption of the case. While we would prefer not to make this re quest of a party that has met its deposit obligations under the rules, the burden of funding the process falls on the parties and neither th e AAA nor the arbitrators can cover these costs. The paying party(s) then may make the repayment of this deposit part of its cl aim to the arbitrators. Id. at 296. The letter encour aged the parties to contact AAA with any questions. No money was forthcom ing, so AAA announced the suspension of the arbitration in a letter da ted November 21. Still, AAA gave the parties one last chance—setting December 7 as the final pa yment deadline and reminding them of the arbitrators’ ability to te rminate the matter for nonpaym ent. Through a December 9 email, AAA extended that deadline to Dece mber 13, adding: “As a reminder, any party may make a payment on be half of another party in or der to prevent this matter from being terminated. Please let me know if there are questions.” Id. at 303. The arbitration was officially “dismissed due to non-paym ent of fees” on December 19,
2016. Id. at 307. AAA issued refund check s for “any unused compensation deposits.” Id. The Trustee returned to di strict court and asked for the stay to be lifted—a request that was granted with no oppositi on from Mr. Davidson. The Trustee also sought to consolidate three interrelated cases because a multi-party arbitration was no longer an option. Meanwhile, the district court held a joint status conference in5 January 2017, at which it ordered the partie s to answer or otherwise respond to the complaint by March and set th e case for a three-week trial beginning in January 2018. In addition, the parties participated in the Fed. R. Civ. P. 26(f) discovery planning meeting and Mr. Da vidson filed a brie f opposing the Trustee’s motion to consolidate. Mr. Davidson did not oppose the litigation or express a ny desire to return the case to arbitrati on until he moved for a stay a nd to compel arbitration of the claims against him on Marc h 20, 2017. The district c ourt found that he waived his right to arbitrate under the circumstance s and denied his motions. This appeal followed.
II. Analysis Equitable principles may prevent a party fr om asserting a right to arbitration: “[T]he right to arbitration, like any ot her contract right, can be waived.” Reid Burton Constr., Inc. v. Carpenters Dist. Council of S. Colo. , 614 F.2d 698, 702 (10th Cir. 1980). The part y asserting waiver bears th e burden of persuasion. Hill v. Ricoh Americas Corp. , 603 F.3d 766, 775 (10th Cir. 201 0). That burden is a “heavy”

one, Peterson v. Shearson/Am. Express, Inc. , 849 F.2d 464, 466 (10th Cir. 1988)— particularly because “we give substan tial weight to the strong federal policy encouraging the expeditious and inexpe nsive resolution of disputes through arbitration,” Hill , 603 F.3d at 775 (internal quotation marks omitted). Even so, we have not hesitated to uphold a district court’s finding of waiver under appropriate circumstances.6 “There is no set rule as to what constitutes a waiv er or abandonment of the arbitration agreement; the question depends upon the facts of each case . . . .” Reid
Burton , 614 F.2d at 702. We have outlined si x factors that cour ts should weigh in considering whether a party waived its right to arbitration: (1) whether the party’s actions ar e inconsistent with the right to arbitrate; (2) whether the litigati on machinery has been substantially invoked and the parties were well into preparation of a lawsuit before the party notified the opposing part y of an intent to arbitrate; (3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long peri od 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 discove ry procedures not available in arbitration] had taken place; and (6) whether the delay affected, misled, or prejudiced the opposing party. Peterson , 849 F.2d at 467-68 (alteration in original) (internal quotation marks omitted). This list is not exclusive, and courts should not mechanically apply the factors. Alwert v. Cox Commc’ns, Inc. ( In re Cox Enters., Inc. Set-top Cable Television Box Antitrust Litig. ) ( Cox II ), 835 F.3d 1195, 1205 (10th Cir. 2016). Other considerations are im portant too, such as “mai ntenance of the combined efficiency of the public a nd private dispute-resolution systems” and “whether the party now seeking arbitration is imprope rly manipulating the judicial process.” Hill , 603 F.3d at 773-74; see also Oxford Health Plans LLC v. Sutter , 569 U.S. 564, 568 (2013) (describing the “ess ential virtue” of arbitrati on as “resolvi ng disputes straightaway” (internal quot ation marks omitted)). Where (as here) the historical facts are not disputed, the distri ct court’s denial of a motion to compel arbitration based on waiver is subject to de novo review. Hill ,7 603 F.3d at 771. Because we “apply[] the same legal standa rd that the district court should apply,” id. , we turn our attention to the Peterson factors and their progeny. We find the first and sixth factors to be the most compelling here. To start, Mr. Davidson’s conduc t is inconsistent with the right to arbitrate. He urges us not to penalize him for his “appa rent” and “[a]lleged [i]naction” once it became clear that the original arbitration was failing. Aplt. Opening Br. at 10. After all, he cooperated with the ar bitration order and had “no reas on . . . to believe . . . that he wouldn’t be able to as sert his right to arbitrati on and pursue his own motion to compel down the road.” Id. at 8; see also id. at 14 (“Davidson did nothing that would imply abandonment. He paid his share of the arbitrator’s f ee, participated in selecting an arbitration panel and partic ipated in pre-hearing conferences.”). But waiver can occur outside of an intentional relinqu ishment of the right to arbitrate; it can be implied from a pa rty’s actions or even inaction. See BOSC, Inc. v. Bd. of Cty. Comm’rs of Cty. of Bernalillo , 853 F.3d 1165, 1178 (10th Cir. 2017) (“The Peterson factors analyze a party’s conduct— that is, that party’s external actions showing that it waiv ed its right to demand arbitr ation even if it did not subjectively intend to do so.”); see also Peterson , 849 F.2d at 468. In Peterson , for example, we concluded that the appellant “w aived arbitration [of its state law claims] due to its inaction ,” 849 F.2d at 467 (emphasis adde d). Similarly, we focused on omissions and found waiver wh ere a party “improperly sat on its right to arbitrate” in Healy v. Cox Communications, Inc. ( In re Cox Enterprises, Inc. Set-top Cable Television Box Antitrust Litigation ) ( Cox I ), 790 F.3d 1112, 1120 (10th Cir. 2015).8 Furthermore, common sense di ctates that a party who intends to exercise his right to arbitrate would object or do something to try to preserve an existing arbitration that is in dange r of being terminated—espec ially where the arbitrator repeatedly invites the parties to reach out. Indeed, we ha ve instructed that a party considering arbitration “must do all it could reasonably have been expected to do to make the earliest feasible determination of whether to proceed judicially or by arbitration”—even if that m eans just mentioning the pr ospect of arbitration. Cox I , 790 F.3d at 1119 (internal quotation marks omitted); see also Reid Burton , 614 F.2d at 703 (referencing a party’s “duty” to “i nsist[] upon or demand[] immediately” the enforcement of an arbitration provision). This practice “ensure[ s] a more expedient and efficient resolution” of the dispute and “prevent[s] . . . improper gamesmanship.”
Cox I , 790 F.3d at 1119. What could Mr. Davidson have done here? While he was understandably reluctant to pay his co-defe ndants’ fees, he c ould have done so and sought repayment later. AAA’s October 18 notice offered an assurance that “[t]he paying party(s) [could] make the repayment of this deposit pa rt of its claim to th e arbitrators.” Aplt. App. at 296. Alternatively, he could have requested relie f or sanctions under Rule 57 or Rule 58 of AAA’s Commercial Arbitra tion Rules and Mediation Procedures, respectively, which were in corporated into the partie s’ arbitration agreement. 2

2 Rule 57 lists remedies for nonpayme nt of arbitrator compensation or administrative charges. Rule 58 details th e arbitrator’s ability to order appropriate sanctions (upon another party’s request) when a party does not comply with its (continued)9 Although AAA cannot preclude a party from defending a claim or enter a default judgment against a non-paying party, such a request would have alerted AAA and the other parties of Mr. Davidson’s desire to continue with th e arbitration and might have helped the parties overcome th e impasse. The district c ourt hinted during the status conference that it could have ordere d the parties to pay their fees. See Aplt. App. at 265 (“[W]e are stalled . . . w ith the arbitration. It l ooks like I am going to lift the stay. There is no choice other than perhap s order people to pay their fees.”). Instead, Mr. Davidson remained silent wh ile the pending arbitration collapsed. His passive approach misled the Trustee, who posits that he might have acted differently had he known Mr. Davidson s till intended to pursue arbitration. See Aplee. Br. at 16 (suggesting that he “could have either (1) paid Mr. Austin’s share of the fees to preserve the Ar bitration as to all parties; or (2) requested (just as Mr. Davidson could have done) to continue the Arbitr ation as to the Trustee and Mr. Davidson—the only partie s who paid the fees”). Mr. Davidson’s behavior also prejudiced the Trustee. We have described prejudice as “inherent unfairnes s—in terms of delay, expens e, or damage to a party’s legal position.” Cox II , 835 F.3d at 1208-09 (internal qu otation marks omitted). All three are implicated here. A second, partial arbitration would add further delay to a case that has dragged on for years because of initial procedural ma tters. It would obligations under the Rules. “T he parties shall be deemed to have made these rules a part of their arbitration ag reement whenever they have provided for arbitration by the [AAA].” R-1(a), Commercial Arbitrat ion Rules and Medi ation Procedures, American Arbitration Association (2013).10 require the Trustee—who spent a total of $ 12,880.50 on filing and arbitrators’ fees for the first arbitration, less any amount s reimbursed—to incu r similar additional fees. And it would frustrate the Trustee’s legitimate goal of resolving related cases in one forum. When the Tr ustee agreed to arbitrate all claims , he made clear he was doing so “in the interest of reducing costs and maximizing the valu e of the Trusts.” Aplee. App. at 42. Likewise, when th e Trustee moved to consolidate related litigation after the arbitration was terminated , he stressed the impor tance of resolving claims “ in a single forum . . . [to] bring order, effici ency, and common sense to these proceedings.” Id. at 59. Although the Trustee now speculates on appeal that he might have been willing to proceed with the arbitration solely as to Mr. Davidson, see Aplee. Br. at 16, we agree with the district court that forcing th e Trustee to “split litigation of similar, if not th e same, issues between two venu es” is “neither fair nor a good use of resources.” Aplt. App. at 335-36. 3 To the contrary, it would contravene the “combined efficiency of the public and private di spute-resolution systems.” Hill , 603 F.3d at 774. The remaining factors are so mewhat neutral or not relevant. As for factors (2) and (5), the parties have only partially invoked the litigation machinery and are admittedly toward the front end of litigatio n, with discovery to date limited to the arbitrability issue; thus , this case has not yet progressed much substantivel y. But this lack of progress cuts both ways . This dispute needs to be resolved expeditiously, and

3 Mr. Davidson concedes th is point but minimizes the burden imposed on the Trustee by calling it a matter of “conve nience.” Aplt. Reply Br. at 5.11 the plan developed by the parties at the sc heduling conference seems to present the most efficient path forwar d. As for factor (3), Mr. Davidson did not request arbitration close to the trial date, but he did delay announci ng his intent to arbitrate as explained above. Finally, fact or (4) is not relevant.
III. Conclusion Mr. Davidson waived any right to arb itrate the claims ag ainst him. We therefore affirm the district court’s order denying his moti on to stay the litigation and to compel arbitration.

Entered for the Court
Bobby R. Baldock Circuit Judge