Filed 7/20/21 Pacheco v. Baronhr CA2/7

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

JOSH ALEXANDER 

PACHECO,

Plaintiff and Respondent,

v.

BARONHR, LLC.,

Defendant and Appellant.

 B302687

 (Los Angeles County

 Super. Ct. No. BC722440)

APPEAL from an order of the Superior Court of Los 

Angeles County, Dennis J. Landin, Judge. Reversed with 

directions.

Eric M. Welch, for Defendant and Appellant.

No appearance by Plaintiff and Respondent.

_____________

BaronHR, LLC appeals from the trial court’s denial of its 

motion to compel arbitration. The trial court found BaronHR 

waived its right to compel arbitration based on Code of Civil 
2

Procedure section 1281.5, subdivision (b),

1 as well as the factors 

set forth in St. Agnes Medical Center v. Pacificare (2003) 31 

Cal.4th 1187 (St. Agnes), by waiting a year following the filing of 

the complaint and participating in the litigation before moving to 

compel arbitration. Substantial evidence does not support the 

trial court’s ruling, and we reverse.2

FACTUAL AND PROCEDURAL BACKGROUND3

A. Pacheco’s Employment 

In January 2017 BaronHR a temporary staffing agency, 

placed Pacheco with Holiday Inn Express as a maintenance 

worker. On June 15, 2017 Pacheco and BaronHR entered into a 

written agreement to arbitrate all claims. The agreement,

written in both English and Spanish, provides that BaronHR and 

Pacheco “mutually agree that they shall resolve by final and 

binding arbitration any and all claims or controversies for which 

a court or other governmental dispute resolution forum otherwise 

would be authorized by law to grant relief, in any way arising out 

1 All further undesignated statutory references are to the

Code of Civil Procedure. 

2 Pacheco initially appeared through counsel. However, his 

attorney withdrew as counsel, and Pacheco did not file a 

respondent’s brief.

3 BaronHR designated an incomplete record on appeal. To 

assist our review, on our own motion we augment the record to 

include the complaint, BaronHR’s answer, the declaration of 

Angie Munguia in support of BaronHR’s motion to compel 

arbitration, Pacheco’s opposition to the motion, and the 

declaration of Aaron Eslamboly in opposition to the motion. (Cal. 

Rules of Court, rule 8.155(a)(1)(A).)
3

of, relating to, or associated with Employee’s application for 

employment with Employer, Employee’s employment with 

Employer, or the termination of any such employment.” The 

arbitration agreement provided it was “governed by and 

enforceable under the Federal Arbitration Act.” 

Pacheco was terminated from his employment at Holiday 

Inn Express in September 2017. 

B. This Action

On September 19, 2018 Pacheco filed a complaint against 

BaronHR, Holiday Inn Express, and other corporate and 

individual defendants4 alleging, among other claims, violations of 

the California Fair Employment and Housing Act (Gov. Code, 

§ 12900 et seq.) relating to an alleged disability, breach of 

contract, and wrongful termination. Pacheco alleged that while 

working at Holiday Inn Express he “was subjected to dangerous 

and unsafe working conditions,” suffered significant workplace 

injuries, and was later terminated as a result of the injuries. 

BaronHR filed an answer to the complaint on November 8, 

2018. The sixth affirmative defense states, “The Complaint, and 

each purported cause of action contained therein, is barred by 

arbitration because Plaintiff Josh Pacheco validly executed an 

Arbitration Agreement in June 2017 with Defendant BaronHR, 

LLC.” BaronHR filed a case management statement on 

December 19, 2018. 

On February 21, 2019 Pacheco served BaronHR with two 

sets of form interrogatories, special interrogatories, and requests

for production of documents. Pacheco also served written 

discovery on the other defendants. BaronHR responded to the 

4 Only BaronHR is a party to this appeal.
4

discovery, but its discovery responses included mostly objections. 

The parties engaged in a meet and confer process, followed by an 

informal discovery conference. The informal discovery conference 

was unsuccessful, and Pacheco filed six motions to compel 

discovery. 

The parties attended a mediation on June 12, 2019, but 

they were unable to resolve the matter. On July 29, 2019 the 

parties attended a postmediation status conference, at which the 

trial court ordered BaronHR to file its motion to compel 

arbitration. BaronHR filed its motion on August 5, 2019, setting 

a hearing date for August 27, but the trial court granted 

Pacheco’s ex parte application to strike the motion for lack of 

sufficient notice. BaronHR refiled its motion on August 16, 2019, 

setting a November 4, 2019 hearing date. The parties attended 

status conferences on August 27, September 11, and October 16, 

2019. 

C. BaronHR’s Motion To Compel Arbitration

In its motion to compel arbitration, BaronHR asserted 

Pacheco signed an arbitration agreement, his claims fell within 

the scope of the agreement, the agreement was not 

unconscionable, and arbitration was mandatory under the 

Federal Arbitration Act, 9 U.S.C. § 1 et seq.

In his opposition, Pacheco argued BaronHR waived its 

right to compel arbitration because BaronHR failed to file its 

motion within 30 days of service of the complaint, in violation of 

section 1281.5, subdivision (b), and after BaronHR filed its 

answer, in violation of section 1281.5, subdivision (c). Further, 

BaronHR waited for over a year after the complaint was filed and 

just three months before trial to file its motion. Pacheco also 

argued BaronHR had invoked the “litigation machinery” by 
5

responding to Pacheco’s discovery, engaging in meet and confer 

efforts, and attending mediation and status conferences. 

Pacheco did not dispute he signed the arbitration agreement, but 

he asserted the arbitration agreement was unconscionable, and 

that compelling arbitration with BaronHR, but not the other nonsignatory defendants, risked inconsistent rulings. 

In its reply, BaronHR argued the agreement was not 

unconscionable and, in any event, any unconscionable provisions 

could be severed. As to waiver, BaronHR asserted “Plaintiff was 

well informed of the existence of the arbitration agreement, as it 

was repeatedly brought to his attention during the early 

mediation, Defendant’s discovery responses which indicated the 

existence of the arbitration agreement, and Informal Discovery 

Conference, wherein Defendant BaronHR, LLC informed this 

Court and Plaintiff relating to same.” 

At the outset of the November 4, 2019 hearing, the trial 

court indicated its “inclination is to deny that motion because it 

was not filed in a timely fashion, and considering the factors in 

the Saint Agnes case, they all seem to weigh in favor of denying 

the motion.” BaronHR’s attorney argued the motion “was timely 

brought in accordance with the formal discovery conference and a 

date set for BaronHR . . . to file the motion to compel arbitration.” 

Further, BaronHR asserted its discovery responses only 

preserved its objections and it consistently asserted in its answer, 

case management statement, informal discovery conference, and 

mediation that there was an arbitration agreement. BaronHR’s 

attorney also argued there was a valid arbitration agreement 

covering the disputes in the case and the agreement was not 

unconscionable. 

Pacheco’s attorney responded that the motion was untimely 

because it was not filed before the answer or within 30 days of 
6

filing the complaint. Further, although BaronHR made the court 

and Pacheco aware of the arbitration agreement, it failed to file 

the motion, and “[w]e’ve been litigating this case for a full year 

since August of 2018.” 

BaronHR’s attorney replied that “the reason that there was 

a delay in bringing this motion for the most part was because we 

engaged in mediation for the first six months of—we were 

preparing for mediation and we were engaged in mediation with 

the plaintiff with regard to this matter. And as soon as that did 

not work out, we brought the motion as timely as we could.” 

The trial court denied the motion, explaining, “I’m going to 

stick with my tentative thoughts on this matter and deny the 

motion due to its untimely filing. . . . The statute involved here is 

[section 1281.5, subdivision (b)], which has been discussed in the 

moving papers. And as I mentioned . . . in the Saint Agnes case . 

. . and using those factors, they weigh in favor of . . . denying the 

motion to arbitrate.” 

DISCUSSION

A. Waiver of the Right To Arbitration

“A motion to compel arbitration is properly denied when 

the moving party has waived its right to do so.” (Spracher v. 

Paul M. Zagaris, Inc. (2019) 39 Cal.App.5th 1135, 1137; accord, 

Guess?, Inc. v. Superior Court (2000) 79 Cal.App.4th 553, 557; see 

§ 1281.2 [upon a petition to compel arbitration, “the court shall 

order the petitioner and 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”].) The 

Federal Arbitration Act and California law apply the same 
7

standards for determining whether a party has waived the right 

to seek arbitration. (Lewis v. Fletcher Jones Motor Cars, Inc. 

(2012) 205 Cal.App.4th 436, 444 (Lewis).)

The party seeking to compel arbitration bears the burden of 

proving by a preponderance of the evidence an agreement to 

arbitrate a dispute exists; the party opposing arbitration bears 

the burden of proving any defense (such as unconscionability or 

waiver). (Pinnacle Museum Tower Assn. v. Pinnacle Market 

Development (US), LLC (2012) 55 Cal.4th 223, 236; Rosenthal v. 

Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413

[“If the party opposing the petition raises a defense to 

enforcement—either fraud in the execution voiding the 

agreement, or a statutory defense of waiver or revocation (see 

§ 1281.2, subds. (a), (b))—that party bears the burden of 

producing evidence of, and proving by a preponderance of the 

evidence, any fact necessary to the defense.”].) “[A] party who 

resists arbitration on the ground of waiver bears a heavy burden 

[citations], and any doubts regarding a waiver allegation should 

be resolved in favor of arbitration.” (St. Agnes, supra, 31 Cal.4th 

at p. 1195; accord, Cox v. Bonni (2018) 30 Cal.App.5th 287, 303

(Cox); Gloster v. Sonic Automotive, Inc. (2014) 226 Cal.App.4th 

438, 447 (Gloster).) Generally, a determination of waiver is a 

question of fact, and we will affirm the trial court’s finding if 

supported by substantial evidence. (St. Agnes, at p. 1196; accord, 

Spracher v. Paul M. Zagaris, Inc., supra, 39 Cal.App.5th at p. 

1137.) But where the evidence is undisputed and only one 

reasonable inference may be drawn, the question is one of law. 

(St. Agnes, at p. 1196.)

In assessing a waiver claim, a trial court may consider six 

factors: “‘“(1) whether the party’s actions are inconsistent with 

the right to arbitrate; (2) whether ‘the litigation machinery has 
8

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.”’” (St. Agnes, supra, 31 Cal.4th at p. 1196; accord, Cox, 

supra, 30 Cal.App.5th at p. 303.) 

Although the trial court may consider all six factors, no 

single test determines the nature of the conduct that constitutes 

a waiver of arbitration. (St. Agnes, supra, 31 Cal.4th at p. 1195.) 

However, the presence or absence of prejudice from litigation of 

the dispute is “determinative” under federal law and “critical” 

under state law. (Id. at p. 1203; accord, Gloster, supra, 226 

Cal.App.4th at p. 448 [“‘[W]hether litigation results in prejudice 

to the party opposing arbitration is critical in waiver 

determinations.’”]; Hoover v. American Income Life Ins. Co. (2012) 

206 Cal.App.4th 1193, 1205 [“The presence or absence of 

prejudice from the litigation is a determinative issue.”].) “‘“The 

moving party’s mere participation in litigation is not enough; the 

party who seeks to establish waiver must show that some 

prejudice has resulted from the other party’s delay in seeking 

arbitration.”’” (Lewis, supra, 205 Cal.App.4th at p. 451; accord, 

Gloster, at p. 448.) Nor does the expenditure of funds by the 

opposing party to litigate the case establish prejudice. (St. Agnes,

at p. 1203 [“[C]ourts will not find prejudice where the party 

opposing arbitration shows only that it incurred court costs and 
9

legal expenses.”]; Cox, supra, 30 Cal.App.5th at p. 304 [“The fact 

that plaintiff expended money and resources in the trial court 

does not establish prejudice.”].) Rather, the party claiming 

waiver must show “substantial expense and delay were caused by 

the unreasonable or unjustified conduct of the party seeking 

arbitration.” (Iskanian v. CLS Transportation Los Angeles, LLC

(2014) 59 Cal.4th 348, 377.)

B. Substantial Evidence Does Not Support the Trial Court’s 

Finding That BaronHR Waived Its Right To Arbitration

BaronHR contends the trial court erred in finding waiver 

under the St. Agnes factors based on BaronHR’s delay of more 

than a year in filing its motion to compel arbitration. We agree 

substantial evidence does not support the trial court’s finding.5

As to the first St. Agnes factor, BaronHR’s conduct in the 

litigation was not inconsistent with its right to arbitrate. (St. 

Agnes, supra, 31 Cal.4th at p. 1196.) BaronHR asserted its right 

to arbitrate from the outset of the litigation, raising the 

arbitration agreement as an affirmative defense in its answer

and in its discovery responses. Thus, Pacheco was well aware 

that BaronHR sought to arbitrate its claims. As to the second 

factor, BaronHR did not substantially invoke the “litigation 

5 The trial court also incorrectly relied on section 1281.5, 

subdivision (b), in denying the motion to compel arbitration. 

That section applies only to actions to enforce a mechanic’s lien, 

not at issue here. (See § 1281.5, subd. (a) [setting requirements 

for “[a]ny person who proceeds to record and enforce a claim of 

lien . . . .”]; Crown Homes, Inc. v. Landes (1994) 22 Cal.App.4th 

1273, 1281 [“section 1281.5, subdivision (b) provides for a special 

waiver rule that comes into play when a party fails to seek 

arbitration of a dispute subject to a mechanic’s lien”].) 
10

machinery.” (Ibid.) Although BaronHR participated in several 

status conferences, an informal discovery conference, and a oneday mediation, it did not file any motions (other than to compel 

arbitration), nor did it propound discovery. Pacheco pointed out 

in the trial court that BaronHR had responded to his discovery, 

but according to BaronHR, it only preserved its objections, 

asserting its right to arbitrate.

As to the third factor, BaronHR delayed almost a year 

before filing its motion to compel arbitration, and the hearing 

was three months before the scheduled trial date. (St. Agnes, 

supra, 31 Cal.4th at p. 1196.) But Pacheco failed to show 

prejudice from the delay or that BaronHR gained a litigation 

advantage from using judicial procedures not available in

arbitration (the fifth and sixth factors).

6 (See id. at pp. 1203-1205

[reversing trial court finding of waiver where party delayed four 

months before filing petition to compel arbitration, but the 

parties did not litigate the merits or take discovery, and there 

was no prejudice to opposing party other than the costs incurred 

in responding to petitioner’s motion to change venue]; Gloster, 

supra, 226 Cal.App.4th at pp. 442, 449-450 [reversing trial court 

order finding waiver where defendants waited a year to file 

petition to compel arbitration, but they pleaded right to 

arbitration as affirmative defense and asserted intent to file 

petition in their case management statement, and opposing party 

suffered no prejudice other than costs of litigation]; cf. Lewis, 

supra, 205 Cal.App.4th at p. 451 [affirming trial court’s finding of 

waiver where moving defendant filed three demurrers, two 

motions to strike, and three motions to compel discovery 

6 BaronHR also did not file a counterclaim without 

requesting a stay of the proceeding (the fourth factor). 
11

responses and refused to extend deadline for plaintiff to file 

discovery motions].) 

Further, Pacheco failed to show BaronHR’s conduct in 

delaying the filing of the motion was unreasonable. To the 

contrary, as counsel for BaronHR explained at the hearing, the 

delay resulted from an effort to settle the case over a six-month 

period, culminating in an unsuccessful mediation, and “as soon as 

that did not work out, [BaronHR] brought the motion as timely as 

[it] could.”7

DISPOSITION

7 Although the trial court did not reach Pacheco’s argument 

the arbitration agreement was unconscionable, Pacheco has not 

filed a respondent’s brief presenting any other basis on appeal for 

affirming the trial court’s order. 
12

The November 4, 2019 order denying BaronHR’s motion to 

compel arbitration is reversed. The trial court is directed on 

remand to vacate its order denying BaronHR’s motion to compel 

arbitration and to enter a new order granting the motion. 

BaronHR is to bear its own costs on appeal in the interest of 

justice.

FEUER, J.

We concur:

SEGAL, Acting P. J.

McCORMICK, J.*

* Judge of the Orange County Superior Court, assigned by 

the Chief Justice pursuant to article VI, section 6 of the 

California Constitution.