Filed 3/28/23 Titlemax of California v. Pena CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication 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

FIFTH APPELLATE DISTRICT

TITLEMAX OF CALIFORNIA,

Petitioner and Appellant,

v.

CARLOS PEÑA,

Respondent;

DEPARTMENT OF INDUSTRIAL 

RELATIONS, DIVISION OF LABOR 

STANDARDS ENFORCEMENT, 

Intervener and Respondent.

F084706

(Super. Ct. No. 21CECG03730)

OPINION

APPEAL from orders of the Superior Court of Fresno County. Rosemary T. 

McGuire, Judge.

Baker & Hostetler, Shareef S. Farag and Vartan S. Madoyan, for Petitioner and 

Appellant.

No appearance for Respondent.

Scott R. Jones and Patrick C. McManaman for Intervener and Respondent.

-ooOoo-
2.

INTRODUCTION

Petitioner and appellant TitleMax of California, Inc. (TitleMax) appeals from two

orders: (1) an order (sometimes referred to as the “subject order”) denying its petition to 

compel arbitration of a wage dispute between it and its former employee, respondent 

Carlos Peña; and (2) an order denying its ex parte application to stay proceedings before 

the Division of Labor Standards Enforcement (sometimes referred to as the “ex parte 

order”). (TitleMax and Peña are referred to, collectively, as the “parties.”) The 

Department of Industrial Relations, Division of Labor Standards Enforcement (DLSE) is 

the respondent in intervention. (TitleMax and DLSE are sometimes referred to, 

collectively, as the “litigants.”) 

We reverse the subject order and ex parte order and remand the case to the trial 

court to enter an order compelling arbitration of Peña’s claims and staying the DLSE 

proceedings pending completion of the arbitration.

FACTUAL AND PROCEDURAL BACKGROUND

I. Peña’s Employment By TitleMax and Agreement to Arbitrate Certain Claims

Peña was employed by TitleMax or its affiliates from approximately May 2014 

until his resignation in July 2018. On May 12, 2014, at or near the commencement of 

Peña’s employment with TitleMax’s affiliate, TitleMax of Nevada, Inc., Peña and his 

then employer entered into a standalone, multi-page arbitration agreement (arbitration 

agreement). The arbitration agreement bound Peña and affiliates of TitleMax of Nevada, 

Inc. to its provisions. Neither Peña nor TitleMax dispute the validity of the arbitration 

agreement or that each is subject to its terms. Among other things, the arbitration 

agreement provided:

“The Federal Arbitration Act (9 U.S.C. §§ 1–16) (‘FAA’) shall 

govern this Agreement. If for any reason the FAA does not apply, then 

state law of arbitrability where Employee works for the Employing 

Company (or, if Employee is no longer employed by the Employing 

Company, last worked for the Employing Company) shall apply.”
3.

The arbitration agreement goes on to describe claims that are covered by the 

agreement. Those provisions read, in relevant part:

“The Parties mutually consent to the resolution by arbitration of all 

Arbitrable Claims (as defined below), past, present, or future, that 

Employee may have against any of the following: (1) TitleMax of Nevada, 

Inc. (the “Employing Company”), (2) any and all parents, subsidiaries, 

affiliates, and/or any other related companies of the Employing Company 

(collectively, the ‘Affiliated Companies’), (3) any and all officers, directors, 

members, managers, owners, shareholders, employees, agents, or any other 

representatives of any entity referenced in subsections (1) or (2) above (in 

their capacity as such or otherwise), ... or that the Employing Company or 

any of the Affiliated Companies may have against Employee. The Parties 

understand and agree that, if Employee becomes employed by an Affiliated 

Company after executing this Agreement, then that Affiliated Company 

shall be the Employing Company for purposes of this Agreement. 

“The only claims that are subject to this Agreement are those that are 

allowed under applicable federal, state, or local law, and are not specifically 

excluded below (‘Arbitrable Claims’). Arbitrable Claims include, but are 

not limited to: claims for wages or other compensation due; claims for 

breach of any contract or covenant (express or implied); tort claims 

(including, but not limited to, claims of outrage, intentional infliction of 

emotional distress, negligent hiring, or negligent supervision), even if such 

torts are currently unforeseeable; ... and claims for violation of any federal, 

state, or other governmental law, statute, regulation, or ordinance ....” 

In addition, the arbitration agreement contains a section describing various claims 

not covered by the agreement. The following provision is one of several describing 

claims not covered by the arbitration agreement:

“Regardless of any other terms of this Agreement, claims may be 

brought before and remedies awarded by an administrative agency if 

applicable law permits access to such an agency, notwithstanding the 

existence of an agreement to arbitrate. Such administrative claims include, 

without limitation, claims or charges brought before the Equal Employment 

Opportunity Commission, the U.S. Department of Labor, the National 

Labor Relations Board, and any state and local administrative agencies.” 

[Hereafter, the “savings clause.”]
4.

On or about April 30, 2016, Peña was transferred to California and, thereafter, was 

employed by TitleMax until his resignation in July 2018. 

II. Peña Files a Claim Against TitleMax with DLSE

In January 2019, Peña filed a claim against TitleMax with DLSE.1 In that claim, 

Peña sought reimbursement for business expenses he allegedly incurred during his 

employment with TitleMax, and waiting time penalties for wages he allegedly was not 

timely paid. 

DLSE notified TitleMax of the claim on or about February 19, 2019. Notices 

were sent to the parties on that date, advising them that a conference “to discuss the 

validity and to settle the claim” was scheduled to occur the following month. 

The settlement conference occurred, as scheduled, on March 14, 2019. Both 

parties participated but no settlement was reached. During the conference, Peña indicated 

he wanted to add additional claims against TitleMax. Because the matter did not settle, it 

was “referred to hearing” which we understand to mean a decision was made by DLSE to 

hold an evidentiary hearing (Berman hearing).2 TitleMax made no mention of the 

existence of the arbitration agreement at the March 14, 2019 settlement conference. 

1 “An employee (plaintiff) alleging the non-payment of wages or other 

compensation by his or her employer (defendant), must file a claim (the DLSE Form 1, 

‘Initial Report of Claim’ form) with a local office of DLSE to initiate investigation of 

the claim by the Labor Commissioner.” (<https://www.dir.ca.gov/dlse/policies.htm> [as 

of Mar. 27, 2023].) “Filing of an Initial Report or Claim triggers the Labor 

Commissioner investigation that Lab[or] C[ode section] 98[, subd.] (a) authorizes.” 

(Chin et al., Cal. Practice Guide: Employment Litigation (The Rutter Group 2022) 

¶ 11:1358, p. 11-222.) To our understanding, at no time was Peña independently 

represented by counsel. 

2 Labor Code section 98 authorizes the Labor Commissioner to investigate, hear, 

and decide wage claims within the Labor Commissioner’s jurisdiction. (Id., at subd. (a).) 

Evidentiary hearings under Labor Code section 98 are commonly referred to as Berman 

hearings, named after the sponsor of the authorizing legislation. (Sonic-Calabasas A, 

Inc. v. Moreno (2013) 57 Cal.4th 1109, 1128 (Sonic II).) 
5.

Nothing significant occurred in connection with the DLSE matter until January 28, 

2020, more than ten months after the 2019 settlement conference, when DLSE sent 

TitleMax a new notice of claim (capitalization omitted). In this new notice of claim, 

Peña reasserted the claims set forth in his initial claim and added claims for failure to pay 

overtime wage premiums; failure to compensate for meal periods and rest periods not 

provided; and failure to pay minimum wages set forth in two counts seeking liquidated 

damages. Included with the notice of claim was a letter from DLSE indicating the matter 

would be “set for a formal hearing [i.e., a Berman hearing] pursuant to Section 98 of the 

California Labor Code.” However, no hearing date was set at that time. 

On March 3, 2020, DLSE sent the parties a notice of hearing (capitalization 

omitted) indicating a Berman hearing was scheduled for April 1, 2020. Included with the 

notice of hearing was a copy of the complaint (capitalization omitted) filed by Peña and 

dated February 7, 2020. The February 7, 2020 complaint is the earliest filed complaint 

reflected in the record on appeal.3 The notice of hearing informed TitleMax of its right to 

file an answer within ten days of service of the notice of hearing, and that the hearing 

would go forward regardless of whether TitleMax submitted an answer, or appeared at 

the hearing, and that an “Order Decision or Award [would] be issued in accordance with 

the evidence offered at the hearing.” The record on appeal does not reflect that TitleMax 

ever filed an answer to the February 7, 2020, complaint.

On March 13, 2020, and again on March 17, 2020, counsel for TitleMax requested 

the Berman hearing be postponed due to the worsening Covid-19 outbreak and the travel 

3 Whereas the filing of a claim triggers a DLSE investigation (see fn. 1, ante), the 

filing of a complaint triggers DLSE’s obligation to “notify the parties as to whether a 

hearing will be held, whether action will be taken in accordance with [Labor Code] 

Section 98.3, or whether no further action will be taken on the complaint.” (Lab. Code,

§ 98, subd. (a).) Once a defendant is served with the notice of hearing and complaint, the 

defendant is permitted (but not required) to “file an answer with [the DLSE] ... setting 

forth the particulars in which the complaint is inaccurate or incomplete and the facts upon 

which the defendant intends to rely.” (Id., at subd. (c).)
6.

bans that had issued. TitleMax proposed the hearing be rescheduled to June 1, 2020. On 

March 17, 2020, DLSE postponed the Berman hearing to an undetermined date. DLSE 

admits “the postponement was due to the statewide lockdown over concerns of the 

Covid-19 pandemic.” (Unnecessary capitalization omitted.) As explained by DLSE, 

Governor Newsom declared a state of emergency on March 15, 2020 due to the 

pandemic; that “[a] series of executive orders restricting all manners of operations 

followed[]”; that on March 20, 2020, DLSE “postponed all hearings scheduled to be 

heard over the ensuing weeks”; that, as a result of the pandemic, “business as usual 

ceased, including all proceedings before [DLSE]”;4 and that “in the fall of 2021, as [the] 

pandemic subsided, [Peña’s] case resumed course.” 

Thus, approximately 18 months after DLSE had shut down all hearing operations, 

Peña’s matter resumed course. Specifically, on September 10, 2021, Peña filed an 

amended complaint with DLSE which set forth the same claims he had raised in his 

amended wage claim. In addition, the amended complaint named Tracy Young, Chief 

Executive Officer of TitleMax’s parent company, TMX Finance LLC, as an additional 

defendant in the matter. On September 14, 2021, DLSE sent the parties notice that a 

telephonic Berman hearing would be held on October 27, 2021. 

On or about September 30, 2021, TitleMax filed an answer to Peña’s amended 

complaint. On or about October 6, 2021, Mr. Young filed his answer. Neither answer 

made mention of the arbitration agreement.

According to the declaration of Deputy Labor Commissioner Kathleen Salzer, 

“[o]n October 18, 2021, the Labor Commissioner began receiving batches of evidence 

from [TitleMax and Young] for the upcoming hearing.” TitleMax submitted additional 

4 During this cessation period, DLSE “continued to process incoming wage 

claims[ but] none were adjudicated until hearings resumed—remotely—many months 

later.” 
7.

evidence to DLSE over the next several days. In addition, TitleMax provided DLSE with 

hearing appearance sheets to identify its counsel and intended witnesses. 

Also during this period, on October 21, 2021, counsel for TitleMax requested 

DLSE convert the Berman hearing to a settlement conference “in order to enforce the 

settlement agreement that the parties had agreed to” which, according to TitleMax’s 

counsel, was “confirmed multiple times, by ... Peña, on the phone.” TitleMax’s counsel 

indicated, “[w]ith the Labor Commissioner’s guidance, that settlement can be finalized 

and, in light of these circumstances, it would be a waste of time, money, and resources 

for all parties and for the Labor Commissioner to both prepare for and conduct a 

[Berman] hearing on October 27 (instead of a settlement conference to finalize the deal). 

This proposal would allow all parties to conduct a settlement conference with the 

assistance of your office, and if and only if that fails, to spend considerable time, money, 

and resources for a hearing.” 

On October 22, 2021, TitleMax’s counsel sent DLSE an email to follow up on his 

request to convert the Berman hearing to a settlement conference. Also on that day, 

TitleMax’s counsel emailed DLSE seeking confirmation that DLSE had received 

TitleMax’s exhibits marked “TitleMax 0001 through 0566,” advising DLSE that 

additional defense exhibits would be forthcoming, and noting that TitleMax had not 

received any exhibits Peña might have submitted to DLSE in advance of the Berman 

hearing. The email read, in part, “[p]lease let me know if you can provide us copies of 

these as soon as possible so that TitleMax can exercise its due process rights to review 

the exhibits in advance of the hearing, which is only a few days away.” (Emphasis 

omitted.) 

On October 25, 2021, DLSE received amended hearing appearance sheets from 

TitleMax identifying its counsel and intended witnesses. 

TitleMax did not mention the arbitration agreement in any of the above mentioned 

communications with DLSE. 
8.

The Berman hearing scheduled for October 27, 2021 was converted to a settlement 

conference. The conference was held but was unsuccessful. DLSE advised it would 

notify the parties of a new hearing date. The following day, October 28, 2021, DLSE 

sent an email to TitleMax’s counsel indicating that a future Berman hearing would be 

conducted by video. However, no Berman hearing was scheduled at that time. 

On November 15, 2021, Peña provided DLSE his evidence in support of his 

claims. However, there is no evidence in the record that Peña’s evidence was ever 

provided to TitleMax.

On November 16, 2021, TitleMax sent Peña a letter dated November 15, 2021 

demanding he “resolve any and all of [his] claims (including the ... pending wage claims) 

by binding arbitration, pursuant to the [arbitration agreement].” DLSE received a 

courtesy copy of the letter on November 17, 2021. This letter appears to be the first time 

TitleMax mentioned the arbitration agreement in connection with the DLSE proceedings 

and the first indication in the record on appeal that TitleMax intended to assert its right to 

compel arbitration.

Subsequently, TitleMax notified DLSE that it filed a petition to compel arbitration 

and provided DLSE with copies of the petition paperwork. 

III. The Trial Court Denies TitleMax’s Petition to Compel Arbitration

A. TitleMax Moves to Compel Arbitration

TitleMax filed its petition to compel arbitration of Peña’s claim on December 17, 

2021. In its petition, TitleMax alleged Peña had filed an administrative complaint against 

it in January 2019 with DLSE, and had amended his complaint on September 10, 2021 to 

bring additional claims against it and to add Mr. Young as a defendant. TitleMax alleged 

it demanded arbitration on November 16, 2021, but Peña failed to respond to the demand 

and thus refused to arbitrate his claims. TitleMax requested the trial court order Peña to 

arbitrate all of his claims against TitleMax “including but not limited to those claims 

currently before [DLSE], while preserving Mr. Young’s personal jurisdiction challenge.” 
9.

In support of its petition, TitleMax authenticated and submitted a copy of the arbitration 

agreement in addition to other evidence. 

B. The Trial Court Grants DLSE Leave to Intervene

On or about March 3, 2022, DLSE filed an application for leave to intervene in 

connection with TitleMax’s petition to compel arbitration. In its memorandum of points 

and authorities in support of its application, DLSE contended “[b]ecause [TitleMax] has 

unreasonably delayed asserting its right to arbitration and fully participated in the 

administrative adjudicative process to [Peña’s] detriment, [TitleMax] has waived its 

rights under the arbitration agreement and thus cannot deprive [DLSE] of jurisdiction 

over [Peña’s] claims.” DLSE argued it has a “right to intervene in ‘any proceedings 

when it appears that [the Labor Commissioner’s] jurisdiction is being usurped by an 

unenforceable arbitration agreement[,]’ ” quoting Sonic II, supra, 57 Cal.4th at p. 1149. 

DLSE also submitted a copy of its proposed opposition to TitleMax’s petition. 

Peña joined in DLSE’s application and its proposed opposition. DLSE contended 

it has a substantial interest in protecting its jurisdiction and that its “intervention will not 

expand the issues presented in this case since [its] arguments will not extend beyond the 

arbitration agreement’s enforceability” and that “[t]he arguments made by [DLSE] in 

opposition to the petition would be the same arguments raised by [Peña]—that his claims 

pending before [DLSE] are not excluded by the arbitration agreement and that the 

agreement is unenforceable, and thereby insufficient to remove [Peña’s] claim from 

[DLSE’s] jurisdiction. No additional issues will be presented ....”5 

5 On appeal, TitleMax contends DLSE did not abide by its representation to the 

trial court that it would limit the issues it would raise in opposition to the petition to 

compel arbitration, arguing the issue of “waiver” is a new issue. However, TitleMax 

does not contend it was error for the trial court to consider DLSE’s waiver argument and 

presents no argument to that effect. Arguments presented in passing and without 

argument or authority are waived. (Dills v. Redwoods Associates, Ltd. (1994) 

28 Cal.App.4th 888, 890; In re Marriage of Schroder (1987) 192 Cal.App.3d 1154, 1164. 
10.

In support of its application to intervene, DLSE submitted a declaration from Peña

in which he indicated he had spoken with TitleMax’s attorney “on roughly a dozen 

occasions with the expectation of settling [his] claims, the most recent of which was on 

October 20, 2021.” Peña averred TitleMax’s counsel stated, “Even if you win with the 

Labor Board, [TitleMax] is willing to spend any money necessary to ensure that we win 

the case. We don’t think you have any merit on what you are asking. We already waited 

this long, so time is not an issue. Companies have money set aside specifically for these 

types of legal matters, so cost is not an issue.” Peña stated he was not surprised by these 

comments because, “on April 18, 2020, in an earlier telephone conversation, [TitleMax’s 

counsel] told me that: ‘We will delay this case by any means necessary.’ ” Peña also 

stated, “Many of my encounters with [TitleMax’s counsel] included discussions 

regarding the merits of my case. I believe this provides Title[M]ax with an unfair 

advantage over me in the present litigation.”6 

On June 16, 2022, TitleMax filed a reply to DLSE’s proposed opposition. 

TitleMax also submitted a supplemental declaration of its counsel in which counsel 

averred TitleMax participated in the March 14, 2019, settlement conference in good faith; 

on March 3, 2020, TitleMax received notice of the Berman hearing scheduled for April 1, 

2020, but the hearing was postponed indefinitely due to the Covid-19 pandemic; no 

litigation activity occurred in connection with the DLSE proceedings until about one and 

a half years later when TitleMax received a copy of Peña’s amended complaint; and, in 

the intervening period, TitleMax and Peña “had, on multiple occasions, tentatively agreed 

to a settlement amount, but [Peña] changed his mind each time before a settlement 

6 DLSE argues TitleMax’s failure to address Peña’s declaration on appeal 

“effectively waives issues and arguments” asserted on appeal, citing In re Marriage of 

Fink (1979) 25 Cal.3d 877, 887–888. We disagree. Peña’s declaration was only filed in 

connection with DLSE’s motion to intervene and not in opposition to TitleMax’s petition 

to compel arbitration. Nothing in the trial court’s order denying the petition to compel 

arbitration suggests the court relied on Peña’s declaration. 
11.

agreement was executed.” Counsel also indicated TitleMax “vehemently denie[d] 

unreasonably delaying the case in bad faith”; and he “vehemently denie[d] ever uttering, 

‘We will delay the case by any means necessary,’ or ‘[TitleMax] is willing to spend any 

money necessary to ensure we win the case.’ ” Counsel averred “[a]s an Officer of the 

Court ..., [I] ha[ve] never uttered those words in any case, let alone in this case.” 

Counsel further noted the parties, prior to TitleMax’s petition to compel arbitration, “did 

not engage in any motion practice, written discovery, or depositions”; “have not litigated 

the merits of the dispute”; and “have not exchanged proposed exhibits.” Furthermore, 

counsel averred “TitleMax has not obtained information as to the legal strategies of 

[Peña].” 

On June 21, 2022, DLSE served TitleMax and Mr. Young with a copy of a newly 

amended complaint dated April 19, 2022, and noticed a Berman hearing for August 2, 

2022. The newly amended complaint amended Peña’s claim for overtime wages, meal 

and rest period premium wages, and liquidated damages.7 

On June 23, 2022, the trial court granted DLSE’s motion to intervene and 

continued the hearing on TitleMax’s petition to compel arbitration to July 28, 2022. In 

its adopted tentative ruling, the court noted that TitleMax did not oppose DLSE’s motion 

7

In this newly amended complaint dated April 19, 2022, Peña reduced his claim 

for overtime wages from $34,770.60 to $16,052.85; reduced his claim for meal period 

premium wages from $5,837.40 to $3,574.35; reduced his claim for rest period premium 

wages from $5,181.75 to $3,574.35; and reduced his two claims for liquidated damages 

from $1,128.00 and $10,521.00 to a single amount of $6,072.00. In addition, the alleged 

periods of time for which Peña claimed he was entitled to recovery were changed. Each 

claim now sought recovery for the period January 1, 2018 through July 16, 2018 (rather 

than from February 1, 2017 through February 3, 2018). The remaining claims for 

unreimbursed business expenses and waiting time penalties were the same in amount as 

compared to Peña’s prior amended complaint but the alleged period of time for which 

Peña claimed he was entitled to recover for unreimbursed business expenses was changed 

from January 31, 2017 through July 20, 2018 to February 1, 2017 through January 31, 

2018. 
12.

to intervene and that TitleMax had “in good faith submitted a reply to the proposed 

opposition [to the petition to compel arbitration]” but that “the proposed opposition is not 

filed so it is not presently before the court.” The court directed TitleMax to “refile its 

response to any arguments filed in opposition.” 

C. The Trial Court Denies the Petition to Compel Arbitration

On July 6, 2022, DLSE filed its opposition to TitleMax’s petition to compel 

arbitration. DLSE’s opposition raised similar points to those raised in its proposed 

opposition submitted in connection with its application for leave to intervene. DLSE 

noted that, prior to the hearing on DLSE’s application for leave to intervene, DLSE had 

noticed a new date for the Berman hearing on Peña’s newly amended complaint. In 

addition, DLSE resubmitted the prior declaration of Deputy Labor Commissioner, 

Kathleen Salzer, in opposition to TitleMax’s petition. 

On July 21, 2022, TitleMax filed its reply in support of its petition to compel 

arbitration and a reply declaration from its counsel along the same lines as that which was 

filed in reply to DLSE’s application for leave to intervene and proposed opposition to 

TitleMax’s petition to compel arbitration. 

On July 22, 2022, DLSE objected to the trial court considering the reply 

declaration of TitleMax’s counsel, arguing new evidence submitted in reply papers 

should not be considered. TitleMax replied to the objections noting (1) when it filed its 

petition to compel, it could not have anticipated DLSE’s joinder or arguments in 

opposition; (2) the declaration responds to new issues raised by DLSE in opposition; and 

(3) the reply declaration was substantially the same as that which it had filed in reply to 

DLSE’s proposed opposition which gave DLSE an opportunity to address it when it filed 

its formal opposition. 

On July 25, 2022, TitleMax filed an ex parte application to stay the Berman 

hearing that was scheduled to commence on August 2, 2022, three court days following 

the hearing on TitleMax’s petition to compel arbitration. DLSE opposed the ex parte 
13.

application and notified TitleMax that, absent a court ordered stay, the Berman hearing 

would remain on calendar for August 2, 2022. 

On July 28, 2022, the trial court denied TitleMax’s petition to compel arbitration 

and its ex parte application for a stay of the Berman hearing. The court sustained 

DLSE’s objection to the reply declaration of TitleMax’s counsel. With regard to its 

denial of the petition to compel, the trial court found it was undisputed Peña was 

employed by TitleMax and subject to a “valid agreement to arbitrate wage claims” and 

determined “[t]he only contested issue [was] whether [TitleMax] waived its right to 

compel arbitration.” Relying on a six factor test set forth in St. Agnes Medical Center v. 

PacifiCare of California (2003) 31 Cal.4th 1187, 1196 (St. Agnes), the trial court found 

TitleMax’s conduct was “inconsistent with the right to arbitrate and constitute[d] a 

waiver.” 

On July 28, 2022, TitleMax timely appealed the trial court’s order denying 

TitleMax’s petition to compel arbitration and its order denying a stay of the DLSE 

proceedings.

DISCUSSION

I. This Court Granted TitleMax’s Petition for a Writ of Supersedeas to Stay 

DLSE Proceedings During Pendency of the Appeal

On August 1, 2022, TitleMax filed a petition for writ of supersedeas with this 

court seeking an immediate, temporary stay of the August 2, 2022, Berman hearing. We 

granted a temporary stay and subsequently granted the petition “until a determination of 

the appeal on the merits or further order of this court.” 

II. Peña’s Claims are Arbitrable Under the Terms of the Arbitration Agreement

In the court below, in addition to arguing TitleMax waived its right to arbitrate 

Peña’s claims, DLSE argued the savings clause permitted Peña to bring his claims before 

DLSE—i.e., that the arbitration agreement, as applied to Peña’s claims, was merely 
14.

permissive and not mandatory. We set forth the text of the savings clause again for the 

reader’s convenience.

“Regardless of any other terms of this Agreement, claims may be brought 

before and remedies awarded by an administrative agency if applicable law 

permits access to such an agency, notwithstanding the existence of an 

agreement to arbitrate. Such administrative claims include, without 

limitation, claims or charges brought before the Equal Employment 

Opportunity Commission, the U.S. Department of Labor, the National 

Labor Relations Board, and any state and local administrative agencies.” 

The trial court, having found that TitleMax waived its right to arbitrate, did not 

address DLSE’s alternative argument that Peña’s claims were not subject to mandatory 

arbitration in light of the language of the savings clause. On January 4, 2023, we ordered 

supplemental briefing to determine this threshold issue. 

Having reviewed and considered the litigants’ supplemental briefing, we conclude 

Peña’s claims are not exempt from the scope of the arbitration agreement and are subject 

to mandatory arbitration for the reasons set forth below.

A. Clauses Similar to the Savings Clause Have Been Held to Save an

Arbitration Agreement From Being Declared Invalid Where Applicable Law 

May Prohibit the Waiver of Access to Administrative Relief

TitleMax contends the savings clause is “designed most immediately to address 

NLRB [National Labor Relations Board] rulings under federal labor-relations law.” “For 

decades, the National Labor Relations Board (NLRB) took the position that it is an unfair 

labor practice for an employer to ... require employees to agree to mandatory arbitration 

of all claims ....” (Chin et al., Cal. Practice Guide: Employment Litigation, supra, 

¶ 18:526.) “The U.S. Supreme Court reversed this policy in Epic Systems Corp. v. Lewis

(2018) ___ US ___, ___, 138 S.Ct. 1612, 1632 .... [¶] However, the NLRB takes the 

position that an arbitration agreement violates section 8(a)(1) of the NLRA [National 

Labor Relations Act] if it can be reasonably construed to interfere with an employee’s 

right to file charges with the NLRB.” (Chin, et al., Cal. Practice Guide: Employment 
15.

Litigation, supra, at ¶ 18:526, citing, e.g., Prime Healthcare Paradise Valley, LLC (2019) 

368 NLRB No. 10.)

TitleMax notes the NLRB has approved “ ‘virtually identical’ ” language as an 

appropriate means to protect an arbitration agreement from potential invalidation on 

grounds it conflicts with provisions of the NLRA, citing Uber Technologies, Inc. & 

Lenza H. Mcelrath III (2020) 369 NLRB 102. In Uber Technologies, the NLRB 

concluded section 8(a)(1) of the NLRA was not violated by a mandatory arbitration 

agreement which contained a savings clause that read, “[r]egardless of any other terms of 

this Agreement, claims may be brought before and remedies awarded by an 

administrative agency if applicable law permits access to such an agency notwithstanding 

an agreement to arbitrate. Such administrative claims include without limitation claims 

or charges brought before ... the [NLRB] ....” (Uber Technologies, at pp. 1, 3–4.)

DLSE acknowledges the NLRB has interpreted provisions substantively identical 

or similar to the above quoted provision and have “concluded the provision is a savings 

clause that adequately provides parties access to an agency’s administrative process to 

resolve certain disputes.” DLSE argues, however, a similar result should apply here—

i.e., that the savings clause should operate to provide access to “state and local 

administrative agencies” pursuant to the final phrase of the savings clause. In support of 

its contention, DLSE largely relies on California Labor Code section 2298 which 

provides, in relevant part: “Actions to enforce the provisions of this article for the 

collection of due and unpaid wages claimed by an individual may be maintained without 

regard to the existence of any private agreement to arbitrate.”

In response, TitleMax contends the FAA preempts section 229 and that 

“California courts have consistently recognized that, ‘if the FAA applies,’ the ‘statutory 

claims’ under the Labor Code ‘may be arbitrated,’ [citation], including claims subject to 

8 Statutory references are to the Labor Code unless otherwise indicated. 
16.

adjudication in a Berman hearing, [citation].” Thus, TitleMax contends the savings 

clause is not triggered by section 229 because it is not “applicable law.” 

We conclude TitleMax has the better argument.

B. The FAA Applies to the Arbitration Agreement and Section 229 Is 

Preempted by the FAA

1. The FAA Applies to the Arbitration Agreement

The FAA is codified commencing at section 1 of title 9 of the United States Code. 

The law was passed “to ‘overrule the judiciary’s longstanding refusal to enforce 

agreements to arbitrate’ and to place such agreements ‘ “upon the same footing as other 

contracts ....” [Citation.]’ [Citation.] The federal statute rests on the authority of 

Congress to enact substantive rules under the commerce clause, requiring courts to 

enforce arbitration agreements in contracts involving interstate commerce.” (Cronus 

Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, 383 (Cronus).)

Here, the arbitration agreement expressly provides, “[t]he Federal Arbitration Act 

(9 U.S.C. §§ 1–16) (‘FAA’) shall govern this Agreement. If for any reason the FAA does 

not apply, then the state law of arbitrability where Employee works for the Employing 

Company (or, if Employee is no longer employed by the Employing Company, last 

worked for the Employing Company) shall apply.” The arbitration agreement further 

provides, “[t]he Parties understand and agree that the Employing Company is engaged in 

transactions involving interstate commerce and that this Agreement relates to transactions 

in interstate commerce. Specifically, the parties agree that the Employing Company 

markets and sells products and provides services to customers which involve the 

movement of money, automobiles, and automobile titles from state to state.” Peña does 

not dispute that TitleMax’s business involved interstate commerce. Moreover, DLSE 
17.

acknowledges that, unless the savings clause takes the arbitration agreement out of the 

FAA, “the FAA controls ....”9 

Based on the foregoing, we conclude TitleMax has successfully demonstrated the 

FAA applies to the arbitration agreement. For reasons discussed in a subsequent section 

of this opinion, we reject DLSE’s contention that the savings clause takes the arbitration 

agreement out of the FAA.

2. Section 229 Is Preempted by the FAA

The FAA “embodies Congress’ intent to provide for the enforcement of arbitration 

agreements within the full reach of the Commerce Clause.” (Perry v. Thomas (1987) 

482 U.S. 483, 490 [107 S.Ct. 2520, 96 L.Ed.2d 426] (Perry).) “[T]he FAA ‘establishes 

that, as a matter of federal law, any doubts concerning the scope of arbitrable issues 

should be resolved in favor of arbitration, whether the problem at hand is the construction 

of the contract language itself or an allegation of waiver, delay, or a like defense to 

arbitrability.’ [Citation.] The policy of enforceability established by section 2 of the 

FAA is binding on state courts as well as federal courts.” (Cronus, supra, 35 Cal.4th at 

p. 384.)

Section 2 of the FAA provides: “A written provision in any maritime transaction 

or a contract evidencing a transaction involving commerce to settle by arbitration a 

controversy thereafter arising ... shall be valid, irrevocable, and enforceable, save upon 

such grounds as exist at law or in equity for the revocation of any contract ....” 

(9 U.S.C.A § 2.) “[F]ederal policy places [section 2 of the FAA] in unmistakable conflict 

with California’s [section] 229 requirement that litigants be provided a judicial forum for 

9 DLSE argues that “[t]he question here is whether or not the [savings] [c]lause 

takes the [arbitration] [a]greement out of the FAA for purposes of arbitrating ... Peña’s

wage claims. If not, the FAA controls and [DLSE’s] initial analysis applies: [TitleMax] 

waived its rights to arbitrate those claims as determined by the [trial court].” (Italics 

added.) 
18.

resolving wage disputes. Therefore, under the Supremacy Clause, the state statute must 

give way.” (Perry, supra, 482 U.S. at p. 491; Performance Team Freight Systems, Inc. v. 

Aleman (2015) 241 Cal.App.4th 1233, 1239-1240 (Performance Team) [“[I]n most cases, 

the FAA mandates arbitration when contracts involving interstate commerce contain 

arbitration provisions. [Citations.] In matters in which the FAA applies, it preempts 

Labor Code section 229, requiring arbitration of claims that otherwise could be resolved 

in court.”].)

In its supplemental reply brief, DLSE argues for the first time that Peña did not 

sign the arbitration agreement until 2014 and that, because our state courts did not 

recognize the preemption until 2015, citing Performance Team, supra, 241 Cal.App.4th

at p. 1240, the arbitration agreement was not preempted when signed by Peña. The claim 

that our state courts did not recognize section 229’s preemption until 2015 is inapposite. 

(See, e.g., Sonic II, supra, 57 Cal.4th at pp. 1170–1171 [discussing Perry at length and 

holding “the FAA preempts a state-law rule that categorically prohibits an adhesive 

arbitration agreement from requiring an employee to waive access to a Berman hearing”]; 

id. at 1171 [vacating judgment in Sonic-Calabasas A, Inc. v. Moreno (2011) 51 Cal.4th

659 (Sonic I) [in which the Court concluded it was unconscionable and contrary to public 

policy for an employer to require an employee waive its right to a Berman hearing].)

Notwithstanding, assuming for purposes of analysis that Performance Team was 

the first California decision recognizing the FAA preempted section 229, we nonetheless 

reject DLSE’s argument on several grounds. First, the point was not raised until DLSE 

filed its final supplemental reply briefing and no good cause was shown for as to why it 

was asserted late. (High Sierra Rural Alliance v. County of Plumas (2018) 

29 Cal.App.5th 102, 111, fn. 2 [“ ‘ “points raised in the reply brief for the first time will 

not be considered, unless good reason is shown for failure to present them before.” ’ ”]. 

Second, “Conflict preemption occurs when ‘ “[S]tate law is pre-empted to the extent that 

it actually conflicts with federal law.” ’ ” (Physicians Committee for Responsible 
19.

Medicine v. McDonald’s Corp. (2010) 187 Cal.App.4th 554, 565.) Thus, conflict 

preemption occurs upon the existence of the conflict—not the existence of caselaw 

recognizing the conflict. Third, DLSE does not provide any authority (and we know of 

none) that suggests a state court must explicitly recognize U.S. Supreme Court authority 

before such authority binds the state.

We conclude there is no merit to the contention that the FAA did not preempt 

section 229 at the time the arbitration agreement was signed.

3. Analysis of the Savings Clause

“Interpretation of a contract is a question of law ‘when it is based on the words of 

the instrument alone, when there is no conflict in the extrinsic evidence, or when a 

determination was made based on incompetent evidence.’ [Citation.] In addition, 

courts interpret a contract as a matter of law ‘even when conflicting inferences may be 

drawn from the undisputed extrinsic evidence [citations] or that extrinsic evidence 

renders the contract terms susceptible to more than one reasonable interpretation.’ ” 

(Oakland-Alameda County Coliseum Authority v. Golden State Warriors, LLC (2020) 

53 Cal.App.5th 807, 818–819.) “Absent any conflict in extrinsic evidence, we review de 

novo issues regarding the proper interpretation of a contract.” (Gilkyson v. Disney 

Enterprises, Inc. (2021) 66 Cal.App.5th 900, 915.) Here, there is no conflict in the 

evidence and we may decide the proper interpretation of the arbitration agreement de 

novo.

Arbitration agreements are “subject to the same rules of construction as any other 

contract ....” (Fittante v. Palm Springs Motors, Inc. (2003) 105 Cal.App.4th 708, 713.) 

“Agreements to arbitrate are construed according to the ordinary rules of contract 

interpretation, as augmented by a federal policy requiring that all ambiguities be resolved 

in favor of arbitration.” (Choice Hotels Intern., Inc. v. BSR Tropicana Resort, Inc.

(4th Cir. 2001) 252 F.3d 707, 710.) 
20.

“The language of a contract is to govern its interpretation, if the language is clear 

and explicit, and does not involve an absurdity.” (Civ. Code § 1638.) “When a contract 

is reduced to writing, the intention of the parties is to be ascertained from the writing 

alone, if possible ....” (Id. at § 1639.) “The whole of a contract is to be taken together, 

so as to give effect to every part, if reasonably practicable, each clause helping to 

interpret the other.” (Id. at § 1641.) “The words of a contract are to be understood in 

their ordinary and popular sense, rather than according to their strict legal meaning; 

unless used by the parties in a technical sense, or unless a special meaning is given to 

them by usage, in which case the latter must be followed.” (Id. at § 1644.) “A contract 

may be explained by reference to the circumstances under which it was made, and the 

matter to which it relates.” (Id. at § 1647.) “Particular clauses of a contract are 

subordinate to its general intent.” (Id. at § 1650.) “Repugnancy in a contract must be 

reconciled, if possible, by such an interpretation as will give some effect to the repugnant 

clauses, subordinate to the general intent and purpose of the whole contract.” (Id. at 

§ 1652.) “Words in a contract which are wholly inconsistent with its nature, or with the 

main intention of the parties, are to be rejected.” (Id. at § 1653.) With these principles in 

mind, we now turn to the text of the savings clause.

“Regardless of any other terms of this Agreement, claims may be brought 

before and remedies awarded by an administrative agency if applicable law 

permits access to such an agency, notwithstanding the existence of an 

agreement to arbitrate. Such administrative claims include, without 

limitation, claims or charges brought before the Equal Employment 

Opportunity Commission, the U.S. Department of Labor, the National 

Labor Relations Board, and any state and local administrative agencies.” 

According to TitleMax “[t]he operative terms here are sufficiently clear to resolve 

the inquiry on their face. The term ‘applicable’ means ‘capable of being applied’ or ‘fit, 

suitable, or right to be applied.’ [Citation.] The term ‘law’ ... refers to ‘the whole body 

of laws relating to one subject.’ [Citation.] The FAA is clearly part of the ‘body of laws 

relating’ to access to an adjudicatory for[u]m notwithstanding an agreement to arbitrate, 
21.

and it is clearly ‘capable’ or ‘fit’ ‘to be applied,’ ....” TitleMax argues “[w]here the FAA 

applies, ‘applicable law’ does not afford access to an [administrative] agency, 

notwithstanding an arbitration agreement.” (Italics omitted.)

DLSE argues parties are free to structure an arbitration agreement in such a 

manner as to exclude certain claims from those that are arbitrable under the agreement. 

DLSE is undoubtedly correct on this point. “[A]rbitration is a matter of contract and a 

party cannot be required to submit to arbitration any dispute which he has not agreed so 

to submit.” (AT & T Technologies, Inc. v. Communications Workers of America (1986) 

475 U.S. 643, 648 [106 S.Ct. 1415, 1418, 89 L.Ed.2d 648, ___]; Ericksen, Arbuthnot, 

McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 323.)

DLSE contends the savings clause “contemplates control under state law because 

it says so” and that, once triggered, “the [savings clause] controls and takes the 

[arbitration agreement] out of the FAA, hence no preemption.” DLSE then engages in a 

lengthy analysis of Peña’s claims to demonstrate that they fall within the scope of section 

229. Assuming, without deciding, that each of Peña’s claims falls within the scope of 

section 229, we conclude DLSE’s argument, nonetheless, fails because the savings clause 

was not actually triggered in this case.

The first sentence of the savings clause states: “Regardless of any other terms of 

this Agreement, claims may be brought before and remedies awarded by an 

administrative agency if applicable law permits access to such an agency, 

notwithstanding the existence of an agreement to arbitrate.” DLSE argues the 

introductory phrase “Regardless of any other terms of this Agreement” means that once 

the savings clause is triggered, “none of the other terms of the [arbitration agreement] 

could apply.” DLSE then turns to the second sentence of the savings clause and argues 

the inclusion of the phrase “any state and local administrative agencies” demonstrates 

Peña is entitled to have DLSE adjudicate his claims. DLSE argues nothing prohibits an 
22.

employer from “allow[ing] a wage claimant access to a Berman hearing and then 

proceed[ing] to arbitration if either party appeals.” (Italics omitted.) 

We begin by recognizing that each of Peña’s claims appear to fall within the scope 

of claims generally identified as subject to arbitration. The arbitration agreement 

provides: “Arbitrable Claims include, but are not limited to: claims for wages or other 

compensation due ... and claims for violations of any federal, state, or other 

governmental law, statute, regulation, or ordinance (except as otherwise provided 

below).” The phrase “except as otherwise provided below” refers to the section on 

“Claims Not Covered by the Agreement” of which the savings clause is a part.

The litigants disagree as to whether the savings clause was triggered; we conclude 

it was not. The triggering language that allows a party to bring claims before an 

administrative agency reads “if applicable law permits access to such an agency, 

notwithstanding the existence of an agreement to arbitrate.” We agree with TitleMax that 

“applicable law” includes the FAA. Because the FAA preempts section 229, section 229 

is not “applicable.” Nothing in the language of the savings clause suggests the parties 

intended a two-tier system whereby a Berman hearing is first allowed and then arbitration 

is only available should a party decide to appeal.

To the extent DLSE is arguing the savings clause completely eliminates the need 

to arbitrate Peña’s claims because the second sentence of the savings clause includes the 

phrase “any state and local administrative agencies,” several comments are in order. In 

our view, the second sentence of the savings clause is intended to merely provide 

exemplars of agencies that, under certain circumstances, are appropriate adjudicatory 

fora—i.e., when applicable law allows them to serve as fora despite the existence of an 

agreement to arbitrate. To allow the second sentence of the savings clause to operate 

independent of the first sentence would be to render the first sentence mere surplusage. 

That the first sentence limits the second is supported by the first few words of the second 

sentence which, in referencing the first sentence, begins “Such claims include ....” 
23.

Moreover, the phrase “any state and local administrative agencies” remains 

relevant in the event a court were to find the FAA did not apply. This was an identified 

concern in the second paragraph of the arbitration agreement in which it states, “If for 

any reason the FAA does not apply, then the state law of arbitrability where Employee 

works ... shall apply.” Were this court to have concluded the FAA did not apply, then 

section 229 would have constituted “applicable law” and would have permitted access to 

the DLSE “notwithstanding the existence of an agreement to arbitrate.”

Based on the foregoing, we conclude Peña’s claims are subject to mandatory 

arbitration and may not be adjudicated by DLSE unless TitleMax waived its right to 

compel arbitration. As discussed below, we conclude TitleMax did not waive its right to 

compel arbitration.

III. Standard of Review on the Issue of Waiver

“A right to compel arbitration may be waived.” (Davis v. Continental Airlines, 

Inc. (1997) 59 Cal.App.4th 205, 211 (Davis).) Code of Civil Procedure section 1281.2 

provides, in pertinent part: “On petition of a party to an arbitration agreement alleging 

the existence of a written agreement to arbitrate a controversy and that a party to the 

agreement refuses to arbitrate that controversy, 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 ....” (Code Civ. Proc., § 1281.2, subd. (a), italics added.) 

Here, the trial court based its order denying TitleMax’s petition to compel arbitration on 

its determination that TitleMax had waived its right to compel arbitration. 

DLSE contends this court should review the trial court’s order denying TitleMax’s 

petition to compel arbitration for substantial evidence, and the order must be upheld 

because it is supported by substantial evidence. TitleMax acknowledges waiver 

determinations typically involve questions of fact but where “ ‘the facts are undisputed 
24.

and only one inference may reasonably be drawn’ ” a question of law is presented. 

Impliedly, TitleMax contends this court may decide the waiver issue de novo. 

“There is no uniform standard of review for evaluating an order denying a motion 

to compel arbitration. [Citation.] If the court’s order is based on a decision of fact, then 

we adopt a substantial evidence standard. [Citations.] Alternatively, if the court’s denial 

rests solely on a decision of law, then a de novo standard of review is employed.” 

(Nieto v. Fresno Beverage Co., Inc. (2019) 33 Cal.App.5th 274, 279, internal quotation 

marks omitted.)

“[A]lthough the burden of proof is heavy on the party seeking to establish waiver, 

which should not lightly be inferred in light of public policy favoring arbitration, a 

determination by a trial court that the right to compel arbitration has been waived 

ordinarily involves a question of fact, which is binding on the appellate court if supported 

by substantial evidence. The appellate court may not reverse the trial court’s finding of 

waiver unless the record as a matter of law compels finding nonwaiver.” (Davis, supra, 

59 Cal.App.4th at p. 211.) 

Moreover, “[i]f more than one reasonable inference may be drawn from 

undisputed facts, the substantial evidence rule requires indulging the inferences favorable 

to the trial court’s judgment.” (Davis, supra, 59 Cal.App.4th at p. 211.) “ ‘When, 

however, the facts are undisputed and only one inference may reasonably be drawn, the 

issue is one of law and the reviewing court is not bound by the trial court’s ruling.’ ” (St.

Agnes, supra, 31 Cal.4th at p. 1196.)

Here, the salient facts are undisputed10 and our review is de novo.

10 DLSE contends the facts are not undisputed, arguing there is a dispute as to 

whether TitleMax “engaged in ‘good-faith’ settlement efforts.” However, DLSE also 

acknowledges that those disputes are not relevant, and that it is TitleMax’s “inaction that 

is at issue here.” We agree with this latter statement. Moreover, the only evidence of 

TitleMax’s good faith, or lack thereof, is contained in declarations that were either not 

submitted in opposition to the petition to compel arbitration (i.e., Peña’s declaration in 
25.

III. Factors Considered in Determining Whether a Waiver Has Occurred

“ ‘ “[W]aiver” means the intentional relinquishment or abandonment of a known 

right.’ [Citations.] Waiver requires an existing right, the waiving party’s knowledge of 

that right, and the party’s ‘actual intention to relinquish the right.’ [Citation.] 

‘ “Waiver always rests upon intent.” ’ [Citation.] The intention may be express, based 

on the waiving party’s words, or implied, based on conduct that is ‘ “so inconsistent with 

an intent to enforce the right as to induce a reasonable belief that such right has been 

relinquished.” ’ ” (Lynch v. California Coastal Com. (2017) 3 Cal.5th 470, 475 (Lynch).)

A. California Law

In St. Agnes, the California Supreme Court adopted the six factor test relied upon 

by the trial court in denying TitleMax’s petition to compel arbitration, as follows: “ ‘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 ‘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.)

“There is no single test for the type of conduct which may waive arbitration rights, 

but the conduct must have caused prejudice to the opposing party. The California 

Supreme Court has summarized: ‘We have stressed the significance of the presence or 

support of DLSE’s motion to intervene) and the reply declaration of TitleMax’s counsel 

which was rejected by the trial court on DLSE’s objection. Thus, TitleMax’s good faith 

was not before the court or considered by it. (See fn. 6, ante.) 
26.

absence of prejudice. Waiver does not occur by mere participation in litigation; there 

must be “judicial litigation of the merits of arbitrable issues,” ... although “waiver could 

occur prior to a judgment on the merits if prejudice could be demonstrated” .... This 

result is fully consistent with federal cases which have held that “as an abstract exercise 

in logic it may appear that it is inconsistent for a party to participate in a lawsuit for 

breach of a contract, and later to ask the court to stay that litigation pending arbitration. 

Yet the law is clear that such participation, standing alone, does not constitute a waiver, 

for there is an overriding federal policy favoring arbitration .... [M]ere delay in seeking a 

stay of the proceedings without some resultant prejudice to a party ... cannot carry the 

day.” ’ ” (Groom v. Health Net (2000) 82 Cal.App.4th 1189, 1194 (Groom), italics 

omitted.)

However, in Burton v. Cruise (2010) 190 Cal.App.4th 939 (Burton), the Fourth 

District Court of Appeal concluded Groom “erred in failing to recognize that a 

petitioning party’s conduct in stretching out the litigation process itself may cause 

prejudice by depriving the other party of the advantages of arbitration as an ‘expedient, 

efficient and cost-effective method to resolve disputes.’ ” (Burton, at p. 948, quoting 

Sobremonte v. Superior Court (1998) 61 Cal.App.4th 980, 996 (Sobremonte).) 

“Arbitration loses much, if not all, of its value if undue time and money is lost in the 

litigation process preceding a last-minute petition to compel.” (Burton, at p. 948.) 

The Burton court noted, “[i]n St. Agnes, the Supreme Court cited 

both Groom and Sobremonte as opposite extremes of the same continuum for finding 

prejudice. [Citation.] But, as St. Agnes recognized, the critical factor in demonstrating 

prejudice is whether the party opposing arbitration has been substantially deprived of the 

advantages of arbitration as a ‘ “ ‘speedy and relatively inexpensive’ ” ’ means of dispute 

resolution. [Citation.] ‘Rather, courts assess prejudice with the recognition that 

California’s arbitration statutes reflect “ ‘a strong public policy in favor of arbitration as a 

speedy and relatively inexpensive means of dispute resolution’ ” and are intended “ ‘to 
27.

encourage persons who wish to avoid delays incident to a civil action to obtain an 

adjustment of their differences by a tribunal of their own choosing.’ ” ’ ” (Burton, supra, 

190 Cal.App.4th at p. 948.)

“ ‘ “California courts have found a waiver of the right to demand arbitration in a 

variety of contexts, ranging from situations in which the party seeking to compel 

arbitration has previously taken steps inconsistent with an intent to invoke arbitration 

[citations] to instances in which the petitioning party has unreasonably delayed in 

undertaking the procedure. [Citations.] The decisions likewise hold that the ‘bad faith’

or ‘willful misconduct’ of a party may constitute a waiver and thus justify a refusal to

compel arbitration. [Citation.]” [Citation.] The fact that the party petitioning for 

arbitration has participated in litigation, short of a determination on the merits, does not 

by itself constitute a waiver.’ ” (Khalatian v. Prime Time Shuttle, Inc. (2015) 

237 Cal.App.4th 651, 661 (Khalatian); accord, Iskanian v. CLS Transportation Los 

Angeles, LLC (2014) 59 Cal.4th 348, 374–375 (Iskanian), abrogated on other grounds in 

Viking River Cruises, Inc. v. Moriana (2022) ____ U.S. ____ [142 S.Ct. 1906, 

213 L.Ed.2d 179].) 

B. Under the FAA, Prejudice Is Not Required for a Finding of Waiver

“In California, whether or not litigation results in prejudice ... is critical in waiver 

determinations.” (St. Agnes, supra, 31 Cal.4th at p. 1203.) However, DLSE notes that 

the U.S. Supreme Court has recently rejected “prejudice” as a special requirement in 

order to find waiver under the FAA. (Morgan v. Sundance, Inc. (2022) ___ U.S. ___ 

[142 S.Ct 1708, 1712, 212 L.Ed.2d 753] (Morgan).) The Morgan court stated, “the 

FAA’s ‘policy favoring arbitration’ does not authorize federal courts to invent special, 

arbitration-preferring procedural rules.” (Id. at p. 1713.) “If an ordinary procedural 

rule—whether of waiver or forfeiture or what-have-you—would counsel against 

enforcement of an arbitration contract, then so be it. The federal policy is about treating 

arbitration contracts like all others, not about fostering arbitration.” (Ibid.) 
28.

DLSE contends “Morgan does not state that prejudice can no longer be 

considered; it remains a factor. However prejudice is not a requirement to find waiver.” 

We agree that Morgan stands for the proposition that prejudice is not a requirement to 

find waiver under the FAA. 

With these state and federal principles in mind, we address the considerations for 

waiver of an arbitration agreement identified in St. Agnes. (St. Agnes, supra, 31 Cal.4th 

at p. 1196.)

IV. TitleMax’s Limited Participation in DLSE Proceedings Was Not Inconsistent 

With Its Right to Arbitrate

On appeal, TitleMax contends it “took no action inconsistent with the right to 

arbitrate”; ninety percent of the delay experienced between Peña’s initial filing of his 

wage claim in January 2017, and TitleMax’s demand for arbitration in November 2021, 

was caused by a combination of the “Covid-19 pandemic, unexplained administrative 

delay, or failure of prosecution on ... Peña’s part”; and the “the remaining time period 

was subsumed with bona fide settlement discussions that, as a matter of law, cannot form 

the basis of waiver.” (Italics omitted.) 

TitleMax argues the superior court relied on TitleMax’s “inaction” rather than on 

actions inconsistent with the right to arbitrate in denying its petition to compel arbitration. 

Although the court posited that the delay in the DLSE proceedings due to the Covid-19 

pandemic “did not impede [TitleMax’s] ability to demand arbitration...,” TitleMax 

argues it “had no reason to demand arbitration” when the DLSE process “was stalled ... 

through no fault of TitleMax’s.” It argues “[o]nly ‘the unreasonable and unjustified

conduct of the party seeking arbitration’ can be deemed inconsistent with the right to 

arbitrate,” citing Iskanian, supra, 59 Cal.4th at p. 377.) TitleMax argues there was no 

conduct on its part inconsistent with the right to arbitrate and that its inaction was both 

reasonable and justified. 
29.

A. TitleMax’s Participation in Settlement Negotiations Was Not Inconsistent 

With Its Right to Compel Arbitration

TitleMax contends its participation in settlement negotiations was not an act 

inconsistent with it right to compel arbitration. We agree.

DLSE argues that TitleMax’s “settlement efforts were fully acknowledged, but 

were not relevant to the court’s analysis and final determination.” However, the trial 

court did, in fact, consider and base its decision, in part, on TitleMax’s participation in 

the settlement conferences with DLSE. The court, in referring to TitleMax’s 

participation in settlement conferences, wrote, “the evidence shows that [TitleMax] 

utilized DLSE’s process for a significant amount of time to do so. Rather than object to 

the process in favor of arbitration, [TitleMax] participated in two settlement conferences

in an attempt to resolve the dispute. At the latter settlement conference, [TitleMax] 

sought DLSE’s guidance to finalize a settlement.” In the penultimate paragraph of its 

adopted tentative ruling, the court cites TitleMax’s participation in the DLSE settlement 

conferences as one of two pieces of evidence to show TitleMax “fully engaged the DLSE 

process.”11 Thus, it appears the court considered and relied on TitleMax’s participation 

in the DLSE settlement conferences as a basis to find waiver. Similarly, DLSE relies on 

TitleMax’s participation in those settlement conferences to argue that TitleMax fully 

engaged in the limited processes available to it in connection with the DLSE proceedings. 

TitleMax cites to several cases to support its contention that participation in 

settlement efforts is not inconsistent with the right to compel arbitration. We examine 

those authorities below.

11 The other piece of evidence relied on by the trial court to demonstrate 

TitleMax’s “full[] engage[ment] in the DLSE process,” was TitleMax’s “exchanging 

evidence in preparation for hearing.” We address that issue in a subsequent section of 

this opinion.
30.

In Dickinson v. Heinold Securities, Inc. (7th Cir. 1981) 661 F.2d 638 (Dickinson), 

the plaintiff held an account with the “defendant’s stock options brokerage service.” (Id. 

at 639.) By agreement, the defendant had “limited discretionary power to trade plaintiff’s 

account” and the plaintiff, believing the defendant exceeded its authority, complained to 

the Chicago Board Options Exchange (CBOE). (Id. at p. 640.) The CBOE investigated 

for more than a year and, when the plaintiff threatened to sue, the defendant demanded 

arbitration pursuant to the parties’ agreement. (Ibid.) The plaintiff did not respond so the 

defendant commenced arbitration with the CBOE. (Ibid.) Despite this, the plaintiff filed 

suit in U.S. District Court and defendant answered, asserting in its answer the matter 

should be arbitrated. (Ibid.) For more than a year, the parties engaged in discovery and 

in attempts to settle the dispute before the defendant eventually moved to compel 

arbitration. (Id. at pp. 640–641.) 

The plaintiff argued the defendant’s conduct waived the right to compel arbitration 

and that it took the defendant “18 months after the controversy arose to seek arbitration.” 

(Dickinson, supra, 661 F.2d at p. 641.) In concluding the defendant did not waive its 

right to compel arbitration, the court wrote, “when [the] plaintiff indicated that an 

informal resolution would no longer be possible, [the defendant] promptly moved for 

arbitration. Preliminary negotiations concerning a settlement are not sufficient to waive 

arbitration. [Citation.] Significant periods of delay prior to the onset of litigation are 

often necessary to allow the parties to engage in good faith efforts to resolve the 

controversy without reference to an adjudicatory body. Neither the length of the delay 

nor the interim actions of [the defendant] were inconsistent with [the defendant’s] 

arbitration right.”12 (Ibid.)

12 The Dickinson court also found the defendant’s participation in discovery was 

reasonable and justified due to questions surrounding whether certain claims were 

arbitrable. (Dickinson, supra, 661 F.2d at pp. 641–642.)
31.

In Walker v. J.C. Bradford & Co. (5th Cir. 1991) 938 F.2d 575 (Walker), the 

defendant waited 13 months after the plaintiffs filed suit to move to compel arbitration. 

(Id. at 576.) During that period, the plaintiff answered the complaint and served 

preliminary interrogatories and document requests on the plaintiff. (Ibid.) The plaintiff 

produced documents but did not answer interrogatories. (Ibid.) Subsequently, the 

defendant moved to compel arbitration but the court denied the motion finding that “by 

using the court’s judicial resources and processes,” the defendant had waived its right to 

arbitrate. (Ibid.) On appeal, the Walker court reversed and ordered the trial court to refer 

the matter to arbitration. (Id. at p. 579.) In doing so, the Walker court rejected the trial 

court’s reasoning that “attempts at settlement [were] evidence of pre-trial activity 

supporting a finding of waiver.” (Id. at p. 578.) The court wrote “[a]ttempts at 

settlement, ... , are not inconsistent with an inclination to arbitrate and do not preclude 

the exercise of a right to arbitration.” (Ibid.)

In Zamora v. Leman (2010) 186 Cal.App.4th 1 (Zamora), a defendant who had 

demurred to the plaintiff’s complaint, participated in limited discovery, and during the 

pendency of the case attempted to settle, thereafter sought to compel arbitration. (Id. at 

pp. 9, 19–20.) In upholding the trial court’s decision to refer the matter to arbitration, the 

appellate court wrote, “[the defendant’s] attempt to settle the action was not inconsistent 

with the right to arbitrate and did not result in undue delay.” (Id. at p. 20.) Quoting 

Walker, the Zamora court wrote, “ ‘Offers to settle, like arbitration, are to be favored, as 

they encourage the amicable and quick settlement of suits outside the judicial system.’ ” 

(Ibid., quoting Walker, supra, 938 F.2d at p. 578, and citing Dickinson, supra, 661 F.2d 

at p. 641.) Notably, the policy in favor of settlement is also reflected in many of our 

statutes. (E.g., Fam. Code, § 271 [discussing “the policy of the law to promote settlement 

of litigation”]; Code Civ. Proc., § 877 [discharging settling tortfeasor’s liability for 

contribution to other parties in connection with good faith settlement]; Evid. Code,
32.

§§ 1152 & 1154 [inadmissibility of settlement offers to prove liability or invalidity of 

claim].)

DLSE argues Walker and Zamora are inapposite because the trial court did not 

rely on TitleMax’s participation in settlement processes to support its ruling. As 

discussed above, we have concluded the trial court, at least in part, relied on such 

participation in finding TitleMax had waived its right to appeal. DLSE also argues that in 

Walker, the appellate court found that the defendant’s participation in the litigation was 

minimal. However, we note that the Walker defendant’s participation in the litigation 

was arguably greater than that in the instant case. In Walker, not only did the defendant 

answer the plaintiff’s complaint but it also served written discovery (i.e., interrogatories 

and document requests), received documents in response to the discovery, and 

participated in at least one pretrial conference. (Walker, supra, 938 F.2d at p. 576.)13 

We address the extent of TitleMax’s participation in other DLSE processes below. 

However, in terms of TitleMax’s engagement in settlement activity, we find the 

reasoning in Walker, Dickinson, and Zamora persuasive. Participation in settlement 

proceedings, as a general matter, is not inconsistent with the right to compel arbitration of 

a dispute and, like arbitration, is favored in our judicial system. 

13 DLSE argues there is no evidence that TitleMax engaged in “bona fide

settlement discussions.” (Emphasis in original.) We disagree. The declaration of 

Deputy Labor Commissioner Salzer authenticated communications between TitleMax’s 

counsel and DLSE which include TitleMax’s representations that the parties were close 

to settlement on more than one occasion. DLSE is authorized to postpone Berman 

hearings “if the Labor Commissioner finds that it would lead to an equitable and just 

resolution of the dispute.” (§ 98, subd. (a).) The fact that DLSE agreed to convert the 

October 27, 2021, Berman hearing to a second settlement conference suggests TitleMax 

was participating itself in good faith and does not lend itself to a contrary inference. See 

also, footnote 10, ante. 
33.

B. TitleMax’s Participation In The DLSE Proceedings Was De Minimis and 

Insufficient to Constitute a Waiver of Its Right to Compel Arbitration

DLSE notes that TitleMax “makes much of the fact that it filed no demurrers, had 

not responded to nor objected to discovery, and filed no dispositive motions.” DLSE 

contends this “is of no consequence” since “[n]one of those things are available in 

Berman proceedings. Rather, the Berman process is a simple one. [Citation.] There are 

only two pleadings and no discovery.” Discovery is only allowed, after a Berman 

hearing is held, an appeal has been filed, and the trial court grants leave to conduct 

discovery. Thus, DLSE contends TitleMax “made full use of [DLSE’s] process” by 

attending the settlement conferences (including “utilizing DLSE’s guidance” and 

“exploit[ing DLSE’s] expertise” in seeking settlement), filing an answer, exchanging 

evidence, and seeking continuances. 

We decline to view the lack (or minimum availability) of processes through DLSE 

as a factor weighing in favor of a finding of waiver. With regard to DLSE’s specific 

contentions, we have already addressed TitleMax’s participation in settlement discussions 

and have concluded such participation is not inconsistent with a right to arbitrate. As to 

the contention TitleMax sought a continuance in March 2020 at the outset of the 

pandemic, we note the continuance sought was of limited duration and was, within a few 

days, made moot by the fact that DLSE continued all hearings almost contemporaneously 

with TitleMax’s request and did not resume hearings for another 18 months—all through 

no fault of TitleMax. Moreover, Deputy Labor Commissioner Salzer admitted “the 

postponement was due to the statewide lockdown over concerns of the Covid-19 

pandemic.” (Unnecessary capitalization omitted.) 

We also reject the contention that TitleMax “exploited [DLSE’s] expertise.” 

DLSE does not explain this contention and the only evidence on the subject is in DLSE’s 

proffered declarations which read, in relevant part: “Once enough information is 

obtained from the complainant, ... a conference is scheduled whereby the parties, with 
34.

assistance from the Deputy Labor Commissioner, can attempt to resolve the claim. That 

was done in this case as well[]”; DLSE “discussed the claim process with both parties” 

during the settlement conferences; and “[t]he October 27, 2021 hearing was converted to 

a settlement conference. It was unsuccessful ....” The assistance of a deputy labor 

commissioner in settlement talks is part of the settlement conference process. Again, we 

do not view attempts at settlement as inconsistent with the right to arbitrate. 

We acknowledge, however, that the filing of an answer without invocation of the 

right to arbitrate may be said to be inconsistent with a right to arbitrate. Yet, cases have 

noted such conduct alone is insufficient to constitute a waiver. (Gloster v. Sonic 

Automotive, Inc. (2014) 226 Cal.App.4th 438, 449 (Gloster) [“Answering a complaint 

and participating in litigation, on their own, do not waive the right to arbitrate.”]; 

Hoover v. American Income Life Ins. Co. (2012) 206 Cal.App.4th 1193, 1205 (Hoover) 

[“A defendant answering the complaint does not per se waive the right to demand 

arbitration later.”]; Khalatian, supra, 237 Cal.App.4th at p. 662 [“Answering a complaint 

does not result in waiver.”]; Consolidated Brokers Ins. Services, Inc. v. Pan-American 

Assur. Co., Inc. (D. Kansas 2006) 427 F.Supp.2d 1074, 1079 [no waiver where defendant 

sought leave to amend answer relatively early in litigation to allege arbitration 

agreement].)

Moreover, the following facts militate against finding the mere filing of an answer 

as supportive of a finding of waiver: (1) the answer was filed with DLSE on or about 

September 30, 2021; (2) no Berman hearing was held, it having been instead converted to 

a settlement conference; and (3) when that settlement conference (held on October 27, 

2021) proved unsuccessful, Titlemax demanded arbitration only two and half weeks later 

(i.e., by November 16, 2021) and only one and a half months after TitleMax actually filed 

its answer with DLSE. 
35.

V. TitleMax Did Not Substantially Invoke the Litigation Process

As mentioned, DLSE acknowledges that its processes are relatively minimal. 

TitleMax contends, “an invocation [of the litigation machinery] must be substantial, not 

‘limited,’ and intervening steps must be important, not nominal,” citing Aronow v. 

Superior Court (2022) 76 Cal.App.5th 865, 885 (Aronow), and that “ ‘mere participation 

in litigation’ is not enough,” citing St. Agnes, supra, 31 Cal.4th at p. 1203. TitleMax 

argues the facts are insufficient to demonstrate the substantial invocation of litigation 

machinery. We agree.

DLSE contends that Aronow is inapposite because the court was merely stating 

that certain types of collateral discovery will not place a party at risk of waiving its right 

to arbitration. In Aronow, the defendant desired to conduct discovery of the plaintiff’s 

finances to challenge the plaintiff’s in forma pauperis status. (Aronow, supra, 

76 Cal.App.5th at p. 884.) DLSE contends the discovery at issue here was not collateral. 

But TitleMax notes, “[n]o evidence was actually exchanged between the parties, and this 

is in all events precisely the ‘de minimis’ involvement in litigation that cannot plausibly 

support a waiver finding.” In fact, there is no evidence in the record that any evidence 

submitted by Peña to DLSE was ever provided to TitleMax or that the documents 

TitleMax provided DLSE were ever provided to Peña. Moreover, if any of the evidence 

submitted by TitleMax to DLSE was communicated or provided to Peña, it would only 

have redounded to Peña’s benefit.

TitleMax contends participation in settlement discussions does not qualify as a 

substantial invocation of the litigation machinery, and that to hold otherwise “would 

achieve the bizarre result of disincentivizing future litigants from utilizing that process to 

achieve settlement.” We agree with both points for the reasons discussed above.

TitleMax argues the filing of an answer is also not a sufficient invocation of the 

litigation machinery to constitute a waiver. Again, we agree. “Answering a complaint 

and participating in litigation, on their own, do not waive the right to arbitrate.” (Gloster, 
36.

supra, 226 Cal.App.4th at p. 449; Hoover, supra, 206 Cal.App.4th at p. 1205 [“A 

defendant answering the complaint does not per se waive the right to demand arbitration 

later.”].)

Based on the above, we conclude that TitleMax did not substantially invoke the 

litigation machinery in a manner that would weigh in favor of a finding of waiver. 

VI. TitleMax’s Request for Arbitration Was Sufficiently Timely

Another factor related to waiver is “whether a party either requested arbitration 

enforcement close to the trial date or delayed for a long period before seeking a stay.” 

(St. Agnes, supra, 31 Cal.4th at p. 1196). When DLSE first scheduled a settlement 

conference between the parties, no formal complaint was on file with DLSE and no 

Berman hearing had been set. No adjudicative process had been commenced and 

TitleMax was neither required nor authorized to file an answer at that time. (§ 98, 

subd. (c).) 

In General Guaranty Ins. Co. v. New Orleans General Agency, Inc. (5th Cir. 

1970) 427 F.2d 924 (General Guaranty), the parties had entered into an agency 

agreement which included an arbitration provision. (Id. at p. 926.) A dispute arose in 

1964 but no suit had been filed and neither party demanded arbitration. (Ibid.) Ten 

months later, the plaintiff filed suit. (Ibid.) The defendant moved for summary judgment 

on grounds the agreement had been abandoned and superseded by a new agreement 

releasing the defendant from all obligations and liability. (Ibid.) The defendant 

requested that “only in the event” the court found the original agreement operative, then 

it should refer the matter to arbitration. (Ibid.) 

The trial court denied the motion in its entirety and determined a trial on the issue 

of whether the first agreement was abandoned was necessary. (General Guaranty, supra, 

427 F.2d at p. 927.) In 1968, trial on the abandonment issue was held. (Ibid.) The court 

found the first agreement (containing the arbitration provision) had not been abandoned 

but declined to refer the matter to arbitration because, among other things, the defendant 
37.

“failed to ask for arbitration before suit was filed”; “allowed [the] plaintiff to proceed 

with taking depositions in Florida before indicating any intent to request arbitration”; and 

only requested arbitration “in the alternative.” (Id. at pp. 927–928.)

In concluding the defendant had not waived its right to seek arbitration, the 

General Guaranty court wrote, “[r]equiring pre-suit demand will place on the party 

sought to be charged the duty to institute proceedings which may establish his own 

liability, though if he remains inactive the claims asserted against him may never be 

formally pressed in either arbitration or court proceedings (and in some instances may be 

wholly without merit).” (Id. at p. 928.)

Here, in its subject order, the trial court determined General Guaranty’s “holding 

has no application here, where a claim was filed and pending since January 7, 2019.” We 

disagree. Requiring TitleMax to demand arbitration before an actual complaint had been 

filed with DLSE, and before any Berman hearing was scheduled, would have placed 

TitleMax in the position of instituting proceedings while it was still uncertain whether 

Peña’s claims would ever be formally pressed.

Then, once a formal complaint was filed on February 7, 2020, and the matter was 

first set for a Berman hearing in March 2020, it was soon taken off calendar due to the 

pandemic through no fault of TitleMax and the case was dormant for the next 18 months.

When DLSE resumed hearing cases, it served TitleMax with a newly filed 

amended complaint on September 10, 2021, which added a new party defendant, Tracy 

Young. A Berman hearing was scheduled for October 27, 2021. On or about 

September 30, 2021, TitleMax did file an answer but was successful in convincing DLSE 

to convert the hearing to a settlement conference. We conclude TitleMax’s request to 

convert the hearing to a settlement conference was justified and reasonable given that no 

proceedings before DLSE had occurred in the preceding 18 months and DLSE 

presumably felt the request was justified. (See fn. 13, ante.)
38.

When the October 27, 2021, settlement conference proved unsuccessful, TitleMax 

demanded arbitration less than a month later on November 16, 2021, and less than two 

months after it had filed its initial answer in the matter. No further Berman hearing had 

yet been scheduled. We conclude TitleMax’s demand for arbitration was sufficiently 

timely.

VII. No Counterclaims Were Filed By TitleMax

The fourth factor set forth in St. Agnes is “whether a defendant seeking arbitration 

filed a counterclaim without asking for a stay of the proceedings.” (St. Agnes, supra, 

31 Cal.4th at p. 1196.) The trial court noted this factor is “inapplicable.” We agree and 

conclude the factor does not weigh in favor of a finding of waiver.

VIII. No Important Intervening Steps Had Taken Place

The fifth factor set forth in St. Agnes is “ ‘whether important intervening steps 

[e.g., taking advantage of judicial discovery procedures not available in arbitration] had 

taken place.’ ” (St. Agnes, supra, 31 Cal.4th at p. 1196.) Here, DLSE notes that 

discovery is not available in Berman proceedings. Moreover, we have mentioned the fact 

that TitleMax provided numerous exhibits to DLSE but there is no evidence that 

TitleMax ever received any evidence that Peña may have submitted to support his claim. 

DLSE further notes that the Berman process is a simple one involving “only two 

pleadings and no discovery.” In light of this, we conclude the evidence does not support 

a finding that important intervening steps had taken place, weighing against a finding of 

waiver.

IX. Peña Was Not Prejudiced

Finally, although not required to find waiver, we fail to appreciate any prejudice 

suffered by Peña as a result of TitleMax’s actions. As we have discussed, to the extent 

there was delay in the DLSE proceedings, by and large those delays were not caused by 

TitleMax. The slight delay that was caused by TitleMax (i.e., requesting the October 27, 
39.

2021, hearing be converted to a settlement conference) was reasonable and justified. 

TitleMax demanded arbitration the very next month.

The fact that TitleMax provided DLSE with evidence in advance of the 

October 27, 2021, hearing before it was converted to a settlement conference did not 

operate to Peña’s prejudice. There is no evidence that TitleMax’s documentary 

submissions were thereafter communicated or provided to Peña—but, if they were, this 

would have only inured to Peña’s benefit and not his detriment. Peña was not prejudiced 

in that regard.

Moreover, although Peña’s declaration in support of DLSE’s motion to intervene 

does not appear to have been considered by the trial court, we note that the only prejudice 

identified by Peña is that “[m]any of [his] encounters with [TitleMax’s attorney] included 

discussions regarding the merits of [his] case” and that he “believe[s] this provides 

Titlemax with an unfair advantage over [him] in the present litigation.” From Peña’s 

declaration it is clear that these “encounters” were limited to either the two settlement 

conferences scheduled by DLSE or in telephone calls and email exchanges outside the 

DLSE process. We have already concluded that participation in settlement conferences is 

an insufficient basis upon which to premise a finding of waiver. Moreover, participation 

in settlement conferences invariably involves a discussion of the merits of claims in 

dispute. This is not a basis for finding waiver.

X. Summary

Peña’s claims are subject to mandatory arbitration. Although it may be the better 

practice for a party to assert the right to arbitrate promptly after being notified of an 

adverse claim, the facts of this case do not warrant a finding that TitleMax waived its 

right to compel arbitration. 

The delays in proceeding to a Berman hearing were not due to any unreasonable or 

unjustified conduct by TitleMax. Although Peña’s claim was filed in January 2019, it 

was not noticed for a Berman hearing until March 2020. Less than two weeks later, 
40.

DLSE took the hearing off calendar due to the Covid-19 pandemic and the case went 

dormant for another 18 months. None of this was Titlemax’s fault. Moreover, the failure 

to invoke arbitration during that period does not weigh in favor of a finding of waiver for 

the reasons discussed above.

When the Berman hearing was rescheduled for October 27, 2021, the matter was 

converted to a settlement conference which we have determined was both reasonable and 

justified. When that proved unsuccessful, TitleMax demanded arbitration less than a 

month later, on November 16, 2021. We have concluded this demand was sufficiently 

timely.

The fact that TitleMax filed an answer a month and a half prior to the October 27, 

2021, settlement conference and delivered documents to DLSE during that period did not 

cause unjustified delay or prejudice, did not substantially invoke the litigation machinery, 

and was not an important intervening step in the process justifying a finding of waiver.

Based on all of the foregoing factors, we conclude TitleMax did not waive its right 

to compel arbitration in this matter. 

XI. TitleMax’s Remaining Challenge Is Moot

On appeal, TitleMax also challenges the trial court’s evidentiary ruling in which it 

sustained DLSE’s objection to the reply declaration of TitleMax’s attorney. Because we 

have concluded reversal is required, we need not consider this argument on appeal.

DISPOSITION

The trial court’s orders denying TitleMax’s petition to compel arbitration and 

denying TitleMax’s ex parte application to stay the DLSE proceedings are reversed. The 

cause is remanded to the trial court with directions to enter a new order referring the 
41.

matter to arbitration and staying the DLSE proceedings pending completion of 

arbitration. In the interests of justice, each party shall bear its own costs on appeal. 

SNAUFFER, J.

WE CONCUR:

POOCHIGIAN, Acting P. J.

DETJEN, J.