Filed 4/12/21 Wells Fargo Bank, N.A. v. Agak CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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

SECOND APPELLATE DISTRICT

DIVISION SIX

WELLS FARGO BANK, N.A.,

 Plaintiff. Cross-defendant,

and Appellant,

v.

GEORGE W. AGAK,

 Defendant, Crosscomplainant, and Respondent.

2d Civ. No. B300635

(Super. Ct. No. 56-2017-

00500587-CU-CL-VTA)

(Ventura County)

This is an appeal from an order denying a petition to 

compel arbitration. The trial court denied the petition on the 

ground that petitioner waived any right it may have had to 

arbitrate. We affirm.

FACTS

In August 2017, Wells Fargo Bank, N.A. (Wells Fargo) 

brought an action against George W. Agak to collect $17,000 in 

credit card debt. Wells Fargo’s complaint alleged breach of 

contract and common counts.
2.

Attached as an exhibit to the complaint is Wells Fargo’s 

alleged credit card customer agreement. The agreement contains 

a dispute resolution clause. The clause provides that a dispute 

between the bank and its customer shall be resolved by 

arbitration. The clause continues, “The foregoing 

notwithstanding, the Bank shall not initiate an arbitration to 

collect a consumer debt, but reserves the right to arbitrate all 

other disputes . . . . A ‘Dispute’ is any unresolved disagreement 

between [the customer] and the Bank. It includes any 

disagreement relating in any way to the Card or related 

services . . . .” The agreement prohibits any dispute as a 

representative or member of a class.

Agak answered Wells Fargo’s complaint by general denial, 

and raised as affirmative defenses: ambiguity in the amount at 

issue; breach of contract; fraud, deceit, and misrepresentation;

illegal conduct; violation of public policy; and “Lack of jurisdiction 

– Defendant has a right to arbitrate these claims.” 

Wells Fargo Case Management Statement

In August 2018, Wells Fargo filed a case management 

statement. Wells Fargo stated that the case will be ready for 

trial within 12 months of the filing of the complaint. Wells Fargo 

did not request referral to arbitration.

Discovery

Wells Fargo propounded requests for admissions, form 

interrogatories, inspection demands, and special interrogatories. 

Agak also propounded form interrogatories and inspection 

demands.

In September 2018, Agak’s response to Wells Fargo’s 

interrogatories stated that Wells Fargo had charged Agak illegal 
3.

“credit defense” fees. Agak claims Wells Fargo charged the fees 

without his consent in violation of the credit card agreement.

Motion for Leave to File Cross-Complaint

In October 2018, Agak filed a motion for leave to file a 

cross-complaint alleging causes of action for breach of contract, 

fraud, unfair competition, failure to correct a billing error in 

violation of Civil Code section 1747.50, and declaratory relief. 

The cross-complaint alleges Wells Fargo charged Agak an illegal 

and unauthorized “credit defense” fee.

Second Case Management Statement

In November 2018, Wells Fargo filed another case 

management statement. Like the first statement, Wells Fargo 

represented to the court that it was a limited civil case, and 

asked for a one-day court trial. Wells Fargo did not request

arbitration.

Motion to File Cross-Complaint Granted

In December 2018, the trial court granted Agak’s motion to 

file his cross-complaint. Wells Fargo did not oppose. Wells Fargo 

answered the cross-complaint. The answer alleged 16 affirmative 

defenses, but the right to arbitrate was not alleged.

Case Management Conferences

The trial court conducted case management conferences in 

December 2018 and January 2019. Wells Fargo did not raise the 

issue of arbitration.

Amended Cross-Complaint

In February 2019, Agak sought leave to amend the crosscomplaint. The amendment would turn Agak’s existing crosscomplaint, alleging Wells Fargo illegally imposed a “credit 

defense” fee, into a class action.
4.

While the motion was pending, the trial court conducted 

another case management conference. Wells Fargo did not 

request arbitration.

Wells Fargo did not oppose the motion to amend the crosscomplaint. The trial court granted the motion.

Removal to Federal Court

In March 2019, Wells Fargo removed the matter to federal 

court. The district court sua sponte ordered the case remanded to 

state court. The court ordered Wells Fargo to show cause why it 

should not be sanctioned for improperly removing the case.

On remand, Wells Fargo filed its answer to Agak’s 

amended cross-complaint. The answer included as affirmative

defenses that Wells Fargo has the right to arbitrate, and that 

Agak has waived the right to bring a class action.

Motion to Compel Arbitration

In May 2019, Wells Fargo petitioned to compel arbitration. 

The petition was based on the arbitration provision contained in 

the consumer credit card customer agreement. The alleged 

agreement was attached to the petition as exhibit A. Wells 

Fargo’s counsel attempted to authenticate the agreement to 

arbitrate by declaring: “Attached hereto as Exhibit A is a true 

and correct copy of the Consumer Credit Card Customer 

Agreement governing the terms of a credit card account 

Defendant and Cross-Claimant George W. Agak (‘Agak’) had with 

Wells Fargo.” (Boldface omitted.)

Agak opposed the petition on the ground that Wells Fargo 

waived any right it may have had to arbitration by its extensive 

participation in the lawsuit. 
5.

Ruling

The trial court sustained Agak’s objections to both Wells 

Fargo’s original affidavit and the affidavit in its reply papers. 

The court determined by the parties’ actions there was no 

agreement to arbitrate. 

The trial court also found that Wells Fargo waived its right 

to arbitration by its participation in the litigation. The court 

stated: “[T]he court also notes that waiver applies. Here, it is 

apparent that Plaintiff knew of the right to compel arbitration by 

virtue of the fact that it possessed the alleged arbitration 

agreement at issue and filed this motion. It is also apparent that 

Plaintiff acted inconsistent with that existing right, by filing this 

lawsuit in State Court, failing to allege a right to arbitration in 

its pleadings, failing to mention its right to compel arbitration in 

its case management statements, filing a motion for removal, 

participating in discovery, participating in four case management

conferences without mentioning arbitration, generally 

participating in the litigation for nearly 2 years, and filing two 

discovery motions.” 

The trial court did not consider whether the arbitration 

agreement is unconscionable.

DISCUSSION

I

Standard of Review

The trial court’s ruling on the admissibility of evidence is 

reviewed for an abuse of discretion. (Christ v. Schwartz (2016) 2 

Cal.App.5th 440, 446-447.) The trial court’s ruling on waiver of 

the right to arbitrate is reviewed for substantial evidence. 

(Burton v. Cruise (2010) 190 Cal.App.4th 939, 945-946.)
6.

II

Waiver of Arbitration

The trial court found that Wells Fargo waived its right to 

compel arbitration by its participation in the litigation.

Code of Civil Procedure section 1281.2, subdivision (a) 

provides: “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 . . . .”

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 Medical Center v. PacifiCare of California

(2003) 31 Cal.4th 1187, 1196 (St. Agnes).) Where, however, the 

evidence is undisputed and only one reasonable inference may be 

drawn, the question is one of law. (Ibid.)

The court may consider the following factors in determining 

whether there has been a waiver: (1) whether the party’s actions 

are inconsistent with the right to arbitrate; (2) whether the 

parties are well into preparation for the lawsuit before a party 

notified the opposing party of the intent to invoke arbitration; (3) 

whether a party delayed for a long period before seeking a stay; 

(4) whether a party seeking arbitration filed a counterclaim 

before seeking a stay; (5) whether important intervening steps 

such as 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 
7.

p. 1196.) Although the trial court may consider these factors, no 

single test determines the nature of the conduct that constitutes 

a waiver of arbitration. (Id. at p. 1195.)

Wells Fargo contends the trial court erred in considering its

actions prior to December 18, 2018. That is the date Agak filed 

his cross-complaint alleging Wells Fargo unlawfully imposed an 

unauthorized “credit defense” fee, the dispute that Wells Fargo 

now claims is subject to arbitration.

But Wells Fargo had notice of the dispute that it now 

claims is arbitrable at least as early as October 2018, when Agak 

made a motion to file his cross-complaint. Wells Fargo did not 

respond with a petition to compel arbitration. Nor did it oppose 

Agak’s motion. Instead, it allowed the motion to be granted 

unopposed, and answered the cross-complaint without raising 

arbitration as a defense. Thereafter, Wells Fargo participated in 

case management conferences without mentioning arbitration.

In February 2019, when Agak sought leave to amend his 

cross-complaint to convert it to a class action, Wells Fargo still 

did not petition to compel arbitration. Instead, it participated in 

another case management conference, and allowed the motion to 

be granted unopposed.

Wells Fargo responded to the amended cross-complaint by 

removing the case to federal court, thus, showing its intent not to 

arbitrate.

It was not until May 2019, seven months after Agak 

motioned for leave to file his cross-complaint, that Wells Fargo 

petitioned to compel arbitration.

St. Agnes points out that a waiver of arbitration is not to be 

lightly inferred, and a party seeking to establish a waiver bears a 

heavy burden of proof. (St. Agnes, supra, 31 Cal.4th at p. 1195.) 
8.

Agak carried that burden here. Applying the applicable factors 

listed by our Supreme Court in St. Agnes, the trial court could 

reasonably conclude that Wells Fargo waived the right to 

arbitrate. The court could reasonably conclude that Wells 

Fargo’s actions were inconsistent with the right to arbitrate; that 

the parties were well into preparation for the lawsuit; that Wells 

Fargo delayed for a long period before invoking the right to 

arbitrate; that important intervening steps, such as case 

management conferences, had taken place; and that the delay

prejudiced Agak by making him spend time and money on the 

court action. (Id. at p. 1196.)

Wells Fargo argues it did nothing more than what was 

necessary to avoid default. But it could have avoided default by

bringing a motion to compel arbitration in response to Agak’s 

motion for leave to file a cross-complaint. Instead, Wells Fargo 

continued to litigate the matter in court.

Moreover, Wells Fargo did more than what was necessary 

to avoid default. It removed the case to federal court. Wells 

Fargo cites St. Agnes, supra, 31 Cal.4th at page 1205 for the 

proposition that a party does not waive arbitration by removing 

to federal court or otherwise attempting to change venue. What 

St. Agnes actually says is that a party does not waive arbitration 

rights “merely” by seeking to change venue, but a waiver 

determination requires a consideration of all the circumstances. 

(Ibid.) Here the trial court did not find waiver merely because 

Wells Fargo removed the case to federal court. The court 

considered all the circumstances, including that the federal court 

sua sponte remanded the case to state court on the ground that 

the removal was obviously improper, resulting in an order to 

show cause regarding sanctions.
9.

In view of our decision, we need not discuss the other issues 

raised by Wells Fargo.

The dissent acknowledges that Wells Fargo did not request 

arbitration until May 19 after participating in numerous court 

hearings. The dissent ignores that in Agak’s answer to the 

complaint he raised arbitration. Yet Wells Fargo continued with 

the litigation. The dissent also confuses the abuse of discretion 

standard with substantial evidence. But assuming the applicable 

standard of review is abuse of discretion, the dissent apparently

believes the trial judge’s ruling was arbitrary, capricious, and 

beyond the bounds of reason. Otherwise, the dissent is 

improperly assuming the role of the trial judge.

The judgment (order) is affirmed. Costs are awarded to 

Agak.

NOT TO BE PUBLISHED.

GILBERT, P. J.

I concur:

PERREN, J.
TANGEMAN, J., dissenting:

I respectfully dissent. The record in this case does not 

support a waiver for the following reasons.

The credit card customer agreement between the parties 

provides that “the Bank shall not initiate an arbitration to collect 

a consumer debt.”1 Accordingly, Wells Fargo was legally 

prohibited from compelling arbitration prior to the date that 

Agak’s cross-complaint was filed. That date was December 18, 

2018. 

Wells Fargo filed its motion to compel on May 14, 2019. 

Our task is to determine whether the trial court abused its 

discretion when it determined that Wells Fargo, by its conduct 

and/or omissions, waived its right to arbitrate during this period 

of less than five months. 

During this five-month period, no trial date was pending, 

no demurrers or motions to strike were filed or pending, no 

discovery was initiated or responded to by Wells Fargo, and no 

litigation of the merits occurred. During this same period, Wells 

Fargo asserted its right to arbitrate no less than five times: first, 

on February 22 in its case management statement; second, in its 

statement of non-opposition to Agak’s motion for leave to file an 

amended cross-complaint on March 4; third, as the basis for its 

removal to federal court (to arbitrate class action allegations 

pursuant to the FAA), in March; fourth, in a formal written 

demand to Agak on April 8; and fifth, when it asserted its right to 

arbitrate as an affirmative defense to the operative pleading, i.e., 

the amended cross-complaint, on April 22. 

1 This specific language was held enforceable in Quiroz v. 

Cavalry SPV I, LLC (C.D.Cal. 2016) 217 F.Supp. 1130, 1138.
11.

The majority finds waiver because it “starts the clock” 

before December 18, thus penalizing Wells Fargo for not taking 

actions it was legally barred from taking. It compounds that 

error by ignoring the numerous and repeated assertions by Wells 

Fargo of its right to arbitrate in February, March (two times), 

and April (two times). 

The majority acknowledges that waiver shall not be lightly 

inferred, that waiver cannot be inferred by removal to federal 

court, and that Agak “bears a heavy burden of proof.” (St. Agnes 

Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 

1195.) In St. Agnes, our Supreme Court set forth six factors to 

consider in determining whether a waiver occurred. All six 

factors militate against a waiver finding: (1) Wells Fargo 

undertook no actions during the relevant period inconsistent with 

its desire to arbitrate the cross-complaint; (2) Wells Fargo 

asserted its arbitration right on numerous occasions including in 

its answer to the operative cross-complaint; (3) there was no 

lengthy delay after the right arose (December 18) and before 

Wells Fargo first asserted its arbitration right (February 22); (4) 

Wells Fargo filed no counterclaim to the cross-complaint; (5) no 

discovery or litigation of the merits occurred in the relevant 

period; and (6) Agak has shown no prejudice he incurred between 

December 18 and February 22. 

On this record, I would conclude that the trial court abused 

its discretion when it found waiver based on Wells Fargo’s filing 

of the initial complaint (as was required by contract), failing to 

mention its right to arbitrate in its case management statements 

(it did so on February 22), removing the case to federal court 

(which does not operate as a waiver), participating in discovery 

(it did not do so during the relevant time period), participating in 
12.

litigation “for nearly 2 years,” and filing two discovery motions (it 

filed no such motions in the relevant time period).

NOT TO BE PUBLISHED.

TANGEMAN, J.
Kevin G. DeNoce, Judge

Superior Court County of Ventura

______________________________

Faegre Drinker Biddle & Reath, Angela J. Morales, Alan J. 

Lazarus and Amanda Semaan, for Plaintiff, Cross-defendant, and 

Appellant.

Mardirossian & Associates, Inc., Garo Mardirossian and 

Adam Feit for Defendant, Cross-complainant, and Respondent.