Court Opinion

ID: 6349690
Source: CourtListenerOpinion
Date Created: 2022-06-14 17:16:25.858652+00
Date Added: 2024-06-11T09:14:48.447293
License: Public Domain

2022 UT App 71

                THE UTAH COURT OF APPEALS

  BRENT LIVINGSTON AND THE ESTATE OF VERNOLD LIVINGSTON,
                        Appellants,
                            v.
FINCO HOLDINGS CORP., CHICO’S AUTO SALES INC., CIELO OSORIO,
    BILL KISHTON, MILTON RODRIGUEZ, AND OMAR BOLANOS,
                         Appellees.

                              Opinion
                         No. 20200200-CA
                         Filed June 9, 2022

           Third District Court, Salt Lake Department
              The Honorable Richard D. McKelvie
                          No. 150901881

               Ronald Ady, Attorney for Appellants
        Joseph A. Skinner and Morgan I. Marcus, Attorneys
         for Appellees Finco Holdings Corp., Cielo Osorio,
                          and Bill Kishton

JUDGE JILL M. POHLMAN authored this Opinion, in which JUDGES
      GREGORY K. ORME and RYAN M. HARRIS concurred.

POHLMAN, Judge:

¶1     To finance the purchase of a vehicle, Brent and Vernold
Livingston entered into a consumer loan agreement with Finco
Holdings Corp. dba The Equitable Finance Company (Lender). As
part of the transaction, the Livingstons agreed to arbitrate any
disputes they may have with Lender and related parties. After the
Livingstons allegedly defaulted on their loan, Lender repossessed
the vehicle, sold it, and remitted the excess proceeds of the sale to
the Livingstons.

¶2    Based on their claim that they were current on the loan and
were wrongfully denied the opportunity to redeem the vehicle,
                   Livingston v. Finco Holdings

the Livingstons filed suit against, among others, Lender and
certain of its employees (collectively, Lender Defendants). 1 More
than fifteen months later, Lender Defendants moved to compel
arbitration pursuant to the parties’ agreement. The district court
granted the motion, and following arbitration, judgment was
entered in Lender Defendants’ favor.

¶3     The Livingstons appeal, arguing that the court erred in
compelling arbitration. First, the Livingstons contend that Lender
did not manifest its agreement to arbitrate and thus no binding
agreement was formed. Second, the Livingstons assert that
Lender Defendants waived their right to arbitrate by substantially
participating in litigation and that the Livingstons were
prejudiced as a result. Because we agree with the district court
that the parties entered into an enforceable arbitration agreement
and that the Livingstons have not shown that they were
prejudiced by Lender Defendants’ delay in compelling
arbitration, we affirm.

                        BACKGROUND 2

¶4    In November 2013, the Livingstons purchased a vehicle
from a dealership. To facilitate their purchase, the Livingstons

1. The Livingstons named Lender and its employees Cielo Osorio,
Bill Kishton, and Brent Robinson as defendants, as well as Chico’s
Auto Sales Inc. and its employees Milton Rodriguez and Omar
Bolanos. Brent Robinson passed away while the litigation was
pending. Defendants Chico’s Auto Sales, Rodriguez, and Bolanos
have not participated in this appeal.

2. In ruling on Lender Defendants’ motion to compel arbitration,
the district court made few factual findings, and most of the
relevant facts are undisputed procedural facts. For the limited
purpose of providing context for this appeal, we recite some
                                                 (continued…)

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                    Livingston v. Finco Holdings

sought financing from Lender. As part of the loan transaction, the
Livingstons signed several documents, including the consumer
loan agreement and a separate arbitration rider.

¶5     The arbitration rider, which by its terms “is incorporated
into and becomes a part of every application, purchase, finance
and lease document and other contracts,” provides: “If a Dispute
(defined below) arises between you and us that you and we
cannot resolve, you or we may elect to arbitrate the Dispute under
this Binding Arbitration Clause (‘Clause’) rather than litigate the
Dispute in court.” In the definitional section of the rider, it defines
“Dispute” as “any dispute, claim or controversy between you and
us that accrues before or after the date of this Clause,” and
includes “any dispute . . . concerning the validity, enforceability
and scope of this Clause.” It also defines “we” and “us” as “the
creditor signing below,” as well as the creditor’s agents and
related companies, and it defines “you” as “the applicant(s)
signing below.” However, the arbitration rider does not contain a
signature block for the creditor. Instead, it contains only a
signature block for the borrower and states, “I agree to the terms
of this Clause and acknowledge receipt of a completed copy of
this Clause.”

¶6     Lender provided the Livingstons with the loan on the
condition that the loan agreement and the arbitration rider “be
signed.” Accordingly, the Livingstons signed both documents, 3

additional undisputed facts as they are alleged in the Livingstons’
complaint or as they are offered in support of or in opposition to
the motion to compel.

3. Before the district court, the Livingstons disputed that they
signed the arbitration rider, but after discovery and an
evidentiary hearing that included expert testimony, the district
court found otherwise. It found that the Livingstons “signed the
arbitration rider to the loan agreement at issue . . . ; that the
                                                   (continued…)

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                   Livingston v. Finco Holdings

and the loan was financed. Lender, who signed the loan
agreement, received the executed rider from the Livingstons and
retained it as part of its records relating to the loan. 4

¶7      A few months later, based on its belief that the Livingstons
had defaulted on the loan, Lender repossessed and sold the
vehicle. Alleging, among other things, that the repossession was
unlawful, the Livingstons filed a lawsuit against Lender
Defendants and others. Lender Defendants responded with a
motion to dismiss, seeking a dismissal of certain of the
Livingstons’ ten causes of action. Nearly ten months after the case
was filed, the district court granted the motion to dismiss in part,
and the Livingstons sought leave to amend their complaint.
However, before their motion for leave to amend was granted,
Lender Defendants removed the case to federal court based on the
Livingstons’ assertion of a federal claim in their draft amended
complaint. Because the removal was premature, the federal court
remanded the case to state court and awarded the Livingstons the
attorney fees they incurred in challenging the removal. A month
later, the motion for leave to amend was granted (with the federal
claim removed), and the next day, Lender Defendants moved to
compel arbitration based on the arbitration rider.

¶8     The Livingstons opposed Lender Defendants’ motion,
arguing that arbitration could not be compelled because “an
arbitration contract was never formed.” In the alternative, the
Livingstons argued that Lender Defendants had waived their
right to arbitrate by substantially participating in litigation to a
point inconsistent with the right to arbitrate and that the

signatures contained thereon are genuine and are not forgeries.”
This finding is not challenged on appeal.

4. Lender eventually signed the rider, but the Livingstons contend
that it was not signed contemporaneously with the loan
agreement. They contend that Lender did not sign the rider until
after the litigation began.

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                    Livingston v. Finco Holdings

Livingstons were prejudiced by Lender Defendants’ delay in
seeking arbitration. The district court disagreed and ordered the
case to arbitration. It concluded that the arbitration rider was an
enforceable contract and that Lender Defendants did not waive
their right to arbitrate. Specifically, the court determined that
Lender Defendants did not act inconsistently with the right to
arbitrate and that the Livingstons failed to show that the delay
prejudiced them. The arbitration proceeding resulted in an award
for Lender Defendants, which the district court confirmed. The
Livingstons appeal.

             ISSUES AND STANDARD OF REVIEW

¶9     The Livingstons contend that the district court erred in
granting Lender Defendants’ motion to compel arbitration for two
reasons.

¶10 First, the Livingstons assert that a binding arbitration
agreement was never formed. “The issue of whether a contract
exists may present questions of both law and fact. Whether a
contract has been formed is ultimately a conclusion of law, but
that ordinarily depends on the resolution of subsidiary issues of
fact.” Nunley v. Westates Casing Services, Inc., 1999 UT 100, ¶ 17,
989 P.2d 1077. Here, the relevant facts are not in dispute and both
parties invite us to review the court’s decision for correctness.

¶11 Second, the Livingstons argue that Lender Defendants
waived their right to arbitrate by substantially participating in
litigation, which prejudiced the Livingstons. The parties agree
that the district court’s determination regarding waiver of the
right to arbitrate presents a mixed question of law and fact.
Quoting Central Florida Investments, Inc. v. Parkwest Associates, 2002
UT 3, 40 P.3d 599, the parties argue that “a legal question . . . is
reviewed for correctness, but the actions or events allegedly
supporting waiver are factual in nature and should be reviewed
as factual determinations, to which we give a district court
deference.” Id. ¶ 20. However, when a district court’s

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                     Livingston v. Finco Holdings

determination to compel or deny arbitration is “based on
documentary evidence alone, it is a legal conclusion that is
reviewed for correctness.” ASC Utah, Inc. v. Wolf Mountain Resorts,
LC, 2010 UT 65, ¶ 11, 245 P.3d 184; see also Turpin v. Valley
Obstetrics & Gynecology, 2021 UT App 12, ¶¶ 15–17, 482 P.3d 831.
Here, because the district court’s waiver determination was made
based on documentary evidence alone, we review its decision for
correctness. See ASC Utah, 2010 UT 65, ¶ 11.

                             ANALYSIS

             I. Enforceability of the Arbitration Rider

¶12 The Livingstons contend that the district court erred in
compelling arbitration of their dispute with Lender Defendants
because, they argue, the parties never entered into a binding
agreement to arbitrate. In making this argument, the Livingstons
repeatedly acknowledge that they signed the arbitration rider as
part of the transaction with Lender to finance the purchase of their
vehicle. Still, the Livingstons claim that Lender did not timely
manifest its assent to the arbitration rider—either by signature or
otherwise—and thus no agreement to arbitrate was reached and
the rider is unenforceable. We disagree with the Livingstons and
conclude that the district court correctly determined that the rider
was enforceable and that, absent a waiver, see infra Part II,
arbitration was appropriately compelled.

¶13 The arbitration rider states that the Federal Arbitration Act
(the FAA), “not state arbitration law,” governs the arbitrability of
the parties’ disputes. By its terms, that includes any dispute
concerning the enforceability of the arbitration rider. But in
interpreting the FAA, the United States Supreme Court has held
that when the enforceability of an arbitration agreement is at
issue, state-law principles of contract formation generally apply.
See Perry v. Thomas, 482 U.S. 483, 492 n.9 (1987) (citing 9 U.S.C. § 2);
see also First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995)
(“When deciding whether the parties agreed to arbitrate a certain

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                    Livingston v. Finco Holdings

matter . . . , courts generally . . . should apply ordinary state-law
principles that govern the formation of contracts.”); Ellsworth v.
American Arb. Ass’n, 2006 UT 77, ¶ 14, 148 P.3d 983 (“Arbitration
is a matter of contract law, and state-law principles of contract
formation apply.” (citation omitted)); Cade v. Zions First Nat’l
Bank, 956 P.2d 1073, 1077 (Utah Ct. App. 1998) (explaining that
even though enforcement of an agreement was governed by the
FAA, state contract law applied to the issue of whether and who
may enforce the agreement). Thus, in considering the Livingstons’
challenge to the enforceability of the arbitration rider, we apply
principles of Utah contract law.

¶14 “[I]t is a basic principle of contract law that there can be no
contract without the mutual assent of the parties.” John Call Eng’g,
Inc. v. Manti City Corp., 743 P.2d 1205, 1207 (Utah 1987); see also
Rossi v. University of Utah, 2021 UT 43, ¶ 31, 496 P.3d 105
(“Generally, a promise is legally enforceable where it is part of a
bargain in which there is a manifestation of mutual assent to the
exchange and a consideration.” (cleaned up)). A contract results
when “there is a manifestation of mutual assent, by words or
actions or both, which reasonably are interpretable as indicating
an intention to make a bargain with certain terms or terms which
reasonably may be made certain.” Rapp v. Salt Lake City, 527 P.2d
651, 654 (Utah 1974) (cleaned up).

¶15 The Livingstons contend that there is no enforceable
agreement to arbitrate because Lender did not timely manifest its
assent to the arbitration rider. Specifically, the Livingstons argue
that the rider “explicitly requir[ed]” Lender to manifest its assent
by signing the rider, and that without a timely signature, “there
was no binding arbitration agreement.” 5 Alternatively, the

5. Although it is undisputed that Lender eventually signed the
arbitration rider, the Livingstons contend that it was not signed
until after litigation was commenced. Because we ultimately
conclude that a signature was not necessary to manifest Lender’s
                                                    (continued…)

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                    Livingston v. Finco Holdings

Livingstons contend that even if Lender’s timely signature was
not required, Lender did not otherwise manifest its assent in a
timely way. We disagree with the Livingstons on both counts.

¶16 First, the arbitration rider did not require Lender’s
signature, and thus its absence does not render the rider
unenforceable. Under standard contract principles, it is
established that “the purpose of a signature is to demonstrate
mutuality of assent.” Commercial Union Assocs. v. Clayton, 863 P.2d
29, 34 (Utah Ct. App. 1993) (cleaned up). But it is equally
established “that a signature is not always necessary to create a
binding agreement.” Id. (cleaned up). As our supreme court has
stated, “it is fundamental contract law that the parties may
become bound by the terms of a contract even though they did
not sign the contract, where they have otherwise indicated their
acceptance of the contract, or led the other party to so believe that
they have accepted the contract.” Ercanbrack v. Crandall-Walker
Motor Co., 550 P.2d 723, 725 (Utah 1976) (cleaned up). Further,
neither the Utah Uniform Arbitration Act nor the FAA requires a
party’s signature on an arbitration agreement for it to be
enforceable; instead, they require only that the agreement be in
writing. See Createrra, Inc. v. Sundial, LC, 2013 UT App 141, ¶¶ 8,
12, 304 P.3d 104 (recognizing the Utah statutory requirement that
an arbitration agreement be in writing); Medical Dev. Corp. v.
Industrial Molding Corp., 479 F.2d 345, 348 (10th Cir. 1973)
(observing that the FAA does not require that a party sign an
arbitration agreement; “[a]ll that is required is that the arbitration
provision be in writing”).

¶17 The Livingstons do not dispute these general principles;
they instead contend that the arbitration rider, by its own terms,
requires Lender’s signature as a condition precedent to the
formation of a valid contract. In support of their contention, the
Livingstons cite the definitional paragraph of the arbitration rider,

agreement to arbitrate, we need not address the Livingstons’
complaint that the signature was untimely.

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                    Livingston v. Finco Holdings

which states: “As used in this Clause, ‘we’ and ‘us’ means the
creditor signing below, its officers, directors, employees and
agents, parents, subsidiaries and affiliated companies and
their assigns and respective successors-in-interest. ‘You’ means
the applicant(s) signing below.” The Livingstons contend that
by defining the “we” and “us” as “the creditor signing below,”
the arbitration rider “requires” Lender’s signature “before a
binding agreement was formed.” We do not share the
Livingstons’ view.

¶18 In Utah, “[a] simple statement . . . in a contract is not
necessarily a condition to a party’s duty of performance. The
intention to create a condition in a contract must appear expressly
or by clear implication.” Cheever v. Schramm, 577 P.2d 951, 953
(Utah 1978). And although the language cited by the Livingstons
suggests that Lender would sign the arbitration rider, the
language does not expressly state or clearly imply that Lender’s
signature was a condition precedent to the enforceability of the
rider or was the only method by which Lender could manifest its
assent. The purpose of the signature, as expressly set forth in the
rider, was to identify the creditor by name. The rider does not
expressly state or clearly imply that the signature was a
prerequisite to a binding agreement.

¶19 This result is consistent with conclusions reached by
other courts considering similar arguments applying like
principles of contract law. For example, the United States Court
of Appeals for the Fifth Circuit concluded that the absence of a
signature did not invalidate an arbitration agreement because
there was no express language in the parties’ agreements stating
that they would be bound only if the agreements were signed.
Trujillo v. Volt Mgmt. Co., 846 F. App’x 233, 236 (5th Cir. 2021) (per
curiam). The court reached its conclusion despite the presence of
a signature block in the agreement, stating “there is no language
that the parties needed to sign the agreements to give it effect.” Id.
Similarly, the federal district court in Colorado rejected the
argument that an arbitration agreement must be signed by the

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                   Livingston v. Finco Holdings

parties to become effective because the agreement did not use
conditional language that required the signatures of the parties to
become effective. Hickerson v. Pool Corp., No. 19-cv-02229-CMA-
STV, 2020 WL 5016938, at *4 (D. Colo. Aug. 25, 2020). The court
concluded that the reference to signatures in the agreement
suggested that assent could be manifested by signature, but the
reference did not require a signature for the agreement to take
effect. Id.

¶20 Like the contracts in these cases, the arbitration rider here
did not state that signatures were required for the agreement to
be enforceable. In fact, the rider did not even contain a signature
block for Lender. And although the rider suggested that Lender
would be identified by its signature, because the rider did not
require that it be signed, the absence of Lender’s signature did not
render the agreement unenforceable.

¶21 Second, we disagree with the Livingstons’ alternative
argument that even if Lender’s signature was not required, the
arbitration rider is unenforceable because Lender did not
otherwise manifest its assent to the rider. Contrary to the
Livingstons’ claim, Lender manifested its assent in multiple ways.
As the district court found, Lender presented the arbitration rider
to the Livingstons and required its execution by the Livingstons
before the loan would be funded. Further, Lender signed the loan
agreement on the same date the arbitration rider was presented to
and signed by the Livingstons. The arbitration rider expressly
states that it “is incorporated into and becomes part of every
application, purchase, finance and lease document and other
contracts . . . entered into between” Lender and the Livingstons,
and the district court concluded that the two documents should
be construed as a whole. Thus, Lender’s signature on the loan
agreement was an additional manifestation of its assent to the
arbitration rider. And finally, Lender funded the loan that was
conditioned on the Livingstons agreeing to arbitration, it
maintained the arbitration rider in its files, and it sought to
enforce the arbitration rider.

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                    Livingston v. Finco Holdings

¶22 Together, these actions manifest Lender’s assent to the
rider, and the Livingstons presented no evidence beyond the
absence of a signature to suggest a contrary intent. See Dickson v.
Gospel for ASIA, Inc., 902 F.3d 831, 835 (8th Cir. 2018) (“We have
no doubt that GFA assented to the agreements at issue and
intended them to be enforceable: GFA drafted the agreements and
affixed its letterhead to them; it maintained the agreements; and
it seeks to enforce them.”); Hickerson, 2020 WL 5016938, at *6
(“Pool also manifested its assent in numerous ways; it drafted the
Agreements, presented them to Plaintiffs for signature . . . ,
included reference to the Agreements in the Employee Handbook,
had Plaintiffs sign an acknowledgement that they received and
read the Employee Handbook, and continued to employ Plaintiffs
after they signed the Agreements.”); Wright v. Hernandez, 469
S.W.3d 744, 761 (Tex. App. 2015) (concluding that the employer
manifested its assent to an unsigned arbitration agreement by
preparing the agreement, presenting the agreement to the
employee for signature, maintaining the agreement as a business
record, and seeking to enforce the agreement). Thus, we have no
trouble concluding, as did the district court, that Lender
manifested to the Livingstons that it agreed to the arbitration rider
and was therefore bound. And having resolved this issue in favor
of Lender, we likewise conclude that the district court did not err
in concluding that a binding arbitration agreement existed
between the Livingstons and Lender Defendants.

                             II. Waiver

¶23 The Livingstons next challenge the district court’s
determination that Lender Defendants did not waive their right
to arbitrate the Livingstons’ dispute. The Livingstons contend that
the court committed legal error in applying federal law to the
waiver inquiry and that the court incorrectly concluded that
Lender Defendants did not waive their right to arbitrate. We
begin by addressing the legal standard for waiver of the right to
arbitrate. We then address whether the district court correctly
concluded that Lender Defendants did not waive their right to

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                    Livingston v. Finco Holdings

arbitrate because the Livingstons were not prejudiced by Lender
Defendants’ delay.

A.     The Legal Standard

¶24 As noted above, the parties’ arbitration rider states that the
FAA governs the arbitrability of the parties’ disputes, including
any dispute concerning the rider’s enforceability. See supra ¶ 13.
Relying on that choice of law provision, Lender Defendants
invited the district court to apply federal law in assessing the
Livingstons’ contention that Lender Defendants had waived their
right to arbitrate by participating in litigation for a time before
seeking to compel arbitration. Accepting Lender Defendants’
invitation, the court considered the factors relevant to the
question of waiver that were summarized by the Tenth Circuit
Court of Appeals in Peterson v. Shearson/American Express, Inc., 849
F.2d 464, 467–68 (10th Cir. 1988). Specifically, the court considered
“whether the litigation machinery ha[d] been substantially
invoked,” whether Lender Defendants’ “actions [we]re
inconsistent with the right to arbitrate,” and whether Lender
Defendants had “tak[en] advantage of judicial discovery
procedures not available in arbitration.” See id. (cleaned up). The
court also considered whether the delay in demanding arbitration
“affected, misled, or prejudiced” the Livingstons. 6 See id. at 468
(cleaned up).

¶25 The Livingstons contend that even though the arbitration
rider is governed by federal law, the question of waiver is

6. Consistent with Tenth Circuit authority, the district court also
considered whether “the parties were well into preparation of a
lawsuit” before Lender Defendants notified the Livingstons of
their intent to arbitrate, whether Lender Defendants had filed a
counterclaim, and whether Lender Defendants’ arbitration
request came “close to the trial date” or was “delayed for a long
                                                    (continued…)

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                    Livingston v. Finco Holdings

governed by the two-part waiver test first articulated by the Utah
Supreme Court in Chandler v. Blue Cross Blue Shield of Utah, 833
P.2d 356, 360 (Utah 1992). There, the court stated, “[W]aiver of a
right of arbitration must be based on both a finding of
participation in litigation to a point inconsistent with the intent to
arbitrate and a finding of prejudice.” 7 Id. The Livingstons contend
that “the Utah Supreme Court can independently develop its own
case precedent . . . in construing federal arbitration law” and that
the Chandler standard “is fully compliant” with United States
Supreme Court authority. Ultimately, we need not resolve
whether the district court erred in applying the factors identified
by the Tenth Circuit in Peterson rather than the waiver test as
articulated by our supreme court in Chandler. Had the court
applied the Chandler test, the result would have been the same.

¶26 Under Chandler, “waiver of a right of arbitration must be
based on both a finding of participation in litigation to a point
inconsistent with the intent to arbitrate and a finding of
prejudice.” Id. (emphasis added). Thus, if either prong is unmet,
there is no waiver.

¶27 Here, in its application of the Peterson standard, the district
court considered and ultimately determined that the Livingstons

period” of time. See Peterson v. Shearson/Am. Express, Inc., 849 F.2d
464, 467–68 (10th Cir. 1988) (cleaned up).

7. In Mounteer Enterprises, Inc. v. Homeowners Ass’n, 2018 UT 23,
422 P.3d 809, a non-arbitration case, the Utah Supreme Court
observed that “[t]he prejudice requirement is a doctrinal misfit in
the law of waiver,” and it thus “repudiate[d] [its] prior decisions
that speak of prejudice as an element of waiver.” Id. ¶¶ 33–34.
Mounteer was decided after the district court entered its decision
in this case and neither side has argued that prejudice is no longer
an element of the Chandler waiver test. Accordingly, we assume
for purposes of our review in this case that the prejudice prong
still applies.

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                    Livingston v. Finco Holdings

did not show that Lender Defendants’ delay in seeking arbitration
prejudiced them. Because that determination of no prejudice
would have been fatal to the Livingstons’ waiver claim under
Chandler, the Livingstons would have fared no better had that
standard been applied.

B.     The Livingstons’ Claim of Prejudice

¶28 The Livingstons next contend that the district court erred
in concluding that they had failed to demonstrate that Lender
Defendants’ delay in seeking arbitration prejudiced them. We are
not persuaded.

¶29 As the parties opposing arbitration, the Livingstons bore
the burden of proving prejudice. See Turpin v. Valley Obstetrics
& Gynecology, 2021 UT App 12, ¶ 28, 482 P.3d 831. To be material,
“prejudice must result from the delay in the assertion of the right
to arbitrate, not from factors that are inherent in arbitration itself,
such as the severance of a claim or limitations on remedies.”
Chandler v. Blue Cross Blue Shield of Utah, 833 P.2d 356, 359 (Utah
1992). Further, “prejudice [must] be of such a nature that the party
opposing arbitration suffers some real harm,” id. at 360, which
may be shown if that party “has incurred significant expenses in
the district court litigation that would not have been incurred in
arbitration, or if it has participated in discovery that would not
have been available in arbitration,” Turpin, 2021 UT App 12, ¶ 28
(cleaned up). Additionally, “prejudice can occur if a party gains
an advantage in arbitration through participation in pretrial
procedures.” Chandler, 833 P.2d at 359.

¶30 Here, the Livingstons identify three possible sources of
prejudice, but none of the three satisfy the Chandler standard.

¶31 First, the Livingstons contend that they were prejudiced by
having to respond to Lender Defendants’ motion to dismiss
certain claims that were filed early in the litigation. The
Livingstons claim they suffered prejudice because they incurred
“substantial litigation expense” and several of their claims were

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                    Livingston v. Finco Holdings

dismissed. This argument is not persuasive. The Livingstons
conceded in oral argument before this court that they would have
had to litigate the same issues in arbitration and that Lender
Defendants could have received the same relief. Relatedly, the
Livingstons have not identified any expense incurred in the
litigation that they would not have incurred in defending a
motion to dismiss filed in arbitration. Thus, the Livingstons have
not demonstrated actual harm. Because the Livingstons would
have had to defend against the same motion in arbitration that
they faced in litigation, they have not shown that they were
prejudiced by the litigation of the motion in the district court. See
Turpin, 2021 UT App 12, ¶ 28; see also Pledger v. Gillespie, 1999 UT
54, ¶ 23, 982 P.2d 572 (considering whether the party opposing
arbitration incurred significant litigation expenses “that would
not have been incurred in arbitration”).

¶32 Second, the Livingstons argue that they were “greatly
prejudiced” by the expenses they incurred in litigating Lender
Defendants’ failed removal of the lawsuit to federal court. Again,
we do not agree. Not only did the Livingstons neglect to provide
any evidence to the district court to demonstrate that they
incurred “significant expenses” defending against the removal
sufficient to establish prejudice under the Chandler standard, see
Turpin, 2021 UT App 12, ¶ 28, they conceded in oral argument
before this court that the federal court awarded them the attorney
fees they incurred when it rejected the removal as improper. Thus,
the Livingstons cannot show that they were prejudiced by having
to defend against Lender Defendants’ removal.

¶33 Finally, the Livingstons contend that they were prejudiced
by Lender Defendants’ forum shopping. They argue that Lender
Defendants “tested the judicial waters in state court,” and when
it was not to their “liking,” they “engaged in forum shopping by
attempting to remove” the Livingstons’ claims to federal court.
The Livingstons are correct that “prejudice exists when the party
seeking arbitration is attempting to forum-shop after the judicial
waters have been tested.” See Chandler, 833 P.2d at 359 (cleaned

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                    Livingston v. Finco Holdings

up). But the Livingstons have not shown prejudice on this record.
They have not identified an adverse ruling in state court from
which Lender Defendants appeared to be fleeing. Instead, Lender
Defendants had success before the state court on their motion to
dismiss and they understandably sought to remove the case to
federal court after the Livingstons indicated that they intended to
assert a federal claim. Without more, there is no suggestion that
in moving to compel arbitration, Lender Defendants were
“sensing an adverse court decision” and by compelling
arbitration were trying to gain “a second chance in another
forum.” See Jones Motor Co. v. Chauffeurs, Teamsters & Helpers Local
Union No. 633, 671 F.2d 38, 43 (1st Cir. 1982).

¶34 In sum, the district court correctly concluded that the
Livingstons did not demonstrate that they were prejudiced by
Lender Defendants’ delay in compelling arbitration. Accordingly,
the district court did not err in concluding that Lender Defendants
did not waive their right to arbitrate.

                         III. Attorney Fees

¶35 Lender Defendants seek an award of attorney fees incurred
on appeal pursuant to paragraph 3(d) of the loan agreement, the
arbitration rider, and rule 33 of the Utah Rules of Appellate
Procedure. We decline to consider this request because it was
inadequately briefed. See Anderson v. Taylor, 2006 UT 79, ¶ 25, 149
P.3d 352 (“Our rules require not just bald citation to authority but
development of that authority and reasoned analysis based on
that authority.” (cleaned up)); see also Utah R. App. P. 24(a)(9) (“A
party seeking attorney fees for work performed on appeal must
state the request explicitly and set forth the legal basis for an
award.”). Lender Defendants identify several sources for their
claimed right to attorney fees, but they fail to engage in any
analysis or provide any explanation for why they are entitled to
recover the fees they have incurred on appeal. Lender Defendants
have not claimed that this appeal is “either frivolous or for delay,”
as required for an award under rule 33. See Utah R. App. P. 33(a)

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                    Livingston v. Finco Holdings

(“[I]f the court determines that a[n] . . . appeal taken under these
rules is either frivolous or for delay, it will award just damages,
which may include . . . reasonable attorney fees, to the prevailing
party.”). Similarly, Lender Defendants have not identified a
provision in the arbitration rider that entitles them to a fee award,
nor have they undertaken any effort to show that their defense of
this appeal is an enforcement of the loan agreement as required
by paragraph 3(d) of that agreement. Accordingly, Lender
Defendants’ fee request is denied.

                          CONCLUSION

¶36 The district court did not err in concluding that a binding
arbitration agreement existed between Lender and the
Livingstons. Nor did the court err in determining that Lender
Defendants did not waive their right to arbitrate. Although the
Livingstons proffer that Lender Defendants waived their right to
arbitrate, the Livingstons have not shown that they were
prejudiced by the delay. Thus, we affirm the district court’s order
compelling arbitration.

 20200200-CA                     17                2022 UT App 71