Court Opinion

ID: 9904782
Source: CourtListenerOpinion
Date Created: 2023-11-27 21:02:57.432127+00
Date Added: 2024-06-11T09:21:25.735091
License: Public Domain

Filed 11/27/23 Oppenheimer v. Centinela Storage Associates CA2/8
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                      DIVISION EIGHT

STEVEN OPPENHEIMER et al.,                                      B321544

         Plaintiffs and Respondents,                            (Los Angeles County
                                                                Super. Ct. No. 19STCV24447)
         v.

CENTINELA STORAGE
ASSOCIATES,

         Defendant and Appellant.

     APPEAL from an order of the Superior Court of
Los Angeles County, Deirdre Hill, Judge. Affirmed.

     ClintonBailey, Mark C. Bailey; Schumann Arevalo, Eric
Arevalo, Kimberly Hisa; Law Offices of Kathryn M. Davis and
Kathryn M. Davis for Defendant and Appellant.

     Lynberg & Watkins, Michael J. Larin; Dordick Law
Corporation, Gary A. Dordick and Robert B. Reagan for Plaintiffs
and Respondents.

                                 _______________________
     Shortly before trial, Centinela Storage Associates (CSA)
unsuccessfully petitioned the trial court to compel arbitration.
We affirm the court’s order. We also deny pending motions to
dismiss and to impose sanctions.

      FACTUAL AND PROCEDURAL BACKGROUND

       In October 2018, Steven Oppenheimer entered into a
contract to rent a storage unit from Public Storage, Inc. The
rental contract contained an arbitration provision. Weeks later,
Oppenheimer’s minor child Avery was injured at the facility in a
collision with a motorized cart alleged to have been operated by a
Public Storage employee.
       In July 2019, Oppenheimer, his wife Shelice, and his three
children sued Public Storage, Inc. and its employee (collectively,
Public Storage), and Does 1-10. In December 2019, the
Oppenheimers identified Doe No. 1 as CSA, the owner of the
property on which the storage facility is located.
       Although CSA had not yet appeared in the litigation, it
engaged in discovery in cooperation with the Oppenheimers. At
CSA’s request, Avery Oppenheimer underwent a
neuropsychological evaluation in January 2020 and a
neurosurgeon’s evaluation in February 2020. CSA agreed to
permit the Oppenheimers access to the storage facility and to test
the motorized cart involved in the underlying incident. The
parties agreed these events qualified as if they had been
requested under the Code of Civil Procedure.
       In their first amended complaint, filed July 14, 2020, the
Oppenheimers alleged causes of action for negligence and
premises liability. CSA was served with the Oppenheimers’ first

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amended complaint on August 20, 2020. CSA filed an answer
and a cross-complaint against Steven and Shelice Oppenheimer.
       CSA responded in October 2020 to written discovery
requests propounded by the Oppenheimers. CSA had to
investigate to provide discovery responses.
       On January 15, 2021, CSA filed a first amended answer to
the first amended complaint. In the first amended answer, CSA
relied on the contract in six different affirmative defenses. On
information and belief, CSA asserted the contract released it
from liability: “Plaintiffs entered into an agreement with
Defendants and/or other parties in which Plaintiffs assumed
responsibility and released Defendants and/or other parties from
liability for all claims of injuries that could occur arising out of
Plaintiffs’ use of the subject property.” CSA alleged the
Oppenheimers had waived their claims when they entered into
the contract, under which they “assumed responsibility for all
claims of injuries that could occur arising out of Plaintiffs’ use of
the subject property.” CSA alleged the Oppenheimers’ damages
were limited because the contract “limits recovery of said alleged
injuries, damages, and losses (if any).” The contract was also the
basis for affirmative defenses of ratification, consent, and
assumption of the risk.
       In 2021 the Oppenheimers answered the cross-complaint.
The parties participated in two unsuccessful mediations. CSA
filed a first amended cross-complaint adding causes of action
against Public Storage. The first amended cross-complaint was
later stricken because it was filed without leave. Public Storage
moved to compel arbitration on CSA’s cross-claims; this was
denied as moot when CSA’s first amended cross-complaint was
stricken.

                                  3
       On August 31, 2021, the Oppenheimers filed a motion
seeking trial preference under Code of Civil Procedure section 36
due to the ages of the minor plaintiffs. CSA opposed the motion
for trial preference. While the motion for preference was
pending, CSA sought leave to file its first amended cross-
complaint, which the Oppenheimers opposed.
       The trial court granted the motion for trial preference on
April 5, 2022. The court set the trial for August 1, 2022, with a
discovery cut-off of July 5, 2022.
       CSA did not propound written discovery to the Plaintiffs
until March 2022. Between March 2022 and May 2022, CSA
propounded a total of 26 sets of form interrogatories, special
interrogatories, and document production requests to the five
plaintiffs. In May 2022, CSA filed an ex parte application and a
motion to compel a person most qualified deposition. Also in May
2022, during a meet and confer session concerning the scheduling
of depositions, CSA’s counsel complained to the Oppenheimers’
counsel that she lacked sufficient time to do all the work she
needed to do. The Oppenheimers’ counsel observed that CSA
should have begun discovery earlier, and CSA’s counsel
responded that she had been told not to do anything earlier.
       As of June 2022, the Oppenheimers had retained
11 experts, produced 2460 pages of documentation, and taken
and attended depositions.
       CSA deposed Public Storage Inc’s person most qualified on
May 27, 2022. That day, CSA’s attorney received a copy of the
rental contract for the Oppenheimers’ storage unit.

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       Less than two months before trial, on June 9, 2022,1 CSA
moved to compel the Oppenheimers to arbitrate the causes of
action against it and to stay proceedings pending completion of
arbitration. CSA also applied ex parte for the court to either
continue the trial date or to advance the hearing and shorten
notice on a discovery matter and on the pending motion to compel
arbitration.
       The court denied CSA’s motion to compel arbitration on
June 29, 2022. The trial court found there was no arbitration
agreement between the Oppenheimers and CSA and the
arbitration provision did not cover personal injury claims.
Finally, the court found that even if CSA could enforce the
arbitration provision in the rental contract and the provision
covered the claims asserted in the lawsuit, CSA had waived its
right to arbitration by engaging in acts inconsistent with that
purported right, to the prejudice of the Oppenheimers.
       CSA appealed the denial of its motion to compel
arbitration, staying the pending trial.

                         DISCUSSION

I.    Motion to Compel Arbitration
      An order denying a petition to compel contractual
arbitration is appealable. (Code Civ. Proc., § 1294, subd. (a);
Mercury Ins. Group v. Superior Court (1998) 19 Cal.4th 332, 349.)
CSA argues each finding of the trial court was incorrect and
asserts 1) it is entitled to invoke the applicability of the

1     CSA states their motion to compel arbitration was filed
June 2, 2022. The copy of the motion in the Appellant’s Appendix
lacks a file stamp, but both the docket and the court’s ruling on
the motion state it was filed June 9, 2022.

                                5
arbitration provision, 2) the arbitration clause covers personal
injury claims, and 3) CSA did not waive the right to arbitrate.
       We examine the trial court’s ruling that CSA waived its
right to compel arbitration under the substantial evidence
standard of review. (St. Agnes Medical Center v. PacifiCare of
California (2003) 31 Cal.4th 1187, 1196 (St. Agnes).) Unless the
facts are undisputed, not the case here, “the determination of
waiver is a question of fact, and the trial court’s finding, if
supported by sufficient evidence, is binding on the appellate
court.” (Ibid.) “The appellate court may not reverse the trial
court’s finding of waiver unless the record as a matter of law
compels finding nonwaiver.” (Kokubu v. Sudo (2022)
76 Cal.App.5th 1074, 1083 (Kokubu).)
       We conclude that even if CSA were entitled to invoke the
arbitration provisions of the storage unit contract and the claims
in this action were within the scope of the arbitration provision,
the trial court did not err when it concluded CSA had waived its
right to arbitration.
       Code of Civil Procedure section 1281.2 provides in relevant
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 thereto refuses to arbitrate such 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.) The California Supreme
Court has held that “no single test delineates the nature of the
conduct that will constitute a waiver of arbitration. [Citations.]
‘ “In the past, California courts have found a waiver of the right

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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.” ’ ” (St.
Agnes, supra, 31 Cal.4th at pp. 1195–1196.)
      In St. Agnes, the Supreme Court identified factors relevant
to the determination of a waiver claim: “ ‘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.)
      Based on the St. Agnes factors, CSA argues the finding it
waived any right to arbitrate the dispute is legally erroneous
because the Oppenheimers did not provide “proof of actual
knowledge” of the right to arbitrate. St. Agnes does not stand for
the proposition that proof of actual knowledge of the right to
arbitrate is required to establish waiver. To the contrary, in St.
Agnes, the Supreme Court explained, “While ‘waiver’ generally
denotes the voluntary relinquishment of a known right, it can
also refer to the loss of a right as a result of a party’s failure to

                                  7
perform an act it is required to perform, regardless of the party’s
intent to relinquish the right. [Citations.] In the arbitration
context, ‘[t]he term “waiver” has also been used as a shorthand
statement for the conclusion that a contractual right to
arbitration has been lost.’ ” (St. Agnes, supra, 31 Cal.4th at
p. 1195, fn. 4.)
       The trial court found, “CSA’s actions are inconsistent with
the right to arbitrate, and CSA delayed for a long period of time
before seeking a stay and requesting arbitration. CSA filed a
cross-complaint and have participated in discovery.” These
findings are supported by substantial evidence.
       CSA has been claiming it is shielded from liability by the
contract since early in this action. In January 2021, CSA filed a
first amended answer to the first amended complaint in which
the existence of an agreement between the defendants and the
Oppenheimers was alleged as the basis for six different
affirmative defenses. CSA repeatedly asserted on information
and belief that “Plaintiffs entered into an agreement with
Defendants and/or other parties in which Plaintiffs assumed
responsibility for all claims of injuries that could occur arising
out of Plaintiffs’ use of the subject property.” Accordingly, it
argued the affirmative defenses of waiver, release, limitation of
liability, consent, ratification, and assumption of the risk based
on that agreement. Given CSA’s awareness that a contract
existed and its claim that the contract protected it from liability,
inexplicably failing to examine that contract until trial was
imminent may reasonably be considered inconsistent with the
right to arbitrate and certainly created a substantial delay in

                                  8
seeking to assert that right.2 CSA’s request to compel
arbitration, presented less than two months before trial, was
unquestionably presented close to the trial date. (See St. Agnes,
supra, 31 Cal.4th at p. 1196; Davis v. Sheik Shoes, LLC (2022)
84 Cal.App.5th 956, 969 [courts have found the absence of a
reasonable explanation for delay a significant factor weighing in
favor of finding waiver].)
      There is also substantial evidence that the litigation
machinery had been substantially invoked and the parties were
well into the lawsuit and preparation for trial by the time CSA
sought to compel arbitration. (See St. Agnes, supra, 31 Cal.4th at
p. 1196.) Long before CSA formally appeared in the litigation, by
early 2020 it had already made agreements about discovery with
the Oppenheimers and successfully requested multiple
examinations of Avery Oppenheimer, all of which CSA and the
Oppenheimers agreed would be treated by the parties as if they
had been requested pursuant to the Code of Civil Procedure.
Additionally, CSA filed a cross-complaint against the
Oppenheimers without seeking a stay of proceedings, and it
engaged in extensive discovery and motion practice. CSA
distinguishes between its litigation conduct on the
Oppenheimers’ claims and its litigation with Public Storage, and

2     We are aware that the parties dispute when CSA became
aware of the arbitration provision in the rental contract. CSA
denies it knew of its right to compel arbitration until May 27,
2022, based on its counsel’s highly specific declaration that he
had not “not been made aware that [the contract] contained an
arbitration clause.” The Oppenheimers observe that one attorney
not having been made aware that a contract contained a
particular clause does not establish a lack of knowledge on the
part of the client. We need not resolve this dispute.

                                9
it urges against considering several of its actions to be an
invocation of litigation, but ultimately it argues that its litigation
activity did not constitute waiver because “there is no evidence
[it] engaged in aggressive litigation tactics designed to obtain an
unfair advantage over Respondents or block their
litigation/discovery efforts,” and “there is no evidence that CSA
had the arbitration agreement for a very long time, withheld it,
and chose instead to actively litigate to Respondents’ detriment.”
(Italics and boldface omitted.) Whatever the factual merits of
these assertions, neither engaging in aggressive litigation
designed to obtain an unfair advantage nor knowingly
withholding an arbitration agreement and choosing to actively
litigate to another party’s detriment is a requirement under St.
Agnes for finding a party waived its right to arbitrate.
       Finally, the court found the Oppenheimers were prejudiced
by the delay in petitioning to compel arbitration. Whether
prejudice is a part of the waiver analysis is not fully resolved at
this point. In St. Agnes, the California Supreme Court noted that
the “ ‘presence or absence of prejudice from the litigation of the
dispute is the determinative issue under federal law,’ ” and stated
that “[i]n California, whether or not litigation results in prejudice
also is critical in waiver determinations,” although it also noted
that no individual factor was dispositive. (St. Agnes, supra, 31
Cal.4th at p. 1203.) However, the United States Supreme Court
has recently declared prejudice is not to be considered in
determining waiver under federal law. (Morgan v. Sundance,
Inc. (2022) 596 U.S. 411.) The role of prejudice in the waiver
analysis under California law is pending before the California
Supreme Court in Quach v. California Commerce Club, Inc.

                                 10
(2022) 78 Cal.App.5th 470, review granted August 24, 2022,
S275121.
       We conclude that whether or not a showing of prejudice
remains part of the waiver analysis, the court’s decision must be
affirmed. If prejudice is no longer required, even if the trial court
may have improperly conditioned its waiver determination in
part on a showing of prejudice, its decision may still be affirmed
so long as any other correct legal reason exists to sustain it. (See
D'Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 18–19
[“ ‘No rule of decision is better or more firmly established by
authority, nor one resting upon a sounder basis of reason and
propriety, than that a ruling or decision, itself correct in law, will
not be disturbed on appeal merely because given for a wrong
reason. If right upon any theory of the law applicable to the case,
it must be sustained’ ”]; Rappleyea v. Campbell (1994) 8 Cal.4th
975, 981 [“we cannot undo the effect of the ruling . . . as long as
any other correct legal reason exists to sustain” it].) As noted
above, substantial evidence supports the court’s findings on
multiple St. Agnes factors regardless of the question of prejudice.
And if prejudice is still required, substantial evidence supports
the court’s determination that the Oppenheimers would be
prejudiced by compelling arbitration just a few weeks before trial.
       While “merely participating in litigation, by itself, does not
result in a waiver,” waiver is found when a party’s conduct
substantially undermines the strong “ ‘ “public policy in favor of
arbitration as a speedy and relatively inexpensive means of
dispute resolution” ’ ” or “substantially impair[s] the other side’s
ability to take advantage of the benefits and efficiencies of
arbitration.” (St. Agnes, supra, 31 Cal.4th at pp. 1203–1204.)
A “ ‘petitioning party’s conduct in stretching out the litigation

                                 11
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.” [Citation.] 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.’ ” (Kokubu, supra, 76 Cal.App.5th at pp. 1090–1091.)
This is all the more true where, as here, the Oppenheimers had
demonstrated the intent to move the litigation along as quickly
as possible, seeking and obtaining a preferential trial date
pursuant to Code of Civil Procedure section 36 due to the ages of
the minor plaintiffs. CSA, on the other hand, opposed the
request for a preferential trial date and fully litigated the matter
to the point of trial before seeking arbitration, engaging a full
range of pre-trial litigation that would have been unnecessary if
CSA had timely requested arbitration, and causing the
Oppenheimers to lose the time and money savings offered by
arbitration.
       It is true, as CSA argues, that invoking arbitration always
means the loss of a trial date, but that does not support CSA’s
conclusion that the loss of a preferential trial date can never
constitute prejudice. The trial court could reasonably have
concluded the Oppenheimers were prejudiced by the last-minute
assertion of the right to arbitration on the verge of trial after
years of pretrial litigation. As the record does not as a matter of
law compel finding nonwaiver, the trial court’s finding of waiver
must be affirmed. (Kokubu, supra, 76 Cal.App.5th at p. 1083.)

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II.    Motions to Dismiss and for Sanctions
       On July 20, 2022, the Oppenheimers filed motions to
dismiss the appeal and to impose sanctions, and on February 9,
2023 they filed another motion for sanctions with their
respondents’ brief. In all the motions the Oppenheimers argued
CSA’s appeal was meritless and objectively frivolous, and filed for
purposes of delay. (See In re Marriage of Flaherty (1982)
31 Cal.3d 637, 650 [“[A]n appeal should be held to be frivolous
only when it is prosecuted for an improper motive—to harass the
respondent or delay the effect of an adverse judgment—or when
it indisputably has no merit—when any reasonable attorney
would agree that the appeal is totally and completely without
merit”]; Zimmerman v. Drexel Burnham Lambert, Inc. (1988) 205
Cal.App.3d 153, 161 [“Appellate courts have an inherent power to
summarily dismiss any appeal which is designed for delay or
which is based on sham or frivolous grounds. Appropriate
sanctions may be imposed on the parties or their attorneys”].)
Although CSA does not prevail on its arguments on appeal, we
will not go so far as to declare that its appeal indisputably has no
merit or that it was prosecuted for an improper motive.
Accordingly, we deny the Oppenheimers’ motions to dismiss and
for the imposition of sanctions.

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                          DISPOSITION

      The order is affirmed. Respondents shall recover their
costs on appeal.

     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                         STRATTON, P. J.

We concur:

             GRIMES, J.

             VIRAMONTES, J.

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