Court Opinion

ID: 4032259
Source: CourtListenerOpinion
Date Created: 2016-09-08 18:02:46.135333+00
Date Added: 2024-06-11T14:35:26.656763
License: Public Domain

Filed 9/8/16 Gemini Basketball Holdings v. Williams Group Holdings CA2/3
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 THREE

GEMINI BASKETBALL HOLDINGS, LLC,                                           B260257

         Plaintiff and Appellant,                                          (Los Angeles County
                                                                           Super. Ct. No. BC494542)
         v.

WILLIAMS GROUP HOLDINGS, LLC et al.,

         Defendants and Respondents.

         APPEAL from an order of the Superior Court of Los Angeles County,
Maureen Duffy-Lewis, Judge. Reversed with directions.

         Law Offices of John R. Walton, John R. Walton and Katherine E. Hashimoto for
Plaintiff and Appellant.

         Buchalter Nemer, Kalley Aman, Sarah A. Syed and Robert M. Dato for Defendant
and Respondent Williams Group Holdings, LLC.

         Riley Law Group and Grant K. Riley for Defendant and Respondent Gemini
Basketball, LLC.
                                            _____________________
                                    INTRODUCTION
       Plaintiff Gemini Basketball Holdings, LLC (GBH) appeals from the court’s denial
of its motion to compel arbitration, asserting that the court erred in concluding that GBH
waived its right to arbitration. We reverse because GBH did not act inconsistently with
the intent to arbitrate, did not unreasonably delay in seeking arbitration, did not engage in
misconduct or act in bad faith, and did not prejudice the defendants.
                    FACTS AND PROCEDURAL BACKGROUND
       On October 25, 2012, GBH sued attorney Marc Samotny and his law firm, Patzik,
Frank & Samotny, Ltd. (collectively Samotny) alleging four causes of action: legal
malpractice, breach of fiduciary duty, fraud and negligent misrepresentation (the
malpractice action). As explained in the complaint, GBH served as the managing
member of a limited liability company, Gemini Basketball LLC (Gemini), after Gemini
bought the Los Angeles Sparks basketball team in 2006. GBH borrowed $3.25 million
(#07 loan) from Broadway Federal Bank (the Bank) to finance the purchase. Williams
Group Holdings, LLC (Williams) invested in Gemini in 2007, and by 2010, became a co-
managing member of Gemini along with GBH. Meanwhile, GBH borrowed another
$750,000 from the Bank (#05 loan) in 2008, investing the money in Gemini in exchange
for Gemini’s promise to repay the loan.
       In February 2011, a month before the two loans came due, Williams introduced
GBH to Samotny and Samotny agreed to represent Gemini and GBH in their efforts to
restructure or modify the Bank loans. GBH’s complaint alleged that Samotny failed to
disclose or obtain GBH’s waiver of his potential conflict of interest in representing
Williams and GBH. GBH claimed Samotny abandoned GBH when the conflict
materialized. Samotny allegedly breached duties by withholding from GBH material
information, such as the Bank’s insistence on obtaining personal guarantees from
Williams and/or its principals, Williams’s refusal to invest more money in Gemini or the
Sparks team, and the Bank’s intention to proceed with default and enforcement
procedures against GBH.

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       Three months after suing Samotny in the malpractice action, GBH filed a January
25, 2013 first amended complaint (FAC) identifying Gemini as a nominal defendant and
adding Williams as an additional defendant along with a Bank director, Paula Madison
(Madison), and accountant Edward Chez and his accounting firm Schultz & Chez, LLP
(collectively Chez). The FAC added nine causes of action against the various additional
defendants for fraud, negligent misrepresentation, breach of fiduciary duty, violation of
securities laws, and declaratory relief. Among other things, GBH alleged that Williams
and Madison concealed their positions as directors of the Bank and influenced the Bank
to pursue GBH rather than Gemini for repayment of the loans. GBH accused Williams
and Madison of entering into, without any intention of performing, a January 2012
agreement under which Williams increased its ownership interest in Gemini in exchange
for Gemini’s forgiveness of GBH’s obligation to pay accrued management fees. The
FAC also accused Williams, Madison, Gemini and Chez of failing to allocate to GBH its
pro rata share of tax credits.
       Williams first appeared in the action on March 12, 2013, filing jointly, with
Madison, a demurrer and motion to strike with a hearing date of June 4, 2013. Four
weeks later and nearly two months before the hearing on the demurrers, GBH’s attorney
sent Williams’s and Madison’s counsel an April 11, 2013 demand for arbitration via
email. On April 18, and May 2, 2013, GBH notified them of its intention to seek an ex
parte order staying proceedings pending arbitration. We have no record indicating that
Williams or Madison responded in any way to GBH’s demand for arbitration or intention
to seek a stay.
       On May 6, 2013, GBH filed a motion to compel Williams, Madison, and Gemini
to arbitration, giving notice of a September 5, 2013 hearing date. GBH supported its
motion with a declaration from its managing member, Katherine Goodman, who averred
that Williams, Madison, and Gemini were bound by an arbitration provision contained in
paragraph 11.17 of Gemini’s Amended and Restated Limited Liability Company
Agreement, and that all of Gemini’s operating agreements contained a similar provision.

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          One day later, on May 7, 2013, GBH filed its ex parte application for partial stay
pursuant to Code of Civil Procedure section 1281.2, subdivision (c). GBH argued that a
failure to stay the action posed the possibility of conflicting rulings, referencing
Williams’s demurrer and motion to strike set for hearing on June 4, 2013. Williams
urged the court to deny the motion for stay because GBH failed to identify an agreement
with Madison to arbitrate disputes, and because GBH had waited six months to demand
arbitration while the defendants invested time in “comprehensive demurrers.”
          The court’s May 7, 2013, minute order memorialized the denial of GBH’s motion
to stay and its order granting the motions of Samotny and Chez to quash for lack of
jurisdiction. GBH appealed the jurisdictional rulings and filed timely opposition to the
pending demurrers. At the June 10, 2013 hearing, the court sustained Williams’ demurrer
without leave to amend on some causes of action and with leave to amend on others. In
response to GBH’s second amended complaint, Williams again demurred and moved to
strike.
          On August 6, 2013, GBH filed an amended motion to compel arbitration,
informing the court, among other things, that GBH had sued Williams and Gemini in
arbitration on July 3, 2013 (Claim No. AAA 72 196 Y 000609 13). A few days later, on
August 9, 2013, GBH petitioned this Court for a writ of mandate to temporarily stay the
litigation, pending resolution of the motion to compel arbitration. This court granted the
petition and temporarily stayed the proceedings on August 21, 2013.
          Williams and Gemini meanwhile filed oppositions to the amended motion to
compel arbitration. At the September 5, 2013 hearing on the amended motion, the trial
court imposed a stay on all litigation in the case pending the resolution of GBH’s appeals
of the court’s dismissals of Madison, Samotny, and Chez. The court also continued the
hearing on the motion to compel arbitration to January 16, 2014. On January 16, 2014
the court kept the stay in place and continued all proceedings to September 10, 2014. In
June 2014, GBH dismissed the Madison and Samotny appeals and filed a request for
statement of decision on the issues raised in its motion to compel arbitration.

                                                4
       The court heard and denied the motion to compel arbitration on October 23, 2014,
concluding that GBH waived its right to arbitrate its disputes with Williams and Gemini.
Likening GBH to the plaintiff in Christensen v. Dewor Developments (1983) 33 Cal.3d
778, 783-784 (Christensen), the trial court stated:
       “The matter at bar is similar to that of Christensen. Plaintiff, who has the
       option and the control to file, filed this case in October 2012. Instead of
       petitioning for arbitration immediately thereafter, [P]laintiff instead chose
       to file a first amended complaint in January 2013. It was not until after two
       motions to quash and three demurrers ([brought by] Williams, Madison and
       Gemini) were filed that [P]laintiff changed [its] mind and sought
       arbitration, filing that motion six and a half months later. By that time, the
       parties - especially Williams - have incurred substantially more than
       $2,300.00 in fees and costs by reviewing and analyzing an original and first
       amended complaint, drafting and appearing on the demurrers and motions
       to strike, attending case management conferences and ex parte appearances
       and preparing third party subpoena duces tecum. Further, with regard to
       the subpoena, there is undoubtedly, as the Christensen court noted, ‘faded
       memories’ and perhaps ‘lost records.’ Additionally, [P]laintiff - ignoring
       the appropriate court procedure - filed [an] application for arbitration with
       [the American Arbitration Association,] AAA[,] in May 2013. Defendant,
       again, incurred costs and fees associate[d] with that proceeding. [¶] Given
       the ruling and the language of Christensen, as well as the facts of this case,
       the motion to compel arbitration is DENIED.”

GBH now appeals this order. Williams opposes the appeal joined by nominal defendant
Gemini.
                                       DISCUSSION
       The sole issue on appeal is whether GBH waived its right to arbitration. We
review the issue de novo. As our Supreme Court recently reiterated, “In light of the
policy in favor of arbitration, ‘waivers are not to be lightly inferred and the party seeking
to establish a waiver bears a heavy burden of proof.’ ” (Iskanian v. CLS Transportation
Los Angeles, LLC (2014) 59 Cal.4th 348, 375 (Iskanian).) “Because arbitration is a
highly favored means of settling such disputes, the courts have been admonished to
‘closely scrutinize any allegation of waiver of such favored right’ [citation], and to
‘indulge every intendment to give effect to such proceedings’ [Citations.] Accordingly,

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in the face of conflicting authorities, we should endeavor to reach a result which
comports with the ‘strong public policy’ favoring arbitration.” (Doers v. Golden Gate
Bridge etc. Dist. (1979) 23 Cal.3d 180, 189 (Doers).) “Generally, 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. [Citations.] ‘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.’ ” (Saint Agnes Medical
Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1196 (Saint Agnes).) As the
facts are undisputed in this case, we review GBH’s appeal de novo.
       Although waiver ordinarily refers to the voluntary relinquishment of a right, it
“ ‘ “has also been used as a shorthand statement for the conclusion that a contractual right
to arbitration has been lost.” [Citation.]’ [Citation.] [¶] ‘. . . California courts have
found a waiver of the right to demand arbitration in a variant 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.’ . . . 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.” (Iskanian, supra,
59 Cal.4th at pp. 374-375.) Our Supreme Court has explained that while there is no
single test for establishing waiver, the courts should examine whether the party seeking
arbitration (a) has previously taken steps inconsistent with the intent to invoke arbitration;
(b) is unreasonably delayed in seeking arbitration; (c) has acted in bad faith or with
willful misconduct; or (d) has caused prejudice. (Christensen, supra, 33 Cal.3d at
p. 782; see Saint Agnes, supra, 31 Cal.4th at p. 1196; Iskanian, at p. 375.) Whether the
party opposing arbitration was prejudiced by a delay in seeking arbitration is the
“critical” factor when determining whether there has been a waiver. (Saint Agnes, at
p. 1203.)

                                                6
       a.     Steps Inconsistent with an Intent to Arbitrate
       “[T]he mere filing of a lawsuit does not constitute a waiver of the right to
arbitrate.” (Doers, supra, 23 Cal.3d at p. 183 (italics added).) “The trial court
must . . . view the litigation as a whole and determine if the parties’ conduct is
inconsistent with a desire to arbitrate.” (McConnell v. Merrill Lynch, Pierce, Fenner &
Smith, Inc. (1980) 105 Cal.App.3d 946, 952, fn. 2.) The extent to which the party
seeking arbitration has invoked the procedures of the judicial forum before moving to
compel arbitration is a key factor. (See Doers, at p. 188.)
       For example, where a party seeking arbitration has conducted discovery, filed
dispositive motions on the merits, or otherwise invoked judicial procedures, the courts
have regarded such conduct as inconsistent with an intent to arbitrate. (Gloster v. Sonic
Automotive, Inc. (2014) 226 Cal.App.4th 438, 450 [“While the filing of a dispositive
motion has been found to contribute to waiver, such a motion ordinarily must involve
‘the merits of arbitrable issues.’ ”]; Law Offices of Dixon R. Howell v. Valley (2005)
129 Cal.App.4th 1076, 1100-1104 [waiver based on pursuit of litigation for 15 months
before requesting arbitration]; Guess?, Inc. v. Superior Court (2000) 79 Cal.App.4th
553, 558 (Guess?) [waiver based on participation in discovery for three months before
asserting right to arbitration]; Sobremonte v. Superior Court (1998) 61 Cal.App.4th 980,
994 (Sobremonte) [filing two demurrers, a cross-complaint, and a motion to transfer to
municipal court while engaging in extensive discovery inconsistent with desire to
arbitrate]; Davis v. Continental Airlines, Inc. (1997) 59 Cal.App.4th 205, 213 [two-day
deposition of opposing party and obtaining 1,600 pages of documents in discovery
inconsistent with intent to arbitrate].)
       On the other hand, where there is substantial delay but the party’s conduct is not
inconsistent with an intent to proceed with arbitration, the courts have not found waiver.
Indeed, in Iskanian, supra, 59 Cal.4th at pp. 377-378, our Supreme Court found no
inconsistent conduct supporting a waiver where the defendant promptly petitioned for
arbitration, withdrew the petition as futile based on a change in law, and spent three years
engaged in discovery and litigation on the merits before renewing the petition based on a

                                              7
further change in the law. In this case, the delay was three months rather than three years
and GBH did not promulgate discovery, file dispositive motions, or otherwise actively
prosecute its claims against any parties to an arbitration agreement before moving to
compel arbitration. Although GBH filed the first amended complaint and served
Williams and other defendants, the mere filing of a lawsuit is not sufficient to constitute a
waiver of the right to arbitrate. We therefore conclude that GBH did not take steps
inconsistent with the intent to arbitrate prior to compelling arbitration.
       b.     Unreasonable Delay
       “ ‘[A] demand for arbitration must not be unreasonably delayed. . . . [A] party
who does not demand arbitration within a reasonable time is deemed to have waived the
right to arbitration.’ ” (Sobremonte, supra, 61 Cal.App.4th at p. 992.) The party seeking
to compel arbitration, “ha[s] the responsibility to ‘timely seek relief either to compel
arbitration or dispose of the lawsuit, before the parties and the court have wasted valuable
resources on ordinary litigation.’ ” (Id. at pp. 993–994.)
       Here, GBH’s dispute with parties covered by an arbitration agreement was first
articulated in its January 25, 2013 amended complaint. The malpractice action filed
several months earlier did not name Williams or Gemini.1 There is no evidence GBH
sent pre-litigation demand letters to Williams or that its dispute with any arbitral
defendants otherwise ripened any earlier than January 25, 2013.
       Williams first appeared in the action on March 12, 2013, filing a demurrer and
motion to strike. Less than a month later, on April 11, 2013, GBH directed a formal
written demand for arbitration to counsel for Williams and Gemini via email. On April
18, 2013, GBH notified the same counsel of its intent to move for a stay of court

1
       The trial court’s observation that “[i]t was not until after two motions to quash and
three demurrers ([brought by] Williams, Madison and Gemini) were filed that [P]laintiff
changed [its] mind and sought arbitration, filing that motion six and a half months later”
overlooks the fact that the original malpractice complaint filed October 25, 2012 did not
name the arbitral defendants. As explained above, only three months elapsed from the
time when GBH sued the arbitral defendants and the time it moved to compel arbitration
and stay the hearing on defendants’ pending motions.

                                              8
proceedings pending arbitration. GBH reasonably waited a few weeks for Williams to
reply to the demand for arbitration. GBH then filed its May 6, 2013 motion to compel
arbitration and moved, the next day, to stay all court proceedings pending the September
5, 2013 hearing on its motion. In summary, GBH demanded arbitration a month after
Williams first appeared in the action and gave notice a week later that it wanted to stay
all court proceedings. After several weeks passed with no response, GBH filed its motion
to compel arbitration and immediately moved to stay proceedings. In total, a little more
than three months elapsed from January 25, 2013 when GBH sued Williams and the
filing of its May 6, 2013 motion to compel. In the meantime, aside from filing and
serving the amended complaint, GBH did nothing to invoke the jurisdiction or procedures
of the court.
       We conclude that waiting two and a half months to demand arbitration and three
months to move to compel arbitration was not unreasonable, particularly where, as in this
case, the moving party’s conduct was consistent with an intent to arbitrate. (See
Khalatian v. Prime Time Shuttle, Inc. (2015) 237 Cal.App.4th 651, 663 [defendant’s 14-
month delay in filing motion to compel arbitration was not sufficient to support waiver;
although defendant engaged in discovery, and filed two motions in court, “there was no
evidence that [the moving party] stretched out the litigation process, gained information
about [the opposing party]’s case they could not have learned in an arbitration, or waited
until the eve of trial to move to compel arbitration”].) We find no support for Williams’s
contention that GBH’s failure to dismiss its lawsuit rather than obtain a ruling on its
motion to compel arbitration was inconsistent in an intent to arbitrate.
       Williams asserts that “other courts have found comparable delays . . . [to GBH’s
three month delay] to be unreasonable and a justification for finding waiver of
arbitration,” citing Lewis v. Fletcher Jones Motor Cars, Inc. (2012) 205 Cal.App.4th 436
(Lewis); Augusta v. Keehn & Associates (2011) 193 Cal.App.4th 331 (Augusta); Adolph
v. Coastal Auto Sales, Inc. (2010) 184 Cal.App.4th 1443 (Adolph); Guess?, supra,
79 Cal.App.4th 553; and Kaneko Ford Design v. Citipark, Inc. (1988) 202 Cal.App.3d
1220 (Kaneko). However, in all five cases, the parties seeking arbitration actively

                                             9
engaged in litigation during the delay period, acting contrary to an intent to arbitrate and
to the prejudice of their opponents. (See Lewis, at p. 446 [defendant’s four-month delay
in seeking arbitration unreasonable where defendant filed multiple demurrers and
motions to strike and participated in discovery before raising its right to arbitration];
Augusta, at p. 338 [plaintiff’s six and a half-month delay in seeking arbitration
unreasonable where plaintiff meanwhile engaged in formal discovery prohibited under
the arbitration agreement and filed motions to compel discovery.]; Adolph, at p. 1451
[defendant’s six-month delay in demanding arbitration unreasonable where the defendant
filed two demurrers, accepted and contested discovery requests, scheduled further
discovery, and made no mention of arbitration in case management statement.]; Guess?,
at p. 558 [plaintiff’s less than four month delay unreasonable where plaintiff used
litigation process to test validity of its claims, compromising efficiency and benefits of
arbitration.]; Kaneko, at pp. 1228-1229 [plaintiff’s five-month delay in seeking
arbitration unreasonable where plaintiff meanwhile engaged in settlement negotiations,
obtaining information about opposing parties’ defenses and strategies.].)
       In contrast to the parties seeking arbitration in these cases, GBH did not conduct
discovery or prosecute any motions in court. The cases cited by Williams are therefore
inapposite.
       c.     Bad Faith or Willful Misconduct
       The trial court compared the present case to Christensen, a case that Williams also
cites extensively in its briefing. Christensen is distinguishable, however, because the
basis for the court’s finding of waiver in Christensen was the plaintiffs/moving parties’
bad faith and misconduct. In Christensen, the owners of an apartment building sued their
contractors. The plaintiffs “candidly admit[ted] that they intended all along to avail
themselves of arbitration, but filed their superior court action only to obtain a set of
verified pleadings . . . which would reveal their opponents’ legal strategies and theories.”
(Christensen, supra, 33 Cal.3d at p. 783.) The Supreme Court affirmed a finding of
waiver, noting that such “procedural gamesmanship provides ample support for the trial

                                              10
judge’s conclusion that plaintiffs filed their action in bad faith, and by doing so waived
their right to arbitrate.” (Id. at p. 784.)
       Because the court’s holding was based on bad faith rather than delay, Christensen
did not focus on or calculate the amount of time that elapsed from the filing of plaintiffs’
complaint and their dismissal of a first amended complaint the day before the hearing on
defendants’ demurrer. Although Christensen noted the two months that elapsed between
plaintiffs’ dismissal of the amended pleading and the petition to compel arbitration, the
parties earlier activities (serving the complaint, demurring, amending the complaint, and
re-demurring) necessarily consumed several months of additional time. Therefore, in
Christensen, the lapse of time between the filing of the complaint and the filing of the
motion to compel arbitration was far longer than the three months between GBH’s
January 25, 2013 lawsuit against the arbitral defendants and its May 6, 2013 motion to
compel arbitration. (Christensen, supra, 33 Cal.3d at p. 781.)
       More importantly, the record in this case is devoid of any evidence of bad faith or
misconduct. Unlike the plaintiffs in Christensen, who consciously litigated two rounds of
demurrers to discover their opponents’ defenses, GBH moved to stay proceedings and
compel arbitration almost two months before the court heard Williams’s initial demurrer
to the complaint and before GBH’s opposition to the demurrer was due to be filed.
GBH’s filing of the motion to stay is a critical distinction because it gave Williams the
option of avoiding further court proceedings by agreeing to arbitration or by acceding to a
temporary stay of court proceedings. By instead successfully opposing the stay, Williams
forced GBH to oppose the pending demurrer and file a timely amendment to its
complaint after Williams’s demurrer was sustained.
       On the other hand, aside from filing and serving the complaint against Williams,
GBH took no action inconsistent with its desire to arbitrate. Even after its motion to stay
was denied, GBH did not promulgate discovery or file motions with the court. To the
contrary, it sued Williams in arbitration, took steps to prosecute the arbitration with AAA
and successfully petitioned this court for a stay of all court proceedings pending a

                                              11
determination on its motion to compel arbitration.2 In contrast to Christensen, there is no
evidence in this case of any procedural gamesmanship or bad faith.
       d.     Prejudice
       “In California, whether or not litigation results in prejudice . . . is critical in waiver
determinations.” (St. Agnes, supra, 31 Cal.4th at p. 1203.) Prejudice does not occur by a
party’s mere participation in litigation. (Ibid.) Nor does it result simply because “ ‘the
party opposing arbitration shows . . . it incurred court costs and legal expenses.’ ”
(Lewis, supra, 205 Cal.App.4th at p. 452.)
       On the other hand, prejudice can be found where a party’s delayed demand for
arbitration deprives the opposing party “of the benefits available through arbitration,
including a speedy resolution of the dispute.” (Burton v. Cruise (2010) 190 Cal.App.4th
939, 949; Sobremonte, supra, 61 Cal.App.4th at p. 996; Davis v. Continental Airlines,
Inc., supra, 59 Cal.App.4th at p. 216.) Prejudice can also be shown where a party
seeking arbitration uses discovery procedures unavailable in arbitration, or causes the
other side to reveal trial tactics or legal strategies. (Groom v. Health Net (2000)
82 Cal.App.4th 1189, 1196, italics omitted [“[P]rejudice can be established when the
party seeking arbitration used judicial discovery procedures not available in arbitration to
obtain discovery of the opposing party’s strategies, evidence, theories, or defenses.”].)
In sum, prejudice will be found where the conduct of the moving party “substantially
undermined [the] important public policy [of arbitration as a speedy and relatively
inexpensive means of dispute resolution] or substantially impaired the other side’s ability
to take advantage of the benefits and efficiencies of arbitration.” (St. Agnes, supra,
31 Cal.4th at p. 1204.)

2
       Although GBH continued to actively litigate claims against the attorneys and
accountants who did not sign the arbitration agreement, its prosecution of claims against
those parties is not relevant to our decision.

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       Here, GBH affirmatively but unsuccessfully took action to avoid causing
prejudice, filing a motion to stay all proceedings before the court heard Williams’s first
demurrer. Even after the court denied the stay, GBH took no action to undermine the
process of arbitration. Although the court did not rule on GBH’s motion to compel
arbitration until October 2014, more than 18 months after GBH amended its complaint to
add the allegations against Williams and other arbitral defendants, GBH was not
responsible for any of the delay or litigation expenses incurred after its mid-April 2013
demand for arbitration and notice of intent to request a stay. From that time forward,
GBH only acted defensibly, opposing Williams’s and Madison’s pending demurrers and
motions to strike and timely filing an amended complaint after the demurrer was
sustained with leave to amend. As it was Williams’s decision to insist on obtaining a
ruling on its first demurrer and to file a second demurrer before the motion to compel
arbitration was set for hearing, any disclosure of strategy in its court filings and the
consequences of any rulings made by the court are matters of its own making.
       We therefore conclude that based on the factors articulated by the Supreme Court,
Williams has failed to demonstrate waiver. GBH’s delays in demanding and moving to
compel were not unreasonable. From the time of its April 18, 2013 demand for
arbitration, GBH’s conduct has been fully consistent with an intent to arbitrate. It did not
cause Williams to suffer prejudice and evinced no bad faith or other misconduct
compromising its right to arbitrate. Williams has accordingly failed to meet the “ ‘heavy
burden’ ” required to undo the parties’ agreement to resolve disputes by arbitration.
(Iskanian, supra, 59 Cal.4th at p. 375.)

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                                    DISPOSITION
      The court’s order denying GBH’s motion to compel arbitration is reversed. The
trial court is instructed to enter an order compelling Defendants and Respondents
Williams Group Holdings and Gemini Basketball LLC to arbitrate. Plaintiff and
Appellant Gemini Basketball Holdings, LLC is awarded costs on appeal.

      NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                                HOGUE, J.*

I concur:

                    EDMON, P. J.

                    ALDRICH, J.

*
        Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.

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