Court Opinion

ID: 4879580
Source: CourtListenerOpinion
Date Created: 2021-08-27 18:04:24.907292+00
Date Added: 2024-06-11T08:12:41.850541
License: Public Domain

Filed 8/27/21 Delgado v. Statewide Fumigation San Diego County CA4/1
                 NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.

                COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                 DIVISION ONE

                                         STATE OF CALIFORNIA

 NICOLAS DELGADO,                                                     D077913

           Plaintiff and Respondent,

           v.                                                         (Super. Ct. No. 37-2016-
                                                                      00018022-CU-OE-CTL)
 STATEWIDE FUMIGATION SAN
 DIEGO COUNTY, INC.,

           Defendant and Appellant.

         APPEAL from an order of the Superior Court of San Diego County,
Timothy Taylor, Judge. Affirmed.
         Simpson Delmore Greene, Terence L. Greene and Ross M. Poole for
Defendant and Appellant.
         Rastegar Law Group, Farzad Rastegar and Thomas S. Campbell for
Plaintiff and Respondent.

                                                             I.
                                               INTRODUCTION
         In this second appeal in the above-captioned matter, Defendant
Statewide Fumigation San Diego County, Inc. (Statewide) appeals from an
order denying a petition to compel arbitration. The trial court denied
Statewide’s petition to compel arbitration on the ground that Statewide
waived any right it may have had to arbitrate this matter. We affirm.
                                      II.
                               BACKGROUND
      Delgado filed this putative class action against Statewide on May 27,
2016, on behalf of himself and other similarly situated current and former
employees of Statewide. In his complaint, Delgado alleged a variety of Labor
Code violations against Statewide, including the failure to provide meal
periods, to provide rest periods, to pay minimum and straight time wages, to
pay overtime compensation, to pay wages in a timely manner upon
termination of employment, and to provide accurate statements and maintain
required records. The complaint also alleged a claim for unfair business
practices under Business and Professions Code section 17200 et seq. (Section
17200). Finally, Delgado brought a representative cause of action under the
Private Attorneys General Act (PAGA), Labor Code section 2698 et seq., for
all of the violations of the Labor Code alleged elsewhere in the complaint.
      Statewide filed an answer on September 13, 2016.1 After Statewide
filed its answer, the case proceeded to discovery, and a motion for class
certification was anticipated. In a previous appeal in this matter, we
summarized the early procedural history of the litigation as follows:
         “The trial court held a Case Management Conference with
         the parties on October 28, 2016. At the Case Management
         Conference, the trial court scheduled a hearing on
         Delgado’s anticipated motion for class certification for July
         21, 2017.

1     The trial court subsequently struck Statewide’s Answer while the
court’s order denying Delgado’s class certification motion was pending on
appeal.
                                       2
“On May 9, 2017, the parties filed a joint stipulation to
continue the hearing on the anticipated motion for class
certification. In the stipulation, the parties stated that
they were seeking a six-month continuance for multiple
reasons, including the fact that Statewide was ‘contend[ing]
it is in a state of financial hardship and is incapable of
paying a judgment on Plaintiff’s claims,’ that Statewide
had ‘objected to the deposition [of the PMK that Delgado
had noticed] and the Request for Production of Documents’
that Delgado had propounded, and that defense counsel
‘believes it may have to withdraw as counsel, due to
Defendant’s financial condition,’ such that ‘judicial economy
and the resources of the parties will be best served if the
[m]otion for [c]lass certification hearing and filing deadline
are continued by approximately six month[s].’

“The trial court denied, without comment, the parties’
stipulated request to continue the hearing date for the
anticipated motion for class certification.

“Later that same month, on May 30, Statewide filed a
‘Joint Ex parte Application to Continue Motion for Class
Certification Hearing.’ (Some capitalization omitted.) The
parties jointly sought a six-month continuance of the
anticipated hearing on the motion for class certification. In
addition to the reasons that the parties had provided in the
May 9 request, they stated that they were ‘exploring the
possibility of settling the matter.’

“Upon the conclusion of the ex parte hearing, the trial court
issued a minute order denying the parties’ joint application
for a continuance, stating . . . , ‘The court is inclined to keep
the previously scheduled dates in place. [¶] It is now left for
plaintiff’s counsel to determine whether to proceed with the
class claims.’

“On June 14, 2017, two weeks after the trial court issued
its minute order denying the joint request for a continuance
of the class certification hearing, Delgado filed an ex parte
application to compel responses to the requests for

                                3
production of documents that he had propounded on
Statewide. In response to the ex parte application, the
court scheduled a hearing on Delgado’s motion to compel
for July 21, 2017, the date the court had originally set for
the class certification hearing, and treated Delgado’s ex
parte application papers as his moving papers with respect
to the motion to compel. The court also continued the class
certification hearing date to September 1, 2017.

“On July 11, 2017, after much back and forth with counsel
for Statewide regarding scheduling the deposition of its
PMK, Delgado returned to court with an ex parte
application for an order to compel a PMK deposition. The
following day, July 12, the court heard arguments from the
attorneys for both parties, and thereafter scheduled a
hearing on Delgado’s motion to compel the deposition of a
PMK on July 21, 2017, the same date on which the motion
to compel responses to the pending request for production
of documents was set. The court also ordered that a Case
Management Conference in the matter would be held on
the same date as the motion for class certification—
September 1, 2017.

“On July 19, 2017, two days prior to the scheduled hearing
on the motions to compel outstanding discovery, the trial
court issued tentative rulings indicating its inclination to
grant both motions to compel.

“The following day, July 20, counsel for Statewide
submitted a Notice of Withdrawal to the court. The record
does not demonstrate that Statewide retained other counsel
to represent it in this matter in the trial court.

“On July 21, the trial court issued a minute order adopting
its tentative rulings and granting Delgado’s motions to
compel responses to the outstanding discovery requests. In
doing so, the court ordered Statewide to produce its PMK
for a deposition to be conducted on July 31, 2017, which
was approximately a month before the date set for the
hearing on the motion for class certification. The court did
not set any date by which Statewide was to produce the

                              4
documents that the court was ordering Statewide to
produce pursuant to Delgado’s motion to compel.

“[Although the California Rules of Court required Delgado
to file his motion for class certification by August 4, 2017,
which was four days after the date of the deposition that
the court had set,] Delgado did not file a formal motion for
class certification by August 4, 2017. However, Delgado
filed his Case Management Statement on August 18, 2017.
In that document, in the portion of the form where the
court asks the parties to indicate whether they have a
request for any additional matters to be ‘considered or
determined at the case management conference,’ Delgado
indicated that he was requesting that the court continue
the class certification hearing date due to Statewide’s
failure to comply with the court’s orders that it produce its
PMK for deposition and that it produce the documents that
Delgado had requested. Delgado also indicated in his Case
Management Statement, in the portion of the form that
asks parties to indicate whether they intend to file any
other motions before trial, that he intended to file a motion
to strike Statewide’s answer to the complaint, due to
Statewide’s failure to provide the discovery that it had been
ordered to produce, and that he also planned to file a
motion to continue the hearing on the motion for class
certification.

“Six days later, on August 24, [2017,] the court issued a
tentative ruling with respect to the class certification
hearing that was scheduled for September 1. In the
tentative ruling, the court indicated its intention to deny
Delgado’s request in his Case Management Statement to
continue the class certification hearing. The court further
indicated its intention to deny any motion for class
certification (even though Delgado had not yet filed his
motion for class certification), and to strike Delgado’s class
allegations from the complaint. After stating its intention
to deny class certification and to strike the class
allegations, the court added, ‘The defendant is apparently
insolvent and is unrepresented, and this presents
tremendous management issues were the court to certify

                               5
the case notwithstanding plaintiff’s failure to advance
evidence supporting certification.’ The court then indicated
that it would order Delgado to submit an ex parte
application for an order striking Statewide’s answer to the
complaint, and would require Delgado to proceed via
default prove-up ‘with respect to his individual claims.’
The court warned that if Delgado failed to proceed as
ordered, the court would ‘simply dismiss the case.’

“Seven days later (and one day prior to the scheduled date
for both the Case Management Conference and the hearing
on the motion for class certification), Delgado submitted a
motion to strike Statewide’s answer and a corresponding
motion to continue the class certification hearing. In his
motion, Delgado explained that Statewide had failed to
replace its counsel after its original counsel had withdrawn,
and that Statewide was ‘not cooperating with Plaintiff in
the discovery process.’ Delgado listed the multiple times
that he had noticed a deposition for a PMK and indicated
that despite the trial court’s order that this deposition take
place, Statewide had failed to produce anyone for
deposition on the appointed date, and had also failed to
respond in any way to Delgado’s request for documents.
Delgado indicated that Statewide’s failure to replace its
counsel precluded Delgado’s attorneys from being able to
communicate with Statewide, and was preventing Delgado
from being able to ‘file supporting documents to
successfully move for class certification at this time.’

“The following day, September 1, 2017, the trial court held
a joint case management conference and hearing regarding
class certification. After hearing argument from Delgado’s
counsel, the court affirmed its tentative ruling denying
Delgado’s request to continue the hearing on the motion for
class certification and also denying on the merits any
motion for class certification. The court also issued an
order to show cause why the case should not be dismissed,
and set a hearing on the order to show cause for November
3, 2017.

                              6
           “On October 5, 2017, Delgado filed a notice of appeal from
           the court’s order denying class certification . . . .” (Delgado
           v. Statewide Fumigation San Diego County, Inc. (Mar. 15,
           2019, D072966) [nonpub. opn.] [2019 Cal.App.Unpub. Lexis
           1555, *5–12] (Delgado I), italics omitted.)

        At some point, Statewide hired new counsel. While the appeal from the
denial of class certification was pending, that counsel filed a new answer,
given that the trial court had stricken the original answer. In the new
answer, Statewide asserted an affirmative defense that Delgado’s claims
were subject to arbitration pursuant to an agreement between the parties.
        Delgado’s appeal of the trial court’s order denying class certification
was pending before this court from October 2017 until March 2019.
Statewide’s counsel represented Statewide in that appeal.
        On March 5, 2019, this court issued our opinion in Delgado I, in which
we reversed the trial court’s denial of the motion for class certification and
directed the trial court “to permit Delgado sufficient time to attempt to obtain
the discovery that the court previously ordered Statewide to produce and to
file his papers in support of class certification.” (Delgado I., supra, 2019
Cal.App.Unpub. Lexis 1555 at p. *25.) The remittitur issued on June 26,
2019.
        On remand, the trial court set a Case Management Conference for
August 16, 2019. In the Case Management Statement that Statewide filed
for the August 2019 Case Management Conference, Statewide indicated that
it was requesting “a jury trial”; Statewide did not mark any of the boxes
related to arbitration or otherwise indicate that Delgado’s claims were
subject to arbitration.2

2      The only other Case Management Statement that Statewide filed in the
trial court that is included in the record on appeal similarly contains no
                                          7
      At the August 2019, hearing, the trial court set June 5, 2020 as the new
date for Delgado’s class certification hearing.
      As the trial court noted in the order that Statewide challenges in this
appeal, on March 17, 2020, the Presiding Judge of the San Diego Superior
Court signed the first in a series of administrative orders closing the court for
all but emergency matters due to the COVID-19 pandemic. Both a May 15,
2020 civil motion hearing date set by Statewide and the June 5, 2020 hearing
date for Delgado’s class certification were vacated because of the court’s
closure. The trial court re-opened on May 26, 2020. More than a month
later, the parties appeared before the court for a status conference, at which
time the court rescheduled the hearings for Statewide’s motion to compel
arbitration and Delgado’s motion for class certification.
      The trial court noted that during the time that the court was closed, the
parties exchanged moving and opposition papers with respect to Statewide’s
motion to compel arbitration. The court deemed these motion and opposition
papers filed as of May 26, 2020, the day the trial court reopened.
      The trial court heard Statewide’s motion to compel arbitration on
August 28, 2020. After reviewing the parties’ briefing and hearing oral
argument on the matter, the trial court denied the motion to compel
arbitration on the ground that Statewide had waived its right to compel
arbitration of this matter.
      In finding that Statewide had waived its right to compel arbitration,
the trial court noted that Statewide “knew about the arbitration provision” in
the parties’ agreement from the outset, given that Statewide asserted the
existence of the arbitration provision and its right to arbitrate pursuant to

indication by Statewide of its intention to move to compel arbitration or that
it believed that Delgado’s claims should be determined in an arbitral forum.
                                        8
that provision in an affirmative defense “in the now-stricken answer it filed
nearly four years ago.” The court noted that Statewide “reiterate[d] the same
asserted right to compel arbitration” in its 2017 answer to the complaint, as
well, but did not seek to enforce that term of the parties’ agreement “until, at
the earliest, mid-March 2020,” and that Statewide failed to offer the court
“any explanation for its delay.” Based on this delay, the court determined
that the petition to compel arbitration “was not brought within a reasonable
time,” citing Burton v. Cruise (2010) 190 Cal.App.4th 939, 945, in which the
court noted that the Supreme Court has expressly observed that “ ‘[a] party’s
unreasonable delay in demanding or seeking arbitration, in and of itself, may
constitute a waiver of a right to arbitrate.’ ”
      The trial court also found that Statewide had not only unreasonably
delayed in asserting its right to arbitrate Delgado’s claims, but that it had
also taken actions inconsistent with an intent to assert its right to arbitrate
by participating in discovery negotiations, objecting to discovery requests on
the merits, and generally participating in the litigation over a period of
several years. Finally, the trial court found that Delgado had suffered
prejudice as a result of Statewide’s conduct in waiting so long to move to
compel arbitration and in acting in a manner inconsistent with its right to
arbitrate during that time period.
      Statewide filed a timely notice of appeal from the trial court’s order.
                                        III.
                                  DISCUSSION
      Statewide contends that there is insufficient evidence to support the
trial court’s finding that it waived its right to compel arbitration. We
disagree.

                                         9
      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 . . . .” (Italics added.)3
      The determination that a party has waived its right to compel
arbitration is a question of fact, and this determination is reviewed for
substantial evidence. (St. Agnes Medical Center v. PacifiCare of California
(2003) 31 Cal.4th 1187, 1196 (St. Agnes).) There is no specific test for
waiving the right to compel arbitration. However, “ ‘ “[i]n the past, California
courts have found a waiver of the right to demand arbitration in a variety of
contexts, ranging from situations in which the party seeking to compel
arbitration has previously taken steps inconsistent with an intent to invoke
arbitration [citations] to instances in which the petitioning party has
unreasonably delayed in undertaking the procedure. [Citations.] The
decisions likewise hold that the ‘bad faith’ or ‘willful misconduct’ of a party
may constitute a waiver and thus justify a refusal to compel arbitration.
[Citations.]” ’ [Citations.]” (Ibid.)
      Given the varying contexts in which waiver of arbitration may be
found, the St. Agnes court noted that there are a number of relevant factors
that a trial court may consider in deciding whether a party has waived its

3    Given this statutory framework, the question of waiver of the right to
compel arbitration is one for the trial court, not the arbitrator, to decide. (See
Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 982.)
                                        10
right to compel arbitrate: “ ‘ “(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 the 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, quoting
Sobremonte v. Superior Court (1998) 61 Cal.App.4th 980, 992.)
      A waiver of arbitration is not to be lightly inferred, and a party seeking
to establish waiver bears a heavy burden of proof. (St. Agnes, supra,
31 Cal.4th at p. 1195.) However, once a trial court determines that a party
has met that burden of proof and established waiver of the right to
arbitration, an appellate court reviews the trial court’s ruling on the waiver
of the right to arbitrate only for substantial evidence to support that
determination (See Burton v. Cruise (2010) 190 Cal.App.4th 939, 945–946.)
      In this case, the trial court stated that it “ha[d] no difficulty concluding
[that the] defendant waived its right to compel arbitration . . . .” After
examining the procedural record before it, the court determined that
Statewide was aware of the arbitration provision from the beginning of the
litigation, yet waited approximately four years before indicating any
intention to move to compel arbitration.4 The court found this to be a lengthy

4     Although some portion of this time involved the closure of court
services for matters other than emergency matters, that approximately two-
                                       11
delay weighing in favor of a finding of waiver. (See St. Agnes, supra,
31 Cal.4th at p. 1196 [a court may consider whether a party “ ‘ “delayed for a
long period before seeking a stay” ’ ” in deciding whether party has waived
arbitration].)
      Beyond the extreme delay that occurred in this case, as the trial court
noted, Statewide engaged in any number of actions that were inconsistent
with the right to arbitrate. (See St. Agnes, supra, 31 Cal.4th at p. 1196 [the
first factor among many a court may consider when weighing waiver of right
to arbitrate is whether party has engaged in actions inconsistent with the
right to arbitrate].) For example, Statewide took part in negotiating,
drafting, and entering into a stipulated protective order regarding “ ‘the
exchange of documents and information’ ” in the litigation. Further, the
record discloses that, in response to Delgado’s document demands and notice
of a deposition of Statewide’s designated person most knowledgeable,
Statewide filed objections and fought the discovery, all without ever
suggesting that the matter should be arbitrated and that the judicial
discovery process should be halted for this reason. The manner in which
Statewide responded to Delgado’s discovery requests therefore supports the
trial court’s finding that Statewide engaged in acts that were inconsistent
with its right to arbitrate. (See Guess?, Inc. v. Superior Court (2000)
79 Cal.App.4th 553, 558 [defendant who “fully participated in the discovery
process” by “objecting to [plaintiff’s] interrogatories and demands for
production on a variety of grounds, but never once suggesting that discovery
should be barred because this dispute had to be arbitrated” had engaged in
conduct that was “wholly inconsistent with its present desire to arbitrate”].)

month period was relatively brief when compared with the time that this
matter has been pending.
                                       12
      A review of the record also demonstrates that Statewide participated in
the litigation in other ways, such as by appearing for hearings, filing
documents, and defending the trial court’s denial of class certification in the
appeal taken from that order, all without suggesting that the matter should
be arbitrated rather than litigated in court. As the trial court noted,
Statewide did not indicate in either of its case management statements that
it was “willing to participate in” binding private arbitration. (See Adolph v.
Coastal Auto Sales, Inc. (2010) 184 Cal.App.4th 1143, 1451 [among conduct
by the defendant that was considered inconsistent with an intent to arbitrate
was failure to “ ‘mark or assert arbitration in its case management
statement’ ”].)
      Finally, the record provides ample evidence to support the trial court’s
finding that Statewide’s actions during the litigation that were inconsistent
with its claimed intent to arbitrate had the effect of causing real prejudice to
Delgado. (See St. Agnes, supra, 31 Cal.4th at p. 1196 [court may consider
whether a party’s delay has “ ‘ “ ‘affected, misled, or prejudiced’ the opposing
party” ’ ”].) As the trial court noted, Statewide’s conduct has deprived
Delgado of the opportunity to obtain a prompt resolution of his claims.
Rather than move to compel arbitration at an earlier point in time, Statewide
repeatedly defended against Delgado’s discovery and other motions on their
merits. As a result, Delgado’s attorneys have expended more than 150 hours
on the case, and have spent $7,753.13 up until the time of this appeal.5

5      As the trial court noted, at one point, Statewide simply stopped paying
its attorneys, causing that law firm to withdraw from representing
Statewide. The court understood this to be “part of a strategic ploy to obtain
delay.” Based on this record, we cannot say that we disagree with the trial
court’s assessment.
                                       13
      We conclude that the record fully supports the trial court’s finding that
Statewide has waived its right to compel arbitration.
                                      IV.
                                DISPOSITION
      The trial court’s order denying Statewide’s motion to compel arbitration
is affirmed. Delgado is entitled to his costs on appeal.

                                                             AARON, J.

WE CONCUR:

HUFFMAN, Acting P. J.

DATO, J.

                                       14