Court Opinion

ID: 8374225
Source: CourtListenerOpinion
Date Created: 2022-10-18 23:01:30.010901+00
Date Added: 2024-06-11T16:46:16.274432
License: Public Domain

Filed 10/17/22

                      CERTIFIED FOR PUBLICATION

             COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                 DIVISION ONE

                             STATE OF CALIFORNIA

 MARY LEGER, as represented, etc.,         D080705

        Plaintiff and Respondent,          (Super. Ct. No. 37-2022-
                                           00007625-CU-PO-CTL)
        v.

 R.A.C. ROLLING HILLS L.P. et al.,

        Defendants and Appellants.

       APPEAL from an order of the Superior Court of San Diego County, Joel
Wohlfeil, Judge. Affirmed.
       Wilson Getty, William C. Wilson and Dawn A. Phleger; Williams
Iagmin and Jon R. Williams for Defendants and Appellants.
       Niddrie Addams Fuller Singh and John S. Addams; Pick Law and
Lukas I. Pick; Elder Law & Advocacy and Andrew A. Thompson for Plaintiff
and Respondent.
       R.A.C. Rolling Hills LP, dba ActivCare at Rolling Hills Ranch, and
ActivCare Living, Inc. (together, ActivCare), appeal from an order denying
their petition to compel arbitration in the elder abuse lawsuit filed by Mary
Leger. (Code Civ. Proc., § 1281.2.)1 ActivCare contends the trial court erred

1      Undesignated statutory references are to the Code of Civil Procedure.
in concluding that it had waived its right to arbitration because it moved
with alacrity by seeking to compel arbitration less than 30 days after filing
its answer. Under the unique facts of this case, we conclude substantial
evidence supported the trial court’s waiver finding and affirm the order.
              FACTUAL AND PROCEDURAL BACKGROUND
      Leger is 92 years old and suffers from late-stage dementia, severe
diabetes, and severe contractures.2 She is under hospice care and has a
limited life expectancy due to her late-stage dementia. In January 2015, the
San Diego Superior Court appointed two conservators for Leger, her
daughters Karen Ochoa and Barbara Bleichwehl. Ochoa was appointed as
conservator of Leger’s person and estate, and Bleichwehl appointed as
conservator of Leger’s person.3
      In February 2020, Ochoa admitted Leger to ActivCare, a residential
care facility for the elderly. At that time, Ochoa agreed to binding arbitration
of any claims Leger might have against the facility.4 On February 28, 2022,5
Leger, acting as an individual, filed a complaint against ActivCare alleging,
among other things, elder abuse, claiming that ActivCare left her in bed

2     A contracture is “a permanent shortening (as of muscle, tendon, or scar
tissue) producing deformity or distortion.” (Merriam-Webster's Online Dict.
(2021)  [as of Oct.
11, 2022], archived at .)

3     The appointment orders are not part of the record on appeal. The
parties, however, do not dispute that Leger is under a valid conservatorship.

4     For purposes of this appeal, the parties concede the validity of the
arbitration agreement.

5     All further date references are to 2022.

                                       2
causing her to become emaciated, severely contracted, and unable to walk.
On March 10, ActivCare was served with the complaint. On March 15,
Bleichwehl filed a petition to act as Leger’s guardian ad litem. On March 21,
the trial court granted the petition. On March 29, Leger filed a motion for
trial preference. On April 6, ActivCare filed its answer alleging numerous
affirmative defenses, including the existence of a binding arbitration
agreement.
      On April 11, ActivCare filed its opposition to Leger’s preference motion.
ActivCare claimed it would be prejudiced if the court granted trial preference
because, among other things, elder and dependent adult abuse claims
generally take 18 to 20 months to litigate. ActivCare requested 12
“accommodations” should the court grant the motion for trial preference.
ActivCare never mentioned the existence of an arbitration agreement and
that it would be filing a petition to compel arbitration.
      On April 22, the trial court granted Leger’s motion for trial preference,
ordered that all motions and discovery be completed by August 6, and set
trial for August 19. ActivCare demanded a jury trial. Three days later, on
April 25, ActivCare’s counsel sent an email to Leger’s counsel demanding
that the arbitration agreement be enforced and requesting that Leger
stipulate to arbitration. On April 29, Leger declined to stipulate to
arbitration. On May 4, ActivCare filed an ex parte application for an order
shortening time to hear its petition to compel arbitration, or to hear and rule
upon the petition and stay discovery until an arbitrator could be agreed upon.
The following day, the trial court set the hearing on the petition for May 26
and “ ‘froz[e]’ ” discovery based on the possibility that the arbitration
agreement would be enforced. On May 13, Leger opposed the petition

                                        3
arguing, among other things, that ActivCare waived the right to compel
arbitration.
      The trial court issued a tentative ruling denying ActivCare’s petition to
compel arbitration based on waiver. It noted that ActivCare offered no
explanation why its petition to compel arbitration could not be filed after
service of the complaint. It concluded that ActivCare acted inconsistently
with the right to arbitrate by waiting until after the court ruled on Leger’s
motion for trial preference and that this evidenced the progress of “ ‘litigation
machinery.’ ” It found that compelling arbitration would greatly prejudice
Leger given her age and health and that ActivCare did not explain how
arbitration could be concluded by the August 19 trial date.
      At the May 26 hearing on the tentative ruling, defense counsel claimed
that the petition to compel arbitration could not be filed earlier because it
needed to obtain the entire arbitration agreement and confirm that Ochoa
had the authority to bind Leger. The court took the matter under submission
and then requested supplemental briefing on the import of Laswell v. AG
Seal Beach, LLC (2010) 189 Cal.App.4th 1399 (Laswell) to this action, and if
the arbitration agreement is enforced, whether the trial court can mandate
an expedited arbitration timeline. After considering the supplemental
briefing, the trial court confirmed its order denying the petition to compel
arbitration and lifted the discovery stay.
      The court commented that Laswell, supra, 189 Cal.App.4th 1399, did
not address or apply the waiver exception set forth in section 1281.2,
subdivision (a) and did not compel a different result. It found that although
ActivCare’s delay in filing its petition was “comparatively minor” it was
“unreasonable, manifest and prejudicial given the unique circumstances of
this action.” It noted that ActivCare’s opposition to Leger’s motion for trial

                                        4
preference did not reference an intent to seek to compel arbitration and
instead made multiple references to ActivCare’s ability to conduct discovery
and prepare for trial, statements that were “inconsistent with an intent to
invoke arbitration.” Although Leger’s prejudice could be minimized through
an expedited arbitration, the court found it lacked the authority to make such
an order, ActivCare has not offered to stipulate to an expedited arbitration,
and it is unknown whether an expedited arbitration is even possible.
ActivCare timely appealed.
                                  DISCUSSION
                            I. LEGAL PRINCIPLES
      Although both “Federal and state laws reflect a strong public policy
favoring arbitration as ‘ “ ‘a speedy and relatively inexpensive means of
dispute resolution,’ ” ’ ” a party waives a contractual right to arbitrate by
failing to promptly enforce this right after a lawsuit has been brought in
court. (Lewis v. Fletcher Jones Motor Cars, Inc. (2012) 205 Cal.App.4th 436,
443 (Lewis), id. p. 444 [“waiver is more like a forfeiture arising from the
nonperformance of a required act”].) “[A] party that wishes to pursue
arbitration must take ‘ “active and decided steps to secure that right” ’
because an arbitration agreement ‘ “is not . . . self-executing.” ’ [Citation.]
‘Mere announcement of the right to compel arbitration is not enough. To
properly invoke the right to arbitrate, a party must (1) timely raise the
defense and take affirmative steps to implement the process, and (2)
participate in conduct consistent with the intent to arbitrate the dispute.
Both of these actions must be taken to secure for the participants the benefits
of arbitration.’ ” (Fleming Distribution Co. v. Younan (2020) 49 Cal.App.5th
73, 80–81.) Where an arbitration agreement does not specify a time limit for
demanding arbitration, a party must demand arbitration within a reasonable

                                         5
time. (Wagner Construction Co. v. Pacific Mechanical Corp. (2007) 41 Cal.4th
19, 30.) “ ‘[W]hat constitutes a reasonable time is a question of fact,
depending upon the situation of the parties, the nature of the transaction,
and the facts of the particular case.’ ” (Ibid.)
      Relevant factors in assessing waiver claims include: “ ‘(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.” ’ [Citations.]” (St.
Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1196
(St. Agnes).) “Both state and federal law emphasize that no single test
delineates the nature of the conduct that will constitute a waiver of
arbitration.” (Id. at p. 1195.)
      Waiver is not to be lightly inferred and the party seeking to establish it
bears a “heavy burden of proof,” with all doubts resolved in favor of
arbitration. (St. Agnes, supra, 31 Cal.4th at p. 1195.) Nonetheless, waiver
may be “implied, based on conduct indicating an intent to relinquish the
right.” (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 31.)
“Whether a party waived the right to contractual arbitration is a factual
question we review under the substantial evidence standard of review.
[Citations.] The trial courts ‘determination of this factual issue, “ ‘if

                                         6
supported by substantial evidence, is binding on an appellate court.’ ”
[Citations.] Only “ ‘in cases where the record before the trial court
establishes a lack of waiver as a matter of law, [may] the appellate court . . .
reverse a finding of waiver made by the trial court.’ ” [Citation.]’ [Citations.]
[¶] We infer all necessary findings supported by substantial evidence
[citations] and ‘construe any reasonable inference in the manner most
favorable to the judgment, resolving all ambiguities to support an
affirmance[.]’ ” (Lewis, supra, 205 Cal.App.4th at p. 443.)
   II. SUBSTANTIAL EVIDENCE SUPPORTS THE TRIAL COURT’S
  CONCLUSION THAT ACTIVCARE WAIVED ITS RIGHT TO COMPEL
                       ARBITRATION

      In its order denying ActivCare’s petition to compel arbitration, the trial
court cited the factors set forth in St. Agnes, supra, 31 Cal.4th 1187. While
the trial court did not make its findings within the context of these factors, its
findings correspond with several of the St. Agnes factors.
      The trial court found that ActivCare acted inconsistently with the right
to arbitration by waiting until the court ruled on Leger’s motion for trial
preference and that this evidenced progress of the “ ‘litigation machinery.’ ”
Construing all reasonable inferences in the manner most favorable to the
trial court’s ruling, substantial evidence supports these findings. (Lewis,
supra, 205 Cal.App.4th at p. 443.)6

6      We disagree with ActivCare’s contention that our review is de novo
because the trial court based its decision on undisputed chronological facts.
We apply the de novo standard where “the facts are undisputed and only one
inference may reasonably be drawn.” (St. Agnes, supra, 31 Cal.4th at p. 1196,
italics added.) Here, while the facts are undisputed, the trial court could
reasonably draw different inferences from the undisputed facts. Accordingly,
                                        7
      Leger served the summons and complaint on March 10. ActivCare filed
its answer on April 6, alleging the existence of a binding arbitration

agreement.7 Despite knowing about the arbitration agreement, ActivCare
waited until after it received an adverse ruling on Leger’s motion for trial
preference to claim its right to arbitration.8 We reject ActivCare’s argument
that the trial court incorrectly emphasized that trial preference had been
granted. Instead, it appears the trial court reasonably considered ActivCare’s

we must consider the evidence in the light most favorable to the trial court's
ruling.

7     In unsworn statements at the hearing on the petition to compel
arbitration, ActivCare’s counsel informed the court that ActivCare had sent a
copy of the arbitration agreement to Leger’s family before the lawsuit was
even filed.

8      ActivCare blames Leger for filing her complaint in the trial court
instead of initiating arbitration and argues her “deliberate strategy” pitted
the speed of an arbitration hearing against extended court litigation on the
threshold issue of arbitrability. “ ‘[C]ontractual arbitration is in no sense . . .
a usurpation or ouster of the judicial power vested in the trial court of this
state by our Constitution. [Citation.] As a result, there is nothing to prevent
one of the parties to a contractual arbitration provision from resorting initially
to an action at law. [Citations.] The other party, if determined to pursue
arbitration, must then take action to compel arbitration.’ ” (Sargon
Enterprises, Inc. v. Browne George Ross LLP (2017) 15 Cal.App.5th 749, 768.)
“ ‘[L]acking a request for arbitration, the courts stand ready, willing and able
to decide controversies between the parties even though a provision for
arbitration exists.’ ” (Id. at p. 769, italics deleted.) We also disagree that
Leger raced to the courthouse and “weaponized” her trial preference motion
as a means of avoiding arbitration. Leger was entitled to bring her motion
after “all essential parties have been served with process or have appeared.”
(§ 36, subd. (c)(1).) Given Leger’s age and poor health, her counsel cannot be
faulted for bringing the motion as soon as possible.

                                        8
actions between the period it filed its answer and received the trial court’s
ruling on Leger’s motion for trial preference.
       First, ActivCare could have requested an order shortening time to file
its petition to compel arbitration so that its petition could be considered
simultaneously with Leger’s motion for trial preference. As ActivCare
observed in its opening brief, “[i]f the arbitration agreement is valid and
enforceable, any order for trial preference in another forum is nugatory.”
Instead, when opposing Leger’s motion for trial preference, ActivCare never
raised the existence of an arbitration agreement or its future intent to file a
petition to compel arbitration. Accordingly, it never alerted the trial court of
a significant issue that may have impacted the ruling on Leger’s trial
preference motion.
       Instead, in opposing trial preference ActivCare argued that the trial
date should be set “in due course” to give it “sufficient time to complete
discovery and prepare for trial.” Alternatively, should the trial court be
inclined to grant trial preference, ActivCare requested 12 accommodations,
including that Leger agree to shortened notice for a motion for summary
judgment or summary adjudication, informal exchange of discovery, and not
quash any subpoenas to her healthcare providers. At the hearing on the
preference motion, ActivCare never indicated it would be filing a petition to
compel arbitration and instead requested a jury trial. These actions are
inconsistent with an intent to invoke arbitration. (Lewis, supra, 205
Cal.App.4th at p. 448 [“ ‘A waiver of the right to arbitrate may properly be
implied from any conduct which is inconsistent with the exercise of that
right.’ ”].)

                                        9
      ActivCare asserts that the caption of Leger’s complaint misled it (she
brought the action individually), it did not have notice that another party
potentially had the authority to bind Leger to an arbitration agreement, and
it did not know that Ochoa was Leger’s conservator until late April, at which
time it promptly reached out to Leger’s counsel about agreeing to arbitration.
The record contradicts these assertions. In its answer filed on April 6,
almost one month before ActivCare filed its ex parte application for an order
shortening time to file a petition to compel arbitration, ActivCare asserted
arbitration as an affirmative defense. ActivCare submitted the admission
agreement containing the arbitration provision as an exhibit in support of its
petition to compel arbitration. The admission agreement, dated February 1,
2020, shows that below Ochoa’s signature as the “responsible party” two
boxes are checked indicating that Ochoa signed as the conservator of Leger’s
estate and person. Thus, ActivCare knew of Ochoa’s authority to agree to
arbitration two years before Leger filed this action.
      The party seeking to compel arbitration has the “burden of proving the
existence of an arbitration agreement.” (Pinnacle Museum Tower Assn. v.
Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)9
ActivCare’s argument shows it knew about the arbitration agreement and
could have requested that Leger arbitrate the dispute shortly after being
served with the summons and complaint. “As a preliminary matter,” in

9      A petition to compel arbitration must “alleg[e] the existence of a
written agreement to arbitrate a controversy.” (§ 1281.2.) It also “must
state, in addition to other required allegations, the provisions of the written
agreement and the paragraph that provides for arbitration. The provisions
must be stated verbatim or a copy must be physically or electronically
attached to the petition and incorporated by reference.” (Cal. Rules of Court,
rule 3.1330.)

                                       10
ruling on a petition to compel arbitration the trial court is only required to
make a finding regarding the existence of an arbitration agreement, not an
evidentiary determination of its validity, and the “petitioner is not required
to authenticate an opposing party’s signature on an arbitration agreement . .
. in moving for arbitration.” (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232
Cal.App.4th 836, 845–846, italics deleted.)10 As the trial court properly
observed, ActivCare never explained why it could not have filed its petition to
compel arbitration sooner.
      ActivCare contends the trial court improperly switched Leger’s heavy
burden of establishing waiver to ActivCare, requiring that it show why it did
not seek to compel arbitration sooner. We disagree.
      The trial court properly addressed whether a waiver existed by
applying the factors set forth in St. Agnes, supra, 31 Cal.4th 1187.
ActivCare’s own conduct of waiting to argue the existence of an enforceable
arbitration agreement until after the trial court granted Leger’s preference
motion simply made the task of opposing Leger’s waiver argument more
difficult. If ActivCare wanted to enforce the arbitration agreement, it was up
to it to timely do so under the circumstances.
      The trial court could also reasonably infer that ActivCare’s delay in
mentioning its intent to enforce the arbitration agreement until after the
trial court ruled on Leger’s trial preference motion, progressed the litigation
machinery. By that time, the court had already set the motion, discovery and
expert exchange deadlines, and the trial readiness conference and the trial
dates. ActivCare also had the opportunity to wait and see how the trial court

10    If an agreement to arbitrate exists, the burden then shifts to the party
refusing arbitration to demonstrate the agreement is unenforceable.
(Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.)

                                       11
ruled on its 12 accommodation requests before raising the prospect of
arbitration. As another court noted, litigants may not “test[] the water before
taking the swim” and “go elsewhere” if the water is too chilly. (McConnell v.
Merrill Lynch, Pierce, Fenner, & Smith, Inc. (1980) 105 Cal.App.3d 946, 951.)
Additionally, as noted by Leger’s counsel, the preference motion informed
ActivCare that Leger would likely not live long enough to see trial unless the
trial date was accelerated and that Leger would use the proceeds from a
successful trial for rehabilitation and to seek better care. Had the trial court
denied trial preference, Leger would have been under pressure to settle.
      Finally, the trial court found that compelling arbitration would “greatly
prejudice [Leger] given [her] age and health” and it lacked the authority to
order that arbitration be expedited. ActivCare has not challenged either
finding. (City of Hollister v. Monterey Ins. Co. (2008) 165 Cal.App.4th 455,
484 [“[i]t is the appellant’s burden, not the court’s, to identify and establish
deficiencies in the evidence”].) Because ActivCare did not provide a proper
argument challenging the sufficiency of the evidence supporting these factual
findings, it has forfeited that issue on appeal.
      Although we have come across no opinion directly on point with the
facts of this case, the evidence and the general principles set forth above
support the trial court’s waiver finding and the record does not establish the
lack of waiver as a matter of law. Accordingly, we must affirm the trial
court’s waiver ruling. (Lewis, supra, 205 Cal.App.4th at p. 453 [“It is not
enough the trial court potentially could have reached a different conclusion;

                                        12
rather, we may reverse the trial court’s waiver finding only if the record
establishes a lack of waiver as a matter of law.”].)
                                 DISPOSITION
      The order denying the petition to compel arbitration is affirmed.
Respondent is entitled to costs on appeal.

                                                               McCONNELL, P.J.

WE CONCUR:

IRION, J.

DO, J.

                                       13