Court Opinion

ID: 9297157
Source: CourtListenerOpinion
Date Created: 2022-11-29 21:04:33.125681+00
Date Added: 2024-06-11T17:13:24.403474
License: Public Domain

Filed 11/29/22 Russell v. Five Star Home Health 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   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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has not been certified for publication or ordered published for purposes of rule 8.1115.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 EIGHT

EVELIN RUSSELL,                                               B307230

     Plaintiff and Respondent,                                (Los Angeles County
                                                               Super. Ct. No. 18STCV06073)
                   v.

FIVE STAR HOME HEALTH,
INC. et al.,

    Defendants and Appellants.

      APPEAL from an order of the Superior Court of Los
Angeles County. Randolph M. Hammock, Judge. Affirmed.
      Bent Caryl & Kroll and Steven M. Kroll for Defendants and
Appellants.
      JML Law, Joseph M. Lovretovich, Nicholas W. Sarris,
Jennifer A. Lipski and Brooke C. Bellah for Plaintiff and
Respondent.

                                        **********
       Defendants and appellants Five Star Home Health, Inc.
and Anthony Nieves appeal from the denial of their motion to
compel arbitration. The trial court found defendants waived
their right to compel arbitration of plaintiff and respondent
Evelin Russell’s employment discrimination claim. We find
substantial evidence supports that ruling and therefore affirm.
       FACTUAL AND PROCEDURAL BACKGROUND
       Plaintiff alleges she is the victim of workplace sexual
harassment and discrimination. Plaintiff and Nieves were dating
when he hired her in August 2016 to work as the office manager
of his company, Five Star Home Health, Inc. The harassment
began almost a year later after plaintiff ended her personal
relationship with Nieves. Plaintiff alleges Nieves initially begged
and pressured her to resume their relationship. When she
refused, Nieves then began to harass and disparage her at work,
ultimately firing her in or about August 2017. Plaintiff filed an
administrative complaint with the Department of Fair
Employment and Housing in June 2018.
       On November 26, 2018, plaintiff filed this action, alleging
four statutory claims pursuant to the Fair Employment and
Housing Act (FEHA; Gov. Code, § 12940 et seq.) and a common
law claim for wrongful termination in violation of public policy.
       In December 2018, before filing a responsive pleading,
defendants served written discovery requests on plaintiff,
including two sets of interrogatories, requests for admissions and
a request for production of documents. Plaintiff responded and
served written discovery on Five Star Home Health. Five Star
Home Health responded to plaintiff’s discovery.
       On February 28, 2019, the parties attended a case
management conference. Both plaintiff and defendants

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demanded trial by jury. At no time did defendants raise, orally or
in writing, the existence of an arbitration agreement or otherwise
state any intention to move to compel arbitration. The court set
trial for May 11, 2020.
       Also in February 2019, defense counsel prepared and
signed defendants’ answer to plaintiff’s complaint. However, the
answer was not filed or served until August 2019. There is
nothing in the record to explain defendants’ six-month delay in
filing and serving the answer. Defendants’ answer asserts
17 affirmative defenses but does not set forth any defense based
on the existence of a binding arbitration agreement between the
parties.
       Additional discovery ensued. Plaintiff propounded written
discovery on Nieves, who served responses thereto, and
defendants served a subpoena on third party Accredited Home
Care, plaintiff’s new employer. In February and early March
2020, both plaintiff and Nieves were deposed.
       Plaintiff admitted in her deposition that during her tenure
as office manager she assisted Nieves in revising the company’s
employee handbook and arbitration agreement. She could not
recall however whether she ever signed an arbitration agreement
herself.
       On March 23, 2020, less than two months before trial,
defendants filed their motion to compel arbitration. In a
supporting declaration, Nieves said he was unable to locate any
arbitration agreement signed by plaintiff in her personnel file,
but that he recalled she did sign one when he hired her. An
unsigned sample arbitration agreement was attached as an
exhibit and it provides, among other things, that claims

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regarding FEHA or termination from employment were to be
arbitrated.
       The hearing on defendants’ motion was continued to
June 25, 2020, because of safety measures and restrictions on in-
person appearances necessitated by the COVID-19 pandemic.
The May 11, 2020 trial date was also continued to July 11, 2020.
       At the June 25, 2020 motion hearing, the parties appeared
telephonically. After entertaining argument, the court denied
defendants’ motion on the basis of waiver. The court explained
that defendants failed to provide any reasonable basis for waiting
until the eve of trial to first assert their right to arbitrate. The
court said it appeared defendants made a strategic decision to
delay filing their motion and did not act with reasonable diligence
in pursuing arbitration. The court then reset trial for July 19,
2021, its first available date due to then-pending COVID-19
restrictions.
       This appeal followed.
                             DISCUSSION
       While California law strongly favors arbitration, the right
to arbitrate is not absolute. In order to “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.”
(Sobremonte v. Superior Court (1998) 61 Cal.App.4th 980, 997–
998.) If a party fails to do so, waiver is one of the statutorily
enumerated grounds upon which a court may deny a motion to
compel arbitration. (Code Civ. Proc., § 1281.2.) In the trial court
and on appeal, the parties agree that California and federal law
are in accord in allowing waiver. Defendants have not argued

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that finding waiver would offend the Federal Arbitration Act (9
U.S.C. § 1 et seq.)
       Our review of the trial court’s ruling finding waiver is
governed by the substantial evidence test. (Garcia v.
Haralambos Beverage Co. (2021) 59 Cal.App.5th 534, 541–542;
accord, Zamora v. Lehman (2010) 186 Cal.App.4th 1, 12.) We
consider the record in the light most favorable to the court’s
ruling, construing all reasonable inferences and resolving all
ambiguities in favor of its findings. If the finding of waiver is
supported by substantial evidence, that determination is binding
on us. (Garcia, at pp. 541–542.) We may not reverse the trial
court’s finding of waiver unless the record establishes there was
no waiver as a matter of law. (Burton v. Cruise (2010)
190 Cal.App.4th 939, 946 (Burton).)
       There is no bright-line test for establishing waiver. Each
case must be judged on its own facts. (St. Agnes Medical Center
v. PacifiCare of California (2003) 31 Cal.4th 1187, 1195
(St. Agnes).) However, the Supreme Court has acknowledged
several relevant factors that should be taken into consideration.
They are: (1) Whether the actions of the party seeking
arbitration 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 the party first sought to compel
arbitration or stay the proceedings close to the trial date or
otherwise “delayed for a long period”; (4) whether the party
seeking arbitration filed a counterclaim without also asking for a
stay; (5) whether procedural steps not available in the arbitral

                                5
forum were taken advantage of; and (6) “whether the delay
‘affected, misled, or prejudiced’ the opposing party.” (Ibid.)
       With these factors in mind, we conclude the record contains
substantial evidence supporting the trial court’s finding that
defendants waived their right to arbitrate this dispute.
       For 16 months, starting in December 2018 with the service
of multiple sets of discovery, defendants participated in the
action without disclosing an intent to pursue arbitration as an
alternative forum. Defendants delayed filing their answer and
when they did file it, it did not raise arbitration as an affirmative
defense. (Guess?, Inc. v. Superior Court (2000) 79 Cal.App.4th
553, 558 [“the failure to plead arbitration as an affirmative
defense is an act inconsistent with the later assertion of a right to
arbitrate”].) Defendants argue the delay was primarily
occasioned by their efforts to determine whether plaintiff had
signed an arbitration agreement, but the record does not show
they diligently tried to resolve that issue, delaying taking
plaintiff’s deposition until shortly before trial. Defendants also
engaged in third party discovery.
       The record also establishes prejudice. Prejudice exists
when the delay in seeking arbitration has “substantially
undermined” California’s policy favoring arbitration “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.) Where, as here, arbitration is first sought
on the eve of trial, courts will find the requisite prejudice. (Ibid.;
see also Burton, supra, 190 Cal.App.4th at p. 949 [affirming
finding of waiver where party did nothing to pursue arbitration
for 11 months, filing a motion just weeks before the scheduled
trial date]; Adolph v. Coastal Auto Sales, Inc. (2010)

                                  6
184 Cal.App.4th 1443, 1452 [filing motion less than three months
before trial and forcing parties to start “anew in an arbitral
forum” would delay resolution rather than advance it].)
       Defendants filed their motion to compel arbitration less
than two months before the scheduled trial date—a date which
they had known about for over a year while they litigated the
action. Defendants cite to our decision in Khalatian v. Prime
Time Shuttle, Inc. (2015) 237 Cal.App.4th 651 (Khalatian), where
we reversed the trial court’s denial based on waiver. But the
facts in Khalatian were entirely different than this case. “While
the [trial] court found defendants actively participated in
discovery, the evidence showed that only one defendant
propounded discovery. That defendant propounded only one set
of interrogatories, to which plaintiff responded with nothing more
than references to the allegations of the complaint, and one
request for production, to which plaintiff responded with
177 pages of documents. No depositions were taken, and no
discovery motions were filed or heard. There is no evidence
plaintiff provided any strategic information or any information he
would not be required to provide in arbitration.” (Id. at p. 662.)
Most significantly, the motion to compel arbitration in Khalatian
was filed more than a year before the scheduled trial date. (Id. at
p. 663.)
       As we said in Khalatian, “ ‘[i]n light of the policy in favor of
arbitration, “waivers are not to be lightly inferred. ” ’ ”(Khalatian,
supra, 237 Cal.App.4th at p. 662.) But defendants’ actions here
were dilatory and prevented the possibility of an expeditious
resolution via arbitration. The trial court was therefore justified
in finding that defendants’ strategy of delay denied plaintiff the
opportunity to obtain the most important benefit of arbitration:
an efficient and timely resolution of the dispute. “Arbitration

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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.” (Burton, supra, 190 Cal.App.4th at p. 948.)
       The fact the trial court had to continue the trial date due to
the pandemic does not undermine the court’s ruling. At the
hearing, defense counsel speculated that perhaps plaintiff would
not suffer prejudice because they might still be able to get an
arbitration completed before the trial court could proceed with
trial. Defense counsel said, “I don’t know that for certain. I’m
just surmising.” The trial court did not have a crystal ball. The
court was justified in ruling on the facts before it at the time.
The court knew it would have to delay trial due to the ongoing
pandemic but requiring the parties to start over in a new forum,
one that would also be operating under pandemic protocols,
would also cause delay. The record does not compel a finding of
nonwaiver as a matter of law. (Burton, supra, 190 Cal.App.4th at
p. 946.)
                            DISPOSITION
       The order denying defendants and appellants’ petition to
compel arbitration is affirmed. Plaintiff and respondent shall
recover her costs of appeal.

                                     GRIMES, J.

      WE CONCUR:

                         STRATTON, P. J.                WILEY, J.

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