Court Opinion

ID: 9747927
Source: CourtListenerOpinion
Date Created: 2023-08-27 15:43:42.75708+00
Date Added: 2024-06-11T07:25:28.928047
License: Public Domain

WOODS, J., Concurring.
I agree with my colleagues that the judgment must be affirmed, based on the record before the trial court when it ruled on Health Net’s motion to compel arbitration. I write separately to state my view that a finding of prejudice sufficient to establish waiver requires more than a mere showing that the party seeking arbitration has obtained discovery not available in arbitration, as the majority opinion suggests. I think the law is clear that there must be, in addition, some basis for inferring that the discovery obtained has worked an unfair advantage to the moving party, or some other evidence of unreasonable delay, bad faith or the like from which prejudice may be inferred.
Arbitration is strongly favored. In waiver cases, our Supreme Court has “stressed the significance of the presence or absence of prejudice,” observing that waiver does not occur “by mere participation in litigation . . . .” *1374(Keating v. Superior Court (1982) 31 Cal.3d 584, 605 [183 Cal.Rptr. 360, 645 P.2d 1192].)1
My concern in this case arises because it appears from the record on appeal that both Health Net and the Bermans engaged in extensive discovery. This suggests to me that both parties likely have obtained substantial information about the other’s case—“strategies, evidence and witnesses”— that would not have been available in arbitration. If that is so, then it is hard to see what prejudice the Bermans have suffered from Health Net’s discovery, as both parties would be in equivalent positions. Under those circumstances, in the absence of some other factor—unreasonable delay, bad faith misconduct, or the like, none of which were suggested by the record—the requisite showing of prejudice would be conspicuously absent.2
In short, I think the majority misreads the Davis case when it says that the “vice” or “prejudice” required by Davis can be found solely in the use of discovery to obtain information about the other party’s case that could not be gained in arbitration. (Davis v. Continental Airlines, Inc. (1997) 59 Cal.App.4th 205, 215 [69 Cal.Rptr.2d 79].) That would be so in most cases where there has been any discovery, yet we know that waiver does not occur by mere participation in litigation. More is required, as the Davis case itself makes plain.
After observing that the vice or prejudice lay in obtaining information not available in arbitration, the Davis court’s very next sentence points out: “After obtaining discovery from plaintiff by court processes, defendants then belatedly sought to change the game to arbitration, where plaintiff would not have equivalent discovery rights.” (Davis v. Continental Airlines, Inc., supra, 59 Cal.App.4th at p. 215, italics added.) The court explicitly states that the defendants’ participation in discovery would not necessarily compel a finding of prejudice and waiver, and that this presents a factual question for the court “based on the particular circumstances of the case.” In Davis, the court continued, “the trial court could reasonably find the discovery conducted was not equivalent for both sides and would work an unfair advantage for defendants if arbitration were ordered.” (Ibid.) In my view, it is hard to read *1375Davis without concluding that the lack of equivalence in discovery was indeed a critical element in the finding of prejudice.3
That being said, I nonetheless agree with the majority that, on the record before it, the trial court properly denied Health Net’s motion to compel arbitration. The Bermans opposed Health Net’s motion to compel by presenting evidence of the extensive discovery conducted by Health Net, and claiming that, as in Davis, prejudice resulted from the use of the court’s discovery procedures to learn the Bermans’ “strategies, evidence, and witnesses . . . .” In response, Health Net said nothing and submitted no evidence at all on the issue of prejudice from the discovery, failing to produce evidence of reciprocal discovery or otherwise argue there was no prejudice to the Bermans from its discovery. On that state of the record, in the absence of any evidence to the contrary, the trial court was entitled to infer that the Bermans were prejudiced by Health Net’s discovery. As the majority says, it is difficult to see how the trial court could have reached any other result.
I likewise agree there was no error in the trial court’s denial of Health Net’s motion for reconsideration. Under proper circumstances, as outlined above, I would question the trial court’s remarks suggesting that the discovery engaged in by the Bermans was irrelevant to the waiver question. Nonetheless, Health Net’s motion presented neither newly discovered evidence nor a sufficient explanation for the failure to produce it earlier, so denial of the motion was entirely proper.
A petition for a rehearing was denied June 20, 2000, and appellants’ petition for review by the Supreme Court was denied August 16, 2000.

Keating was reversed in part on other grounds in Southland Corp. v. Keating (1984) 465 U.S. 1 [104 S.Ct. 852, 79 L.Ed.2d 1].

I cannot agree with the majority that the trial court could reasonably have found on this record that Health Net’s petition to compel arbitration was a “surprise” to the Bermans. The parties’ stipulation specified the time within which Health Net had to file its petition, and as the majority points out, Health Net served its first discovery requests the day before its counsel signed the stipulation.

I do not, as the majority suggests in footnote 15, read Davis as imposing “a rule that would deprive a party who admittedly wishes to litigate of its right to conduct full discovery and oppose a petition to compel arbitration.” (Maj. opn., ante, at p. 1370, fn. 15.) First, I would point out that here, the “party who admittedly wishes to litigate” in fact agreed to arbitrate, so I am not overly concerned with the “conundrum" in which he finds himself. Second, there really is no conundrum. In the ordinary case, a defendant who conducts extensive discovery and waits six months to move to compel arbitration will have waived arbitration—because of unreasonable delay, bad faith misconduct, gamesmanship, one-sided discovery, or some other specific unfair advantage to which plaintiff can point. All I am saying is that the plaintiff must show one of these things, and cannot rely only on the fact that discovery was conducted. Davis requires more, as do other California precedents, and so should we.