Judge Curtis A. Kin, Case 21STCV30053 2023-03-07 Tentative Ruling

Judge: Curtis A. Kin, Case: 21STCV30053, Date: 2023-03-07 Tentative Ruling

Case Number: 21STCV30053 Hearing Date: March 7, 2023 Dept: 72

MOTION TO COMPEL ARBITRATION

AND STAY PROCEEDINGS

Date: 3/7/23 (8:30 AM)

Case: Fidencio L. Perez et al. v. Nissan North America, Inc. (21STCV30053)

TENTATIVE RULING:

Defendant Nissan North America, Inc.’s Motion to Compel Arbitration and Stay Proceedings is DENIED.

All requests to take judicial notice are DENIED as “unnecessary to the resolution” of the issues before the Court. (Martinez v. San Diego County Credit Union (2020) 50 Cal.App.5th 1048, 1075.)

Defendant Nissan North America, Inc. moves to compel arbitration of plaintiffs’ Fidencio L. Perez and Blanca Vazquez’s claims against it.

The Court finds that defendant has waived the right to seek arbitration. “When an arbitration agreement does not specify the time within which arbitration must be demanded, a reasonable time is allowed; a party who does not demand arbitration within a reasonable time is deemed to have waived the right to arbitration.” (Spear v. California State Auto. Assn. (1992) 2 Cal.4th 1035, 1043.) A fact to consider in determining whether arbitration was demanded within a reasonable time is “any prejudice the opposing party suffered because of the delay.” (Spear, 2 Cal.4th at 1043.)

On September 24, 2021, defendant filed an Answer to the Complaint, wherein defendant asserted an affirmative defense based on its right to seek arbitration of plaintiffs’ claims. (Answer ¶ 22.) On January 27, 2022, defendant filed a Case Management Statement without checking the box indicating that it was willing to participate in binding private arbitration. (1/27/22 Case Management Statement at 3.) On February 14, 2022, the Court set trial to begin on February 6, 2023. Ten months later, on December 16, 2022, defendant filed the instant motion to compel arbitration and noticed the hearing for March 7, 2023, after trial was set to begin. On February 3, 2023, the Court held a Final Status Conference, at which the Court reviewed and discussed with the parties their jointly submitted trial documents (e.g., Joint Statement of Case, Joint Witness List, Joint Exhibits List, Joint Jury Instructions) and heard argument and ruled on seven motions in limine. On the first day trial, February 6, 2023, the parties jointly requested that the Court vacate the trial date for a brief period because the parties had a mediation scheduled for February 8, 2023. The Court accordingly vacated the trial date and scheduled a trial setting conference for the same date as the hearing on the instant motion.

In addition to actively preparing for trial up until the day trial was scheduled to begin, the parties have engaged in active litigation before this Court. On August 29, 2022, defendant responded to plaintiffs’ first set of Request for Production of Documents. (Law Decl. ¶ 2 & Ex. 2.) On November 28, 2022, defendant demanded an exchange of expert information pursuant to CCP § 2034.210 et seq.

Here, under the circumstances, the Court finds that defendant’s delay of 17 months from the assertion of arbitration as an affirmative defense to the hearing on this motion constitutes a waiver of the right to seek arbitration. (Sobremonte v. Superior Court (1998) 61 Cal.App.4th 980, 992 [stating that delay for a long period before seeking a stay is a factor in determining waiver].) During this delay, the Court set trial in this action, and the parties proceeded accordingly. Even though defendant was aware there may be an arbitration agreement, as evidenced by its answer, defendant waited more than 14 months to file the instant motion. Even though trial had already been set to begin on February 6, 2023, defendant set the hearing for March 7, 2023, after trial was set to begin. Moreover, up until February 6, 2023, defendant prepared for trial and did everything to signal to this Court that it was ready to proceed to trial before this Court as scheduled.

Defendant contends, and plaintiffs do not dispute, that the Federal Arbitration Act governs the arbitration of plaintiffs’ claims. (Mtn. at 5:5-25.) Consequently, federal law governs whether a party has waived the right to compel arbitration because “waiver of the right to compel arbitration is not viewed as a question of substantive contract law.” (Aviation Data, Inc. v. American Express Travel Related Services Co., Inc. (2007) 152 Cal.App.4th 1522, 1535.)

“[U]nder the FAA, courts may not ‘condition a waiver of the right to arbitrate on a showing of prejudice.’ [Citation.]” (Davis v. Shiekh Shoes, LLC (2022) 84 Cal.App.5th 956, 965, citing Morgan v. Sundance, Inc. (2022) 142 S.Ct. 1708, 1713.)

Nevertheless, even if prejudice were required for the Court to find a waiver, plaintiffs would be prejudiced if this action were compelled to arbitration. At this juncture, arbitration would delay the resolution of this action, when the parties have already filed trial documents in preparation for a trial that was set to begin on February 6, 2023.

In opposition, defendant cites Quach v. California Commerce Club, Inc. (2022) 78 Cal.App.5th 470 for the assertion that its litigation actions are insufficient to constitute waiver. Quach was granted review by the California Supreme Court and is therefore only citable for its persuasive value. (Rule of Court 8.115(e)(1); Quach v. California Commerce Club (2022) 78 Cal.App.5th 470, 474.) In any event, the defendant in Quach filed its motion to compel arbitration seven months before the trial, and the trial court granted the motion approximately five months before trial. (Quach, 78 Cal.App.5th at 475-76.) The Court of Appeal in Quach found that moving to compel arbitration seven months before the operative trial date did not constitute waiting until the eve of trial to seek arbitration. (Id. at 479.)

Here, by marked contrast, defendant waited well over a year to file the instant motion and filed the motion less than two months before trial, after having actively engaged in litigation over discovery in this action. Defendant does not attempt to explain why it has delayed for so long. Trial was scheduled to commence on February 6, 2023, and plaintiffs have prepared for trial in reliance. Indeed, plaintiffs also prepared for trial in reliance of defendant’s joint submission of trial documents and participation at the February 3, 2023 final status conference at which defendant clearly signaled it was ready to proceed to trial. Under these circumstances, the Court finds that defendant “unduly delayed and waited until the eve of trial to seek arbitration.” (St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1204.) This is so, even though a new trial date has not yet been set. This matter did not proceed to trial as scheduled on February 6, 2023, because the parties jointly requested a brief continuance to attempt resolution through mediation. The Court is now prepared to set this matter for trial imminently.

Accordingly, the Court finds that defendant waived the right to compel arbitration. The motion is DENIED.