Garcia v. Haralambos Beverage Co.Annotate this Case
The Court of Appeal affirmed an order denying defendant's motion to compel arbitration, holding that there was sufficient evidence to support the trial court's finding that defendant waived its right to arbitrate. The court rejected defendant's contention that it was reasonable to wait until it located the executed arbitration agreements before filing its motion, particularly in light of its concession that at the outset of the litigation, it was not only aware of its policy requiring arbitration, but had located checklists that demonstrated both plaintiffs had received a copy of the arbitration agreement. Furthermore, substantial evidence supported a finding that the length of defendant's delay prior to filing its motion to compel arbitration and for a stay was unreasonable.
The court also held that defendant acted in a manner inconsistent with its right to arbitrate. The court explained that, although defendant initially asserted arbitration as an affirmative defense, it subsequently represented in two status conference statements that it did not intend to arbitrate. The court explained that defendant's conduct related to classwide issues was inconsistent with its claimed right to arbitrate individual claims and strongly supported the trial court's finding that defendant acted in a manner inconsistent with its right to arbitrate. The court also concluded that substantial evidence supported the trial court's conclusion that defendant continued to act in a manner inconsistent with arbitration even after it located the arbitration agreements in June 2018. Finally, substantial evidence supported the trial court's finding of prejudice where defendant's delay impaired plaintiffs' ability to realize the benefits and efficiencies of arbitration.