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Court of Appeal:
Motion to Compel Arbitration Properly Denied Where Defendant Delayed in Making Motion
Zukin Says Waiting 10 Months After Locating Arbitration Agreement, 16 Months After the Case Was Filed Was Unreasonable
By a MetNews Staff Writer
Div. Four of the Court of Appeal for this district has affirmed the denial of a motion to compel arbitration because the defendant, 99 Cents Only Stores LLC, delayed unreasonably in filing it 10 months after the time it located the agreement containing the arbitration provision.
It was also 16 months from the time the lawsuit was filed by a terminated employee, Rafael Contreras, who alleged age discrimination, retaliation, and other employment-related claims.
A lawyer for the defendant noted at a case management conference on Oct, 29, 2021 that an agreement to arbitrate existed but had not been located; Contreras declined to stipulate to arbitration; the document was found on Dec. 20, 2021; on Oct. 21, 2022—less than two months before the trial date—the motion was made.
Justice Helen Zukin authored the unpublished opinion, filed Tuesday. It affirms an order by Los Angeles Superior Court Judge Richard Fruin Jr.
No Single Test
Relying on the 2003 California Supreme Court decision St. Agnes Medical Centre v. PacifiCare of California which held that “no single test delineates the nature of the conduct that will constitute a waiver of arbitration,” Zukin found that the evidence supported Fruin’s denial of the motion.
She reasoned:
“The record contains substantial evidence supporting the trial court’s determination of waiver based on 99 Cents’ (1) unreasonable delay, (2) conduct inconsistent with the right to arbitrate, and (3) prejudice.’ ”
Zukin added:
“…99 Cents’ counsel waited ten months between the time it found the agreement until it finally moved to enforce arbitration. Instead of moving promptly to compel arbitration, 99 Cents filed an ex parte application to continue the trial date. 99 Cents only sought arbitration after the court indicated it had waived its right to compel arbitration (and it still waited three more months to file the motion).”
‘Inconsistent With Right’
The jurist reasoned that the conduct by 99 Cents Only Stores rendered the delay “inconsistent with the right to arbitrate.”
Looking to whether or not the delay was prejudicial to Contreras, Zukin found:
“99 Cents’ failure to seek enforcement of the agreement until just before trial, coupled with its conduct to protract the litigation, supports the trial court’s prejudice finding.”
The case is Contreras v. 99 Cents Only Stores LLC, B327023.
Robert M. Dato of Buchalter and David Van Pelt of Seyfarth Shaw joined with out-of-state counsel in representing 99 Cents Only. Cerritos attorney Eric A. Panitz acted for Contreras.
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