Filed 12/19/19 Teed v. Sotheby’s International Realthy CA1/5

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FIRST APPELLATE DISTRICT

DIVISION FIVE

RICHARD TEED, et al.,

Plaintiffs and Respondents,

v.

SOTHEBY’S INTERNATIONAL REALTY, INC.,

Defendant and Appellant.

A154707

(San Francisco County

Super. Ct. No. CGC17561021)

Sotheby’s International Realty, Inc. (Sotheby’s) appeals from an order denying its motion to compel arbitration under Code of Civil Procedure section 1281.2. Sotheby’s contends the court erred in concluding that it had waived its right to arbitrate, because its participation in the litigation and delay in seeking arbitration did not prejudice respondents or result in the adjudication of any arbitrable issue. In light of the strong public policy favoring arbitration and the repeated admonitions of our Supreme Court that waivers must be closely scrutinized, we agree with Sotheby’s and reverse the order.

I. FACTS AND PROCEDURAL HISTORY

A. Respondents’ Complaint

In August 2017, respondents Richard Teed and William “Butch” Henry Haze filed a complaint against Sotheby’s for declaratory relief and breach of contract.

According to the complaint, Teed and Haze each entered into an independent contractor agreement with Sotheby’s, identifying Sotheby’s as broker and Teed and Haze as associate-licensees. An addendum to the agreements required Sotheby’s to provide Teed and Haze, at their expense, “ ‘a policy of errors and omissions insurance’ from a ‘reputable carrier.’ ” An April 2013 amendment to the agreement, while affecting the parties’ commission split, did not extinguish Sotheby’s obligation to provide the insurance. Sotheby’s nonetheless failed to provide it. When a third party lawsuit was filed against Teed in August 2013, and another third party lawsuit was filed against Teed and Haze in May 2017, Sotheby’s refused to provide a defense and settled one of the cases on behalf of itself only, leaving Teed and Haze on their own. The complaint asserted that these and other actions breached the parties’ agreements.

B. Sotheby’s Motion to Strike Respondents’ Complaint

Sotheby’s was served with respondents’ complaint in September 2017. In October 2017, Sotheby’s filed a motion to strike the following portions of the complaint: (1) allegations that Sotheby’s breached the parties’ agreements by charging an administrative fee, on the ground that the agreements did not preclude the fee; and (2) prayers for relief seeking reimbursement for Sotheby’s failure to provide insurance and a defense against the 2013 lawsuit, on the ground that the claims as to such relief were time-barred. Sotheby’s supported its motion with a request for judicial notice and

a declaration.

Respondents filed an opposition to the motion to strike, and Sotheby’s filed a reply brief.

C. Sotheby’s Motion to Disqualify Respondents’ Attorney

On November 6, 2017, with the motion to strike pending, Sotheby’s filed a motion to disqualify respondents’ counsel, submitting a memorandum of points and authorities and a declaration with 74 pages of redacted exhibits. Sotheby’s contended that counsel should be disqualified because he previously represented Sotheby’s and the issues in that matter were similar to the issues arising from respondents’ complaint.

Respondents filed an opposition to Sotheby’s disqualification motion. Sotheby’s filed a reply brief.

D. Sotheby’s Motion to Seal the Complaint

On November 7, 2017, Sotheby’s filed a motion to seal portions of the complaint. Sotheby’s argued that the parties’ amendment to the independent contractor agreement required certain information be kept confidential, including purported trade secrets and commission splits.

Respondents filed an opposition to the motion on November 22, 2017, asserting that the motion did not identify what specific information required the complaint to be sealed. Sotheby’s filed a reply brief on November 29, 2017.

All three of Sotheby’s motions—to strike the complaint, disqualify counsel, and seal portions of the complaint—were set for hearing on December 7, 2017. On that date, as an alternative to granting the motion to disqualify, the court gave respondents an opportunity to file an amended complaint that would limit their claims and thus avoid the disqualification. The court then continued the hearing on Sotheby’s motions to January 10, 2018.

E. First Amended Complaint and Rulings on Sotheby’s Motions

Respondents filed their first amended complaint on December 22, 2017. On January 5, 2018, Sotheby’s filed a supplemental brief in support of its motion to disqualify respondents’ counsel, contending that counsel should be disqualified notwithstanding respondents’ amendments to their pleading. The hearing on Sotheby’s motions was continued to January 23, 2018.

At the hearing on January 23, 2018, the court took Sotheby’s motion to strike the complaint off calendar due to respondents’ filing of the first amended complaint. The court denied Sotheby’s motion to disqualify counsel. The court also denied Sotheby’s motion to seal portions of the complaint, finding that Sotheby’s failed to make the required showing.

F. Sotheby’s Motion to Strike the First Amended Complaint

On February 6, 2018, Sotheby’s filed a motion to strike respondents’ first amended complaint. Sotheby’s repeated the grounds it had asserted in its earlier motion to strike, and further contended that respondents’ amended pleading did not comply with the ruling of December 7, 2017.

Respondents filed an opposition to Sotheby’s motion, contending that, similar to its earlier motion to strike, Sotheby’s motion was essentially one for summary judgment because it would require the court to analyze the facts and evidence beyond the scope of the pleadings. Sotheby’s filed a reply brief.

On March 8, 2018, the court heard and denied Sotheby’s motion to strike respondents’ first amended complaint.

G. Sotheby’s Case Management Statement

Sotheby’s served its case management statement on March 13, 2018, requesting a jury trial of five to seven days, providing dates of unavailability for trial, proposing a deadline for written discovery, oral discovery, and expert witness discovery, and stating that Sotheby’s expected to file a motion for summary judgment or summary adjudication. Sotheby’s did not check any box in the “Alternative Dispute Resolution” section to indicate a willingness to participate in “Binding private arbitration,” and it did not disclose any intent to file a motion to compel arbitration.

H. Sotheby’s Motion to Compel Arbitration

On March 26, 2018, Sotheby’s attorney emailed respondents’ counsel and asked whether respondents would stipulate to arbitration pursuant to provisions in the parties’ agreements. After further communications, in early April 2018 respondents’ counsel declined to stipulate.

On April 16, 2018 – over seven months after the complaint was filed – Sotheby’s filed a motion to compel arbitration under section 1281.2 and the arbitration provisions in the parties’ contracts.

Respondents opposed the motion, contending that Sotheby’s had waived its right to demand arbitration. Sotheby’s filed a reply brief arguing there had been no waiver.

Sotheby’s motion was heard on May 11, 2018. In response to the court’s inquiry, Sotheby’s counsel claimed that Sotheby’s had delayed seeking arbitration because it was waiting for the disqualification motion to be heard.

By written order of May 11, 2018, the court denied Sotheby’s motion on the ground that Sotheby’s had waived its right to compel arbitration. The court explained: “Sotheby’s first raised the notion of arbitration more than seven months after the complaint was filed—and after counsels’ and the Court’s time and resources were consumed by litigation. [¶] Among its other litigation activities, Sotheby’s prosecuted a motion to strike that effectively sought summary adjudication of the case, a motion to disqualify [respondents’] counsel and a motion to seal. Also, [respondents] filed an amended complaint, and Sotheby’s submitted a discovery plan and a case management statement saying it planned a future summary adjudication motion, but not a motion to compel arbitration. Sotheby’s has provided no real justification for its delay in seeking arbitration. [¶] The closest appellate case to ours is Lewis v. Fletcher Jones Motor Cars, Inc. (2012) 205 Cal.App.4th 436 (Lewis). There, defendant moved to compel arbitration after five months of litigation, and the Court of Appeal affirmed the trial court’s finding of waiver. (Id). As in Lewis, the relevant factors favor waiver in our case. Sotheby’s actions have been inconsistent with the right to arbitrate, the ‘litigation machinery has been substantially invoked,’ Sotheby’s delayed for a long period before seeking arbitration, important intervening steps were taken and the delay prejudiced [respondents]. (See id. at 444).” This appeal followed.

II. DISCUSSION

Section 1281.2 provides in part: “On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: [¶] (a) The right to compel arbitration has been waived by the petitioner; or [¶] (b) Grounds exist for the rescission of the agreement.” (Italics added.)

A finding of waiver is usually reviewed for substantial evidence. (St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1196 (St. Agnes).) “When, however, the facts are undisputed and only one inference may reasonably be drawn, the issue is one of law and the reviewing court is not bound by the trial court’s ruling. [Citations.]” (Ibid.; Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 319.) Here, Sotheby’s urges that we apply de novo review, while respondents insist that we should review for substantial evidence. Under either standard of review, we would reach the same disposition in this appeal.

As used in section 1281.2, the term “waiver” may be used “ ‘as a shorthand statement for the conclusion that a contractual right to arbitration has been lost.’ ” (St. Agnes, supra, 31 Cal.4th at p. 1195, fn. 4.) It does not require proof of a voluntary relinquishment of a known right but may arise from a party’s failure to perform an act it was required to perform, regardless of the party’s intent to relinquish the right. (Ibid.) Nonetheless, because California law reflects a strong public policy favoring arbitration, “waivers are not to be lightly inferred and the party seeking to establish a waiver bears

a heavy burden of proof.” (Id. at p. 1195; Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180, 189.)

Factors to consider in deciding whether there has been a waiver include: (1) whether the party’s actions were 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 a party requested arbitration close to the trial date or delayed for

a long period before seeking a stay; (4) whether a defendant seeking arbitration filed a counterclaim without requesting a stay; (5) “ ‘whether important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place’ ”; and (6) whether the delay affected, misled, or prejudiced the opposing party. (St. Agnes, supra, 31 Cal.4th at p. 1196; Sobremonte v. Superior Court (1998) 61 Cal.App.4th 980, 992.)

“ ‘ “[W]aiver does not occur by mere participation in litigation” ’ if there has been no judicial litigation of the merits of arbitrable issues” or “prejudice.” (St. Agnes, supra, 31 Cal.4th at p. 1203.) “[A]ny doubts regarding a waiver allegation should be resolved in favor of arbitration.” (Id. at p. 1195.)

A. First Factor: Actions Inconsistent with the Right to Arbitrate

Sotheby’s was served with respondents’ complaint in September 2017. For the next six months, it pursued the case in the trial court without a hint that it intended to seek arbitration of the matter. Sotheby’s filed a motion to strike the complaint, a motion to seal the complaint, a motion to disqualify respondents’ lawyer, a motion to strike the first amended complaint, and a case management statement that estimated the time for trial, proposed discovery deadlines, and omitted any mention of possible arbitration. Sotheby’s participated in a number of court hearings that were held as a result of its motions. One of those motions—the motion to strike respondents’ first amended complaint—was characterized by the trial court as a disguised summary judgment motion. And Sotheby’s counsel admitted that he did not advise the court or respondents’ counsel of Sotheby’s intent to seek arbitration until seven months into the litigation. These actions were inconsistent with an intent to compel arbitration.

Sotheby’s argues that mere participation in litigation does not constitute a waiver where, as here, there was no judicial determination of arbitrable issues or prejudice to

the other party. (See, e.g., Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 375; St. Agnes, supra, 31 Cal.4th at p. 1203.) We address this argument post, in our discussion of the sixth St. Agnes factor regarding prejudice.

B. Second Factor: Substantial Invocation of Litigation Machinery

The second St. Agnes factor is “ ‘ “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.” ’ ” (St. Agnes, supra, 31 Cal.4th at p. 1196.)

It is fair to say that Sotheby’s “invoked” the litigation machinery by filing its several motions. Both of its motions to strike the pleadings compelled a response from respondents, and one of those motions proceeded to a hearing; Sotheby’s other two motions involved briefing and hearings as well.

Sotheby’s essentially contends, however, that it did not substantially invoke the litigation machinery, pointing to waiver cases that involved more than preliminary motions (like Sotheby’s motions to strike) or motions collateral to the merits (like its disqualification motion and motion to seal). (Citing Law Offices of Dixon R. Howell v. Valley (2005) 129 Cal.App.4th 1076, 1099–1100 [party waived right to arbitrate by failing to indicate an intent to compel arbitration until 15 months into the litigation and after submitting to judicial arbitration, allowing the court to consider a summary judgment motion, participating in a mandatory settlement conference, and allowing the case to proceed to the brink of trial after significant discovery]; Oregel v. PacPizza, LLC (2015) 237 Cal.App.4th 342, 354–356, 359 [defendant waived right to arbitrate by waiting 17 months to seek arbitration, demanding a jury trial, attending case management conferences, filing an answer that did not assert arbitration as an affirmative defense, propounding discovery, engaging in discovery motions, and leading plaintiff to reveal legal positions and evidence unobtainable in arbitration].)

Respondents counter that courts have found the litigation machinery invoked

in the absence of dispositive motions or a 15-month delay. (Citing Lounge-A-Round v. GCM Mills, Inc. (1980) 109 Cal.App.3d 190, 201 [litigation machinery invoked

where the case was pending nine months before any indication of an intent to arbitrate and no dispositive motions had been filed].) But even in Lounge-A-Round, the parties had—unlike here—engaged in discovery, suggesting a greater availment of the litigation process.

Similarly, it cannot be said that the parties were well into the preparation of the case before Sotheby’s told respondents, through counsel, of a desire to arbitrate: no answer had been filed, no discovery had been conducted, and no trial date had been set.

C. Third Factor: Delay Before Seeking a Stay

The third St. Agnes factor is whether the party seeking to arbitrate had waited to request arbitration until close to the trial date, or delayed for a long period before seeking a stay. (St. Agnes, supra, 31 Cal.4th at p. 1196.) Here, since no trial date had been set, it cannot be said that Sotheby’s waited until the eve of trial to seek arbitration.

Sotheby’s did, however, delay bringing its motion to compel arbitration until seven months after the complaint was filed. The existence or absence of a reasonable explanation for the delay is germane to whether a party waived its right to arbitrate.

(Law Offices of Dixon R. Howell v. Valley, supra, 129 Cal.App.4th at p. 1100.)

Sotheby’s seeks to justify its delay by claiming it had to wait until the court heard its motion to seal the complaint, because if arbitration was compelled any earlier, the litigation would have been stayed, the court could not have sealed the complaint, and the arbitrator would have lacked authority to do so as well.

Sotheby’s argument rings hollow. First, Sotheby’s told a different tale to the trial court. At the hearing on the motion to compel, Sotheby’s counsel represented that the delay in seeking to compel arbitration was due to Sotheby’s desire to obtain a ruling on the motion to disqualify respondents’ counsel, not the motion to seal.

Second, even if Sotheby’s thought it needed to obtain a ruling on the motion to seal before pursuing arbitration, it still could have disclosed its intention to arbitrate. It failed to do so, remaining mute about arbitration in its case management statement, which indicated that its only anticipated motion was for summary judgment or adjudication.

Third, Sotheby’s does not provide any legal authority for its proposition that the trial court would have lacked jurisdiction to rule on the motion to seal if the litigation was stayed for arbitration. While a trial court’s jurisdiction is certainly limited in that instance (Brock v. Kaiser Foundation Hospitals (1992) 10 Cal.App.4th 1790, 1796), we question that the court would have been powerless to seal a document in its own files.

In any event, Sotheby’s could have brought the motion to compel arbitration much earlier—when it filed its motion to seal—with a request that the action not be stayed until the court ruled on the sealing issue.

While Sotheby’s purported justification for its seven-month delay is thus unconvincing, it does not necessarily follow that the delay was so unreasonable as to constitute a waiver; we merely include it as a factor to be considered.

D. Fourth Factor: Counterclaim

The fourth St. Agnes factor regards a defendant filing a counterclaim without seeking a stay. (St. Agnes, supra, 31 Cal.4th at p. 1196.) The trial court did not find this factor applied, and neither do we.

E. Fifth Factor: Important Intervening Steps

The next factor is “ ‘ “ ‘whether important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place’ ” ’ ” before seeking arbitration. (St. Agnes, supra, 31 Cal.4th at p. 1196.)

The trial court found that this factor was met. The court did not specifically state why, but it noted elsewhere in its order that Sotheby’s had “submitted a discovery plan and a case management statement.” Respondents defend the court’s finding on this basis, but they cite no case for the proposition that merely proposing discovery deadlines as required in a case management statement constitutes an important intervening step within the meaning of St. Agnes. ~(RB 60)~ No written discovery was propounded by either party in this case, and no depositions were noticed. There was no indication that Sotheby’s exploited judicial discovery procedures that would not have been available in arbitration.

Respondents argue that Sotheby’s motions to strike constitute important intervening steps, particularly since the trial court viewed Sotheby’s motion to strike the first amended complaint as a motion for summary judgment. ~(RB 60)~ (Citing Law Offices of Dixon R. Howell v. Valley, supra, 129 Cal.App.4th at p. 1102 [important intervening steps included “significant discovery, a nonbinding judicial arbitration, the hotly contested summary judgment motion, and a mandatory settlement conference”].) In this case, however, the court did not entertain Sotheby’s motion as one for summary judgment or adjudication—which would have required scouring the evidence for a triable issue of material fact—but merely characterized it as a summary judgment motion to explain why the motion was inappropriate. Moreover, neither of Sotheby’s motions to strike resulted in any rulings on the merits. The fifth St. Agnes factor is not germane to this case.

F. Sixth Factor: Whether the Delay Misled, Affected or Prejudiced Respondents

Lastly, we consider the issue of prejudice: did Sotheby’s court filings and delay in bringing its motion to compel arbitration mislead, affect or prejudice respondents to the degree required to conclude that Sotheby’s waived its right to compel arbitration?

The trial court concluded that respondents were prejudiced, without specifying why. In their opposition to the motion to compel arbitration, respondents had argued

that they incurred over $50,000 in legal fees and expenses, and they urge on appeal that these amounts deprived them of an “ ‘inexpensive’ ” arbitration. (Citing Lewis, supra, 205 Cal.App.4th at p. 452 [$46,000 in attorney fees and costs].)

We disagree. In the first place, respondents would have incurred some of their attorney fees and costs even if Sotheby’s had sought arbitration immediately, since the motion to seal and the motion to disqualify would have been pursued in some forum even if arbitration had been compelled at the outset. Because respondents do not quantify what portion of their attorney fees or costs they would not have incurred in arbitration, they fail to establish prejudice in this regard.

Moreover, incurring legal fees and costs is usually insufficient to demonstrate the prejudice necessary for a finding of waiver. (St. Agnes, supra, 31 Cal.4th at p. 1203.) As our Supreme Court has instructed: “Because merely participating in litigation, by itself, does not result in . . . waiver, courts will not find prejudice where the party opposing arbitration shows only that it incurred court costs and legal expenses.” (Ibid., Italics added.) The court explained: “Prejudice typically is found only where the petitioning party’s conduct has substantially undermined this important public policy or substantially impaired the other side’s ability to take advantage of the benefits and efficiencies of arbitration. [¶] For example, courts have found prejudice where the petitioning party used the judicial discovery processes to gain information about the other side’s case that could not have been gained in arbitration [citations]; where a party unduly delayed and waited until the eve of trial to seek arbitration [citation]; or where the lengthy nature of the delays associated with the petitioning party’s attempts to litigate resulted in lost evidence [citation].” (Id. at p. 1204.)

Here, none of the examples in St. Agnes apply. Sotheby’s did not use the judicial discovery processes to gain information about respondents’ case that could not have been gained in arbitration, it did not unduly wait until the eve of trial to seek arbitration, and its delay did not result in lost evidence. (St. Agnes, supra, 31 Cal.4th at p. 1204.) Nor do respondents demonstrate in any other respect how Sotheby’s conduct substantially undermined the public policy of arbitration or substantially impaired respondents’ ability to take advantage of the benefits and efficiencies of arbitration.

Respondents argue that, in opposing Sotheby’s motion to strike the first amended complaint, they were forced to disclose their legal theory as to why the independent contractor agreement required Sotheby’s to provide an errors and omissions policy—“an issue that would undoubtably arise in arbitration.” This argument is unavailing, however, because respondents’ legal theory—merely a reference to a paragraph in the parties’ agreement—would have been disclosed in the course of the arbitration anyway, and respondents show no prejudice in having to disclose their “theory” when they did.

Nor is there any other indication of prejudice. The motions to seal the complaint and disqualify counsel were unrelated to the merits of respondents’ claims, and respondents prevailed on those motions. Although the disqualification motion led to a limit on the claims respondents can assert, that was due to the rules of ethics, not any adjudication of the merits. Only one of Sotheby’s two motions to strike was heard, and it was denied. And even though Sotheby’s case management statement did not disclose an intent to arbitrate, there is no indication respondents detrimentally relied on that omission before Sotheby’s counsel asked respondents’ counsel to stipulate to arbitration about two weeks later.

In making its finding of waiver, the trial court relied on Lewis, supra, noting that the defendant in that case had moved to compel arbitration after five months of litigation. Lewis, however, involved much more than that. Before filing its motion to compel arbitration, the defendant filed a motion to strike and multiple demurrers that would “result in a ‘substantive ruling[] on the merits,’ ” the parties had participated in discovery, and the defendant’s resistance to discovery caused the plaintiff to litigate three motions to compel. (Lewis, supra, 205 Cal.App.4th at pp. 444, 448–452.) Here, fewer motions had been filed, and no discovery had occurred.

More instructive is Khalatian v. Prime Time Shuttle, Inc. (2015) 237 Cal.App.4th 651. There, the defendant waited 14 months before filing a motion to compel, during which it demurred to the plaintiff’s complaint, answered a second amended complaint, responded to a request for documents and propounded a document request and special interrogatories. The trial court found that the defendant waived the right to compel arbitration, but the Court of Appeal reversed, because there was no evidence the defendant stretched out the litigation process, gained information about the plaintiff’s case that it could not have learned in arbitration, or waited until the eve of trial. (Id. at pp. 661–663.)

The other cases cited by the parties are similarly instructive, because they show the extent of litigation and prejudice typically found in cases holding a waiver. (Kaneko Ford Design v. Citipark, Inc. (1988) 202 Cal.App.3d 1220, 1228–1229 [moving party waited over five months to assert its right to arbitrate and “obtained information as to the legal strategies of Citipark by means of the latter’s answer to the complaint”]; Adolph v. Coastal Auto Sales, Inc. (2010) 184 Cal.App.4th 1443, 1449, 1451–1452 [defendant did not file its petition to compel arbitration for six months—about three months before the scheduled trial and two months before the discovery cutoff—and meanwhile filed two demurrers, tried to schedule discovery, was uncooperative with plaintiff’s efforts to conduct discovery, failed to mention arbitration in the case management statement, and withheld production of the arbitration agreement]; Guess?, Inc. v. Superior Court (2000) 79 Cal.App.4th 553, 556, 558 [moving party did not claim a right to arbitrate for four months, during which it answered the complaint and fully participated in discovery to test the validity of plaintiff’s claims, causing plaintiff to disclose more of its trial tactics than it would have disclosed in arbitration]; Bower v. Inter-Con Security Systems, Inc. (2014) 232 Cal.App.4th 1035, 1045–1047 [defendant required plaintiff to respond to discovery that would have been unavailable in arbitration, forced plaintiff to incur legal fees on work that would have been useless in arbitration, and attempted to settle a putative class action while the class was of modest size, only moving to compel arbitration when plaintiff sought an amendment that would have expanded the class]; Augusta v. Keehn & Associates (2011) 193 Cal.App.4th 331, 338-339, 341-342 [party seeking to enforce arbitration agreement waited over six months after filing lawsuit to move to compel arbitration, in the meantime using the court’s processes to obtain formal discovery not available in arbitration, while refusing to reciprocate in discovery]; Davis v. Continental Airlines, Inc. (1997) 59 Cal.App.4th 205, 215 [party seeking arbitration used the discovery process to gain information about the plaintiff’s case, which it could not have obtained in arbitration, and then sought to compel arbitration where the plaintiff could not have equivalent discovery]; Sobremonte v. Superior Court, supra, 61 Cal.App.4th at pp. 995–996 [moving party did not seek arbitration until a little over a month before trial, opponent meanwhile spent 200 hours in 10 months preparing the case for a full trial at considerable expense, and the parties engaged in discovery procedures more expansive than those available through arbitration].) In all of these cases, there was an undercurrent of unfairness in enforcing the arbitration rights of an unreasonably dilatory party; here, there is not.

In light of the strong public policy favoring arbitration of disputes, as well as our Supreme Court’s directive to closely scrutinize waiver claims and its admonition that

“any doubts regarding a waiver allegation should be resolved in favor of arbitration,” we conclude that respondents failed to meet their “heavy burden” of establishing a waiver. (St. Agnes, supra, 31 Cal.4th at p. 1195.) We further conclude that substantial evidence did not support the trial court’s findings of a substantial invocation of the litigation machinery, important intervening steps, or prejudice. Because waiver was the trial court’s sole ground for denying Sotheby’s motion to compel arbitration, and respondents made no other argument in opposition to the motion, we will reverse the order.

III. DISPOSITION

The order denying Sotheby’s motion to compel arbitration is reversed.

NEEDHAM, J.

We concur.

JONES, P.J.

SIMONS, J.

Teed v. Sotheby’s International Realty / A154707