California Supreme Court Watch

#22-234 Quach v. California Commerce Club, Inc., S275121. (B310458; 78 Cal.App.5th 470; Los Angeles County Superior Court; 19STCV42445.) Petition for review after the Court of Appeal reversed an order denying a petition to compel arbitration in a civil action. This case presents the following issue: Does California’s test for determining whether a party has waived its right to compel arbitration by engaging in litigation remain valid after the United States Supreme Court decision in Morgan v. Sundance, Inc. (2022) ___ U.S. ___ [142 S.Ct. 1708]?

Review granted: 8/24/2022

Case fully briefed: 12/27/2022

Cause argued and submitted: 5/21/2024

Opinion filed; judgment reversed: 7/25/2024

See the Court of Appeal Opinion.

See the Petition for Review.

See the Oral Argument.

See the California Supreme Court Opinion.  (Quach v. California Commerce Club, Inc. (2024) 16 Cal.5th 562.)

“[U]nder California law, as under federal law, a court should apply the same principles that apply to other contracts to determine whether the party seeking to enforce an arbitration agreement has waived its right to do so. The Court of Appeal below applied an arbitration-specific prejudice requirement to overrule the trial court’s order denying California Commerce Club’s motion to compel arbitration. We now reverse.

…

The record in this case shows that, being fully aware of its right to compel arbitration, Commerce Club chose not to do so for 13 months, affirmatively indicated its intent to pursue a jury trial rather than arbitration, and actively engaged in discovery — words and conduct markedly inconsistent with an intent to arbitrate. Accordingly, we conclude Commerce Club waived its right to arbitrate the dispute.”

Justice Groban authored the opinion of the Court, in which Chief Justice Guerrero and Justices Corrigan, Liu, Kruger, Jenkins, and Evans concurred.

In the news: No Special Waiver Standard Applies to Arbitration Right, Metropolitan News-Enterprise (July 26, 2024).