Quach v. Cal. Commerce Club

Filed 5/10/22; on rehearing (prior 4/14/22 nonpub opinion vacated)
CERTIFIED FOR PARTIAL PUBLICATION*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

PETER QUACH, B310458

Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. 19STCV42445)
v.

CALIFORNIA COMMERCE
CLUB, INC.,

Defendant and Appellant.

APPEAL from an order of the Superior Court of
Los Angeles County, Michael L. Stern, Judge. Reversed and
remanded with directions.

*
Pursuant to California Rules of Court, rules 8.1105(b)
and 8.1110, this opinion is certified for publication, with the
exception of part B of the Discussion.
 Sanders Roberts, Reginald Roberts, Jr., Eric S. Mintz,
Ayan K. Jacobs; Benedon & Serlin, Wendy S. Albers and Gerald
M. Serlin for Defendant and Appellant.
Law Offices of Dilip Vithani, Dilip Vithlani; Law Office of
Jonathan J. Moon and Jonathan J. Moon for Plaintiff and
Respondent.
_______________________

California Commerce Club, Inc. (Commerce Club) appeals
from an order denying its motion to compel arbitration of a
dispute with its former employee, Peter Quach, respondent here.
Quach argued below that Commerce Club had waived its right to
arbitrate by waiting 13 months after the filing of the lawsuit to
move to compel arbitration, and by engaging in extensive
discovery during that period. Quach claimed the delay prejudiced
him by forcing him to expend time and money preparing for
litigation. The trial court agreed, finding Commerce Club had
waived the right to arbitrate by propounding a “large amount of
written discovery,” taking Quach’s deposition, and expending
“significant time meeting and conferring.”
We disagree with the trial court. Our Supreme Court has
made clear that participation in litigation alone cannot support a
finding of waiver, and fees and costs incurred in litigation alone
will not establish prejudice on the part of the party resisting
arbitration. (St. Agnes Medical Center v. PacifiCare of California
(2003) 31 Cal.4th 1187, 1203 (St. Agnes Medical Center).) This
rule has particular force here, where Quach admitted he incurred
no costs in litigation that he would not otherwise have expended
had the case gone to arbitration earlier.

2
 Although Quach argues later Supreme Court authority has
approved of Court of Appeal cases diluting the rule from
St. Agnes Medical Center, those cases nonetheless involved a
showing that a party’s unreasonable delay in asserting the right
to arbitrate prejudiced the party resisting arbitration. That
showing is absent in the instant case.
In the unpublished portion of the opinion, we reject Quach’s
alternative argument that the arbitration agreement is
unconscionable.
Accordingly, we reverse and direct the trial court to grant
Commerce Club’s motion to compel arbitration.

FACTUAL AND PROCEDURAL BACKGROUND1
Commerce Club operates a hotel and casino in Commerce,
California. In 1989, it hired Quach to supervise activity on the
gambling floor of the casino.
In 2015, Commerce Club required all its employees to sign
a new arbitration policy as a condition of continued employment.
The agreement required employees to submit any covered dispute
to an informal resolution process within the company, and, if
necessary, to resolve the dispute through arbitration. The
agreement covered “all matters directly or indirectly related to
[Quach’s] recruitment, employment, or termination of
employment.” Quach signed and returned his copy of the
agreement on February 18, 2015.

1 Our factual recitation is presented in the light most
favorable to the trial court’s ruling, including assuming the trial
court found credible the factual assertions in Quach’s opposition
to Commerce Club’s motion to compel arbitration.

3
 On November 16, 2018, Commerce Club terminated
Quach’s employment after a customer paid the casino with $100
in counterfeit bills during Quach’s shift.
On November 22, 2019, after receiving a right-to-sue letter
from the Department of Fair Employment & Housing, Quach
filed a lawsuit against Commerce Club. Among other things, the
lawsuit alleged causes of action for wrongful termination, age
discrimination, retaliation, and harassment.
On January 7, 2020, Commerce Club filed its answer to the
complaint. Although it asserted Quach should be compelled to
arbitrate “[t]o the extent that [he] has agreed to arbitrate any or
all of the purported claims asserted in the [c]omplaint,”
Commerce Club did not move to compel arbitration at that time.
It propounded an initial set of discovery requests, consisting of
form interrogatories, special interrogatories, requests for
admission, and requests for production of documents. It posted
jury fees on March 3, 2020, and sent responses to Quach’s
discovery requests on March 6, 2020.
On March 4, 2020, the Governor declared a statewide state
of emergency due to the global COVID-19 pandemic. On
March 23, 2020, the Chief Justice of the California Supreme
Court issued the first in a series of emergency orders delaying
lower court proceedings for the foreseeable future.2
On March 25, 2020, Commerce Club propounded a second
set of special interrogatories on Quach. It also engaged in a meet
and confer process with Quach to address concerns Quach raised
with Commerce Club’s discovery responses. Among other things,

2 We take judicial notice of these orders sua sponte.
(Evid. Code, § 452, subd. (c).)

4
Quach informed Commerce Club in May 2020 that Commerce
Club had not provided verifications for any of its discovery
responses. According to a declaration provided by Quach’s
counsel, “the meet and confer process was put on hold while
[Quach] waited for [Commerce Club] to provide verifications.”
On June 23, 2020, Commerce Club took Quach’s deposition
via Zoom in a full-day session.
On September 16, 2020, the trial court on its own motion
continued the trial date, previously set for December 7, 2020, to
July 19, 2021, with the final status conference continued from
November 19, 2020, to July 1, 2021.
Also on September 16, 2020, Commerce Club served the
verifications Quach had requested in May 2020.
On October 9, 2020, Commerce Club participated in
another meet and confer process with Quach, ultimately agreeing
to provide supplemental responses to Quach’s discovery requests.
On October 29, 2020, Commerce Club informed Quach’s
counsel that it had located Quach’s complete arbitration
agreement, and it asked for Quach’s stipulation to stay his
lawsuit and resolve the dispute through arbitration. Quach
refused, asserting that Commerce Club had waived its right to
arbitrate.
On December 23, 2020, 13 months after Quach filed his
lawsuit, Commerce Club filed a motion to compel arbitration.
The motion, citing a declaration from Commerce Club’s executive
director of human resources, contended that Commerce Club
initially was unable to locate a complete copy of the arbitration
agreement signed by Quach, and only discovered it when
reviewing Quach’s employment file in responding to Quach’s
requests for production of documents. Commerce Club argued

5
Quach suffered no prejudice from the delay, because the parties
had engaged in only “minimal discovery” due to Commerce Club
closing operations during the COVID-19 pandemic, “which has
impacted access to information and witnesses.”
In opposition, Quach argued that Commerce Club had
waived the right to arbitrate. He claimed Commerce Club was
aware it possessed a copy of the arbitration agreement from the
beginning, because it had provided him a copy of his signed
signature page from the agreement before the lawsuit was filed.
He asserted that Commerce Club’s delay in seeking to arbitrate
was prejudicial because he had spent time and money preparing
for litigation. Alternatively, he argued the agreement was
unconscionable and unenforceable.
On January 22, 2021, the trial court denied Commerce
Club’s motion, finding that Commerce Club had waived its right
to arbitration. The court reasoned that Commerce Club had
engaged in a “litany of pretrial exchanges and actions,” despite
knowing of its right to compel arbitration and its company policy
to secure signed arbitration agreements from each employee.
The trial court also found that Commerce Club had presented a
“large amount of written discovery,” “tak[en] [Quach’s]
deposition,” and spent “significant time meeting and conferring
over many months,” and concluded that this evidence showed “a
position inconsistent to arbitrate and resulting prejudice to
[Quach].” The trial court did not reach the issue of
unconscionability.
Commerce Club timely appealed.

6
 DISCUSSION

A. Commerce Club Did Not Waive the Right To
Arbitration
We disagree with the trial court’s conclusion that
Commerce Club, through its conduct, waived the right to demand
arbitration.

1. Applicable law
“California law strongly favors arbitration” “ ‘ “as a speedy
and relatively inexpensive means of dispute resolution.” ’
[Citation.]” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125
(OTO).) Code of Civil Procedure section 1281.2, subdivision (a),
however, provides grounds for denying a petition to compel
arbitration, including when “[t]he right to compel arbitration has
been waived by the petitioner.”
“ . . . ‘California courts have found a waiver of the right to
demand arbitration in a variety of contexts, ranging from
situations in which the party seeking to compel arbitration has
previously taken steps inconsistent with an intent to invoke
arbitration [citations] to instances in which the petitioning party
has unreasonably delayed in undertaking the procedure.
[Citations.] . . . [Citation.]’ [Citation.]” (Iskanian v. CLS
Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 374–375
(Iskanian).) “In light of the policy in favor of arbitration, ‘waivers
are not to be lightly inferred and the party seeking to establish a
waiver bears a heavy burden of proof.’ [Citation.]” (Id. at
p. 375.)
Waiver of the right to arbitrate is assessed through a
number of factors, including: “ ‘ “ ‘(1) whether the party’s actions
are inconsistent with the right to arbitrate; (2) whether “the

7
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 either requested arbitration enforcement 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 asking for a stay of the proceedings; (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.’ ” ’ [Citation.]” (Iskanian, supra, 59 Cal.4th
at p. 375, quoting St. Agnes Medical Center, supra, 31 Cal.4th at
p. 1196.)
“No one of these factors predominates and each case must
be examined in context.” (Lewis v. Fletcher Jones Motor Cars,
Inc. (2012) 205 Cal.App.4th 436, 444; see also St. Agnes Medical
Center, supra, 31 Cal.4th at p. 1195 [“no single test delineates the
nature of the conduct that will constitute a waiver of
arbitration”].) The question of prejudice, however, “is critical in
waiver determinations.” (St. Agnes Medical Center, at p. 1203;
accord, Iskanian, at pp. 376–377; see Hoover v. American Income
Life Ins. Co. (2012) 206 Cal.App.4th 1193, 1205 (Hoover) [“The
presence or absence of prejudice from the litigation is a
determinative issue” in waiver analysis].)
“ ‘The question of waiver is generally a question of fact, and
the trial court’s finding of waiver is binding on us if it is
supported by substantial evidence. [Citation.] “We infer all
necessary findings supported by substantial evidence [citations]
and ‘construe any reasonable inference in the manner most
favorable to the judgment, resolving all ambiguities to support an

8
affirmance.’ ” ’ ” (Garcia v. Haralambos Beverage Co. (2021)
59 Cal.App.5th 534, 541–542.) “Where the relevant facts are
undisputed and only one inference may reasonably be drawn
from the facts, the waiver issue may be reviewed de novo.”
(Fleming Distribution Co. v. Younan (2020) 49 Cal.App.5th 73, 81
(Fleming).)

2. Analysis
Even deferring to the trial court’s factual findings under a
substantial evidence standard of review, we conclude Quach’s
showing of prejudice was inadequate as a matter of law, and he
therefore failed to meet his “ ‘heavy burden’ ” below. (Iskanian,
supra, 59 Cal.4th at p. 375.)
In his opposition below, Quach contended Commerce Club
had “acted inconsistently with an intent to arbitrate” “by
propounding and responding to discovery, engaging in the meet
and confer process regarding those responses, posting jury fees,
and taking [Quach’s] deposition.” He claimed he had “been
prejudiced by expending time and money on the litigation in this
case.” The trial court appears to have accepted this argument,
stating that Commerce Club’s participation in discovery “shows
both a position inconsistent to arbitrate and resulting prejudice
to [Quach].”
Quach’s showing was insufficient as a matter of law to
establish waiver. In St. Agnes, our Supreme Court held that
“ ‘ “[w]aiver does not occur by mere participation in litigation” ’ if
there has been no judicial litigation of the merits of arbitrable
issues . . . . [Citation.]” (St. Agnes Medical Center, supra,
31 Cal.4th at p. 1203.) In the instant case, there has “been no
judicial litigation of the merits of arbitrable issues,” and therefore
no waiver on that basis. (Ibid.)

9
 Further, although “ ‘ “ ‘waiver could occur prior to a
judgment on the merits if prejudice could be demonstrated,’ ” ’ ”
(St. Agnes Medical Center, supra, 31 Cal.4th at p. 1203, italics
added), the Supreme Court has made clear that litigation
expenses alone cannot support a claim of prejudice: “Because
merely participating in litigation, by itself, does not result in a
waiver, courts will not find prejudice where the party opposing
arbitration shows only that it incurred court costs and legal
expenses.” (Ibid.)
“Rather,” continued the court, “courts assess prejudice with
the recognition that California’s arbitration statutes reflect ‘ “a
strong public policy in favor of arbitration as a speedy and
relatively inexpensive means of dispute resolution” ’ and are
intended ‘ “to encourage persons who wish to avoid delays
incident to a civil action to obtain an adjustment of their
differences by a tribunal of their own choosing.” ’ [Citation.]
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.”
(St. Agnes Medical Center, supra, 31 Cal.4th at p. 1204.) “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].”
(Ibid.)

10
 Quach has not met St. Agnes’s test. His showing below
indicated nothing more than the parties participated in litigation.
That participation, moreover, largely was limited to party-
directed discovery, with no trial court involvement, and certainly
no determinations by the court on the merits. Quach has not
shown any prejudice apart from the expenditure of time and
money on litigation. He does not, for example, claim Commerce
Club has gained information or conducted discovery it would not
have been able to obtain in arbitration or that the delay led to
lost evidence. Commerce Club moved to compel arbitration
almost seven months before the then-operative trial date, not on
the “eve of trial.”3 (See St. Agnes Medical Center, supra,
31 Cal.4th at p. 1204.)
Quach argues that cases cited in the Supreme Court’s later
decision in Iskanian establish that litigation expenses can
support a finding of prejudice if they are the result of a party’s
“unreasonable” delay in asserting the right to arbitrate. Iskanian
stated, “Some courts have interpreted St. Agnes Medical Center
to allow consideration of the expenditure of time and money in
determining prejudice when the delay is unreasonable.”
(Iskanian, supra, 59 Cal.4th at p. 377.) As an example, the court
quoted Burton v. Cruise (2010) 190 Cal.App.4th 939 (Burton),
which held that “ ‘a petitioning party’s conduct in stretching out
the litigation process itself may cause prejudice by depriving the
other party of the advantages of arbitration as an “expedient,
efficient and cost-effective method to resolve disputes.”

3 As previously noted, the trial court had previously
continued the initial trial date so that when Commerce Club
moved to compel arbitration in December 2020, the trial date was
set for July 2021.

11
[Citation.] Arbitration loses much, if not all, of its value if undue
time and money is lost in the litigation process preceding a last-
minute petition to compel.’ [Citation.]” (Iskanian, at p. 377,
quoting Burton, at p. 948.)
Iskanian then cited to “[o]ther courts [that] have likewise
found that unjustified delay, combined with substantial
expenditure of time and money, deprived the parties of the
benefits of arbitration and was sufficiently prejudicial to support
a finding of waiver to arbitrate.” (Iskanian, supra, 59 Cal.4th at
p. 377, citing Hoover, supra, 206 Cal.App.4th at p. 1205;
Roberts v. El Cajon Motors, Inc. (2011) 200 Cal.App.4th 832, 845–
846 (Roberts); Adolph v. Coastal Auto Sales, Inc. (2010)
184 Cal.App.4th 1443, 1451 (Adolph); Guess?, Inc. v. Superior
Court (2000) 79 Cal.App.4th 553, 558 (Guess?, Inc.); Sobremonte
v. Superior Court (1998) 61 Cal.App.4th 980, 996 (Sobremonte).)
The court in Iskanian found these authorities inapplicable,
however, because “[i]n each of them, substantial expense and
delay were caused by the unreasonable or unjustified conduct of
the party seeking arbitration.” (Iskanian, supra, 59 Cal.4th at p.
377.) In Iskanian, in contrast, the court concluded the delay in
seeking arbitration was reasonable and excusable given the
fluctuating state of the law at the time as to the arbitrability of
the particular claims at issue. (Id. at pp. 376–378.)
In light of Iskanian, Quach argues that the proper test for
waiver is whether Commerce Club’s delay in asserting its right to
arbitration was “reasonable.” (See Bower v. Inter-Con Security
Systems, Inc. (2014) 232 Cal.App.4th 1035, 1048 (Bower) [“The
distinction in the case law turns on whether any delay in seeking

12
arbitration is reasonable.”].)4 Quach contends Commerce Club’s
delay was not reasonable, because the evidence showed
Commerce Club knew of the arbitration agreement even before
the lawsuit was filed, yet waited more than a year before moving
to compel arbitration. “By then,” he contends, “all benefits of a
speedy resolution [Quach] could have obtained through
arbitration had been lost.”
An examination of the cases cited in Iskanian, however,
reveals that the showing of prejudice and/or undue delay in those
cases was qualitatively different from Quach’s showing here.
In Burton, the plaintiff moved to compel arbitration so close
to the trial date that she had to seek ex parte relief to shorten
time to hear the motion. The appellate court concluded that
granting the motion would have actually lengthened the
proceedings by requiring the parties to take extra time to select
the arbitrators: “ ‘Starting anew in an arbitral forum at that late
date would delay resolution of the dispute, not advance it.’
[Citation.]” (Burton, supra, 190 Cal.App.4th at p. 949.) The
defendant was further prejudiced because, on the assumption he
was preparing for a jury trial, he already had selected and
prepared experts specifically suited for testifying to a jury rather
than a more technically adept arbitration panel. (Id. at pp. 949–
950.)
In Hoover, the evidence showed that the defendant, the
party seeking to compel arbitration, had delayed asserting its

4 It is not clear to us that Iskanian, in citing Burton and
the other Court of Appeal decisions, was endorsing them as
opposed merely to distinguishing them. We need not decide that
question, because as we explain, those cases are distinguishable
from and inapplicable to the instant case as well.

13
right to arbitrate while it “availed itself of discovery mechanisms
like depositions not available in arbitration” and “solicited
putative class members, in an effort to reduce the size of the
class.” (Hoover, supra, 206 Cal.App.4th at p. 1205.) The
defendant also had engaged in extensive litigation requiring
court involvement, including two attempts to remove the case to
federal court, a demurrer, discovery disputes, and opposing a
temporary restraining order. (Id. at pp. 1200, 1205.)
In Roberts, the defendant’s delay in asserting the right to
arbitration led to the plaintiff expending substantial time and
money conducting class discovery, much or all of which “would be
rendered useless” if the matter proceeded to arbitration given a
class action waiver in the arbitration agreement. (Roberts, supra,
200 Cal.App.4th at p. 845.) The defendant also used the delay
between filing its answer and moving to compel arbitration to
seek out putative class members and attempt to settle with them,
an action the reviewing court held was inconsistent with an
intent to arbitrate and prejudicial to the plaintiff. (Id. at p. 847.)5
In Adolph, the court affirmed the trial court’s finding that
the defendants intended to proceed with the court action up until
the point the trial court overruled their second demurrer, at
which point they suddenly produced the previously undisclosed
arbitration agreement and moved to compel arbitration. (Adolph,
supra, 184 Cal.App.4th at p. 1451.) The Court of Appeal stated it
was “loathe to condone conduct by which a defendant repeatedly

5 The dissent states that Hoover and Roberts, as class
action cases, “have little relevance to someone in Quach’s
position.” (Dis. opn. post, at p. 6.) We agree. We address them
only because Quach relies on Iskanian’s purported approval of
those cases and others to support his position.

14
uses the court proceedings for its own purposes (challenging the
pleadings with demurrers) while steadfastly remaining
uncooperative with a plaintiff who wishes to use the court
proceedings for its purposes (taking depositions) . . . .” (Id. at
p. 1452.) The court held the evidence supported a finding of bad
faith on the part of defendants. (Ibid.) As in Burton, the court
also found that given the late date at which the defendants
moved to compel arbitration, switching to the arbitral forum
would further delay the proceedings. (Adolph, at p. 1452.)
In Guess?, Inc., the court concluded that Guess?, Inc., the
party resisting arbitration, had suffered prejudice because of the
“substantial expense of pretrial discovery and motions that would
have been avoided had Kirkland [the party moving to compel
arbitration] timely and successfully asserted a right to arbitrate.
Through its use of the discovery process, Guess has disclosed at
least some of its trial tactics to Kirkland, certainly more so than
would have been required in the arbitral arena. ” (Guess?, Inc.,
supra, 79 Cal.App.4th at p. 558.)
In Sobremonte, akin to Roberts and Guess?, Inc., the parties
resisting arbitration spent time and money on discovery and
proceedings that would have not occurred in arbitration.
(Sobremonte, supra, 61 Cal.App.4th at p. 995.) The party seeking
to compel arbitration, moreover, had taken “ ‘ “advantage of
judicial discovery procedures not available in arbitration.” ’
[Citation.]” (Ibid.) That party also engaged in substantial
litigation requiring judicial involvement, including filing
demurrers, resisting motions to compel discovery, seeking
protective orders, and attempting to transfer the matter to
municipal court. (Id. at pp. 995–996.)

15
 Quach has made no showing comparable to those in the
cases described above. Perhaps most crucially, he provided no
evidence or argument, other than conclusory statements, that he
had spent time or money engaging in proceedings or preparation
he would have avoided had Commerce Club asserted its right to
arbitrate sooner. Indeed, at oral argument Quach’s counsel
conceded Quach had incurred no such expenses. Nor has Quach
made any effort to show that moving to an arbitral forum at this
point will delay proceedings, as the late-filed motions to compel
arbitration did in Burton and Adolph.
The record also is bereft of evidence that Commerce Club
engaged in bad faith abuse of judicial processes akin to the
defendants in Adolph, who used judicial mechanisms such as
demurrers to their advantage while resisting the plaintiff’s use of
other judicial mechanisms. Instead, the parties engaged only in
party-directed discovery, and had yet to involve the trial court or
invoke its powers through demurrers, motion practice, or
otherwise.
Quach argues that Commerce Club was recalcitrant in
responding to his discovery requests while aggressively pursuing
its own discovery, suggesting “it was more interested in delay
than expeditious resolution through arbitration.” Quach has
made no effort to show, however, that this would have been
avoided had the parties been in an arbitral forum. That is,
Quach makes no effort to show that the arbitrator or the
applicable arbitration rules would have altered the discovery the
parties sought or prevented Commerce Club’s purported delay
tactics.
Quach cites additional cases postdating Iskanian, but they
are similarly unavailing. In Bower, the court affirmed a finding

16
of waiver when the defendant “substantially impaired [the
plaintiff’s] ability to obtain the cost savings and other benefits
associated with arbitration” by “requir[ing] [the plaintiff] to
respond to discovery that would have been unavailable in
arbitration. It was not just that [the plaintiff] incurred legal fees
and costs; those expenses were associated with work that would
be useless in arbitration.” (Bower, supra, 232 Cal.App.4th at
p. 1046.)
In Fleming, the employer did not move to compel
arbitration until after its former employee had prevailed on a
claim of unpaid wages and commissions before the Labor
Commissioner. (Fleming, supra, 49 Cal.App.5th at p. 78.) The
Court of Appeal affirmed the trial court’s finding of waiver,
stating the employee “suffered the prejudice of waiting several
years to collect wages that at least one tribunal has determined
he was owed, when the matter could have been arbitrated . . . if
[the employer] had sought to compel arbitration” earlier. (Id. at
p. 83.)
In contrast, again, Quach has made no showing that he has
spent any time or money on litigation that he would not have
spent had Commerce Club moved to compel arbitration earlier.
Nor does he offer any evidence or other basis to conclude that his
claims would have been resolved more quickly in arbitration.
Commerce Club’s delay is not comparable to the employer in
Fleming, which did not move to compel arbitration until the
Labor Commissioner had issued a ruling on the merits against it.
Also distinguishable is the recent decision by our colleagues
in Division Eight, Kokubu v. Sudo (2022) 76 Cal.App.5th 1074,
which upheld the trial court’s finding that the appellants had
waived their right to arbitrate. (Id. at p. 1079.) The appellants

17
in that case had, inter alia, withdrawn an earlier arbitration
demand, acknowledged that they “secretly intended to avail
themselves of rights unique to the court before seeking to compel
arbitration,” engaged in judicial discovery not available
in arbitration, and “substantially invoked the litigation
machinery” by filing a cross-complaint, 10 motions, propounding
discovery, and obtaining relief with respect to a lis pendens.
(Id. at pp. 1086–1087.) The record here shows no conduct akin to
that in Kokubu.
Quach suggests that Commerce Club’s purported reasons
for its delay in moving to compel arbitration—closures due to
COVID-19 and the inability to find a complete signed copy of the
arbitration agreement—were pretextual, and nothing prevented
Commerce Club from asserting its right to arbitrate at the outset
of the lawsuit. The trial court similarly found that Commerce
Club “knew of its right to compel arbitration,” and failure to “find
the proper documents is not an excuse for not moving to compel
arbitration at a much earl[ier] time.”
As the case authority we have discussed above establishes,
a party’s delay in asserting the right to arbitrate is not
“unreasonable” merely because the party could have asserted it
at an earlier time. Rather, what makes the delay “unreasonable”
is that it negatively impacts the party resisting arbitration, such
as by requiring that party to expend resources it otherwise would
have saved by arbitrating the dispute, or by allowing the party
asserting arbitration to take advantage of judicial processes not
available in arbitration. Quach has failed to show negative
impact from Commerce Club’s delay.
The dissent contends we should infer from Commerce
Club’s “lack of candor” regarding the reasons for its delay that

18
Commerce Club deliberately delayed the proceedings and
subjected Quach to judicial discovery “to intimidate a vulnerable
at-will employee who lacks the economic resources to cope with
such delay.” (Dis. opn. post, at p. 8.) Respectfully, this is pure
speculation, and goes far beyond the trial court’s findings, which
were that Commerce Club’s explanations did not excuse the
delay. There is no indication the trial court inferred nefarious
intent, nor shall we on this record.
The dissent at various points intimates we are imposing an
unreasonable or unnecessary evidentiary burden on parties
seeking to establish waiver of arbitration. We merely hold that
when a party resisting arbitration makes no showing other than
a lengthy delay during which the parties engaged in party-
directed discovery—with no indication that discovery would have
been unavailable or unnecessary in arbitration or that the party
incurred costs that it would not otherwise have incurred had
arbitration occurred earlier—that showing runs afoul of St. Agnes
Medical Center’s admonitions that “ ‘ “[w]aiver does not occur by
mere participation in litigation” ’ ” and “courts will not find
prejudice where the party opposing arbitration shows only that it
incurred court costs and legal expenses.” (St. Agnes Medical
Center, supra, 31 Cal.4th at p. 1203.) Our holding here is based
on Quach’s failure to show anything beyond what St. Agnes
Medical Center already has declared insufficient to prove waiver.
Although the dissent suggests we are “overextend[ing]
ourselves to preserve a compulsory arbitration agreement” (dis.
opn. post, at p. 2), we are merely applying well-established
principles set forth by our high court. This we must do regardless
of the dissent’s views on the fairness of compelling plaintiffs to

19
arbitrate pursuant to an agreement signed as a condition of
employment.

B. Quach Fails To Show The Arbitration Agreement Is
Unconscionable
Quach argues that even if Commerce Club did not waive
the right to arbitrate, the arbitration agreement is
unconscionable and unenforceable. We disagree.

1. Applicable law
“ ‘ “[G]enerally applicable contract defenses, such as . . .
unconscionability, may be applied to invalidate arbitration
agreements without contravening” the FAA’ or California law.”
(OTO, supra, 8 Cal.5th at p. 125.)
“A contract is unconscionable if one of the parties lacked a
meaningful choice in deciding whether to agree and the contract
contains terms that are unreasonably favorable to the other
party. [Citation.] Under this standard, the unconscionability
doctrine ‘ “has both a procedural and a substantive element.” ’
[Citation.] ‘The procedural element addresses the circumstances
of contract negotiation and formation, focusing on oppression or
surprise due to unequal bargaining power. [Citations.]
Substantive unconscionability pertains to the fairness of an
agreement’s actual terms and to assessments of whether they are
overly harsh or one-sided.’ [Citation.]” (OTO, supra, 8 Cal.5th at
p. 125.)
“Both procedural and substantive unconscionability must
be shown for the defense to be established, but ‘they need not be
present in the same degree.’ [Citation.] Instead, they are
evaluated on ‘ “a sliding scale.” ’ [Citation.]” (OTO, supra,

20
8 Cal.5th at p. 125.) “The burden of proving unconscionability
rests upon the party asserting it.” (Id. at p. 126.)
If an arbitration agreement contains unconscionable
provisions, the court “ ‘must determine whether these terms
should be severed, or whether instead the arbitration agreement
as a whole should be invalidated.’ [Citation.]” (Lange v. Monster
Energy Co. (2020) 46 Cal.App.5th 436, 452–453 (Lange).) “ ‘[T]he
strong legislative and judicial preference is to sever the offending
term and enforce the balance of the agreement,’ ” unless the
“ ‘ “agreement is ‘permeated’ by unconscionability.” ’ [Citations.]”
(Id. at p. 453.)
In the absence of conflicting evidence, whether an
arbitration provision is unconscionable presents an issue of law
we review de novo. (Swain v. LaserAway Medical Group, Inc.
(2020) 57 Cal.App.5th 59, 66.) Thus, although the trial court in
the instant case did not reach the issue of unconscionability, we
may resolve the issue on undisputed facts as a matter of law in
the first instance.

2. Analysis
We will presume Quach has made a showing of at least
some procedural unconscionability, given the evidence that
Commerce Club required him to sign the arbitration agreement
as a condition of continued employment. (See Najarro v. Superior
Court (2021) 70 Cal.App.5th 871, 883–884.) We nonetheless
conclude he has made an insufficient showing of substantive
unconscionability to invalidate the agreement.

21
 Quach first attacks the following paragraphs in the
arbitration agreement:6 “In the event of any dispute, prior to
commencing any legal action, [the employee] or the Company,
whichever is the complaining party, shall give prompt written
notice to the other . . . of the nature of the dispute, claim or
controversy. Upon the receipt of such written notice, the Parties
agree to meet within 30 days in person to discuss in good faith
the dispute, claim or controversy for the purpose of attempting to
resolve it informally. [¶] If the Parties cannot resolve their
differences in that informal dispute resolution process, then all
claims relating to [the employee’s] recruitment, employment
with, or termination of employment from the Company shall be
deemed waived unless submitted to final and binding arbitration
by JAMS . . . .”
Quach argues the requirement of informal, nonbinding
mediation “ha[s] no meaning to [Quach], unless he retains
counsel.” The very purpose of mediation is to work out disputes
without having to proceed to litigation or arbitration, which is of
benefit to all parties. We see nothing unconscionable in requiring
the parties to do so, and Quach cites no authority to the contrary.
Quach next contends the above quoted language requires
him to “resolve the dispute within 30 days.” (Italics & boldface
omitted.) This misreads the language, which requires only that

6 Quach characterizes the arguments concerning these
paragraphs as pertaining to procedural unconscionability, but
because he is challenging the terms of the agreement itself, his
argument is better characterized as one of substantive
unconscionability. (OTO, supra, 8 Cal.5th at p. 125
[“ ‘Substantive unconscionability pertains to the fairness of an
agreement’s actual terms . . . .’ [Citation.]”].)

22
the parties meet to discuss their dispute within 30 days after one
has served notice of a dispute on the other.
Quach then challenges the language stating that an
employee waives claims not submitted to JAMS for arbitration.
Quach reads this language to provide that “if an employee waits
6 months after a failed mediation, he is out of luck.” We see
nothing in the language setting a deadline for when an employee
must arbitrate claims following an unsuccessful mediation.
Rather, the language indicates that to the extent the employee
wishes to pursue claims following mediation, the employee must
do so through arbitration.
Turning to other provisions of the arbitration agreement,
Quach contends the agreement unfairly exempts from arbitration
claims likely to be brought by Commerce Club, such as claims for
violation of confidentiality or theft of trade secrets, while
requiring the employee to arbitrate most claims. This argument
fails because Quach does not identify any language in the
arbitration agreement establishing this purported exemption for
employer claims, nor can we find any such language. Rather, the
agreement applies to “all matters directly or indirectly related to
[the employee’s] recruitment, employment, or termination of
employment.” This broad language would encompass claims by
Commerce Club against Quach for confidentiality or trade secret
violations, which would be “related to” his “employment.” Indeed,
the agreement’s only express exemptions are for specific claims
by the employee, such as workers’ compensation benefits,
unemployment insurance benefits, and claims under the National
Labor Relations Act.
Quach next contends the agreement is unconscionable for
incorporating JAMS rules that “subjected [Quach] to a risk of

23
bearing costs forbidden by” case law. Arbitration agreements
between employees and employers “ ‘cannot generally require the
employee to bear any type of expense that the employee would
not be required to bear if he or she were free to bring the action
in court. . . .’ [Citation.]” (O’Hare v. Municipal Resource
Consultants (2003) 107 Cal.App.4th 267, 279, italics omitted.)
Quach does not cite any JAMS rules contravening this principle.
Regardless, the agreement expressly states that any arbitration
fees paid by the employee “shall be limited up to the amount the
Employee would have had to pay had the matter been filed in
court. [Commerce Club] shall pay remaining arbitration
administrative costs and arbitrator’s fees.” Quach’s argument
ignores this language.
Quach argues the agreement fails to “discuss recovery of
fees and costs by [Quach],” suggesting that the agreement might
impair his statutory right to fees and costs under the Fair
Employment and Housing Act (FEHA). We read the agreement’s
silence as to attorney fees and costs to indicate the parties intend
the arbitrator to apply FEHA or other substantive law without
alteration. (Armendariz v. Foundation Health Psychcare
Services, Inc. (2000) 24 Cal.4th 83, 112 [an “agreement to
arbitrate a statutory claim is implicitly an agreement to abide by
the substantive remedial provisions of the statute”].)
Quach argues the agreement is unconscionable because it
requires him to waive his right to bring claims in a
“representative proceeding.” Quach argues this language waives
his right to bring claims under the Labor Code Private Attorneys
General Act of 2004 (Lab. Code, § 2698 et seq.; PAGA), a waiver
the Supreme Court has held is unenforceable as contrary to
public policy. (Iskanian, supra, 59 Cal.4th at p. 384.) Assuming

24
arguendo a PAGA waiver is substantively unconscionable, a
question on which we express no opinion, the solution would be to
sever that provision from the agreement. (See Lange, supra,
46 Cal.App.5th at p. 453.) The PAGA waiver would not justify
invalidating the entire agreement. Also, Quach has not asserted
a PAGA claim, and therefore we need not decide whether to sever
that provision.
Although not raised on appeal, in his opposition to the
motion to compel arbitration below, Quach challenged as
unconscionable the following provision: “In the event that either
party files, and is allowed by the courts to prosecute, a court
action on any claim covered by this agreement, the parties agree
that they each agree not to request, and hereby waives his/her/its
right to a trial by jury.” We have held that a similar provision in
an arbitration agreement waiving a right to a jury trial “ ‘in the
event that any controversy or claim is determined in a court
of law’ ” is substantively unconscionable. (Lange, supra,
46 Cal.App.5th at pp. 451–452.) Assuming arguendo the waiver
here also is unconscionable, again, it would be severable.
The only provisions of the agreement identified by Quach
that arguably support a finding of substantive unconscionability
are severable, and Quach’s other claims of substantive
unconscionability are without merit. There is thus no basis to
invalidate the agreement as unconscionable.

25
 DISPOSITION
The order is reversed. The trial court is directed to grant
California Commerce Club, Inc.’s motion to compel arbitration
and stay further proceedings. California Commerce Club, Inc. is
awarded its costs on appeal.
CERTIFIED FOR PARTIAL PUBLICATION.

BENDIX, J.

I concur:

ROTHSCHILD, P. J.

26
CRANDALL, J.,* Concurring and Dissenting.

The unfairness of compelling non-unionized employees to
forfeit their access to the civil justice system in favor of private
arbitration is well recognized. (Greene & O’Brien, Epic
Backslide: The Supreme Court Endorses Mandatory
Individual Arbitration Agreements–#TimesUp on Workers’
Rights (2019) 15 Stan. J. C.R. & C.L. 43, 45, 47-48 (Epic
Backslide).) In 2018, there were as many as 60 million
American workers subjected to such “agreements,” and that
number is likely much higher today. (Id. at p. 45.) Mandatory
arbitration for such employees is pernicious because economic
and noneconomic pressures can leave them without any viable
forum in which to bring their claims. (Id. at pp. 50, 70-71.)
Although the legality of these compulsory arbitration
agreements must be acknowledged for the present moment as
water under the judicial bridge,1 we should not overextend

1 Were we writing on a clean slate, I would encourage us to
find the entire agreement unconscionable and, hence,
unenforceable. Not only had Peter Quach and his fellow
employees been forced to sign the agreement upon pain of
immediate termination, but, among other things, it made all of
them give up any resort whatsoever to the civil justice system,
including the right to a jury trial in the event the case ever did
make it to court. But the California Supreme Court has made
clear that “ ‘contracts of adhesion’ ” are “ ‘indispensable facts of
modern life that are generally enforced’ ” even though they
“ ‘ “bear within them the clear danger of oppression and
overreaching.” ’ ” (Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th
1237, 1244.) Further, there is a strong legislative and judicial
preference to sever any offending term (here: the jury waiver) and
ourselves to preserve a compulsory arbitration agreement that
the employer has clearly waived, as appellant California
Commerce Club, Inc. (Commerce Club) did in this case with
respect to their at-will employee of 29 years, respondent Peter
Quach.
There is no litmus test for determining whether a party has
waived its right to pursue arbitration under Code of Civil
Procedure section 1281.2, subdivision (a). (Iskanian v. CLS
Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 374-375
(Iskanian); see St. Agnes Medical Center v. PacifiCare of
California (2003) 31 Cal.4th 1187, 1195 [“no single test delineates
the nature of the conduct that will constitute a waiver of
arbitration”] (St. Agnes).) Rather, waiver depends upon a variety
of factors, including: “ ‘ “ ‘(1) whether the party’s actions are
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 either requested arbitration enforcement close to the trial
date or delayed for a long period before seeking 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.’ ” ’ ” (Iskanian, supra, at p. 375.)
Despite asserting arbitration as an affirmative defense in
its answer and notwithstanding the litigation difficulties caused
by the onset of the COVID-19 pandemic, Commerce Club actively

enforce the balance of such agreements. (Lange v. Monster
Energy Co. (2020) 46 Cal.App.5th 436, 455.) Accordingly, I
reluctantly concur in the second part of the majority decision.

2
pursued a course of action evidencing every intention of fully
utilizing the civil justice system. It attended case management
conferences, propounded multiple sets of written interrogatories
and requests for admission, engaged in multiple meet-and-confer
meetings with opposing counsel, tasked Quach and his counsel
with analyzing over 900 pages of the company’s responses to his
written discovery, posted jury fees, and required Quach to sit for
a full day of an expected multi-day deposition on the Zoom
platform.
Under Iskanian, Commerce Club’s actions were
“ ‘ “ ‘inconsistent with the right to arbitrate’ ” ’ ” as it
“ ‘ “ ‘ “substantially invoked” ’ ” ’ ” the litigation machinery before
its motion to compel arbitration was filed. (Iskanian, supra, 59
Cal.4th at p. 375.) And, because it first moved to compel
arbitration on the very day of the originally scheduled trial date
(having deliberately waited until 13 months after suit had been
filed) we can safely say that Commerce Club “ ‘ “ ‘requested
arbitration enforcement close to the trial date.’ ” ’ ” (Ibid.)
A critical element in determining whether arbitration has
been waived, under both Iskanian and St. Agnes, is “ ‘ “whether
the delay ‘affect[s], misle[ads], or prejudice[s]’ the opposing
party.” ’ ” (St. Agnes, supra, 31 Cal.4th at p. 1196.) Such
prejudice is ordinarily found “where the petitioning party’s
conduct has substantially undermined [the] important public
policy [in favor of arbitration] or substantially impaired the other
side’s ability to take advantage of the benefits and efficiencies of
arbitration.” (Id. at p. 1204; Iskanian, supra, 59 Cal.4th at p. 377
[“ ‘a petitioning party’s conduct in stretching out the litigation
process itself may cause prejudice by depriving the other party of

3
the advantages of arbitration as an “expedient, efficient and cost-
effective method to resolve disputes” ’ ” (italics added)].)
Although Commerce Club blamed its 13-month delay in
seeking arbitration on (1) the COVID-19 pandemic and (2) its
inability to find a fully executed arbitration agreement, the trial
court record raised serious questions about the veracity of these
explanations. Most notably, Quach produced evidence showing
that, before Quach ever filed his lawsuit, Commerce Club’s
counsel had turned over his personnel file, including the fully-
executed second page of Quach’s two-page arbitration agreement,
signed in 2015 by Quach and Commerce Club’s HR director, Jose
Garcia.
Recognizing these (and other) serious inconsistencies in
Commerce Club’s explanations, the trial court concluded: “The
litany of pretrial exchanges and actions by the defendant
demonstrate that [Commerce Club] knew of its right to compel
arbitration as well as company policy and the employee practice
to sign an arbitration agreement. The combined failure of
counsel . . . to not find the proper documents is not an excuse for
not moving to compel arbitration at a much [earlier] time.” In
other words, the trial court essentially concluded that Commerce
Club’s explanations were a pretext that had been fabricated to
justify its tardy motion to compel arbitration.
Given our limited standard of review,2 the trial court’s
reasoning by itself should be sufficient for us to uphold its finding

2 Because the trial court resolved disputed facts regarding
Commerce Club’s delayed arbitration request, we are required to
infer all necessary findings supported by substantial evidence
and construe all reasonable inferences in the manner most
favorable to the judgment. (Garcia v. Haralambos Beverage Co.

4
of waiver. (Adolph v. Coastal Auto Sales, Inc. (2010) 184
Cal.App.4th 1443, 1452 [courts are “loathe to condone conduct by
which a [litigant] repeatedly uses the court proceedings for its
own purposes . . . all the while not breathing a word about . . .
[its] desire to pursue arbitration”]; Iskanian, supra, 59 Cal.4th at
p. 377 [“ ‘a petitioning party’s conduct in stretching out the
litigation process itself may cause prejudice by depriving the other
party of the advantages of arbitration as an “expedient, efficient
and cost-effective method to resolve disputes” ’ ” (italics added)],
quoting Burton v. Cruise (2010) 190 Cal.App.4th 939, 948.)
Case law cautions against resolving arbitration waivers in
a rote or formulaic manner. (Lewis v. Fletcher Jones Motor Cars,
Inc. (2012) 205 Cal.App.4th 436, 444 [“each case must be
examined in context”].) Although Quach’s showing of prejudice is
not identical to the prejudice discussed in other arbitration
cases,3 it is surely meaningful in the context of an at-will

(2021) 59 Cal.App.5th 534, 541-542.) “The appellate court may
not reverse the trial court’s finding of waiver unless the record as
a matter of law compels finding nonwaiver.” (Kokubu v. Sudo
(2022) 76 Cal.App.5th 1074, 1083.) This deferential standard of
review is critical in waiver cases. (Id. at p. 1085 [“Trial courts
are uniquely positioned to evaluate the conduct of litigants before
them within the broader context of a case. Given that the St.
Agnes factors are largely concerned with such conduct, the
deference we give to the trial courts’ factual determinations is
especially warranted in the context of alleged arbitration
waiver”].)
3 While Quach’s out-of-pocket expenditures in this
litigation have not been significant, his trial counsel has already
spent considerable time litigating this case. The dollars and
cents incurred during litigation are only one of many
considerations in evaluating whether prejudice exists; a party’s

5
employee who lacks even the benefit of a collective bargaining
agreement.4
As of this writing, Quach and Commerce Club are well over
two years into litigation, far beyond the time when private
arbitration would have fulfilled its promise “ ‘ “as a speedy and
relatively inexpensive means of dispute resolution.” ’ ” (OTO,
L.L.C. v. Kho (2019) 8 Cal.5th 111, 125.) Indeed, had Commerce
Club’s arbitration motion been filed at the outset, i.e., during the
three and a half months before the onset of the pandemic, the
entire arbitration could well have been completed by now. (See
Kokubu v. Sudo, supra, 76 Cal.App.5th at p. 1091 [finding that a
party caused prejudice by, among other things, “holding their
demand [to compel arbitration], [and thus] delay[ing] resolution
of the case relative to when it might have concluded had they
promptly exercised their right to compel arbitration”].)
Quach should not need to “prove” the obvious point that
Commerce Club’s serious delay in compelling arbitration has
prejudiced him. It is widely known that the alternate dispute
resolution business flourished on remote platforms while this

and counsel’s expenditure of time is another. (See, e.g., Kokubu
v. Sudo, supra, 76 Cal.App.5th at pp. 1087-1088 [evaluating the
reasonableness of a party’s delayed arbitration demand by
examining whether the delay was “accompanied by costs
incurred, changes in strategic advantage, use of disputed
property, consumption of the time of parties and counsel, and
other impacts”].)
4 His case is also dissimilar to Hoover v. American Income
Life Ins. Co. (2012) 206 Cal.App.4th 1193, 1205 and Roberts v. El
Cajon Motors, Inc. (2011) 200 Cal.App.4th 832, 845 and 847.
These class action cases have little relevance to someone in
Quach’s position.

6
case was being litigated, even as the COVID-19 pandemic
significantly disrupted traditional litigation. (Maclachlan, ADR
sees another boom year, becomes ‘way of life,’ L.A. Daily J.
(Dec. 28, 2021); Maclachlan, Mandatory arbitrations are up,
plaintiffs’ attorneys say, L.A. Daily J. (Dec. 27, 2021).)5
We also ask too much of Quach by requiring him
specifically to identify the motivation for Commerce Club’s lack of
candor.6 (Berman v. Health Net (2000) 80 Cal.App.4th 1359,
1372 [“subjective bad faith is not a required element in a finding
of waiver of the right to compel arbitration,” but merely “an
alternative ground for finding waiver,” such that “the crucial
inquiry is not [necessarily] the subjective motivation of the party
seeking arbitration” (capitalization and italics omitted from first
quotation)]; see Adolph v. Coastal Auto Sales, Inc., supra, 184
Cal.App.4th at p. 1452 [“Although the trial court made no express

5 Judicial notice of these articles is proper pursuant to
section 452 of the Evidence Code. (Id., subd. (h) [“Judicial notice
may be taken of the following matters . . . [f]acts and propositions
that are not reasonably subject to dispute and are capable of
immediate and accurate determination by resort to sources of
reasonably indisputable accuracy”].)
6 Nor should we fault Quach for declining to speculate
about what sorts of discovery the arbitrator might or might not
allow, whether he might be able to use the “judicial” discovery in
arbitration, or whether the modest money he has already spent
during litigation will save money in arbitration. (Maj. opn.,
pp. 17 & 18). All we really can say about the arbitration is that it
will take place in accordance with the JAMS rules, subject to the
agreement’s requirement that the arbitration process must
include “a fair and simple method for the employee to get
information necessary for his/her claim.”

7
finding of [the movant’s] bad faith, the tone of its ruling is
suggestive of such a finding and, had it been made, sufficient
evidence would have supported the finding”].)
Even when an employer’s bad faith in delaying arbitration
is relevant to a finding of waiver, case law does not hold that an
employee must climb such a steep evidentiary hill. Rather,
courts typically infer a party’s motivation from its conduct during
litigation. (See, e.g., Diaz v. Professional Community
Management, Inc. (2017) 16 Cal.App.5th 1190, 1207 [finding that
a party had waived its right to arbitrate where its conduct
showed that “it was the possibility of derailing the trial, rather
than a sudden desire to arbitrate, that was the true motivation
underlying [its] last-minute motion to compel arbitration”];
Burton v. Cruise, supra, 190 Cal.App.4th at p. 949 [finding a
waiver where a party’s conduct suggested that it attempted to
use the court “ ‘ “ ‘as a convenient vestibule to the arbitration hall
so as to allow a party to create his own unique structure
combining litigation and arbitration’ ” ’ ”].)
We can readily surmise from Commerce Club’s lack of
candor (as the trial court implicitly did) why Commerce Club may
have wanted to put Quach through the time and effort of
litigation by serving discovery, taking his full day deposition,
trying to obtain his theory of the case, and then pulling the
litigation plug 13 months after first raising the specter of
arbitration in its initial response. What better way to intimidate
a vulnerable at-will employee who lacks the economic resources
to cope with such delay? (Greene & O’Brien, Epic Backslide,
supra, 15 Stan. J. C.R. & C.L. at p. 45.)
But regardless of its subjective motivation, Commerce
Club’s tactics were prejudicial because they deliberately and

8
forever undermined the very nature of a quick resolution that is
the central tenet of arbitration. (OTO L.L.C. v. Kho, supra, 8
Cal.5th at p. 125.) Quach’s appellate brief hits the nail on the
head: “[By now], all benefits of a speedy resolution [Quach] could
have obtained through arbitration [have] been lost.” Although
Commerce Club’s misconduct surely prejudiced Quach by
“stretching out the litigation process,” we are nevertheless
moving Quach back to the arbitration starting gate—a palpably
unfair result.
Because of the disputed evidence, the deferential standard
of review traditionally used in arbitration waiver cases, and the
very real prejudice Quach suffered as a result of Commerce
Club’s tactics, I respectfully dissent.

CRANDALL, J.*

*Judge of the San Luis Obispo County Superior Court,
assigned by the Chief Justice pursuant to article VI, section 6 of
the California Constitution.

9