Martinez v. Scott Specialty Gases, Inc

In Martinez v. Scott Specialty Gases, Inc. (2000) 83 Cal.App.4th 1236, the Court affirmed the trial court's grant of summary judgment on the basis of the failure of the plaintiffs to exhaust their arbitration remedies. We further held, on the undisputed facts, that the plaintiffs were barred from raising the issue of whether they had waived the right to arbitrate their claim where, despite the defendants' offering a motion to stay the trial court action and to compel arbitration as an alternative in their moving papers, "plaintiffs, consistent with their previously stated refusal to arbitrate, never pursued this." ( Id. at p. 1249.) The plaintiffs failed to raise the issue in their opposition papers or during argument below and it was never considered nor ruled upon by the trial court. (Ibid.) Consequently, we refused to consider the issue on appeal, in accordance with established rules relating to the scope of appellate review. (Ibid.) Alternatively, we concluded that the facts could have supported only one conclusion: that as a matter of law the plaintiffs had waived the right to arbitrate. We acknowledged, " 'There is no single test for waiver of the right to compel arbitration, but waiver may be found where the party seeking arbitration has (1) previously taken steps inconsistent with an intent to invoke arbitration, (2) unreasonably delayed in seeking arbitration, or (3) acted in bad faith or with willful misconduct. The moving party's mere participation in litigation is not enough; the party who seeks to establish waiver must show that some prejudice has resulted from the other party's delay in seeking arbitration. ' " ( Id. at pp. 1249-1250.) The Court concluded in Martinez that the plaintiffs' actions were so inconsistent with the intent to invoke arbitration that we need not examine the other two prongs. ( Id. at p. 1250.) Despite repeated and vigorous warnings from the defendants that the claims had to be arbitrated and that insistence upon proceeding with suit would be construed as a waiver or repudiation of the arbitration agreement and grounds for summary judgment, the plaintiffs steadfastly insisted that no agreement bound them. We also found requisite evidence of prejudice in the attorney's fees and costs the defendants incurred during the plaintiffs' persistence in pursuing the lawsuit. ( Id. at pp. 1250-1251.)