Lewis v. Fletcher Jones Motor Cars, Inc.
205 Cal. App. 4th 436
| Cal. Ct. App. | 2012Background
- Lewis leased a car from Fletcher Jones in October 2006 and was billed nearly $19,000 at lease end due to mileage, missed payments, and late charges.
- Lewis filed suit on January 14, 2011 asserting Vehicle Leasing Act, Consumer Legal Remedies Act, and unfair competition claims, seeking rescission and damages.
- Fletcher Jones demurred, Lewis amended to add only Vehicle Leasing Act allegations, and the court sustained the demurrer with leave to amend after tentative rulings.
- Fletcher Jones demanded arbitration on May 9, 2011, the first time it asserted the Lease’s arbitration provision, while Lewis rejected the demand.
- The trial court denied the motion to compel arbitration, finding the arbitration clause unconscionable and Fletcher Jones had waived arbitration by delay and litigation conduct, expanding its order August 5, 2011.
- On appeal, the court affirmed the waiver ruling (substantial evidence) and did not decide whether the arbitration clause was unconscionable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Fletcher Jones waived the right to arbitrate | Lewis argues delay and litigation tactics defeated arbitration and caused prejudice | Fletcher Jones contends Discover Bank prevented waiver or rendered arbitration futile | Yes; waiver supported by substantial evidence |
| Whether the delay in seeking arbitration was unreasonable | Delay four months plus after suit began was undue | Discover Bank/AT&T Mobility affected enforceability and timing | Yes; delay deemed unreasonable |
| Whether Fletcher Jones’s litigation conduct prejudiced Lewis | Litigation forced discovery, multiple motions, and fees, undermining arbitration benefits | Prejudice not shown or that arbitration could not proceed earlier | Yes; prejudice found due to prolonged litigation and fees |
Key Cases Cited
- St. Agnes Medical Center v. PacifiCare of California, 31 Cal.4th 1187 (Cal. 2003) (multifactor test for waiver of arbitration)
- Burton v. Cruise, 190 Cal.App.4th 939 (Cal. App. 2010) (six-factor waiver framework applied under St. Agnes)
- Sobremonte v. Superior Court, 61 Cal.App.4th 980 (Cal. App. 1998) (unreasonable delay can constitute waiver)
- Zamora v. Lehman, 186 Cal.App.4th 1 (Cal. App. 2010) (affirms St. Agnes factors; mid-level appellate authority)
- Discover Bank v. Superior Court, 36 Cal.4th 148 (Cal. 2005) (class action waivers; limits to unconscionability design)
- Chin v. Advanced Fresh Concepts Franchise Corp., 194 Cal.App.4th 704 (Cal. App. 2011) (Discover Bank not applicable where no class action claims)