Quach v. Cal. Commerce Club, Inc.

Summary

The court held that California courts may not impose an arbitration-specific prejudice requirement when deciding whether litigation conduct waived a contractual right to compel arbitration. Instead, courts must apply generally applicable contract-law principles, under which waiver requires clear and convincing evidence that the party knew of the right and intentionally relinquished or abandoned it, but does not require prejudice. Applying that standard, the court concluded that California Commerce Club waived arbitration by litigating for 13 months while pursuing a jury trial and actively conducting discovery, and it reversed and remanded.