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Berman v. Health Net5/26/2000
re has been any discovery, yet we know that waiver does not occur by "mere participation in litigation." More is required, as the Davis case itself makes plain.
After observing that the vice or prejudice lay in obtaining information not available in arbitration, the Davis court's very next sentence points out: "After obtaining discovery from plaintiff by court processes, defendants then belatedly sought to change the game to arbitration, where plaintiff would not have equivalent discovery rights." (Id., emphasis added.) The court explicitly states that defendants' participation in discovery would not necessarily compel a finding of prejudice and waiver, and that this presents a factual question for the court "based on the particular circumstances of the case." In Davis, the court continued, "the trial court could reasonably find the discovery conducted was not equivalent for both sides and would work an unfair advantage for defendants if arbitration were ordered." (Id.) In my view, it is hard to read Davis without concluding that the lack of equivalence in discovery was indeed a critical element in the finding of prejudice.
That being said, I nonetheless agree with the majority that, on the record before it, the trial court properly denied Health Net's motion to compel arbitration. The Bermans opposed Health Net's motion to compel by presenting evidence of the extensive discovery conducted by Health Net, and claiming that, as in Davis, prejudice results from the use of the court's discovery procedures to learn the Bermans' "strategies, evidence, and witnesses ...." In response, Health Net said nothing and submitted no evidence at all on the issue of prejudice from the discovery, failing to produce evidence of reciprocal discovery or otherwise argue there was no prejudice to the Bermans from its discovery. On that state of the record, in the absence of any evidence to the contrary, the trial court was entitled to infer that the Bermans were prejudiced by Health Net's discovery. As the majority says, it is difficult to see how the trial court could have reached any other result.
I likewise agree there was no error in the trial court's denial of Health Net's motion for reconsideration. Under proper circumstances, as outlined above, I would question the trial court's remarks suggesting that the discovery engaged in by the Bermans was irrelevant to the waiver question. Nonetheless, Health Net's motion presented neither newly discovered evidence nor a sufficient explanation for the failure to produce it earlier, so denial of the motion was entirely proper.
CERTIFIED FOR PUBLICATION
WOODS, J.
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