NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

PERLUSS, P. J.

Amethyst Partners USA, LLC and its principal, Richard Stromberg (collectively the Amethyst plaintiffs), sued Marcus & Millichap Real Estate Investment Services, Inc., Clint Lukens, Michael Pesci (collectively the M&M defendants), Joe Cooper IV and three other defendants alleging fraud and misrepresentation in connection with the sale and purchase of certain real estate. The M&M defendants immediately petitioned the trial court to compel arbitration pursuant to the arbitration clause in the real property purchase agreement. The trial court denied the petition on the ground several named defendants in the action were not subject to the arbitration agreement and compelling arbitration for some, but not all, defendants, could result in inconsistent rulings. The M&M defendants renewed their petition to compel arbitration on the eve of trial after the Amethyst plaintiffs voluntarily dismissed with prejudice the defendants who were not subject to the arbitration agreement. The trial court denied the renewed petition, concluding the M&M defendants had waived their right to arbitrate by participating in discovery proceedings and, in any event, compelling arbitration at that late date would prejudice the Amethyst plaintiffs. We reverse.

FACTUAL AND PROCEDURAL BACKGROUND

1. The Real Estate Purchase Transaction

In March 2005 Ella Gutierrez signed an agreement on behalf of herself "and/or assignee " to purchase improved real property, including a 30-unit apartment building, from Emerson Avenue Apartments, LLC (Emerson). Marcus & Millichap was the real estate broker for Gutierrez in the transaction. Lukens and Pesci, real estate sales persons affiliated with Marcus & Millichap, signed the purchase agreement on behalf of Marcus & Millichap as "agent" for Gutierrez. Gutierrez later assigned her interest to Amethyst. Escrow closed on the purchase in December 2005.

The purchase agreement contained an arbitration clause providing, "If a controversy arises with respect to the subject matter of this Purchase Agreement or the transaction contemplated herein (including but not limited to the parties' rights to the Deposit or the payment of commissions as provided herein), Buyer, Seller and Agent agree that such controversy shall be settled by final, binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof."

2. The Amethyst Plaintiffs' Lawsuit

In August 2008 the Amethyst plaintiffs sued the M&M defendants alleging claims for fraud and concealment. The lawsuit also named as defendants Emerson and its principal, Matthew Sullivan, a signatory to the arbitration agreement, and Joe Cooper IV, Brent Hogan, Daniel Tripathi and Ian Knox, nonsignatories to the agreement. Cooper and Hogan were alleged to be real estate agents either employed by or affiliated with Marcus & Millichap. Tripathi and Knox were alleged to be individuals who received commissions, fees or other compensation from the property's sale. The complaint alleged all defendants had known the property contained toxic contamination as early as 2003, when Marcus & Millichap was involved in a lawsuit involving the same property, and had conspired to conceal that fact from the Amethyst plaintiffs. The Amethyst plaintiffs alleged they did not discover the contamination until 2006 when Amethyst attempted to sell the property to a third party.

3. The M&M Defendants' Petition to Compel Arbitration

On January 20, 2009 the M&M defendants petitioned to compel arbitration of each of the claims against them pursuant to the arbitration provision in the purchase agreement. The Amethyst plaintiffs opposed the petition, emphasizing that Hogan, Cooper, Tripathi and Knox were not signatories to the arbitration agreement and could not be compelled to arbitrate. They argued arbitration against some parties but not others would cause a duplication of judicial and attorney time and create a potential for inconsistent rulings. The trial court agreed and denied the petition to compel arbitration.1

4. The M&M Defendants' and Cooper's Participation in the Litigation

Following denial of their petition to compel arbitration, on April 2, 2009 the M&M defendants answered the complaint and filed a cross-complaint for indemnity and breach of contract. On July 10, 2009, after being properly served, Cooper filed his answer to the complaint. All parties engaged in extensive discovery and participated in a mandatory settlement conference.

5. Amethyst's Dismissal of Parties Not Subject to Arbitration and the Renewed Petition To Compel Arbitration

On August 10, 2009, just two weeks before the August 26, 2009 trial date, the Amethyst plaintiffs reported in their trial brief they had not been able to locate Knox to serve him with the summons and complaint and, as a result, would not be proceeding against him. The next day, the Amethyst plaintiffs voluntarily dismissed with prejudice defendants Tripathi and Hogan. The Amethyst plaintiffs explained their decision to dismiss those two defendants was based on information they had gained in discovery: Hogan's lack of assets made him judgment proof, and Tripathi's involvement in the transaction was too minimal to justify pursuing a claim against him.

On August 17, 2009 the M&M defendants and Cooper applied ex parte for an order shortening time for a hearing on a renewed petition to compel arbitration. Their application and accompanying petition highlighted the Amethyst plaintiffs' recent dismissals of parties who were nonsignatories to the arbitration agreement and argued the conditions for denying the petition no longer existed. The trial court agreed to shorten time, continued the August 26, 2009 trial date and set a hearing on the renewed arbitration petition for September 2, 2009.

The Amethyst plaintiffs opposed the renewed petition to compel arbitration, arguing their dismissal of the nonsignatory defendants was in good faith and they would be severely prejudiced if forced to arbitrate at this late date and after the parties had conducted extensive discovery that would not have been available to them in an arbitration proceeding. They also argued Cooper had not signed the arbitration agreement and thus lacked standing to enforce it.

The trial court denied the renewed petition to compel arbitration. The court rejected Amethyst's argument that Cooper lacked standing to compel arbitration, noting he was sued as an agent of Marcus & Millichap (See Dryer v. Los Angeles Rams (1985) 40 Cal.3d 406, 418 [nonsignatory to arbitration agreement is entitled to benefit of that agreement if complaint alleges he or she was acting as agent of a signatory to the agreement].) Nonetheless, the court found the M&M defendants and Cooper had waived their right to compel arbitration by participating in the litigation to the Amethyst plaintiff's prejudice: "[I]t does appear that there is so much conduct that has been engaged in that would reveal strategies and defenses through the discovery and motion practice, and by way of the documents submitted in preparation for trial. It's not clear that this extensive litigation conduct would have occurred in the arbitration. To force the parties to arbitrate at this stage appears to . . . cause plaintiff prejudice. So there are sufficient facts shown to indicate that prejudice has resulted."

DISCUSSION

1. Law Governing Waiver of Arbitration

"On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: [¶] (a) The right to compel arbitration has been waived by the petitioner." (Code Civ. Proc., § 1281.2.) Although "no single test" can delineate the nature of the conduct that will constitute a waiver of arbitration, factors for the court to consider include "`" (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; (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."'" (St. Agnes Medical Center v. Pacificare of California (2003) 31 Cal.4th 1187, 1196 (St. Agnes).)

"Generally, the determination of waiver is a question of fact, and the trial court's finding, if supported by sufficient evidence, is binding on the appellate court. [Citations.] `When, however, the facts are undisputed and only one inference may reasonably be drawn, the issue is one of law and the reviewing court is not bound by the trial court's ruling.'" (St. Agnes, supra, 31 Cal.4th at p. 1196.)

2. The M&M Defendants and Cooper Did Not Waive Their Right To Compel Arbitration

At the threshold, the Amethyst plaintiffs acknowledge that neither the M&M defendants nor Cooper delayed in requesting arbitration: The M&M defendants immediately filed their petition to compel arbitration in response to the complaint, then promptly renewed that petition (along with Cooper after he was properly served in the action) as soon as the defendants who were not subject to the arbitration provision were dismissed from the action.2 Nonetheless, they argue the M&M defendants and Cooper "lost the right to arbitrate," through no fault of their own, when the trial court denied the initial petition to compel arbitration and participated in extensive discovery that would not have been permitted in an arbitration context. The fact the M&M defendants and Cooper, in essence, did everything they could to preserve their right to arbitrate by filing a timely petition and renewing that petition as soon as possible when the circumstances leading the court to deny the original petition had changed, is, according to the Amethyst plaintiffs, immaterial.

To support their argument, the Amethyst plaintiffs rely primarily on Burton v. Cruise (2010) 190 Cal.App.4th 939 (Burton), which involved a patient who had signed an arbitration agreement with her medical provider and later sued the provider for medical malpractice. After engaging in six months of discovery, the plaintiff shifted course and petitioned to compel arbitration. The medical provider opposed the petition, arguing the plaintiff had waived arbitration by requesting a trial and participating in extensive discovery. The trial court agreed and denied the petition. The appellate court affirmed, concluding the plaintiff's unreasonable delay in invoking the arbitration clause amounted to a waiver of the right to compel arbitration. (Id. at p. 947; accord, Wagner Construction Co. v. Pacific Mechanical Corp. (2007) 41 Cal.4th 19, 58 (Wagner) [party's unreasonably delay in demanding or seeking arbitration constituted waiver of right to arbitrate].)

Citing language from Burton, supra, 190 Cal.App.4th at page 945 that the term "waiver," while often interpreted as a voluntary relinquishment of a known right, may also be simply "`a shorthand conclusion that a contractual right to arbitration is lost"'" (ibid., quoting St. Agnes, supra, 31 Cal.4th at p. 1195, fn. 4), the Amethyst plaintiffs contend they need not show the M&M defendants or Cooper actually did anything inconsistent with the right to arbitrate. They only need to show that that right was somehow "lost," whether or not that right was lost through any fault of the party seeking to compel arbitration.

Neither Burton nor the Supreme Court's decision in St. Agnes, on which it relies, supports this theory. The Burton court merely made the unremarkable observation, in accord with governing precedent, that a party may be "said to have `waived' its right to arbitrate by an untimely demand, even without intending to give up the remedy." (Burton, supra, 190 Cal.App.4th at p. 944; see Wagner, supra, 41 Cal.4th at p. 58.) "In this context, waiver is more like a forfeiture arising from the nonperformance of a required act." (Burton, at p. 944; see St. Agnes, supra, 31 Cal.4th at p. 1195, fn. 4 ["[w]hile `waiver' generally denotes the voluntary relinquishment of a known right, it can also refer to the loss of a right as a result of a party's failure to perform an act it is required to perform, regardless of the party's intent to relinquish the right"].) In short, Burton and St. Agnes stand only for the well-established proposition that, whether considered a waiver or forfeiture, unreasonable delay in seeking arbitration can result in the loss of the right to arbitrate. That proposition has no applicability here, where the M&M defendants and Cooper did everything they could to preserve their right to arbitrate.

The M&M defendants' and Cooper's participation in the litigation itself is not dispositive. (See St. Agnes, supra, 31 Cal.4th at p. 1201 [absent unreasonable delay, mere participation in litigation does not generally result in a waiver "where the arbitrable issues have not been litigated to judgment"].) The critical issue when litigation has commenced is whether a party's conduct, in filing the lawsuit or propounding discovery, is "`so inconsistent with the exercise of the right to arbitration as to constitute an abandonment of that right.'" (Ibid.) Here, the M&M defendants' and Cooper's participation in discovery following the court's order denying the initial petition to compel arbitration was in no way inconsistent with their right to arbitrate the dispute. Their petition was made—and renewed—at the earliest opportunity. That is sufficient to preserve the right even when that opportunity follows participation in discovery proceedings. (See, e.g., Fisher, IV v. A.G. Becker Paribas Incorporation (9th Cir. 1986) 791 F.2d 691, 697 [where United States Supreme Court precedent had made any petition to compel arbitration futile, defendant's petition to compel arbitration after three years of litigation, following a change in Supreme Court precedent, did not amount to a waiver of the right to arbitrate; "the fact that Becker did not file its motion to compel arbitration until the Supreme Court's decision in Byrd was not inconsistent with the agreement to arbitrate disputes arising out of its contract with the Fishers"].)

There similarly is no merit to the Amethyst plaintiffs' assertion that arbitration is properly denied this close to trial because the M&M defendants' and Cooper's participation in the litigation resulted in an exchange of information and trial strategy that would not be available in the arbitration context, a result they describe as "the epitome of prejudice." (See St. Agnes, supra, 31 Cal.4th at p. 1204 [courts have denied petitions to compel arbitration on prejudice grounds where "the petitioning party used the judicial discovery process to gain information about the other side's case that could not have been gained in arbitration"].) To be sure, a belated demand for arbitration, made only after the party seeking to compel arbitration has taken advantage of discovery procedures available only in a judicial forum, is properly denied. (See, e.g., Berman v. Health Net (2000) 80 Cal.App.4th 1359, 1367 [plaintiff's participation in "extensive discovery" before moving to compel arbitration amounted to a waiver of the arbitration right]; Davis v. Continental Airlines, Inc. (1997) 59 Cal.App.4th 205, 214 [same]; Guess?, Inc. v. Superior Court (2000) 79 Cal.App.4th 553, 558 ["`"[t]he courtroom may not be used as a convenient vestibule to the arbitration hall so as to allow a party to create his own unique structure combining litigation and arbitration"'"].) However, none of those cases, including St. Agnes, which cites them, involves a defendant, as here, who filed a timely petition to arbitrate and was only compelled to participate in discovery by virtue of the court's order denying that petition.

We are mindful that compelling arbitration on the eve of trial means many of the efficiencies of arbitration have been lost. (See Burton, supra, 190 Cal.App.4th at p. 948 ["[a]rbitration 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"].) Still, even at this late date, some important benefits remain. In particular, the arbitration procedure itself is more streamlined and less expensive than a jury trial. (See Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 711 ["[t]he speed and economy of arbitration" stands "in contrast to the expense and delay of jury trial"].) Moreover, the claim of prejudice resulting from participation in judicial discovery is largely illusory. The exchange of information in discovery proceedings is mutual; it exists equally for both parties. Thus, to the extent arbitration, like a trial, is a search for the truth, greater discovery produces a more reliable result. Finally, even if the Amethyst plaintiffs were forced to expend time and money in litigation that would not have been required had the case gone to arbitration at the outset, that wound was self-inflicted: It was they, after all, who elected to sue defendants not subject to the arbitration agreement.

The Amethyst plaintiffs insist their decision to include Hogan, Knox and Tripathi as defendants in the action was made in good faith, based on evidence that each of them had been involved to some extent in the transaction at issue. (The trial court impliedly accepted this explanation, and we have no reason to question that determination.) Their equally good faith dismissals of Hogan and Tripathi prior to trial, they argue, should not result in their being penalized by being forced to submit their claims to arbitration. The inherent flaw in this argument lies not with the Amethyst plaintiffs' pronouncements of good faith, but with their characterization of arbitration as "punishment." It is not. The Amethyst plaintiffs (or their assignor) agreed any claims relating to or arising out of the real estate purchase contract would be arbitrated. Once the obstacle to arbitration—the potential for inconsistent rulings between those who are subject to arbitration and those who are not—has been removed prior to a determination on the merits, there is nothing punitive about requiring the parties to honor their contractual agreement to arbitrate. (See Code Civ. Proc., § 1281.2; see also Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9 ["`[t]ypically, those who enter into arbitration agreements expect that their dispute will be resolved without necessity for any contact with the courts'"].)3

In sum, the trial court erred as a matter of law in ruling the M&M defendants and Cooper had waived their right to compel arbitration. Accordingly, we reverse the order denying arbitration and direct the trial court to enter a new order granting the M&M plaintiffs' and Cooper's August 17, 2009 petition to compel arbitration.

DISPOSITION

The order denying the M&M defendants' and Cooper's August 17, 2009 petition to compel arbitration is reversed, and the matter is remanded to the trial court with directions to enter a new order granting that petition. The M&M defendants and Cooper are to recover their costs on appeal.

We concur.

WOODS, J.

JACKSON, J.