v.
Blue Roots, LLC
NOTICE: SLIP OPINION (not the court’s final written decision)
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FILED MAY 25, 2023 In the Office of the Clerk of Court WA State Court of Appeals, Division III IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION THREE BIOCHRON, INC., a Washington ) No. 38834-4-III corporation, KEVIN RUDEEN, an ) individual, BART BENNETT, an ) individual, JOHN GILLINGHAM, an ) individual, ) ) Respondents, ) PUBLISHED OPINION ) v. ) ) BLUE ROOTS, LLC, a Washington ) limited liability company, ) ) Appellant. ) LAWRENCE-BERREY, J. — Blue Roots initially filed a demand for arbitration, but Biochron filed this action to enjoin that arbitration from proceeding. Blue Roots promptly moved the trial court to compel arbitration, but the court denied the motion on the basis that the agreement containing the arbitration clause was unenforceable. The parties participated in litigation for over one year. Biochron moved for partial summary judgment, and Blue Roots renewed its motion to compel arbitration. The trial court granted Biochron’s motion, denied Blue Roots’s renewed motion to compel, and entered a CR 54(b) order certifying finality. Blue Roots appealed. For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC We conclude that the trial court erred in denying Blue Roots’s renewed motion to compel arbitration because the enforceability of a contract containing an agreement to arbitrate is a question for the arbitrator, not the court. In general, a court may only decide whether the agreement to arbitrate exists in a record and whether the arbitration clause can be fairly read to encompass the scope of the dispute. Here, we decide both questions in favor of arbitration. We further conclude that Biochron is unable to meet its heavy burden of showing that Blue Roots waived its right to arbitrate. Blue Roots filed a demand for arbitration and twice moved the trial court to compel arbitration. These actions are consistent with a desire to arbitrate. Also, ordering arbitration will not prejudice Biochron. The trial court entered two partial summary judgment orders during the course of litigation. Blue Roots has waived any challenge to the first ruling, and the second ruling was erroneous—the grant of partial summary judgment dismissing Blue Roots’s misappropriation of trade secrets claim. Because we would have reversed the trial court’s second ruling, Biochron is not prejudiced by Blue Roots’s delay in renewing its motion to compel arbitration. That is, it would have had to litigate the trade secrets claim in one forum or the other.
[*465]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC We reverse the trial court’s order denying Blue Roots’s renewed motion to compel arbitration. FACTS This appeal stems from a failed effort by Blue Roots LLC to purchase the assets of Biochron, Inc. Blue Roots and Biochron are both licensed commercial cannabis producers located in Spokane County. We set forth the facts in the light most favorable to Blue Roots to the extent they relate to its misappropriation of trade secrets claim, which the trial court dismissed by partial summary judgment. Memorandum of understanding On May 21, 2019, the parties executed a memorandum of understanding (MOU), which we attach as an appendix to this opinion. The MOU outlined the terms of the sale of all of Biochron’s assets, including its license with the Washington State Liquor and Cannabis Board,1 to Blue Roots. The MOU stated it was “a commitment by the Parties to complete a transaction as defined in this Agreement and memorialize the terms and conditions in a definitive asset purchase agreement (the “APA”) and any related For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*466]No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC transactions necessary to execute the APA and achieve the Parties’ objectives.” Clerk’s Papers (CP) at 49. Biochron, Inc., and its individual principals, Bart Bennett, Kevin Rudeen, and John Gillingham, collectively acted as the sellers. The MOU anticipated that the transaction would close on June 1, 2019. It listed a condition precedent: that the parties would obtain legal analysis of the transaction to ensure it would comply with Liquor and Cannabis Board regulations. The MOU provided that Blue Roots would purchase 100 percent of Biochron’s assets except any interest in the Biochron business entity itself. The assets were to “be carefully defined in the APA,” but included Biochron’s real property, business assets, intellectual property, and “grow” plant material in any form. CP at 49, 52. In exchange, Blue Roots would pay Biochron 10 percent of its monthly net profits for 10 years, beginning six months after the execution of the asset purchase agreement and would employ Biochron’s president, Mr. Bennett, as a manager in Blue Roots for a salary of $5,000 per month. The MOU included a section entitled “Dispute Resolution.” CP at 51 (some capitalization omitted). The section provided: For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*467]No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC The Parties will resolve any discrepancy of interpretation on an amicable basis and with the utmost good will and cooperation. In the event of any irresolvable disagreement between the parties, the parties agree to submit to arbitration via the AMERICAN ARBITRATION ASSOCIATION, to be conducted in the City of Spokane, Washington. CP at 51. Allan Holms, managing member of Blue Roots, signed on behalf of the company. Mr. Bennett signed on behalf of Biochron. By signing, each represented they had “sufficient authority to enter into this MOU on behalf of the identified party and bind such party to the terms herein.” CP at 51. Joint operations The asset purchase agreement was not completed by June 1, 2019. However, in June, Biochron turned over its assets and keys to its facility, and Blue Roots began overhauling Biochron’s facility to meet its standards for growing cannabis. Also in June, Blue Roots opened a new bank account for joint operating expenses. In July, Blue Roots began paying Mr. Bennett a salary as agreed in the MOU. Blue Roots also paid for the expansion of Biochron’s facility and required that Biochron’s remaining operations be modified to meet Blue Roots’s standards. When the expansion was complete, Blue Roots delivered its mother plants to be propagated at Biochron’s facility.
[*468]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC An attorney and an accountant experienced in the cannabis industry reviewed the MOU and determined it should be modified to stay within the guidelines of the Liquor and Cannabis Board. They recommended the parties adopt a product purchase and option agreement. Thereafter, Blue Roots and Biochron began negotiations for a product purchase and option agreement. In late September or early October 2019, the parties agreed to the terms of a joint venture, although they did not sign any document memorializing the agreement. The terms of the joint venture agreement “would mirror the original MOU” with three changes. CP at 633. The changes were: (1) the agreement would be a product purchase agreement (rather than a purchase of all of Biochron’s assets), and Blue Roots would purchase all of Biochron’s product; (2) Blue Roots would pay Biochron its monthly operating expenses and, beginning December 1, 2019, Blue Roots would additionally pay Biochron 10 percent of Blue Roots’s net profit from the previous month’s sale of Biochron’s product; and (3) Blue Roots would assume the responsibility of managing the grow operations and the costs of production. In January 2020, Blue Roots began making the payments as outlined in the proposed joint venture agreement and those payments continued through April 2020.
[*469]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC In February, Blue Roots e-mailed Biochron an “Intellectual Property Policy And Non-Disclosure Agreement” and directed Biochron to have each employee sign it. CP at 656 (some capitalization omitted). The agreement required Biochron employees not to disclose the “innovative processes and products, including unique strains of cannabis plants” used by Biochron. CP at 656 (boldface omitted). It further stated that the products and strains were the property of the “Company,” which the agreement defined as Biochron. CP at 656-57.2 One week later, Biochron confirmed that all of its employees signed the agreement and that a signed agreement was in each employee’s file. In April, the parties’ business relationship began to sour. Biochron, which had previously been negotiating on its own behalf, retained counsel to continue the negotiations of the product purchase agreement. By May, that agreement had been divided into two separate documents: a product purchase agreement and an asset purchase and sale agreement. The parties ultimately could not agree on the pricing for Blue Roots’s purchase of Biochron’s cannabis harvest, and Biochron began selling its cannabis For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*470]No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC harvest to third parties. Thereafter, the parties’ relationship completely broke down and the acquisition fell through. On June 16, Blue Roots declared an impasse. Because Blue Roots anticipated it would soon own Biochron’s entire business, it had disclosed proprietary information to Biochron, including its mother plants and grow processes. After negotiations ceased, Blue Roots demanded that Biochron return Blue Roots’s cannabis plants and cease using Blue Roots’s grow processes. Biochron refused to do so. Trial court enjoins Blue Roots’s arbitration demand Blue Roots filed an arbitration demand in August against Biochron and its individual owners, Bart Bennett, Kevin Rudeen, and John Gillingham. On September 18, Biochron filed this case in Spokane County Superior Court, requesting injunctive relief from Blue Roots’s arbitration demand and damages. It also moved for a temporary restraining order and preliminarily injunction preventing Blue Roots from pursuing arbitration. On October 9, Blue Roots moved to compel arbitration. It later opposed Biochron’s motion for a preliminary injunction. Blue Roots argued that under Washington law, a challenge to the MOU as a whole, rather than the arbitration clause For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*471]No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC itself, was a question for the arbitrator to decide, and the arbitration clause itself covered any irresolvable disagreement. At oral argument on the motions, Biochron argued the MOU was an unenforceable agreement to agree. The court questioned whether the arbitration clause would be enforceable even if the MOU was not. Blue Roots noted that termination or failure of a contract typically does not terminate an arbitration agreement contained therein. The court disagreed. On October 27, the court entered a written order granting Biochron’s motion for a preliminary injunction in which it concluded in part: For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*472][*473]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*474]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*475]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*476]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*477]No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*478][*479]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*480]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*481]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*482]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*483]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*484]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*485]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*486]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC Although the court had the authority not to consider the evidence, on summary judgment, the decision to exclude evidence that would affect a party’s ability to present its case amounts to a severe sanction. And before imposing a severe sanction, the court must consider the three Burnet[4] factors on the record: whether a lesser sanction would probably suffice, whether the violation was willful or deliberate, and whether the violation substantially prejudiced the opposing party. Keck v. Collins, 184 Wn.2d 358, 368-69, 357 P.3d 1080 (2015) (citation omitted). The trial court did not consider any of the Burnet factors on the record before deciding to disregard Blue Roots’s evidence. It therefore erred in refusing to consider Blue Roots’s previously filed evidence that was not provided as bench copies. In our de novo review of Biochron’s motion for partial summary judgment, we will consider all evidence incorporated by reference by Blue Roots in its response.
[*487]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC Under the Uniform Trade Secrets Act (UTSA), chapter 19.108 RCW, a “trade secret” is information that: (a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. RCW 19.108.010(4). “We review interpretation of the UTSA de novo as a question of law, while we review whether specific information satisfies the statute’s definition of a ‘trade secret’ in any given case as a question of fact.” Lyft, Inc. v. City of Seattle, 190 Wn.2d 769, 781, 418 P.3d 102 (2018). “‘[W]hen reasonable minds could reach but one conclusion, questions of fact may be determined as a matter of law.’” Money Mailer, LLC v. Brewer, 194 Wn.2d 111, 130, 449 P.3d 258 (2019) (internal quotation marks omitted) (alteration in original) (quoting Harvey v. County of Snohomish, 157 Wn.2d 33, 43, 134 P.3d 216 (2006)). a. Independent economic value The trial court acknowledged there were genuine issues of material fact as to whether Blue Roots’s claimed trade secrets derived independent economic value from not being known to or readily ascertainable by others. We agree.
[*488]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC Blue Roots introduced evidence that it engages in phenohunting, where it takes commonly available seeds, all with different genetic makeup, grows them into genetically unique plants, and then selects and propagates those plants with the most desirable phenotypical traits, a time- and resource-intensive process. It also introduced evidence that its grow processes use publicly available procedures and materials in novel and unique ways to maximize production. Biochron advances several unconvincing arguments for why Blue Roots’s cultivars do not constitute trade secrets. First, it argues that Blue Roots’s cultivars are not protectible because Blue Roots does not breed plants. But Blue Roots’s experts explain that each seed has a unique genetic makeup; thus, no other grower has seeds—and eventually plants—with exactly the same genotype as those grown by Blue Roots. Biochron next argues that phenohunting is not a proprietary process. But Blue Roots does not argue the process is a trade secret; it argues the cultivars are a trade secret. Finally, Biochron argues that the plants cannot be trade secrets because marijuana reproduces sexually. That may be relevant were Blue Roots claiming a trade secret in marijuana seeds, but it is not. It claims that its mother plants, grown from seed, selected through phenohunting, and used to asexually propagate genetically identical clones, are trade secrets. Such information is protectible as a trade secret. See 35 U.S.C. § 161 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*489]No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC (“Whoever invents or discovers and asexually reproduces any distinct and new variety of plant . . . may obtain a patent therefor.”). Biochron also argues that Blue Roots’s growing procedures are not proprietary because they are publicly available. However, publicly available information can still constitute a trade secret when it is not readily ascertainable.[5] See Boeing Co. v. Sierracin Corp., 108 Wn.2d 38, 50, 738 P.2d 665 (1987) (“[T]rade secrets frequently contain elements that by themselves may be in the public domain but together qualify as trade secrets.”). Biochron’s expert states that Blue Roots uses off-the-shelf nutrients and soil, but Blue Roots’s expert states that the specific combination of nutrients, timing of application, and application rates are different than those recommend by the manufacturer or used by other commercial cannabis operations with which he is familiar. Similarly, Biochron’s expert points to the fact that trellising plants is common, while Blue Roots’s expert describes Blue Roots’s trellising technique as novel and unique to Blue Roots. We agree with the trial court, the parties’ competing expert reports present genuine issues of material fact as to whether Blue Roots’s purported trade secrets derived independent For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*490]No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC economic value from not being known to or readily ascertainable by others. b. Reasonable efforts to protect confidentiality The trial court found that the dispositive question on summary judgment was whether Blue Roots had made reasonable efforts to protect the confidentiality of its trade secrets. It resolved this question by noting that even if there was a partnership, there was no fiduciary requirement to protect the alleged trade secrets because “if something is disclosed, it’s not a trade secret.” Rep. of Proc. (Mar. 11, 2022) at 42. This oversimplified statement does not accurately reflect Washington law. There is no requirement for absolute secrecy under the UTSA. Precision Moulding & Frame, Inc. v. Simpson Door Co., 77 Wn. App. 20, 28, 888 P.2d 1239 (1995); see also Machen, Inc. v. Aircraft Design, Inc., 65 Wn. App. 319, 329, 828 P.2d 73 (1992), overruled on other grounds by Waterjet Tech., Inc. v. Flow Int’l Corp., 140 Wn.2d 313, 996 P.2d 598 (2000). “‘[R]easonable use of a trade secret including controlled disclosure to employees and licensees is consistent with the requirement of relative secrecy.’” Machen, 65 Wn. App. at 327 (quoting UTSA § 1, cmt., 14 U.L.A. 438, 439 (1990)). The trial court erred by concluding that because Blue Roots had disclosed its alleged trade secrets to Biochron, it could not claim them as trade secrets.
[*491]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC Blue Roots argues that the parties’ joint operations formed a partnership; thus, by virtue of Biochron’s fiduciary duties, Blue Roots made reasonable efforts to maintain the confidentiality of its trade secrets when it disclosed them in the context of their business arrangement. We agree that, viewing the facts in the light most favorable to Blue Roots, a reasonable mind could conclude that their disclosure of trade secrets was made with efforts that were reasonable under the circumstances to maintain its secrecy. Importantly, a trier of fact could find that Blue Roots’s (albeit late) requirement for Biochron’s employees to sign an intellectual property and nondisclosure agreement combined with Biochron’s willingness, evinced a mutual understanding that Blue Roots’s processes and marijuana strains were proprietary and protected. In addition, Biochron may have had a fiduciary duty not to disclose Blue Roots’s trade secrets. Under the “Revised Uniform Partnership Act” (RUPA), chapter 25.05 RCW, “the association of two or more persons to carry on as co-owners a business for profit forms a partnership, whether or not the persons intend to form a partnership.” RCW 25.05.055(1). RUPA also modifies the common law duties partners owe each other and the partnership, limiting them to the duty of loyalty and the duty of care, as defined by the statute. RCW 25.05.165(1). The duty of loyalty includes the duty “[t]o account to the partnership and hold as trustee for it any property, profit, or benefit derived by the For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*492]No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC partner in the conduct . . . of the partnership business or derived from a use by the partner of partnership property.” RCW 25.05.165(2)(a). Even if no partnership was formed, the record suggests that Biochron was acting as Blue Roots’s agent during their business relationship. “An agency relationship arises when one party acts at the instance of, and under the direction and control of, another.” Cascade Auto Glass, Inc. v. Progressive Cas. Ins. Co., 135 Wn. App. 760, 765, 145 P.3d 1253 (2006). Blue Roots provided evidence that Biochron began using Blue Roots’s grow processes and marijuana strains at Blue Roots’s instance and under Blue Roots’s direction and control, which Biochron does not dispute. An agent has a duty not to use or disclose its principal’s trade secrets even after the termination of the agency relationship. Ed Nowogroski Ins., Inc. v. Rucker, 137 Wn.2d 427, 437, 971 P.2d 936 (1999); see also RESTATEMENT (THIRD) OF AGENCY § 8.05 (“An agent has a duty . . . not to use property of the principal [and] not to use or communicate confidential information of the principal for the agent’s own purposes . . . .”). Blue Roots introduced evidence that it relied on its business relationship with Biochron to maintain the secrecy of its alleged trade secrets. Blue Roots’s lead grower stated in a declaration: “When we thought we had acquired Biochron, we shared the Blue Roots Standard Operating Procedures with certain Biochron representatives via a For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*493]No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC password-protected Google drive.” CP at 609. One of Blue Roots’s owners similarly declared that Blue Roots’s delivery of its mother plants to Biochron were not one-off purchases by Biochron. They were entirely dependent on the overall deal that the companies reached with one another and had been operating under for several months. Access and use of the mother plants was entirely dependent on the parties’ overall deal, which included Biochron’s obligation to use Blue Roots[’s] proprietary grow methods and then sell the harvested products exclusively to Blue Roots. CP at 642. This is the sort of controlled disclosure that can constitute reasonable efforts to maintain the secrecy of trade secrets. See Machen, 65 Wn. App. at 327. Whether it did under these circumstances is a question of fact that cannot be resolved on summary judgment. Biochron relies on Pacific Title, Inc. v. Pioneer National Title Insurance Co., 33 Wn. App. 874, 658 P.2d 684 (1983), to argue that Blue Roots cannot claim a trade secret in information it disclosed to Biochron without telling Biochron the information was confidential. Pacific Title is not helpful to Biochron. In Pacific Title, both parties were title insurance companies. Id. at 875. They entered into a 10-year contract in which Pacific acted as the agent of Pioneer, issuing title insurance policies in Pioneer’s name and retaining 87.5 percent of the premiums collected. Id. at 875-76. Pacific sent Pioneer copies of each policy it issued in Pioneer’s name, which Pioneer later provided to a subsequent agent after its contract with Pacific For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*494]No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC ended. Id. at 876. Pacific sued for conversion and misappropriation of the title information it produced, and the trial court dismissed the complaint. Id. at 875. We affirmed, noting that [a]lthough an agent may not use or disclose confidential information obtained during the course of his employment for the principal, a principal may use information developed by the agent during the agency in the scope of work to which the agency relates and for which the principal has paid the agent. Id. at 879 (citations omitted). Because the title information had been “transmitted pursuant to contract in circumstances where the originator knows or should know that the recipient has a legitimate business use for the information,” we required Pacific to show it had “secure[d] confidentiality by express or implied provision of the contract.” Id. We reasoned that in such a situation, an “originator of information cannot claim a property right in it as against one to whom he has disclosed it without bringing to the latter’s attention his expectation that the information will be held in confidence and not used in competition.” Id. Because the parties did not address their rights to the information under the contract, Pacific did not have an exclusive right to it. Id. at 880. Pacific Title is not analogous to these facts. Biochron was not the principal of Blue Roots and thus did not have the right to use information developed by Blue Roots, as Pioneer did for Pacific.
[*495]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC c. Misappropriation Biochron asserts that Blue Roots has no evidence that Blue Roots is currently using its grow processes. But Blue Roots did present evidence that Biochron continued using Blue Roots’s grow processes after ending their business relationship. Biochron further argues that it legitimately purchased Blue Roots’s mother plants. But Blue Roots presented evidence that the purchase was made in the context of the parties’ business relationship, evidenced by their sale at significantly below market value in order to comply with Washington regulations that transferred cannabis plants must have a recorded sale price. Again, this competing evidence creates a genuine issue of fact precluding summary judgment. Because we conclude that the trial court erred in dismissing Blue Roots’s misappropriation of trade secrets claim, Biochron is not prejudiced by arbitrating the claims that survived the first partial summary judgment order in arbitration rather than court. CONCLUSION The trial court erred in denying Blue Roots’s renewed motion to compel arbitration. Blue Roots did not waive its right to arbitrate because its conduct was not inconsistent with an intent to arbitrate its claims.
[*496]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC Biochron is not prejudiced by arbitration being ordered. Biochron would have had to litigate the same claims in trial court as it now must litigate in arbitration. We remand with directions for the trial court to compel arbitration. The order to compel should state that Blue Roots may not assert claims that were dismissed by the trial court’s first order granting partial summary judgment. ________________________________ Lawrence-Berrey, J. I CONCUR: __________________________________ Pennell, J.
[*497]For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC APPENDIX For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*498]No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*499]No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*500]No. 38834-4-III Biochron, Inc. v. Blue Roots, LLC For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
[*501]No. 38834-4-III FEARING, C.J. (concurring) — I write separately because the majority opinion conflates the concepts of waiver and estoppel rather than analyzing each separately. Waiver is the intentional and voluntary relinquishment of a known right. In re of Estate of Petelle, 23 Wn. App. 2d 203, 212, 515 P.3d 548 (2022). Estoppel entails justifiable reliance on an adversary’s conduct in such a manner as to change one’s position for the worse. Saunders v. Lloyd’s of London, 113 Wn.2d 330, 340, 779 P.2d 249 (1989); Buchanan v. Switzerland General Insurance Co., 76 Wn.2d 100, 108, 455 P.2d 344 (1969). Waiver and estoppel are distinct concepts with differing elements. Schuster v. Prestige Senior Management, LLC, 193 Wn. App. 616, 631, 376 P.3d 412 (2016). Strictly defined, waiver describes the act, or the consequences of the act, of one party only, while estoppel exists when the conduct of one party has induced the other party to take a position that would result in harm if the first party’s act were repudiated. Pitts v. American Security Life Insurance Co., 931 F.2d 351, 357 (5th Cir. 1991). Estoppel involves some element of reliance or prejudice on the part of the party asserting estoppel. Pitts v. American Security Life Insurance Co., 931 F.2d 351, 357 (5th Cir. 1991). Waiver For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. No. 38834-4-III (concurrence) Bichron, Inc. v. Blue Roots, LLC requires no reliance. Schuster v. Prestige Senior Management, LLC, 193 Wn. App. 616, 632 (2016). Biochron, Inc. only contends that Blue Roots, LLC waived the right to arbitration. Therefore, I would not examine whether Biochron relied on conduct or statements of Blue Roots or whether Biochron suffered any prejudice. I agree with the majority’s astute analysis and implied ruling that Blue Roots never intentionally relinquished the right to arbitration. I do not blame the majority author for conflating the concepts of waiver and estoppel. For some unknown and odd reason, all Washington decisions, if not also all foreign decisions, meld the two concepts in the context of arbitration. Schuster v. Prestige Senior Management, LLC, 193 Wn. App. 616, 632-34 (2016). I concur: ______________________________ Fearing, C.J.