Implied Waiver of an Arbitration Clause Is a High Burden
This post has been viewed 3,316 times.
A recent case out of Texas, Legoland Discovery Centre (Dallas), LLC v. Superior Builders, LLC, No. 02-16-00425-CV (behind paywall), reaffirms how difficult it is to prove that a party waived its right to arbitration through substantially invoking the judicial process.
In the case, Legoland notified Superior that it was terminating its contract due to alleged breaches on Superior’s part. Superior then sued Legoland. Legoland responded, raising compulsory counterclaims. Superior than added as defendants the subcontractors that were identified by Legoland’s counterclaims. A scheduling order was entered and the parties conducted some “basic” discovery, while Legoland systematically began settling with the subcontractors. A few days after it settled with the last subcontractor, twenty-two months after Superior had filed suit, Legoland moved to compel arbitration under the arbitration clause of its contract with Superior. Superior argued that Legoland had waived its right to arbitration because it had substantially invoked the judicial process, and the trial court agreed.
Read original articleTags:
