Wednesday, July 20, 2011, 3:30 PM

COA: Failure to Assert Right to Arbitration Until Trial Date Results in Waiver

Yesterday the Court of Appeals held that a plaintiff waived her right to arbitration when she requested a jury trial and litigated the matter for about two years, but then moved to compel arbitration on the eve of the second scheduled trial date. The case is Herbert v. Marcaccio.

In Herbert, the trial court concluded that plaintiff waived her right to arbitration by proceeding with litigation "so far and in such a manner" that defendant was prejudiced by having to expend "significant resources." The trial court noted that plaintiff waived arbitration by failing to respond to discovery.

The COA agreed that Plaintiff waived her right to compel arbitration, but not due to any action related to discovery. The COA held that the waiver occurred because Plaintiff failed to demand arbitration after the right accrued and after Defendant expended significant resources. The right to demand arbitration accrued on 24 February 2007, and Plaintiff filed the suit eight months later requested a jury trial. Over the course of the next two years, Defendant's counsel had to "prepare for and attend three court hearings and engage in other defense activities, resulting in an expenditure of resources (including time and expense)that would have been unnecessary had plaintiff moved to compel arbitration earlier." Over that time period plaintiff gave no indication that she had changed her mind about proceeding with a jury trial, and Plaintiff did not move to compel arbitration until right before the second scheduled trial date.

The COA also held that the trial court did not need to make specific findings regarding the exact costs expended by Defendant in order to conclude that it had expended significant resources on the lawsuit due to Plaintiff's failure to demand arbitration. The COA found that Defendant's counsel's attendance at multiple hearings and participating in litigation for two years was enough to support a conclusion that "significant resources" were expended.

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