Arbitration & Mediation

Attempt to Settle Is Not Waiver of Right to Arbitrate

By Christopher B. Hopkins, Esq.

Florida decisions regarding waiver of the right to arbitrate continue to confound as the state courts are not internally consistent and use a different standard than their federal court bethren. Thus, the same situation results in different outcomes depending on which courthouse you are in, as well as which city you are in.

The case of DFC Homes of Florida v. Wayne Lawrence is not likely to change the landscape of these waiver of arbitration disputes, but it does show the unusual situation which parties create when they do not consistently pursue their rights in one (and only one) forum. The clear takeaway message, however, is that attempts to settle a case are not inconsistent with seeking to compel arbitration. At least so says a Panel of the Fourth District (Polen, Gross, and Farmer).

In this case, the parties developed a dispute over a construction contract and both sides pursued arbitration. After one side was deemed the prevailing party, the other side filed suit in state court alleging that the arbitrators did not rule on all of the issues. The prevailing party then argued that the losing party waived any right to further arbitration.

The procedural history of this matter is a mess and the Panel correctly determined that there was no indication of waiver, even when the litigating party filed a motion to dismiss and pursued discovery limited to whether the arbitrators ruled on all issues.

The court held that offers of settlement were not tantamount to waiving arbitration and that to hold otherwise would conflict with the public policy desiring disputes be resolved quickly.

Notably, the Panel relied upon the fact that the alleged acts of waiver occurred *after* the party sought arbitration, not prior to seeking arbitration, and that they never put anything at issue by filing an Answer or seeking relief. For some time, we have been advocating that the bright line waiver standard should be whether a party makes or denies a claim in a counter/cross claim or Answer however other courts have not pursued that simple, bright line test. We question whether this decision signals that the Fourth DCA may take up that standard, at least in limited situations.

Full post as published by Florida Arbitration Law on September 24, 2009 (boomark / email).