Summary
The Louisiana Supreme Court held that, under the Louisiana Binding Arbitration Law, a court must stay litigation and order arbitration when a written arbitration agreement covers the dispute and the applicant is not in default. The court further held that waiver of arbitration is a procedural arbitrability issue reserved for the arbitrator, absent an agreement assigning that issue to the courts. The court reversed and remanded the trial court's denial of the defendants' motion to stay pending arbitration.
Topics
Practice areas
Questions Presented
- Whether the trial court or an arbitrator must decide whether a party waived its contractual right to arbitrate.
- Whether the Louisiana Binding Arbitration Law required the trial court to stay the action and order arbitration when the existence of a written arbitration agreement and the arbitrability of the dispute were undisputed.
Holdings
- A dispute concerning waiver of an arbitration clause is a procedural-arbitrability issue reserved for the arbitrator, not the court, absent an arbitration agreement providing otherwise.
- The defendants were entitled to a stay because the existence of a written arbitration agreement and the referral of the dispute to arbitration were undisputed, and the defendants were not in default in proceeding with arbitration.
Key quotations
“Neither statute allows the trial court to determine waiver issues.” (861 So. 2d at 141)
“If, however, the parties to an arbitration agreement wish for the courts, rather than the arbitrator, to determine the issue of waiver, they may certainly construct the arbitration clause in such a manner as to so allow.” (861 So. 2d at 144)
Factual background
International River Center, owner of the Hilton Riverside Hotel, contracted with the Henry C. Beck Company as general contractor for construction of the hotel. After alleged roof defects, International River Center filed suit against Beck and Johns-Manville Sales Corporation, the roofing-system manufacturer, and Beck later filed a third-party demand against Standard Roofing Company, the roofing subcontractor. Years later, after periods of dormancy and litigation activity including depositions and document production, Standard Roofing invoked the arbitration clause and sought a stay, which International River Center opposed on waiver and prejudice grounds.
Procedural history
International River Center filed a construction-defect action concerning the roof of the Hilton Riverside Hotel. After extensive delay and litigation activity, Standard Roofing moved to stay the proceedings pending arbitration, and Beck and Johns-Manville joined the motion. The trial court denied the stay and the court of appeal denied supervisory relief; the Supreme Court reversed and remanded.
Remand instructions
The matter was remanded to the trial court for disposition not inconsistent with the opinion, including treatment of the defendants' motions in accordance with the requirement that waiver be decided by the arbitrator.