Pinnell v. Cugini & Cappoccia Builders, Inc.

Summary

The Tenth District Court of Appeals of Ohio affirmed the denial of appellants' motion to stay litigation pending mediation and arbitration. The court held that appellants waived their contractual arbitration rights by actively participating in the litigation, including filing a counterclaim, engaging in discovery, seeking court intervention, and delaying their motion to stay.

Holdings

1. Appellants waived their right to compel arbitration because, with knowledge of that right, they acted inconsistently with it by invoking the trial court's jurisdiction, filing a counterclaim, participating extensively in discovery and other litigation, seeking merits relief through summary judgment, and waiting more than a year before requesting a stay.
2. A contractual provision requiring waiver to be in writing may itself be waived through the parties' subsequent conduct; therefore, the operating agreement's written-waiver clause did not prevent appellants from waiving arbitration by their litigation conduct.
3. An alleged failure or rescission of the operating agreement does not, by itself, eliminate the arbitration provision because the arbitration clause is treated as a separate contract within the broader agreement and must be challenged on its own merits.

Questions Presented

1. Whether appellants waived their contractual right to compel arbitration by invoking the trial court's jurisdiction, filing a counterclaim and summary-judgment motion, participating extensively in discovery, and delaying their request for a stay.
2. Whether the operating agreement's written-waiver provision prevented waiver of the arbitration right through litigation conduct.
3. Whether alleged material breaches or rescission of the operating agreement rendered its arbitration provision unenforceable.

Disposition

affirmed