Thursday, August 6, 2009

Answering Complaint Without Demanding Arbitration is Not Sufficient to Find Waiver of Right to Arbitration

In Lynch v. Solid Waste Haulers, LLC (1D09-100), the First District held that the defendants had not participated in the litigation to an extent necessary to waive the right to arbitration.

The appellant argued that one defendant waived the right to arbitration by filing a motion to dismiss and the other "by filing an answer that failed to include a demand for arbitration, prior to either entity’s filing a motion to compel arbitration."

When determining whether waiver has occurred in the arbitration agreement context, the question is whether, under the totality of the circumstances, the defaulting party has acted inconsistently with the right to arbitrate. See id. In the instant case, neither Solid Waste Haulers’ nor Payroll Management’s actions constituted a waiver of the right to arbitration. See Bonati v. Clark, 975 So. 2d 440 (Fla. 2nd DCA 2007) (where a defendant files an answer and raises an arbitration agreement as an affirmative defense, defendant does not waive his right to arbitration); see also Houchins v. King Motor Co. of Fort Lauderdale, 906 So. 2d 325 (Fla. 4th DCA 2005)


We find that Appellees did not engage in litigation that would waive their rights to arbitration, and we therefore affirm the trial court’s order to the extent it directs the parties to comply with the arbitration agreement.


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