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Wright v. Jerry Fulks & Co.10/31/2005
mand arbitration during pretrial proceedings and engages in conduct inconsistent with the intent to arbitrate, 'the party opposing a motion to compel arbitration may more easily show its position has been compromised.' Kinsey, 53 Wn. App. at 170; accord Steele v. Lundgren, 85 Wn. App. 845, 853, 935 P.2d 671 (1997).
We review the determination of waiver de novo, applying the legal test for waiver to the undisputed facts of Fulks' participation in the litigation below. Fisher v. A.G. Becker Paribas, Inc., 791 F.2d 691, 693 (9th Cir. 1986); Steele, 85 Wn. App. at 850. A waiver of the right to arbitrate may be express or implied. An implied waiver occurs 'when party actively participates in litigation or acts inconsistent with its rights to proceed with arbitration.' Siam Feather & Forest Prods. Co. Inc. v. Midwest Feather Co., Inc., 503 F. Supp. 239, 242 (S.D. Ohio 1980). The determination of waiver depends on the facts of each particular case and 'is not susceptible to bright line rules.' Cotton v. Sloan, 4 F.3d 176, 179 (2d Cir. 1993). In Kinsey, this court set forth the federal standard adopted by the Ninth Circuit to establish waiver. A party opposing arbitration and seeking to prove waiver must show (1) knowledge of an existing right to compel arbitration, (2) conduct inconsistent with that right, and (3) prejudice. Kinsey, 53 Wn. App. at 170; Letizia v. Prudential Bache, Sec. Inc., 802 F.2d 1185, 1187 (9th Cir. 1986).
Waiver
The first prong, knowledge of an existing right to compel arbitration, is not in dispute. For the second prong Wright must show Fulks acted in a manner inconsistent with the right to arbitrate. Critical factors in evaluating this prong include the extent to which the parties have prepared for trial and engaged in discovery, and how clearly they manifested intent to use the judicial process. Peterson v. Shearson/American Express Inc., 849 F.2d 464, 467-69 (10th Cir. 1988).
Wright argues Fulks' extensive participation in discovery, pretrial motions including dispositive motions and its failure to demand arbitration until the first day of trial establishes conduct inconsistent with the right to arbitration.
Fulks filed cross-claims against the other parties for indemnification and filed a third-party claim against one of its subcontractors, Western Title and Marble, Inc. Fulks actively engaged in discovery, including propounding numerous interrogatories, requests for productions, and noting at least 25 depositions. Fulks demanded a jury trial; joined in a motion to continue trial; filed a motion for partial summary judgment on the negligence claims and the common elements breach of contract claims; filed two motions for judgment on the pleadings under CR 12(c); and filed motions in limine, a trial brief and jury instructions.
The record also establishes that Fulks passed up logical opportunities to demand arbitration and instead moved forward with litigation. The October 11, 2002 Confirmation of Joinder filed on behalf of all the parties states that the case was not subject to mandatory arbitration. The Confirmation of Joinder form expressly states that if the case is subject to mandatory arbitration, 'this report should not be filed; instead, no later than the deadline for filing this report, a statement of arbitrability should be filed, pursuant to LMAR 2.1(a).' And again in the June 23, 2003 Joint Status Report outlining the claims, the status of discovery, the anticipated length of trial, and other issues there is no reference to arbitration. After asserting the affirmative defense of arbitrability in its answer, Fulks never mentioned arbitration and did not seek to compel arbitration until the first day of trial.
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