Waiver of right to arbitrate must be voluntary and intentional and not inferred lightly: WEIS BUILDERS, INC. V. COMPLETE CONTRACTING, INC. (COA 2/29/2008)

WEIS BUILDERS, INC. V. COMPLETE CONTRACTING, INC.
ARBITRATION: WAIVER

2007-CA-000700
PUBLISHED: REVERSING AND REMANDING
PANEL:  STUMBO PRESIDING; ACREE, GRAVES CONCUR
COUNTY: POWELL
DATE RENDERED: 2/29/2008

Weis appealed arguing the circuit court improperly concluded that Weis waived its unilateral authority to compel arbitration pursuant to the terms of a contract between the parties.  At issue was correspondence wherein counsel for Weis Builders stated,“[a ]t this point in time, Weis Builders ’ preference is to litigate the dispute rather than arbitrate it, although this is open to discussion.”  Complete Contracting would later maintain that this statement represented Weis Builders ’ decision under the contract to proceed with litigation rather than arbitration. Conversely, Weis Builders would argue that the letter evidenced no decision, but rather was merely an invitation to discuss the matter.

COA held the circuit court erred in determining that Weis Builders waived its contractual right to resolve the dispute through arbitration.  A waiver may be either express or implied,although waiver will not be inferred lightly.” Conseco Finance Servicing Corporation v..Wilder ,47 S.W.3d 335 (Ky.App.2001).

The statement that it was Weis’s “preference is to litigate ” did not constitute “a voluntary and intentional surrender or relinquishment of a known right.” One may not reasonably conclude that Weis Builders would be “open to discussing ” its “preference ” if it were not preserving the right to change that preference.

Michael Stevens

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