Wishnosky v. Star-Lite Bldg. Dev., Unpublished Decision (9-7-2000)
Wishnosky v. Star-Lite Bldg. Dev., Unpublished Decision (9-7-2000)
Opinion of the Court
This cause came on to be heard upon the accelerated calendar pursuant to App.R. 11.1 and Loc.R. 25, the records from the Cuyahoga County Court of Common Pleas, the briefs and the oral arguments of counsel. The purpose of an accelerated docket is to allow an appellate court to render a brief and conclusory decision. Crawford v. Eastland Shoppping MallAssn. (1983),
Defendants-appellants Star-Lite Building and Development Co. and Michael Borsky (appellants) appeal the order rendered in Cuyahoga County Court of Common Pleas in which the trial court denied their motion for stay of proceedings pending arbitration. For the reasons stated below, we affirm.
The record reflects that on April 29, 1994, plaintiffs-appellees David and Mary Ann Wishnosky (appellees), as buyers, entered into a contract with appellants, as contractor/seller, for the construction of a residential dwelling and improvements to premises located on Falmouth Circle, North Royalton, Ohio. On March 17, 1999, appellees commenced the within refiled action against appellants Star-Lite Building and Michael Borsky, among others, in a six-count complaint in which they asserted claims against appellants for breach of contract and fraud alleging that appellants failed to complete construction of their home in a good and workmanlike manner. On April 30, 1999, appellants filed their separate answer, demanded trial by jury and included, as an affirmative defense, the claim that the contract was subject to mandatory arbitration and/or mediation. With their answer, appellants asserted both a compulsory counterclaim alleging breach of contract for sums due under the contract and a claim for damages due to appellees intentional and wrongful filing of a mechanic's lien on their property. Appellants included with this answer their jury demand. The same day, appellants moved for a more definite statement on the claim of fraud asserted against them. On September 3, 1999, appellees filed an amended complaint in which they pled their fraud claim with greater particularity. Jury trial was set to commence on November 22, 1999, with a settlement conference set to be held on September 21, 1999. On September 10, appellants filed a motion for stay of proceedings pursuant to R.C.
I. THE COURT ERRED IN NOT CONDUCTING A HEARING BEFORE OVERRULING THE MOTION FOR A STAY.
II. THE COURT COMMITTED PREJUDICIAL ERROR IN OVERRULING THE MOTION FOR A STAY.
The within appeal is advanced pursuant to R.C.
If any action is brought upon any issue referable to arbitration under an agreement in writing for arbitration, the court in which the action is pending, upon being satisfied that the issue involved in the action is referable to arbitration under an agreement in writing for arbitration, shall on application of one of the parties stay the trial of the action until the arbitration of the issue has been had in accordance with the agreement, provided the applicant for the stay is not in default in proceeding with arbitration. An order under this section that grants or denies a stay of a trial of any action pending arbitration, including, but not limited to, an order that is based upon a determination of the court that a party has waived arbitration under the arbitration agreement, is a final order and may be reviewed, affirmed, modified, or reversed on appeal pursuant to the Rules of Appellate Procedure and, to the extent not in conflict with those rules, Chapter 2505. of the Revised Code.
Preliminarily, we shall consider appellees challenge to the jurisdiction of this court to hear the within appeal. Appellants claim their right of immediate appeal based upon R.C.
It is undisputed that the construction contract entered into by the parties on April 29, 1994 does not contain an arbitration provision. However, the construction contract provides in pertinent part that BUILDER shall warrant his workmanship and material for a period of one year after completion and shall further provide PURCHASERS with BIA Registered Warranty * * *. Appellants supported their motion with a written but unsigned BIA Limited Home Warranty agreement which is referenced in the construction contract and which provides by its terms for dispute settlement through mediation or should mediation fail, that either party may request that any matter covered by the limited warranty be determined by arbitration.
We note that nothing in the statute requires that the written agreement be signed by the parties. R.C.
In this appeal, appellants essentially assert that the trial court was bound by the statutory provisions found in R.C. 2711, et seq. to both conduct a hearing on their motion for stay and then grant the motion in their favor.
The Ohio Arbitration Act allows for either direct enforcement of [arbitration] agreements through an order to compel arbitration under R.C.
A fair reading of R.C.
In their second assignment of error, appellants contend that the court erred in denying its motion for stay of proceedings and claim that the BIA Limited Registered Warranty, which was submitted in support of their motion, demonstrates that this dispute is a matter which the parties agreed to arbitrate. Appellees, on the other hand, assert that the decision of the trial court is correct and argue that R.C.
Ohio and federal courts encourage arbitration to settle disputes. [Citations omitted.] ABM Farms Inc. v. Woods (1998),
In this case, the order issued by the trial court denied appellants' motion for stay without setting forth its reasons. Therefore, this court is without guidance as to whether the trial court was not satisfied that the issue involved in the action was referable to arbitration under an agreement in writing or whether such agreement did exist but was waived by appellants. Nonetheless, upon review, if this court fails to find an abuse of the trial court's discretion in its denial, the decision will be affirmed.
First, we consider whether appellants presented evidence sufficient to satisfy the court that the issues involved in the action were subject to arbitration under an agreement in writing. In support of their claim that the issues were arbitable, appellants provided the trial court with an unsigned and undated prototype Limited Home Warranty which by its own terms terminates one year after commencement of the date on the certificate. The Limited Home Warranty requires that written notice of a homeowner's complaint under the warranty must be received by the builder within one year of the commencement date of the warranty. Mediation may be requested by letter, the requisite American Arbitration Association forms, a filing fee and a copy of the claim or complaint letter previously sent. If agreement cannot be reached, the Warranty provides for arbitration and provides The party seeking such arbitration shall submit the requisite AAA forms and shall pay the AAA filing fee for such arbitration. The record is devoid of any evidence that appellees sought arbitration pursuant to the Limited Home Warranty during its term of enforcement. Under these circumstances, it cannot be said that the issues involved in the matter sub judice are referable to arbitration under an agreement in writing for arbitration. Accordingly, where appellants have failed to demonstrate that the issues involved were subject to arbitration, and have failed to establish that an agreement to arbitrate was intended by the parties and in full force and effect at the time of the dispute, then it cannot be said that the trial court erred in denying the motion. Without sufficient evidence of the existence of a written agreement to arbitrate the disputed claims, the trial court is left with no alternative but to deny the motion and proceed with litigation. ACRSInc. v. Blue Cross Blue Shield (1998),
However, assuming arguendo, that the trial court found the issues involved here were, in fact, referable to arbitration, we shall consider whether appellants' conduct constituted waiver of the agreement. A waiver of the right to arbitrate is not lightly inferred. Harsco, supra, 415. This court has set forth a test where two elements must be shown to demonstrate the defending party's conduct during litigation constitutes a waiver to its right to arbitrate. Phillips, supra. To prove that the defending party waived its right to arbitration, the complainant is required to demonstrate that the defending party `knew of an existing right to arbitration, see List Son Co. v. Chase (1909),
The circumstances which may be considered by the court as pertinent to the issue of waiver are: 1) any delay in the requesting party's demand to arbitrate via motion to stay judicial proceedings; 2) the extent of the requesting party's participation in the litigation prior to its filing a motion to stay the proceeding, including the status of discovery, dispositive motions and the trial date; 3) whether the requesting party invoked the jurisdiction of the court by filing a counterclaim or third-party complaint without asking for a stay of the proceedings; and 4) whether the non-requesting party has been prejudiced by the requesting party's inconsistent acts. See Harsco, supra, 414.
In this case, appellants' actions can be seen to be inconsistent with the claimed right to arbitrate the issues. The record demonstrates that in their answer appellants asserted as an affirmative defense its right to arbitrate the dispute but they participated in the discovery and pretrial stages of the litigation and failed to move for a stay of proceedings until the eve of the settlement conference. They filed responsive pleadings; they filed two counterclaims, recognizing the trial court's authority to determine the suit pending before it; and, they twice requested the court to conduct a trial by jury. Based upon the totality of these circumstances, the court reasonably could find that appellants were aware of their claimed right to arbitrate the case but that their actions were inconsistent with that asserted right. Thus, it cannot be said that the trial court's decision was unreasonable, arbitrary or unconscionable. Clearly, a finding that appellants' actions were inconsistent with the right to arbitrate would not be an abuse of the court's discretion given the totality of the circumstances here. Accordingly, a denial of appellants' motion for stay of proceedings, if based upon their waiver of right to participate in arbitration, should be affirmed. Appellants' second assignment of error is without merit.
Judgment affirmed. The within matter is remanded to the trial court for further proceedings consistent with this opinion.
It is ordered that appellees recover of appellants their costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the Common Pleas Court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
SPELLACY, J. and KILBANE, J., CONCUR.
_____________________________________ TIMOTHY E. McMONAGLE, PRESIDING JUDGE
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