Waiver through litigation conduct found after challenge to arbitration


By: William Gildea

In LMH-Lane Cabot Yard Joint Venture v. Mass. Electric Construction Co., Unpublished (Suffolk County Superior Court Civil Action No. 2184CV02019) (Mass. Super. Ct. Sept. 22, 2021) (Ricciuti, J.), the Massachusetts Superior Court denied a Plaintiff’s application to stay arbitration after finding the Plaintiff waived its objection to arbitration through litigation conduct.  The Court found that Plaintiff’s conduct insisting on mediation after receiving the initial arbitration demand was an admission that the arbitration provision in its contract with the Defendant applied to the dispute.  Parties and counsel should take note of this decision and be cognizant to not waive rights through conduct early in litigation. 

Defendant (claimant in arbitration) initially filed an arbitration demand in March 2020.  Plaintiff (respondent in the arbitration) insisted on mediation, and occurred on July 28, 2020 without resolution.  The First Amended Arbitration Demand was filed on October 14, 2020.  Plaintiff did not file an Answering Statement in the arbitration, but filed a motion to dismiss or in the alternative stay arbitration on January 22, 2021 claiming, in part, Defendant failed to comply with the claims procedure set forth in the contract between the parties.  The Panel denied this motion.  Plaintiff continued to engage in “extensive discovery” in the arbitration and did not seek court intervention to stay the arbitration.  Discovery closed in the arbitration on September 17, 2021, and Plaintiff filed the Superior Court action on September 3, 2021 under G.L. ch. 251, § 2(b) seeking to stay the arbitration. 

The Superior Court found that Plaintiff waived its right to challenge arbitration.  The Superior Court looked in part to Federal case law governing the issue of waiver that “focus on whether a party waived a contractually-based objection to a forum by engaging in dispute resolution in that forum.”  The Court looked at Plaintiff’s insistence on mediation, “which under the Contract is a mandatory step before arbitration[,]” and that Plaintiff’s “s insistence on mediation was thus an admission that the arbitration requirement in the Contract applies to this dispute.”  Plaintiff’s conduct of in moving to dismiss the arbitration before the Panel and arguing the merits of its case, which was denied, and failing to “forcefully object” to the arbitration did not “take the necessary steps to preserve [Plaintiff’s] objection before the Panel.” 

This decision is important and reiterates that counsel and parties should be aware of potential contractual obligations early in the litigation to ensure a waiver of an intended forum does not occur. 

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