IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

PNC BANK, N.A., )

 )

Plaintiff, )

)

v. ) CIVIL ACTION 14-0461-WS-B

 )

PRESBYTERIAN RETIREMENT )

CORPORATION, INC., et al., )

 )

Defendants. )

ORDER

This matter comes before the Court on plaintiff’s Motion to Compel Arbitration (doc. 

56). The Motion has been extensively briefed, with both participating defendants having filed

objections (docs. 58 & 61) and movant having submitted replies (docs. 63 & 64) to each.1

I. Background.

A. Nature of the Lawsuit / Causes of Action.

Plaintiff, PNC Bank, N.A., commenced this action against defendants Presbyterian 

Retirement Corporation, Inc. (“Presbyterian”) and The Special Care Facilities Financing 

Authority of the City of Daphne (the “Authority”) back on October 2, 2014.2 Defendant 

Infirmary Health System, Inc. (“Infirmary Health”) was granted leave to intervene via Order 

(doc. 33) entered on November 4, 2014. At its core, this litigation is about Presbyterian’s default 

 1 In light of the issuance of this Order, plaintiff’s Motion to Stay Deadlines (doc. 

65) is moot.

2 To date, the Authority has neither appeared nor defended in this action, even 

though service of process was purportedly perfected on October 10, 2014. (See doc. 25.) 

Notwithstanding the Authority’s failure to appear, PNC Bank has not applied for clerk’s entry of 

default, perhaps because of plaintiff’s explanation in the pleadings that “[t]he Authority is named 

as a defendant primarily to make sure that PNC Bank can obtain the complete relief it seeks 

herein,” in that the Authority is a joint mortgagor for the subject real estate collateral. (Doc. 1, ¶ 

3.)

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of debt-service obligations owed to PNC Bank. Those obligations were secured by Westminster 

Village, a not-for-profit retirement community owned and operated by Presbyterian. PNC Bank

now asserts various claims against Presbyterian rooted in breach of contract. In those claims, 

PNC Bank pursues monetary and equitable remedies arising from the alleged default, including 

money damages in excess of $8.2 million and appointment of a receiver to manage and control 

Westminster Village in anticipation of a proposed foreclosure sale. Infirmary Health is an 

interested stakeholder because it is also a creditor of Presbyterian and a mortgagee as to 

Westminster Village. The rub is that PNC Bank and Infirmary Health appear to have drastically 

different ideas as to the disposition of that collateral.

Both defendants have asserted counterclaims against PNC Bank. For its part, 

Presbyterian filed a Counterclaim (doc. 32) on October 31, 2014, through which it interposed 

claims sounding in conversion, money had and received, negligence, and wantonness, based on 

allegations that PNC Bank had wrongfully seized over $900,000 from Presbyterian accounts that 

could not properly be used to satisfy the defaulted debt because they contained funds that donors 

had restricted to specific purposes. Infirmary Health filed a Counterclaim (doc. 12) that took 

effect on November 4, 2014, asserting that PNC Bank had violated an Intercreditor Agreement 

that PNC Bank’s predecessor and Infirmary Health executed in December 2005 to clarify their

respective rights and duties with respect to Westminster Village and various related assets in 

which they each hold interests. Infirmary Health seeks a declaratory judgment that PNC Bank 

cannot enforce the Intercreditor Agreement against it and that Infirmary Health’s mortgage is 

senior in priority to that of PNC Bank, as well as a money judgment for PNC Bank’s alleged 

breaches of the Intercreditor Agreement.

B. Litigation Activity.

The nature, extent and progress of these legal proceedings are relevant to consideration of 

the pending Motion to Compel Arbitration. More than six months have passed since PNC Bank 

commenced this litigation. Contemporaneously with filing the Complaint, PNC Bank requested 

immediate appointment of a receiver for Westminster Village on an expedited basis. (Docs. 3 & 

5.) The Court entered an Order (doc. 9) on October 7, 2014 denying expedited treatment of the

motion for appointment of receiver, given PNC Bank’s failure to show that Westminster Village 

was likely to suffer catastrophic harm absent immediate resolution of the receivership question, 

and PNC Bank’s longstanding awareness of the circumstances giving rise to the alleged need for 

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urgent equitable relief. The motion for appointment of receiver was then briefed in full, after 

which the Court entered an Order (doc. 35) denying PNC Bank’s motion. In so doing, the Court 

reasoned as follows: (i) PNC Bank was not entitled to the extraordinary equitable remedy of

appointment of a receiver as a matter of contractual right; (ii) PNC Bank’s factual allegations

(i.e., that Westminster Village was being grossly mismanaged, operating in a manner that 

compromised resident care, and teetering on the brink of financial collapse) were largely

unsupported by record facts; and (iii) equitable considerations such as the adequacy of less 

drastic remedies and the likelihood that a receiver may do more harm than good weighed against 

granting the requested relief.

In the wake of denial of the motion for appointment of receiver, this action proceeded for 

several months along a normal federal civil litigation track. A motion for preliminary injunction 

filed by Infirmary Health to block a contemplated March 2015 foreclosure sale of Westminster 

Village was amicably resolved by consent of the parties. (See doc. 55.) The parties submitted 

their Rule 26(f) Report (doc. 43) on December 29, 2014, after which Magistrate Judge Bivins 

entered a comprehensive Rule 16(b) Scheduling Order (doc. 46). That Scheduling Order fixed a 

discovery cutoff date of July 1, 2015, and set this matter for jury trial during November 2015. 

On January 29, 2015, and apparently prior to any discovery having been taken by any 

party, PNC Bank filed its Motion to Compel Arbitration, invoking arbitration clauses set forth in 

Financing Agreements into which it had entered with Presbyterian in 2005 and 2006, as well as 

an arbitration clause in the Intercreditor Agreement between PNC Bank and Infirmary Health.3 

Presbyterian and Infirmary Health oppose the Motion on several theories, including chiefly that,

through its conduct in bringing and litigating this federal lawsuit, PNC Bank has waived its right 

to enforce the arbitration agreements. Defendants also argue that the Motion should be denied 

because, by violating the Intercreditor Agreement in multiple respects, PNC Bank has repudiated 

that document, precluding it from enforcing the arbitration provision.

 3 While briefing was underway on the Motion to Compel Arbitration, Infirmary 

Health filed a Motion for Summary Judgment (doc. 59) on the issue of whether PNC Bank has 

repudiated the Intercreditor Agrement; however, this Court stayed briefing on the Rule 56 

motion pending resolution of the motion to compel arbitration. (See doc. 62.)

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C. Relevant Contractual Terms.

PNC Bank points to three contracts containing arbitration clauses, to-wit: a 2005 

Financing Agreement between PNC Bank’s predecessor and Presbyterian, a 2006 Financing 

Agreement between the same parties, and the Intercreditor Agreement between PNC Bank’s 

predecessor and Infirmary Health. These are the arbitration provisions that PNC Bank now 

seeks to enforce via its request that this entire matter be referred to arbitration.

The two Financing Agreements contain virtually identical arbitration clauses providing 

that “any action, dispute, claim, counterclaim or controversy ... between or among [PNC Bank], 

the Authority, and [Presbyterian], including any claim based on or arising from an alleged tort, 

shall be resolved by arbitration.” (Doc. 56, Exh. B, at 1.) Covered disputes are defined as 

encompassing “all actions, disputes, claims, counterclaims or controversies arising in connection 

with the ... Bond and Note, ... any collection of any indebtedness owed to [PNC Bank], any 

security or collateral given to [PNC Bank], [and] any action taken (or any omission to take any 

action) in connection with any of the foregoing.” (Id.) Pursuant to the Financing Agreements, 

all such disputes “shall be resolved by binding arbitration in accordance with Title 9 of the U.S. 

Code and the Commercial Arbitration Rules of the American Arbitration Association.” (Id.) 

Two other features of the arbitration clauses in the Financing Agreements warrant mention. 

First, those provisions specify that “[i]f [Presbyterian] asserts a claim against [PNC Bank] in 

arbitration or otherwise during the pendency of a claim brought by [PNC Bank] in a court of law, 

the court action shall be stayed and the parties shall submit to arbitration all claims.” (Id. at 2.) 

Second, they provide that “institution or maintenance of an action for judicial relief or pursuit of 

provisional or ancillary remedies [such as appointment of a receiver] shall not constitute a waiver 

of the right of any party, including the plaintiff in such an action, to submit the Dispute to 

arbitration.” (Id.)

As for the Intercreditor Agreement entered into by PNC Bank’s predecessor and 

Infirmary Health, a detailed arbitration provision may be found at Section 22. That clause 

provides that “[a]ny controversy, claim or dispute or issue related to or arising from ... the 

interpretation, negotiation, execution, assignment, administration, repayment, modification, or 

extension of this Agreement; ... [or] any breach of any provision of this Agreement, shall be 

settled by arbitration in accordance with the Commercial Arbitration Rules of the American 

Arbitration Association.” (Doc. 56, Exh. A at Exh. 44, § 22(a).) The signatories further agreed 

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that “[a]ny disagreement as to whether a particular dispute or claim is subject to arbitration under 

this Section shall be decided by arbitration,” and that “[c]ommencement of litigation by any 

person entitled to demand arbitration under this Section shall not waive any right that person has 

to demand arbitration with respect to any counterclaim or other claim that may be made against 

that person.” (Id.) Finally, with respect to provisional remedies (“such as replevin, injunctive 

relief, attachment, or appointment of a receiver from a court having jurisdiction”), Section 22 

establishes that “[t]he exercise of a remedy shall not waive the right of either Mortgagee to resort 

to arbitration.” (Id. at § 22(c).)

II. Analysis.

A. Governing Legal Standard.

The Federal Arbitration Act (“FAA”), which governs plaintiff’s Motion, provides that 

written agreements to arbitrate “shall be valid, irrevocable, and enforceable, save upon such 

grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. In 

conformity with the FAA, “courts must place arbitration agreements on an equal footing with 

other contracts, and enforce them according to their terms.” Inetianbor v. CashCall, Inc., 768 

F.3d 1346, 1349 (11th Cir. 2014) (citations omitted). “Arbitration is a matter of contract” and 

“interpretation of an arbitration agreement is generally a matter of state law.” In re Checking 

Account Overdraft Litigation MDL No. 2036, 674 F.3d 1252, 1255 (11th Cir. 2012). “We must 

interpret the agreement by reading the words of the contract in the context of the entire contract 

and construing the contract to effectuate the parties’ intent.” Inetianbor, 768 F.3d at 1353 

(citation and internal quotation marks omitted); see also Stolt-Nielsen S.A. v. AnimalFeeds Int’l 

Corp., 559 U.S. 662, 682, 130 S.Ct. 1758, 176 L.Ed.2d 605 (2010) (“Whether enforcing an 

agreement to arbitrate or construing an arbitration clause, courts and arbitrators must give effect 

to the contractual rights and expectations of the parties.”) (citation and internal quotation marks 

omitted).

Significantly, the FAA creates a strong federal policy favoring enforcement of arbitration 

agreements. Indeed, “federal courts interpret arbitration clauses broadly where possible,” such 

that “any doubts concerning the scope of arbitral issues should be resolved in favor of 

arbitration.” Solymar Investments, Ltd. v. Banco Santander S.A., 672 F.3d 981, 988 (11th Cir. 

2012) (citations omitted). “When interpreting an arbitration agreement, due regard must be 

given to the federal policy favoring arbitration, and ambiguities to the scope of the arbitration 

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clause itself resolved in favor of arbitration.” Inetienbor, 768 F.3d at 1353 (citation and internal 

quotation marks omitted). Of course, “the FAA’s strong proarbitration policy only applies to 

disputes that the parties have agreed to arbitrate.” Klay v. All Defendants, 389 F.3d 1191, 1200 

(11th Cir. 2004).

B. Whether Waiver Issue is for Court or Arbitrator to Decide.

Presbyterian and Infirmary Health take the position that the claims joined herein are not 

arbitrable because PNC Bank has waived its arbitration rights through its conduct in this 

litigation. Notwithstanding the federal policy favoring arbitration, it is well-settled that 

“[a]rbitration should not be compelled when the party who seeks to compel arbitration has 

waived that right.” In re Checking Account Overdraft Litigation, 754 F.3d 1290, 1294 (11th Cir. 

2014) (citation omitted). A critical threshold dispute presented in the parties’ briefs concerns 

whether a court or an arbitrator should decide whether such a waiver has occurred. Via 

unambiguous holding, the Eleventh Circuit has instructed “that it is presumptively for the courts 

to adjudicate disputes about whether a party, by earlier litigating in court, has waived the right to 

arbitrate.” Grigsby & Associates, Inc. v. M Securities Inv., 664 F.3d 1350, 1353 (11th Cir. 2011); 

see also Plaintiff’s Shareholders Corp. v. Southern Farm Bureau Life Ins. Co., 486 Fed.Appx. 

786, 789 (11th Cir. Aug. 10, 2012) (“questions regarding waiver based on litigation conduct are 

presumptively for the courts – and not the arbitrators – to decide”). “This presumption leaves the 

waiver issue to the decisionmaker with greater expertise in recognizing and controlling abusive 

forum-shopping.” Grigsby, 664 F.3d at 1354 (citations omitted). “Thus, absent ‘clear and 

unmistakable’ evidence of an agreement to the contrary, disputes regarding conduct-based 

waiver are left to the courts to decide.” Plaintiff’s Shareholders, 486 Fed.Appx. at 789.4

Notwithstanding the Grigsby presumption, PNC Bank maintains that the conduct-based 

waiver question is properly submitted to an arbitrator in this case because there is just such “clear 

and unmistakable” evidence that the parties agreed to arbitrate waiver issues. The evidence upon 

which PNC Bank relies consists of the following: (i) the language in Section 22 of the 

Intercreditor Agreement that “[a]ny disagreement as to whether a particular dispute or claim is 

 4 Alabama law is consistent with these principles. Indeed, the Alabama Supreme 

Court has held “that the issue whether a party has waived the right to arbitration by its conduct 

during litigation is a question for the court and not the arbitrator.” Ocwen Loan Servicing, LLC 

v. Washington, 939 So.2d 6, 14 (Ala. 2006).

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subject to arbitration under this Section shall be decided by arbitration;” (ii) the language in the 

Financing Agreements that if Presbyterian brings a claim against PNC Bank during the pendency 

of a claim brought by PNC Bank in court, “the parties shall submit to arbitration all claims;” and 

(iii) references in all three agreements to the Commercial Arbitration Rules of the American 

Arbitration Association (“AAA”). (See doc. 56, at 11-14.)5

The Court agrees with Infirmary Health and Presbyterian that PNC Bank has not made 

the necessary showing to overcome the Grigsby presumption. The provisions on which PNC 

Bank relies are general, not specific. They do not reference waiver issues, much less conductbased waiver issues. Language that the parties agree to arbitrate “all claims” is insufficient

because a waiver issue is not a “claim.” Similarly, a contractual provision that “[a]ny 

disagreement as to whether a particular dispute or claim is subject to arbitration” will be 

submitted to arbitration appears to contemplate arbitrability in its more general sense (e.g., 

whether a particular claim lies within the scope of the agreed arbitration provision),6 rather than 

the very specific context of waiver. And a AAA rule empowering the arbitrator to decide 

“arbitrability of any claim” likewise appears to refer to a different species of arbitrability, distinct 

from the specialized question of waiver. Under these circumstances, the undersigned concludes 

that PNC Bank has not come forward with clear and unmistakable evidence of an agreement by 

the parties that conduct-based waiver questions were to be decided by the arbitrator; therefore, 

the Grigsby presumption carries the day, and those waiver issues will be decided by this Court. 

See, e.g., Plaintiff’s Shareholders, 486 Fed.Appx. at 790 (finding that conduct-based waiver 

issue is not within scope of AAA Rule 7(a) because it is not an objection to validity of agreement 

 5 PNC Bank does not identify which of those Commercial Arbitration Rules it 

deems relevant; however, Rule 7 specifies that “[t]he arbitrator shall have the power to rule on 

his or her own jurisdiction, including any objections with respect to the existence, scope, or 

validity of the arbitration agreement or to the arbitrability of any claim or counterclaim.” That 

same rule provides that “[t]he arbitrator shall have the power to determine the existence or 

validity of a contract of which an arbitration clause forms a part.”

6 See Marie v. Allied Home Mortgage Corp., 402 F.3d 1, 15 (1st Cir. 2005) 

(explaining that the term “arbitrability” is one that “encompasses a wide variety of possible 

meanings, but the most obvious meaning focuses on ... whether a particular kind of dispute at 

issue falls within the scope of the arbitration clause,” and that “[m]ost cases that discuss 

arbitrability focus on these substantive issues”).

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and that “[m]oreover, Southern Farm is unable to point to (and we are unable to find) any other 

contractual language that would constitute clear and unmistakable evidence of an agreement to 

arbitrate issues of conduct-based waiver”).7

In light of the foregoing, this Court (and not an arbitrator) will decide whether PNC 

Bank, via its litigation conduct herein, has waived its right to compel arbitration of this action.

C. Waiver and the Intercreditor Agreement Arbitration Clause.

The Eleventh Circuit applies a two-part test to determine whether a party has waived its 

right to arbitration. “First, we decide if, under the totality of the circumstances, the party has 

acted inconsistently with the arbitration right,” such as by “substantially invok[ing] the litigation 

machinery prior to demanding arbitration.” Garcia v. Wachovia Corp., 699 F.3d 1273, 1277 

(11th Cir. 2012) (citations omitted). Second, the court examines whether those inconsistent 

actions by the movant have “in some way prejudiced the other party,” based on such factors as 

“the length of delay in demanding arbitration and the expense incurred by that party from 

participating in the litigation process.” Id. (citations omitted).8 That said, “mere delay in 

asserting a right to arbitrate, without more, does not require a finding of waiver.” Joca-Roca 

Real Estate, LLC v. Brennan, 772 F.3d 945, 950 (1st Cir. 2014). “Because federal policy 

strongly favors arbitration, the party who argues waiver ‘bears a heavy burden of proof’ under 

this two-part test.” Krinsk v. SunTrust Banks, Inc., 654 F.3d 1194, 1200 n.17 (11th Cir. 2011)

 7 See also Ehleiter v. Grapetree Shores, Inc., 482 F.3d 207, 222 (3rd Cir. 2007) 

(“There are no references to waiver of arbitration in this or any other provision of the 

Agreement. We cannot interpret the Agreement’s silence regarding who decides the waiver 

issue here as giving the arbitrators that power, for doing so would force an unwilling party to 

arbitrate a matter he reasonably would have thought a judge, not an arbitrator, would decide.”) 

(citation and internal marks omitted); Marie, 402 F.3d at 15 (agreement that arbitrator is to 

decide “the arbitrability of any such controversy or claim” does not constitute “clear and 

unmistakable evidence” of intent to have arbitrator decide conduct-based waiver issue, because 

“[t]here are no references to waiver or similar terms anywhere in the arbitration agreement” and 

“[n]either party should be forced to arbitrate the issue of waiver by conduct without a clearer 

indication in the agreement that they have agreed to do so”).

8 See also Joca-Roca Real Estate, LLC v. Brennan, 772 F.3d 945, 948 (1st Cir. 

2014) (“In determining whether a conduct-based waiver has occurred, we ask whether there has 

been an undue delay in the assertion of arbitral rights and whether, if arbitration supplanted 

litigation, the other party would suffer unfair prejudice.”); Campbell v. Verizon Wireless, LLC, 

2015 WL 416484, *7 (S.D. Ala. Jan. 29, 2015) (similar).

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(citations omitted). To vindicate this federal policy favoring arbitration, “waiver is not to be 

lightly inferred, and will normally be found only where the demand for arbitration came long 

after the suit commenced and when both parties had engaged in extensive discovery.” In re 

Pharmacy Ben. Managers Antitrust Litigation, 700 F.3d 109, 117 (3rd Cir. 2012) (citations and 

internal quotation marks omitted).

Application of the two-part Garcia test in this case is informed by the language of the 

parties’ agreement; indeed, the Court looks to the contracts in the first instance to ascertain what 

arrangements the parties may have made as to when a conduct-based waiver may occur. The 

reason is simple: Arbitration is a matter of contract. See Checking Account, 674 F.3d at 1255. 

Pursuant to the Federal Arbitration Act, those contracts are – and must be – rigorously enforced 

according to their terms. See, e.g., Walthour v. Chipio Windshield Repair, LLC, 745 F.3d 1326, 

1329 (11th Cir. 2014) (“Consistent with the FAA’s text, courts must rigorously enforce 

arbitration agreements according to their terms.”) (citation and internal quotation marks omitted); 

Cat Charter, LLC v. Schurtenberger, 646 F.3d 836, 843 (11th Cir. 2011) (“The FAA requires 

courts to enforce privately negotiated agreements to arbitrate, like other contracts, in accordance 

with their terms.”) (citation and internal quotation marks omitted). Federal courts are not free to 

rewrite or disregard particular terms of an arbitration agreement to suit their purposes. See, e.g.,

Checking Account, 674 F.3d at 1256 (where party asked court to modify provision in arbitration 

agreement, responding “[t]hat is something we cannot do”).9 Besides, given that one element of 

 9 See also BP Exploration Libya Ltd. v. ExxonMobil Libya Ltd., 689 F.3d 481, 496 

(5th Cir. 2012) (“for the district court to substitute its own notion of fairness in place of the 

explicit terms of the parties’ agreement would deprive them of the benefit of their bargain just as 

surely as if the district court refused to enforce their decision to arbitrate”) (citation and internal 

markings omitted); Williams v. E.F. Hutton & Co., 753 F.2d 117, 119 (D.C. Cir. 1985) (“The 

arbitration agreement is a contract and the court will not rewrite it for the parties.”); Antonio 

Leonard TNT Productions, LLC v. Goossen-Tutor Promotions, LLC, 2015 WL 269147, *7 (S.D. 

Tex. Jan. 21, 2015) (“A court may not rewrite the parties’ arbitration agreements.”); Baran 

Telecom, Inc. v. The Travelers Companies, Inc., 2010 WL 1141374, *3 (W.D. Okla. Mar. 22, 

2010) (“The court will not rewrite the terms of a contract or arbitration clause to include more 

favorable terms than the parties included for themselves.”); Ex parte Johnson, 993 So.2d 875, 

885 (Ala. 2008) (where party asked court to decide issue that arbitration agreement reserved for 

arbitrator, declining “to rewrite the agreements to suit the preference of one of the parties for an 

immediate judicial determination” because “[s]uch indifference to the unambiguous terms of a 

written agreement is contradictory to settled principles of Alabama contract law” and “[w]e 

cannot create unique rules of contract law applicable only to arbitration agreements”).

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the Garcia test is whether the party seeking arbitration has behaved inconsistently with that right, 

the parameters of conduct authorized in the underlying arbitration agreement are instructive as to 

whether the movant’s conduct was consistent with the arbitration right.

Accordingly, the waiver inquiry as to the arbitration provision in the Intercreditor 

Agreement properly begins with the relevant contract language. In that Intercreditor Agreement, 

PNC Bank and Infirmary Health mutually agreed that “[c]ommencement of litigation by any 

person entitled to demand arbitration under this Section shall not waive any right that person 

has to demand arbitration with respect to any counterclaim or other claim that may be made 

against that person.” (Doc. 56, Exh. A at Exh. 44, § 22(a) (emphasis added).) PNC Bank and 

Infirmary Health likewise agreed that a party’s exercise of a provisional remedy (such as 

applying to a court for appointment of receiver) “shall not waive the right of either Mortgagee to 

resort to arbitration.” (Id. at § 22(c).)

Again, Infirmary Health bears the heavy burden of establishing that PNC Bank waived its 

right to demand arbitration. The centerpiece of its argument is that PNC Bank filed suit, moved 

for appointment of a receiver, and pursued other provisional remedies, all of which activities

Infirmary Health insists are inconsistent with the right to arbitrate. In floating such a theory, 

Infirmary Health would have the Court disregard the plain language of the Intercreditor 

Agreement, wherein Infirmary Health agreed that it was not a waiver (i) for PNC Bank to 

commence litigation only to demand arbitration when another party asserted claims against it, or 

(ii) for PNC Bank to exercise its rights to provisional remedies such as petitioning a court for 

appointment of a receiver. For the reasons stated supra, this Court can neither ignore nor

effectively erase those terms from the Intercreditor Agreement simply because Infirmary Health 

now regrets their inclusion. Having agreed that it was not inconsistent with PNC Bank’s right to 

arbitrate Infirmary Health counterclaims for PNC Bank to commence litigation or to ask a court 

to impose a provisional remedy such as appointment of a receiver, Infirmary Health cannot 

persuasively be heard to argue otherwise.

Notwithstanding the foregoing, Infirmary Health seeks to minimize the debilitating 

effects of Sections 22(a) and 22(c) on its waiver argument. In particular, Infirmary Health seizes 

on the word “commencement” from Section 22(a), suggesting that the parties agreed only that 

filing suit would not constitute a waiver, while remaining silent as to whether actually pursuing

said lawsuit after filing it would constitute a waiver. Applicable precedent highlights the 

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unreasonableness of construing the arbitration provision as hinging on a filing / pursuing 

distinction. See Conseco Finance Corp.-Alabama v. Salter, 846 So.2d 1077, 1082 (Ala. 2002) 

(“It would be meaningless for Salter to agree that Conseco could file such an action in the trial 

court without waiving its right to compel arbitration, but that Conseco could not pursue that 

action without waiving its right to compel arbitration.”). As for Section 22(c), Infirmary Health 

contends that this provision was intended solely to “ensure[] the process of arbitration itself

would not extinguish legal remedies.” (Doc. 58, at 18.) The text of Section 22(c) belies such a 

crabbed, unreasonably narrow construction. To be sure, subsection (c) begins by specifying that 

the arbitration clause does not limit a party’s ability to seek a provisional remedy such as 

appointment of a receiver “before, during or after the pendency of any arbitration proceeding.” 

Had subsection (c) ended there, Infirmary Health might have a point; however, Section 22(c) 

goes on to clarify that “[t]he exercise of a remedy shall not waive the right of either Mortgagee to 

resort to arbitration.” That sentence could not be a clearer refutation of Infirmary Health’s 

position that the purpose of Section 22(c) was merely to prevent arbitration proceedings from 

snuffing out legal remedies.

10

What all of this means for purposes of the two-part test for waiver of the contractual right 

to arbitrate is that PNC Bank has not acted inconsistently with the right to arbitrate counterclaims 

brought by Infirmary Health (which are the only claims directly involving that party, as PNC 

Bank has asserted no causes of action in law or equity against Infirmary Health). Again, 

Infirmary Health and PNC Bank agreed that PNC Bank’s act of filing suit would not waive its 

right to demand arbitration of subsequent counterclaims brought by Infirmary Health. And 

Infirmary Health and PNC Bank further agreed that PNC Bank’s act of pursuing a provisional 

remedy like judicial appointment of a receiver would not waive PNC Bank’s right to demand 

arbitration. By the terms of the Intercreditor Agreement, PNC Bank’s conduct in this litigation is 

not inconsistent with its right to arbitrate the counterclaims brought by Infirmary Health. Nor 

has the litigation of Infirmary Health’s counterclaims (as to which there has been no discovery 

 10 Infirmary Health offers no rejoinder or interpretation of the last sentence of 

Section 22(c) that might help its cause. Instead, Infirmary Health asserts that “nowhere in 

Section 22(c) does ‘waiver’ appear.” (Doc. 56, at 18.) Perhaps the word “waiver” does not 

appear in that subsection, but the word “waive” certainly does, in a manner that is both directly 

on-point and wholly inconsistent with the “waiver” argument propounded by Infirmary Health.

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and no motion practice other than Infirmary Health’s Motion for Preliminary Injunction that was 

resolved amicably without judicial involvement) progressed so far as to warrant a finding that 

PNC Bank unduly delayed after the Infirmary Health counterclaims were filed before moving to 

compel arbitration.

11

In sum, the Court is of the opinion that Infirmary Health has failed to meet its heavy 

burden to establish a conduct-based waiver of PNC Bank’s arbitration rights with respect to the 

Infirmary Health counterclaims. The parties specifically agreed that PNC Bank could file a 

lawsuit without waiving its rights to arbitrate any counterclaims that Infirmary Health might 

bring, and that PNC Bank could ask a court to appoint a receiver without waiving its arbitration 

rights. The Court will neither rewrite nor disregard that prior agreement and understanding 

between the parties, particularly in the absence of excessive or unreasonable delay by PNC Bank 

in asserting such arbitration rights after the filing of the Infirmary Health counterclaims.12

 11 On this point, the court file reflects that Infirmary Health was granted leave to 

intervene on November 4, 2014 (see doc. 33), such that its counterclaims first came into play on 

that date. While PNC Bank did not move for arbitration until January 29, 2015, there appears to 

have been minimal activity as to the counterclaims in the interim. It is undisputed that no 

discovery occurred; furthermore, there was no motion practice related to the counterclaims other 

than Infirmary Health’s request for preliminary injunction that was resolved by agreement of the 

parties. There is simply no indication that PNC Bank allowed Infirmary Health’s counterclaims 

to proceed in court to such a degree that PNC Bank could reasonably be deemed to have 

substantially invoked the litigation process as to those counterclaims prior to exercising its 

arbitration rights. Nor has there been any adjudication of Infirmary Health’s counterclaims in 

these judicial proceedings, such that Infirmary Health’s characterization of the Motion to 

Compel Arbitration as a game of “heads I win, tails you lose” or blatant forum-shopping is 

inaccurate.

12 The Court recognizes, of course, that Infirmary Health has presented an 

alternative argument that the Motion to Compel Arbitration should be denied because PNC Bank 

effectively repudiated and abandoned the Intercreditor Agreement. The argument, as the Court 

understands it, is that PNC Bank has repeatedly engaged in material breaches of its obligations 

under the Intercreditor Agreement, and that “[t]he Court should not allow PNC Bank to cherry 

pick the provisions of the Intercreditor Agreement that it would like to enforce.” (Doc. 58, at 2.) 

So, Infirmary Health reasons, PNC Bank’s breaches of the Intercreditor Agreement disqualify it 

from being able to enforce any aspect of that agreement (including the arbitration clause set forth 

in Section 22) against Infirmary Health. This argument amounts to a direct attack against the 

validity of the arbitration provision (i.e., that PNC Bank has breached the Intercreditor 

Agreement, rendering the arbitration provision in that Agreement invalid and unenforceable). 

That, however, is a question for the arbitrator to decide, per the parties’ agreement. As noted, 

Section 22(a) of the Intercreditor Agreement adopted the AAA’s Commercial Arbitration Rules. 

(Continued)

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D. Waiver and the Financing Agreement Arbitration Clauses.

Having addressed the Motion to Compel Arbitration as it pertains to the Intercreditor 

Agreement and the counterclaims of Infirmary Health, the Court now turns to the Financing 

Agreements and the claims joined herein between PNC Bank and Presbyterian. Recall that in the 

October 2014 Complaint, PNC Bank asserted claims against Presbyterian for breach of contract 

and the like, alleging that Presbyterian was in default of certain loan repayment obligations owed 

to PNC Bank. As part and parcel of those claims, PNC Bank sought immediate appointment of a 

receiver to take control of the mortgaged real property, Westminster Village. That motion was 

litigated and ultimately denied via Order entered on November 13, 2014. During the pendency 

of that motion to appoint receiver, on October 31, 2014, Presbyterian brought counterclaims 

against PNC Bank on grounds such as conversion, money had and received, negligence and 

wantonness, all arising from PNC Bank’s allegedly improper seizure of financial accounts 

belonging to Presbyterian. Thus, at present, PNC Bank and Presbyterian have asserted claims 

against each other for money damages, with PNC Bank also continuing to claim entitlement to 

appointment of a receiver. PNC Bank now seeks to have all claims and issues joined between it 

and Presbyterian referred to arbitration in accordance with substantively identical arbitration 

provisions contained in a pair of underlying Financing Agreements entered into between 

Presbyterian and PNC Bank’s predecessor some years ago.

 

In Rule 7, those Commercial Arbitration Rules specify that “[t]he arbitrator shall have the power 

to determine the existence or validity of a contract of which an arbitration clause forms a part.” 

Pursuant to the rules expressly adopted by the parties, then, questions going to the validity of the 

Intercreditor Agreement (which is precisely what Infirmary Health is challenging via its 

contention that PNC Bank has repudiated / abandoned that entire agreement) are properly 

submitted to the arbitrator for resolution. The Court therefore expresses no opinion as to whether 

the arbitration agreement has been invalidated by PNC Bank’s alleged breaches, but instead 

refers that question to arbitration. See generally Martinez v. Carnival Corp., 744 F.3d 1240, 

1246 (11th Cir. 2014) (“a court may conclude that the parties agreed to arbitrate the very issue of 

arbitrability where there is clear and unmistakable evidence that they did so”) (citation and 

internal quotation marks omitted); Terminix Int’l Co. v. Palmer Ranch Ltd. Partnership, 432 

F.3d 1327, 1332 (11th Cir. 2005) (“By incorporating the AAA Rules, including Rule 8, into their 

agreement, the parties clearly and unmistakably agreed that the arbitrator should decide whether 

the arbitration clause is valid.”) (citations omitted).

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Presbyterian does not challenge the existence of the arbitration agreement, the 

applicability of the FAA, or the premise that PNC Bank’s claims against it are covered by the 

arbitration agreement. Instead, just as Infirmary Health did in arguing about the arbitration 

clause set forth in the Intercreditor Agreement, Presbyterian maintains that PNC Bank, through 

its conduct in this litigation, has waived the right to demand arbitration under the Financing 

Agreements.13 Once again, the parties agree that this argument is properly evaluated by 

reference to the two-pronged test set forth in Garcia v. Wachovia Corp., 699 F.3d 1273, 1277 

(11th Cir. 2012), to-wit: (i) whether PNC Bank has acted inconsistently with the right to arbitrate; 

and (ii) if so, whether PNC Bank’s conduct in this litigation has prejudiced Presbyterian.

As with the Infirmary Health waiver objection, the appropriate analytical starting point is 

the contract language regarding arbitration and waiver issues. One cannot evaluate whether PNC 

Bank acted inconsistently with its right to arbitration unless one knows the contractual contours 

of that right (i.e., the provisions stating what PNC Bank could and could not do). Significantly, 

the Financing Agreements specify that if PNC Bank brings a claim against Presbyterian in a 

court of law, and Presbyterian subsequently brings a claim against PNC Bank, then “the court 

 13 In addition to asserting a conduct-based waiver defense to the Motion to Compel 

Arbitration, Presbyterian references the Intercreditor Agreement and states that “PNC Bank has 

repudiated the arbitration clause it seeks to enforce.” (Doc. 61, at 2, 7.) This argument is a nonstarter for Presbyterian, which was not a party to the Intercreditor Agreement. PNC Bank is not 

seeking to enforce the Intercreditor Agreement’s arbitration clause as to the claims and issues 

joined between PNC Bank and Presbyterian; rather, as to those claims, PNC Bank seeks to 

enforce the arbitration provisions in the Financing Agreements entered into between PNC Bank 

and Presbyterian. Presbyterian does not suggest that PNC Bank has repudiated the Financing 

Agreements; therefore, its repudiation argument is misplaced. Presbyterian’s reasoning is, 

apparently, that the claims between PNC Bank and Presbyterian and those between PNC Bank 

and Infirmary Health are “inextricably intertwined,” such that all of these claims must travel 

together, whether in arbitration or in litigation. (See doc. 61, at 8-9.) As an initial matter, it is far 

from obvious that all claims and causes of action joined herein are inextricably intertwined with 

each other. Besides, arbitration need not be an all-or-nothing proposition, given the variation in 

both the claims presented and the arbitration clauses governing particular claims and issues. 

More generally, if Presbyterian intends to hitch its wagon to Infirmary Health on the arbitration 

question by insisting that all claims travel together, then this argument would actually undercut 

Presbyterian’s opposition to the Motion to Compel Arbitration because, as discussed supra, the 

Court has already referred the PNC Bank / Infirmary Health claims to arbitration, subject to the 

arbitrator making a threshold determination about the validity of Section 22 of the Intercreditor 

Agreement (i.e., the repudiation / abandonment argument).

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action shall be stayed and the parties shall submit to arbitration all claims.” (Doc. 56, Exh. B, at 

2.) Furthermore, the Financing Agreements include a provision under which PNC Bank and 

Presbyterian agreed that “institution or maintenance of an action for judicial relief or pursuit of 

provisional or ancillary remedies shall not constitute a waiver of the right of any party, including 

the plaintiff in such an action, to submit the Dispute to arbitration.” (Id.)

These contractual terms undermine Presbyterian’s position on the Motion to Compel 

Arbitration. For example, Presbyterian posits that “PNC Bank sealed its choice to reject 

arbitration by filing this litigation, waiving any right to compel arbitration” and that “PNC Bank 

waived arbitration by filing the PNC Bank Complaint.” (Doc. 61, at 10-12.) But Presbyterian 

had previously agreed that PNC Bank’s institution of litigation against it or pursuit of provisional 

remedies such as appointment of a receiver would not constitute a waiver. Similarly, 

Presbyterian balks that PNC Bank sought “extraordinary judicial relief from this Court, and then 

revert[ed] to the cover of arbitration when it dislike[d] the results.” (Id. at 3.) Once again, the 

relevant arbitration provisions (to which Presbyterian assented) authorized PNC Bank to seek 

extraordinary judicial relief in court, without waiving its rights to demand arbitration. More 

broadly, by moving to compel arbitration now, PNC Bank is doing precisely what the arbitration 

provisions in the Financing Agreements contemplated. The parties’ agreement specified that if 

PNC Bank were to sue Presbyterian, and if Presbyterian were subsequently to bring claims 

against PNC Bank, then the court action was to be stayed and “all claims” were to be referred to 

arbitration. Thus, PNC Bank’s Motion to Compel Arbitration would merely effectuate that 

which the parties’ agreement said was supposed to happen.

The point is straightforward. Applicable law requires Presbyterian (as the party seeking a 

determination of waiver of the arbitration provisions) to establish that PNC Bank acted 

inconsistently with its right of arbitration. The relevant contract terms establish the opposite. 

Presybterian and PNC Bank agreed that PNC Bank could bring a court action for judicial relief 

and/or provisional remedies such as appointment of a receiver without waiving its right to 

arbitrate. They further agreed that if Presbyterian brought claims against PNC Bank during the 

pendency of such a court action, the entire court action should be stayed at that point and all 

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claims should be referred to arbitration. PNC Bank’s conduct is fully consistent with these

arbitration provisions and, hence, with its right to arbitrate.

14

 14 Presbyterian offers several arguments to the contrary, none of which resonate. 

First, Presbyterian urges the Court to “reject PNC Bank’s construction of the arbitration 

language” (doc. 61, at 8) as being inequitable. In so advocating, Presbyterian likens this 

situation to the undersigned’s decision to override contract language by declining to appoint a 

receiver. The analogy is ill fitting. Appointment of a receiver is an extraordinary, disfavored 

equitable remedy; meanwhile, referral of disputes to arbitration is backed by a broad federal 

policy of enforcing arbitration agreements. Unlike in the case of agreements consenting to 

receivership, courts rigorously enforce arbitration agreements in accordance with their terms. 

Compare F.D.I.C. v. Vernon Real Estate Investments, Ltd., 798 F. Supp. 1009, 1012 (S.D.N.Y. 

1992) (“the court has the discretion to deny appointment of a receiver under the appropriate 

circumstances even though the mortgage provides the mortgagee a specific right to an 

appointment”) with Walthour v. Chipio Windshield Repair, LLC, 745 F.3d 1326, 1329 (11th Cir. 

2014) (“courts must rigorously enforce arbitration agreements according to their terms”). 

Second, Presbyterian argues that PNC Bank did not demand arbitration at the earliest possible 

moment after Presbyterian’s counterclaims were filed, but instead waited until after preparing the 

report of parties’ planning meeting, exchanging initial disclosures, and so on. (Doc. 61, at 3, 12-

13.) However, decisional authorities emphasize that “[t]here are no per se rules as to the length 

of delay necessary to amount to waiver” and that “[t]he length of delay must be evaluated in the 

context of litigation activities engaged in during that time.” Restoration Preservation Masonry, 

Inc. v. Grove Europe Ltd., 325 F.3d 54, 61 (1st Cir. 2003); see also Joca-Roca, 772 F.3d at 950 

(“mere delay in asserting a right to arbitrate, without more, does not require a finding of 

waiver”). From the time that Presbyterian filed counterclaims on October 31, 2014 (thereby 

triggering the contractual provision that the court action should be stayed and the matter referred 

to arbitration) until PNC Bank moved to compel arbitration on January 29, 2015, PNC Bank did 

little to invoke the machinery of litigation. During that interval, PNC Bank merely participated 

in the parties’ planning meeting, contributed to the Rule 26(f) report, filed a brief in opposition to 

a motion for preliminary injunction, and agreed to a consent resolution of said motion. That’s 

all. Such activities are insufficient to constitute substantial invocation of litigation, as necessary 

to overcome the presumption against waiver. See, e.g., Coca-Cola Bottling Co. of New York, 

Inc. v. Soft Drink and Brewery Workers Union Local 812, 242 F.3d 52, 57-58 (2nd Cir. 2001) 

(“neither filing an answer nor waiting four months to seek arbitration was sufficient to constitute 

a waiver”); Subway Equipment Leasing Corp. v. Forte, 169 F.3d 324, 326 (5th Cir. 1999) (noting 

“strong presumption against waiver of arbitration”). Third, Presbyterian argues that PNC Bank 

failed to list the arbitration clause as an affirmative defense to any counterclaims; however, such 

an omission does not mandate a finding of waiver. See Hill v. Ricoh Americas Corp., 603 F.3d 

766, 771 (10th Cir. 2010) (rejecting argument that movant “forfeited its right to demand 

arbitration by not asserting that right as an affirmative defense in its answer”); Forrester v. Penn 

Lyon Homes, Inc., 553 F.3d 340, 343 (4th Cir. 2009) (“simply failing to assert arbitration as an 

affirmative defense does not constitute default of a right to arbitration”).

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Ultimately, PNC Bank has done nothing more than what Presbyterian agreed in the 

Financing Agreements that PNC Bank could do. It came to federal court requesting appointment 

of a receiver as a provisional remedy which, according to the parties’ contract, does not 

constitute a waiver of arbitration rights. Later, when Presbyterian asserted counterclaims against 

it, PNC Bank within a reasonable time invoked the contractual provision that the federal 

litigation should be stayed and all claims referred to arbitration. PNC Bank has acted 

consistently with the arbitration provisions of the Financing Agreements; therefore, it cannot be 

said to have conducted itself inconsistently with its right to arbitration. On that basis, the Court 

concludes that Presbyterian has not satisfied its heavy burden of establishing that PNC Bank has 

waived its right to arbitrate the claims and issues joined herein between PNC Bank and 

Presbyterian. All such claims and issues will be referred to arbitration.15

III. Conclusion.

The Federal Arbitration Act “embodies a liberal federal policy favoring arbitration 

agreements.” Hill v. Rent-a-Center, Inc., 398 F.3d 1286, 1288 (11th Cir. 2005) (citation and 

internal quotation marks omitted). While such arbitration rights may be waived, the party 

seeking to establish such a waiver bears a heavy burden. Here, the parties opposing arbitration –

Infirmary Health and Presbyterian – cannot satisfy that burden. They are sharply critical of PNC 

Bank’s litigation conduct; however, PNC Bank did exactly what its arbitration agreements with 

 15 In so concluding, the Court considers and rejects Presbyterian’s cursory 

contention that its “counterclaims (the conversion of donor or otherwise restricted funds) lie 

outside the scope of [Presbyterian]’s contracts with PNC Bank and are not subject to any 

arbitration provision.” (Doc. 61, at 2.) The arbitration provisions in the Financing Agreements 

expressly cover “all actions ... arising in connection with the ... Bond and Note, ... any 

collection of any indebtedness owed to [PNC Bank], ... [and] any action taken ... in connection 

with any of the foregoing.” (Doc. 56, Exh. B, at 1.) Presbyterian’s counterclaims – alleging that 

PNC Bank wrongfully converted its assets to collect on the outstanding indebtedness – fit 

comfortably within that defined range of claims the parties agreed to submit to arbitration. 

Likewise, Presbyterian’s purported “substantive defense” that it “demanded a jury trial on its 

counterclaims” is unavailing. (Doc. 61, at 7.) Where a party has agreed to submit its claims to 

arbitration, the right to a jury trial must yield. See, e.g., Caley v. Gulfstream Aerospace Corp., 

428 F.3d 1359, 1371 (11th Cir. 2005) (“where a party enters into a valid agreement to arbitrate, 

the party is not entitled to a jury trial or to a judicial forum for covered disputes”); American 

Heritage Life Ins. Co. v. Orr, 294 F.3d 702, 711 (5th Cir. 2002) (“The Seventh Amendment right 

to a trial by jury is limited by a valid arbitration provision that waives the right to resolve a 

dispute through litigation in a judicial forum.”).

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these parties allowed it to do. The Court cannot rewrite or refashion the terms of those 

arbitration agreements, which were negotiated and entered into by sophisticated business entities, 

merely because certain parties now dislike the foreseeable consequences of same.

For all of the foregoing reasons, it is ordered as follows:

1. PNC Bank’s Motion to Compel Arbitration (doc. 56) is granted in part, and 

denied in part;

2. PNC Bank’s request to have the question of litigation conduct-based waiver be 

referred to the arbitrator is denied;

3. In all other respects, the Motion to Compel Arbitration is granted;

4. The Court finds that PNC Bank, through its litigation conduct, has not waived its 

right to arbitrate all disputes joined in this litigation with Presbyterian and 

Infirmary Health, and that (subject to paragraph 5, below) all such disputes are 

properly referred to arbitration at this time in accordance with the written 

arbitration agreements;

5. The Court finds that the threshold questions of whether PNC Bank has repudiated 

or abandoned the Intercreditor Agreement through its alleged violations of same, 

and whether any such violations invalidate the arbitration provision found at 

Section 22, are properly referred to arbitration pursuant to Rule 7 of the 

Commercial Arbitration Rules of the AAA, to which all parties agreed;

6. The issues identified in paragraphs 4 and 5 are hereby referred to binding

arbitration in accordance with the parties’ agreements;

7. There being no remaining issues for litigation in these court proceedings, this 

action is stayed pending arbitration. To keep the Court apprised of developments 

in the arbitral proceedings, PNC Bank is ordered to file, on or before the fourth 

Tuesday of each month, a written report reflecting the status of the arbitration 

proceedings. The first such report is due on or before May 26, 2015; and

8. Plaintiff’s Motion to Stay Deadlines (doc. 65) is moot.

DONE and ORDERED this 28th day of April, 2015.

s/ WILLIAM H. STEELE 

CHIEF UNITED STATES DISTRICT JUDGE

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