Opinion ID: 1166496
Heading Depth: 2
Heading Rank: 2

Heading: waiver of arbitration

Text: Although federal law is strongly in favor of arbitration of labor disputes [10] and this court has also stated that the law favors arbitration, [11] it is clear that arbitration may be waived. [12] This case was filed in the superior court on September 18, 1972. On October 20, 1972, an answer was filed by the union. The answer did not contain an affirmative defense that the dispute was subject to arbitration. There was an affirmative defense stating: 12. That according to the Agreement, plaintiff's Exhibit A, and Article VI of the Master Labor Agreement, attached as defendant's Exhibit A, any grievance by plaintiff must be stated formally in writing to the Union. 13. Plaintiff has not exhausted its administrative remedy by compliance with the contract and, therefore initiation of this suit is premature. Paragraph 12 of the answer refers to the portion of the agreement requiring a formal written statement of the grievance to the union. The vague reference to exhaustion of administrative remedies contained in Paragraph 13 of the same affirmative defense is apparently a reference to this same requirement. The pleading does not comply with the requirement of Civil Rule 8(c) which states in part: In pleading to a preceding pleading, a party shall set forth affirmatively . . arbitration... . An amended complaint was filed on February 5, 1975. The answer to the amended complaint, which was filed on June 2, 1975, contained the same affirmative defenses as in the original answer. The union engaged in discovery, taking the deposition of the plaintiff. It was not until November 21, 1975, more than three years after the filing of the case, that the union filed a motion for summary judgment alleging that the dispute was subject to arbitration. Although a request for oral argument was filed by King, neither party noticed the motion for summary judgment for hearing as was then required by Civil Rule 77(g) and (h). [13] The court never ruled on the motion. [14] The union also referred to the right to arbitrate in its trial memorandum filed on April 20, 1976, shortly before trial commenced on April 27, 1976. Significantly, however, in all the time that the case was pending, the union never initiated arbitration proceedings or endeavored to secure a stay of the trial pending arbitration. The union proceeded with trial of the case, taking its chances on the verdict. Obviously, if the result had been in its favor, it would not have insisted that arbitration was required. Thus, the union failed to plead affirmatively a defense of arbitration as required by Rule 8(c), availed itself of discovery procedures which probably were not available under arbitration, delayed for over three years in raising the issue of arbitration and never sought arbitration or a stay of the court proceedings for that purpose. Under those circumstances, we hold that the right to arbitration was waived. Weight Watchers of Quebec, Ltd. v. Weight Watchers International, Inc . [15] is a closely analogous case. There, a franchise agreement provided for arbitration of controversies or claims. Suit was nevertheless brought by the Quebec corporation in July 1973. The defendant answered without affirmatively raising the arbitration defense and moved for summary judgment on the merits in February 1974. Defendant was unsuccessful in obtaining judgment, although the plaintiff was required to amend the complaint in May 1975. In June, defendant moved for an order directing arbitration and for a stay of the action pending completion of the arbitration. [16] The court stated that in view of the policy favoring arbitration, a waiver is not lightly to be inferred and mere delay in seeking a stay of the proceedings without some resultant prejudice to a party . . cannot carry the day. [17] It held that where the issue of waiver turns on the significance of action taken in a judicial forum, the issue is one for the court, rather than the arbitrator, to decide. [18] The factors upon which the waiver question appears to have turned most frequently against the party seeking to compel arbitration are his dilatory conduct in seeking arbitration, usually coupled with his gaining of an undue advantage in the judicial forum or other substantial prejudice to the opposing party, or any other actions taken by the moving party which are sufficiently inconsistent with his seeking arbitration. Examining the circumstances of a particular case, it is usually the absence of one or more of these factors that forms the basis for concluding there has been no waiver. (footnotes omitted) [19] The court concluded that, even though no trial had taken place, the elements of delay, prejudice and inconsistent action were too great to avoid a finding of waiver. [20] Here, the period of delay before raising the issue of arbitration was considerably longer. The union engaged in discovery, and to this date, has never actually requested arbitration. It did not call up for hearing its summary judgment motion and failed to request a stay from the trial court. As a result, there were no rulings of the trial court from which it otherwise could have petitioned for review by this court. To require arbitration on the eve of trial when the summary judgment motion was filed would have resulted in substantial prejudice to Mr. King, who would have been making preparations for the trial. If we were to order arbitration now, six and one-half years after the events involved, the prejudice in securing witnesses who could accurately recall the events would be enormous. We agree with the numerous cases holding that there is a waiver when prejudice results from such delay in asserting the duty to arbitrate. [21]