Court Opinion

ID: 9913305
Source: CourtListenerOpinion
Date Created: 2023-12-27 17:03:15.077522+00
Date Added: 2024-06-11T13:08:30.245219
License: Public Domain

FILED
                                                                       Dec 27 2023, 8:52 am

                                                                           CLERK
                                                                       Indiana Supreme Court
                                                                          Court of Appeals
                                                                            and Tax Court

ATTORNEYS FOR APPELLANTS                                   ATTORNEYS FOR APPELLEE
Maggie L. Smith                                            David L. Guevara
Joshua N. Kutch                                            James R. A. Dawson
Indianapolis, Indiana                                      Indianapolis, Indiana

                                                           Heather M. Hawkins
                                                           Cincinnati, Ohio

                                            IN THE
    COURT OF APPEALS OF INDIANA

Professional Construction, Inc.,                           December 27, 2023
and West Bend Mutual                                       Court of Appeals Case No.
Insurance Company,                                         23A-PL-654
Appellants-Defendants,                                     Appeal from the Marion Superior
                                                           Court
        v.                                                 The Honorable Heather A. Welch,
                                                           Judge
Historic Walnut Square, LLC,                               Trial Court Cause No.
Appellee-Plaintiff                                         49D01-2206-PL-21757

                                Opinion by Chief Judge Altice
                                Judges May and Foley concur.

Altice, Chief Judge.

Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023                           Page 1 of 20
      Case Summary
[1]   Professional Construction, Inc. (Contractor) and West Bend Mutual Insurance

      Company (Surety) (collectively, Appellants) bring this interlocutory appeal of

      the trial court’s denial of their motion to enforce arbitration agreement and stay

      litigation in a lawsuit brought by Historic Walnut Square, LLC (Owner).

      Appellants present the following restated issues for review:

              1. Did the trial court properly determine that Contractor waived
                 its contractual right to demand arbitration by filing suit
                 against Owner in Wisconsin?

              2. Did the trial court err by determining that Surety had no right
                 to enforce the arbitration provision in the construction
                 contract?

              3. Where is the proper venue for arbitration?

[2]   We reverse and remand.

      Facts & Procedural History
[3]   In 2020, Owner solicited bids for a construction project for the development of

      a forty-unit, multi-family housing project in Terre Haute and ultimately selected

      Contractor as general contractor for the project. On August 6, 2020, they

      executed two standard form American Institute of Architects (AIA)

      agreements, A101-2017 and A201-2017 (collectively, the Construction

      Contract). Additionally, Contractor obtained a Payment Bond and a

      Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023     Page 2 of 20
      Performance Bond (collectively, the Bonds), also AIA standard form

      agreements, through Surety in the amount of the Construction Contract.

[4]   The Construction Contract provides for binding arbitration, pursuant to § 15.4

      of AIA Document A201-2017, of any claim subject to or not resolved by

      mediation and expressly indicates that the Federal Arbitration Act (the FAA)

      shall govern. § 15.4.1 provides in relevant part:

              [A]ny claim subject to, but not resolved by, mediation shall be
              subject to arbitration which, unless the parties mutually agree
              otherwise, shall be administered by the American Arbitration
              Association in accordance with its Construction Industry
              Arbitration Rules in effect on the date of the Agreement. The
              Arbitration shall be conducted in Fond du Lac County,
              Wisconsin unless expressly prohibited by law, in which case
              mediation [sic] shall be held in the place where the Project is
              located, unless another location is mutually agreed upon. A
              demand for arbitration shall be made in writing, delivered to the
              other party to the Contract, and filed with the person or entity
              administering the arbitration.

      Appellants’ Appendix Vol. 2 at 111. Further, pursuant to § 15.4.3, the agreement

      to arbitrate “shall be specifically enforceable under applicable law in any court

      having jurisdiction thereof.” Id.

[5]   Certain contractual disputes arose between Contractor and Owner and came to

      a head in the beginning of 2022. The details of the disputes are not particularly

      relevant here; our focus is on the parties’ attempts to resolve them. Contractor

      initially communicated its claim to the architect (Architect) – the project’s

      initial decision maker under the Construction Contract. Unsatisfied with

      Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023        Page 3 of 20
      Architect’s decision and anticipating a breach of the Construction Contract by

      Owner, Contractor stopped work on the project on February 11, 2022. Owner

      then declared Contractor in default and made a claim against Surety on the

      Performance Bond.

[6]   On February 14, 2022, Contractor (by email and certified mail) sent a written

      demand for mediation/arbitration to Owner and Architect. After setting out

      Contractor’s position in detail, the letter concluded with the following:

                                         Demand for Mediation/ Arbitration
                     Given the Owner’s position, and the Architect’s decision to affirm the
              Owner’s position, concerning the substantial completion date, pursuant to §§ 15.3
              and 15.4 of the Construction Contract, PCI hereby demands mediation and
              arbitration of the current dispute between the parties.

                      Pertinent sections dealing with mediation and arbitration in the
              Construction Contract, call for mediation to be administered by the American
              Arbitration Association ("AAA"). We are not opposed to this prescription,
              however, due to the likely urgency of the matter, PCI would consider using an
              alternate mediation agency or mediator. Please advise on your position on this as
              soon as possible. If we do not hear back from you by February 17, 2022, we will
              assume the Owner’s preference is to have the matter handled by an AAA
              mediator, and we will file the mediation/ arbitration demand with the AAA.

      Appellants’ Appendix Vol. 3 at 46 (emphases in original).

[7]   Surety quickly followed Contractor’s demand for mediation/arbitration with a

      letter to Owner requesting a meeting in Wisconsin with decision makers for all

      parties present, along with Architect. On February 23, Owner responded and

      proposed “a meeting that does not involve the Contractor or the sideshow of

      topics, such as liquidated damages, which are unrelated to the immediate goal

      of performing and completing the Construction Contract.” Id. at 22.

      Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023                   Page 4 of 20
[8]    On February 27, Surety wrote Owner again and emphasized that there were

       issues between Owner and Contractor that were “worth mediating” and that

       resolving these issues was “critical” to Surety’s decision regarding the claim on

       the Performance Bond. Id. at 25, 26. Surety proposed that all parties meet on

       March 4 and agree to prompt mediation of any issues not resolved at that

       meeting.

[9]    On March 1, Owner responded that it would not entertain Contractor’s input in

       the matter between Owner and Surety, explaining in part:

               Right now, and while the Owner attempts to recover the Project
               from the Contractor’s defective, untimely performance, there is
               nothing to mediate. The Owner is open to negotiations and
               engaging a third party mediator to resolve any remaining claims,
               but only after the Owner and Surety have all of the relevant
               information, the Surety performs its obligations under the
               Performance Bond, and the Work is complete. It is only then
               that the parties may be able to bring this matter to a full, final
               resolution. Mediation efforts now would be premature and waste
               precious time.

       Id. at 30.

[10]   On April 17, 2022, Surety denied Owner’s claims on the Bonds and provided a

       detailed explanation of its denial. In summary, Surety claimed that Owner had

       repudiated the Construction Contract prior to Contractor justifiably stopping

       work and that Owner’s subsequent refusal to mediate or arbitrate the dispute

       between Contractor and Owner also constituted a breach of the Construction

       Contract.

       Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023     Page 5 of 20
[11]   Two days after Surety’s denial of Owner’s claims, Contractor filed a four-count

       complaint against Owner in Waukesha County, Wisconsin 1 (the Wisconsin

       Action), and named Surety as an involuntary plaintiff. Relevant here, the

       complaint alleged that Owner had refused Contractor’s written demand for

       mediation/arbitration of the claims and disputes arising out of the Construction

       Contract and that “[b]ecause of [Owner’s] contractual breaches and refusal to

       mediate or arbitrate, [Contractor] has been left with no recourse except

       litigation to seek resolution of the claims.” Appellants’ Appendix Vol. 2 at 176.

       Among its specific requests for relief, Contractor asked the Wisconsin court for:

       “Order compelling [Owner] to comply with the Contract’s mediation and

       arbitration clauses as it relates to all claims arising of the contract.” Id. at 179.

[12]   Two months after the Wisconsin Action was filed, Owner filed the instant

       complaint in Marion County, Indiana, on June 29, 2022, against Contractor

       and Surety (the Indiana Action). Owner asserted breach of contract and other

       associated claims and argued that Indiana was the proper venue for litigation

       related to the Construction Contract and the Bonds. Owner’s complaint for

       damages made no mention of the dispute resolution provisions in the

       Construction Contract.

[13]   On July 1, 2022, in the Wisconsin Action, Owner filed a motion to stay or, in

       the alternative, dismiss without prejudice. Owner argued that Indiana was the

       1
         Contractor, Owner, and Surety are each organized under the laws of Wisconsin with their principal places
       of business there.

       Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023                           Page 6 of 20
       more convenient forum to address the parties’ claims that all “relate to disputes

       concerning the interpretation and enforcement of the Construction Contract

       and Bonds, which relate to the Project in Indiana.” Id. at 196.

[14]   Contractor responded in both pending actions to Owner’s attempt to litigate the

       contractual disputes in Indiana. First, in the Wisconsin Action, Contractor

       filed a motion to compel arbitration. Second, in the Indiana Action, it filed

       jointly with Surety a motion to enforce arbitration agreement and stay litigation

       pending arbitration. Owner opposed both motions on two bases: 1) Contractor

       did not satisfy the mandatory conditions precedent to trigger arbitration under

       the Construction Contract and 2) Contractor waived its right to enforce the

       arbitration provision by filing the Wisconsin Action. 2

[15]   The Wisconsin court was the first to hold a hearing and decide the motions

       pending before it. At the conclusion of the hearing on February 10, 2023, the

       Wisconsin court ordered Owner and Contractor to arbitration in Wisconsin.

       This order was based on three conclusions by the court: 1) Contractor did not

       waive its right to arbitration by filing its complaint, which was “in essence, a

       suit to enforce the arbitration clause”; 2) matters of procedural arbitrability,

       such as whether conditions precedent have been satisfied, are for the arbitrator

       2
         In the Indiana Action, Owner additionally argued that Surety did not have a contractual right to compel
       arbitration of Owner’s claims under the Bonds.

       Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023                            Page 7 of 20
       to decide; and 3) the proper venue for the arbitration is Wisconsin. 3 Appellants’

       Appendix Vol. 3 at 112. Owner did not appeal the Wisconsin court’s arbitration

       ruling, which was reduced to written order on March 6, 2023.

[16]   In the meantime, a hearing was held in the Indiana Action on February 23,

       2023, to address Appellants’ motion to enforce arbitration agreement and stay

       litigation pending arbitration. The trial court denied the motion and issued a

       written order that same day. Specifically, the trial court determined that

       Contractor waived its contractual right to arbitration by initiating the

       Wisconsin Action rather than filing for mediation or arbitration with the AAA.

       Further, the court determined that Appellants could not “get around”

       Contractor’s waiver by arguing that Surety had a right to enforce the arbitration

       provision in the Construction Contract. Appellants’ Appendix Vol. 2 at 24. The

       trial court denied Appellants’ subsequent request to reconsider its ruling

       regarding arbitration.

[17]   Appellants now appeal the trial court’s February 23, 2023 interlocutory order as

       a matter of right pursuant to Ind. Appellate Rule 14(D) and Ind. Code § 34-57-

       2-19(a)(1). 4 Additional information will be provided below as needed.

       3
         The parties agreed that the arbitration order would not extend to Surety. However, Surety acknowledged
       that it would be bound by any contractual determinations made by the arbitrator regarding the Construction
       Contract.
       4
          During the pendency of this appeal, the arbitration process began in Wisconsin. On July 28, 2023, Owner
       filed with the arbitrator a motion to stay the arbitration pending resolution of this appeal. The arbitrator
       denied this request on October 25, 2023, and directed the arbitration to proceed expeditiously.

       Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023                             Page 8 of 20
       Standard of Review
[18]   Our Supreme Court has made clear that we do not defer to a trial court’s

       decision on a motion to compel but rather review it de novo. Decker v. Star Fin.

       Grp., Inc., 204 N.E.3d 918, 921 (Ind. 2023); Doe v. Carmel Operator, LLC, 160

       N.E.3d 518, 521 (Ind. 2021). And we have applied this standard of review

       when determining whether a party waived its contractual right to request

       arbitration. 5 Welty Bldg. Co. v. Indy Fedreau Co., LLC, 985 N.E.2d 792, 798 (Ind.

       Ct. App. 2013) (observing that although waiver is generally a question of fact,

       we review de novo a trial court’s ruling on a motion to compel arbitration).

       This is especially true where, as here, “to the extent the trial court had to

       resolve a ‘factual’ issue regarding waiver, it did so based entirely upon a paper

       record.” Id.

       Discussion & Decision

       1. Waiver of Contractual Right to Demand Arbitration
[19]   The parties do not dispute that the traditional threshold issues of arbitrability

       have been met in this case. That is, Owner and Contractor agreed in the

       Construction Contract to arbitrate, and their agreement covers the particular

       5
         We reject Owner’s invitation to adopt a different standard of review, a clear error standard. Moreover,
       contrary to Owner’s apparent suggestion on appeal, the Seventh Circuit does not review a district court’s
       ultimate waiver determination in this context for clear error. See Cooper v. Asset Acceptance, LLC, 532 F. App’x
       639, 641 (7th Cir. 2013) (“While the factual findings that led to the district court’s conclusion are reviewed
       for clear error, ‘the question of whether [Asset’s] conduct amounts to waiver is reviewed de novo.’”) (quoting
       Kawasaki Heavy Indus., Ltd. v. Bombardier Recreational Prods., Inc., 660 F.3d 988, 994 (7th Cir. 2011)).

       Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023                               Page 9 of 20
       controversy at issue. Their disagreement is focused on whether Contractor

       waived its right to demand arbitration by pursuing the Wisconsin Action.

       1.1 Is Waiver by Litigation Conduct an Issue for the Court to Decide?

[20]   Directing us to the following language by the U.S. Supreme Court, Contractor

       argues that the waiver determination must be made by the arbitrator, not the

       court:

                The Arbitration Act establishes that, as a matter of federal law,
                any doubts concerning the scope of arbitrable issues should be
                resolved in favor of arbitration, whether the problem at hand is
                the construction of the contract language itself or an allegation
                of waiver, delay, or a like defense to arbitrability.

       Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)

       (emphasis added); see also BG Grp., PLC v. Republic of Argentina, 572 U.S. 25, 34-

       35 (2014) (explaining that courts presume that parties intend for arbitrators, not

       courts, to decide “procedural matters includ[ing] waiver, delay, or a like defense

       to arbitrability”) (internal quotations omitted); Howsam v. Dean Witter Reynolds,

       Inc., 537 U.S. 79, 84 (2002) (recognizing the presumption that “the arbitrator

       should decide allegations of waiver, delay, or a like defense to arbitrability”)

       (internal quotations and brackets omitted); Lumbermens Mut. Cas. Co. v.

       Broadspire Mgmt. Servs., Inc., 623 F.3d 476, 480 (7th Cir. 2010) (“Under Howsam,

       questions such as whether prerequisites to arbitration have been met, or

       questions of waiver, delay, or other defenses to arbitrability, should be

       determined by the arbitrator.”).

       Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023        Page 10 of 20
[21]   The flaw with Contractor’s argument is that it improperly lumps waiver by

       litigation conduct in the same bucket as waiver in the contractual sense. The

       United States District Court for the Northern District of Illinois thoroughly

       addressed the two distinct meanings of the word “waiver” and rejected the

       same argument asserted by Contractor:

               The pertinent meaning here concerns waiver through litigation
               conduct or delay. The second meaning refers to a doctrine of
               contract law under which “the conduct of the party” shows an
               “intentional relinquishment of a known right.” Ryder v. Bank of
               Hickory Hills, 585 N.E.2d 46, 49 (Ill. 1991); see also Abellan v.
               Lavelo Prop. Mgmt., LLC, 948 F.3d 820, 830 (7th Cir. 2020)
               (explaining that the waiver defense “admits the alleged breach
               but can defeat a remedy”). Closely related to this second
               meaning of waiver is the equitable defense of laches, which the
               Supreme Court of Illinois has defined as “a neglect or omission
               to assert a right, taken in conjunction with a lapse of time of
               more or less duration, and other circumstances causing prejudice
               to an adverse party.” Sundance Homes, Inc. v. Cnty. of DuPage, 746
               N.E.2d 254, 262 (Ill. 2001). Like the contractual doctrine of
               waiver, laches “bars the remedy but does not discharge the
               right.” Halcon Int’l, Inc. v. Monsanto Austl. Ltd., 446 F.2d 156, 159
               (7th Cir. 1971).

               Moses Cone concerned the contractual meaning of waiver, not the
               litigation conduct meaning. Although the Seventh Circuit has
               not expressly so held, it has continued after Moses Cone and
               Howsam to address whether a party invoking an arbitration clause
               has waived arbitration through litigation conduct or delay. See,
               e.g., Brickstructures, Inc. v. Coiaster Dynamix, Inc., 952 F.3d 887,
               891 (7th Cir. 2020); Smith v. GC Servs. Ltd. P’ship, 907 F.3d 495,
               499 (7th Cir. 2018); Kawasaki Heavy Indus., Ltd. v. Bombardier
               Recreational Prods., Inc., 660 F.3d 988, 994 (7th Cir. 2011)…. In
               fact, years before Moses Cone was decided, the Seventh Circuit
       Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023       Page 11 of 20
        expressly distinguished between “‘[w]aiver’ in the laches or
        estoppel sense, rather than in the default sense or participating in
        judicial proceedings.” Halcon, 446 F.2d at 161. Anticipating
        Moses Cone, the Seventh Circuit held that laches or estoppel issues
        were for the arbitrator, id. at 159 (holding that “[t]he defense of
        laches [is] a matter for the determination of the arbitrators”), but
        made clear that waiver through litigation conduct is reserved for
        the court, id. at 161 (“Section 3 [of the FAA] expressly gives the
        courts jurisdiction to determine the existence of a default.”).

        The circuits to have addressed the issue overwhelmingly agree
        that Moses Cone and Howsam concern only the contractual sense
        of waiver. See Martin v. Yasuda, 829 F.3d 1118, 1123 (9th Cir.
        2016) (“[U]nder Howsam, the question [of waiver through
        litigation conduct or delay] is presumptively for a court and not
        an arbitrator to decide. Every circuit that has addressed this
        issue—whether a district court or an arbitrator should decide if a
        party waived its right to arbitrate through litigation conducted
        before the district court—has reached the same conclusion.”)
        (citation omitted); Grigsby & Assocs., Inc. v. M Sec. Inv., 664 F.3d
        1350, 1353 (11th Cir. 2011) (“[I]t is presumptively for the courts
        to adjudicate disputes about whether a party, by earlier litigating
        in court, has waived the right to arbitrate.”); JPD, Inc. v.
        Chronimed Holdings, Inc., 539 F.3d 388, 394 (6th Cir. 2008)
        (“Unlike contractually-based waiver, courts have long decided
        whether conduct inconsistent with reliance on an arbitration
        agreement waives a defendant’s ability to seek an arbitration
        referral ....”); Ehleiter v. Grapetree Shores, Inc., 482 F.3d 207, 219
        (3d Cir. 2007) (“Properly considered within the context of the
        entire opinion ... the [Howsam] Court was referring only to
        waiver, delay, or like defenses arising from non-compliance with
        contractual conditions precedent to arbitration ... and not to
        claims of waiver based on active litigation in court.”); Marie v.
        Allied Home Mortg. Corp., 402 F.3d 1, 11-13 (1st Cir. 2005)
        (distinguishing a “contractual time limit clause,” which is

Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023         Page 12 of 20
               “presumed to be for the arbitrator” under Howsam, from waiver
               “due to litigation-related activity,” which courts decide).

       Lukis v. Whitepages Inc., 535 F. Supp. 3d 775, 786-87 (N.D. Ill. 2021) (citations

       altered to omit parallel citations and to include full citations as needed).

[22]   We fully agree with the district court’s assessment in Lukis. Moreover, we

       would add that the U.S. Supreme Court has recently addressed the standard

       courts should apply when determining waiver through litigation conduct:

               When a party who has agreed to arbitrate a dispute instead brings
               a lawsuit, the Federal Arbitration Act (FAA) entitles the
               defendant to file an application to stay the litigation. See 9
               U.S.C. § 3. But defendants do not always seek that relief right
               away. Sometimes, they engage in months, or even years, of
               litigation—filing motions to dismiss, answering complaints, and
               discussing settlement—before deciding they would fare better in
               arbitration. When that happens, the court faces a question: Has the
               defendant’s request to switch to arbitration come too late?

               Most Courts of Appeals have answered that question by applying
               a rule of waiver specific to the arbitration context. Usually, a
               federal court deciding whether a litigant has waived a right does
               not ask if its actions caused harm. But when the right concerns
               arbitration, courts have held, a finding of harm is essential: A
               party can waive its arbitration right by litigating only when its
               conduct has prejudiced the other side. That special rule, the
               courts say, derives from the FAA’s “policy favoring arbitration.”

               We granted certiorari to decide whether the FAA authorizes
               federal courts to create such an arbitration-specific procedural
               rule. We hold it does not.

       Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023       Page 13 of 20
       Morgan v. Sundance, Inc., 596 U.S. 411, 413-14 (2022) (emphasis supplied). Of

       course, if waiver of any type is only a question for the arbitrator, as Contractor

       suggests, the Supreme Court would have had no need to determine that “the

       Eighth Circuit was wrong to condition a waiver of the right to arbitrate on a

       showing of prejudice” and would not have remanded so that the Eighth Circuit

       could apply the appropriate waiver inquiry. Id. at 417.

[23]   We hold that, at least in the context of the FAA, courts are the proper arbiters

       of whether a party has waived its right to arbitrate by litigation-related conduct.

       Matters related to whether a party complied with time limits or other

       procedural conditions precedent to arbitration, however, remain presumptively

       reserved for the arbitrator. See BG Grp., 572 U.S. at 34 (“[C]ourts presume that

       the parties intend arbitrators, not courts, to decide disputes about the meaning

       and application of particular procedural preconditions for the use of arbitration”

       such as “time limits, notice, laches, estoppel, and other conditions precedent to

       an obligation to arbitrate.”) (internal quotations omitted).

       1.2 Did Contractor’s Filing of the Wisconsin Action Amount to Waiver?

[24]   Satisfied that we have the authority to decide the waiver issue at hand, we turn

       to Contractor’s litigation conduct. Here, the trial court based its waiver

       determination solely on the fact that Contractor filed the Wisconsin Action

       without filing for mediation or arbitration with the AAA. We believe the

       waiver determination required a deeper analysis and consideration of the

       specific facts of this case.

       Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023     Page 14 of 20
[25]   Whether a party has waived the right to arbitration depends primarily on

       whether that party has acted inconsistently with its right to arbitrate. MPACT

       Const. Grp., LLC v. Superior Concrete Constructors, Inc., 802 N.E.2d 901, 910 (Ind.

       2004) (citing, among other cases, Welborn Clinic v. MedQuist, Inc., 301 F.3d 634,

       637 (7th Cir. 2002)). “This requires an analysis of the specific facts in each

       case.” Id.; see also Cooper, 532 F. App’x at 641 (“We must determine whether,

       considering the totality of the circumstances, a party acted inconsistently with

       the right to arbitrate.”) (internal quotations omitted).

[26]   In considering if waiver has occurred, courts look to a variety of factors, such

       as: whether the party attempting to invoke its right to arbitrate acted diligently

       in doing so, substantially delayed its request, filed dispositive motions, or

       participated in litigation or discovery; the degree of prejudice that would be

       suffered by the other party; and whether the litigant is unfairly manipulating the

       system by attempting to obtain a second bite at the apple. See Cooper, 532 F.

       App’x at 641; Fin. Ctr. First Credit Union v. Rivera, 178 N.E.3d 1245, 1251 (Ind.

       Ct. App. 2021).

[27]   To be sure, “an election to proceed before a nonarbitral tribunal for the

       resolution of a contractual dispute is a presumptive waiver of the right to

       arbitrate.” Cabinetree of Wisconsin, Inc. v. Kraftmaid Cabinetry, Inc., 50 F.3d 388,

       390 (7th Cir. 1995). But this presumption may be rebutted where the facts

       indicate that the invocation of the judicial process does not signify an intention

       to proceed in a court to the exclusion of arbitration. Id. at 391.

       Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023       Page 15 of 20
[28]   Here, Contractor and Surety each urged Owner to mediate the contractual

       dispute, and Contractor sent a clear written demand for mediation/arbitration

       to Owner and Architect on February 14, 2022. These demands were rebuffed

       by Owner, who wanted to deal only with Surety.

[29]   A mere two days after Surety denied Owner’s claim on the Bonds, Contractor

       filed the Wisconsin Action. The complaint recounted Contractor’s contractual

       right to demand mediation and arbitration, Contractor’s demand for such, and

       Owner’s express refusal to do so. Contractor claimed that Owner’s refusal to

       mediate/arbitrate constituted a breach of the Construction Contract and “left

       [Contractor] with no recourse except for litigation to seek resolution of the

       claims.” Appellants’ Appendix Vol. 2 at 176. And among the requests for relief

       listed in the complaint, Contractor expressly asked the Wisconsin court for an

       order compelling Owner to comply with the Construction Contract’s mediation

       and arbitration clauses.

[30]   After initiating the Wisconsin Action, Contractor did not attempt to litigate the

       contractual dispute; rather Contractor filed a motion to compel arbitration.

       Indeed, even Owner recognized that the Wisconsin Action had not proceeded

       along the usual litigation route, as there had been “no disclosures, discovery,

       schedules, or any activity other than the motion practice surrounding dismissal

       or stay of the case.” Appellants’ Appendix Vol. 3 at 143.

[31]   Owner complains that Contractor “jumped straight to litigation” instead of

       following “the clear dispute resolution steps in the Construction Contract.”

       Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023    Page 16 of 20
       Appellee’s Brief at 28-29. But this argument confuses the separate concepts of

       waiver through litigation conduct and failure to satisfy conditions precedent to

       enforcing arbitration. The latter determination is for the arbitrator, not us.

[32]   Further, we find no merit in Owner’s suggestion that the timing of Contractor’s

       motion to compel arbitration was “particularly egregious” and represented

       “Contractor’s new-found desire to arbitrate.” Id. at 29. And this case is not on

       par with Cabinetree, in which the Seventh Circuit found waiver where the

       defendant “dropped a bombshell into the proceedings” and sought arbitration

       in the middle of the litigation, after plaintiff had provided extensive discovery to

       defendant, a trial date had been set six months prior, and the defendant offered

       no reason for its delay in requesting a stay besides needing time to weigh its

       options. 50 F.3d at 389. Unlike the defendant in Crabtree, there was no hiding

       the ball. Contractor’s desire to arbitrate was clear, despite any alleged

       procedural stumbles.

[33]   We agree with the Wisconsin court’s assessment of the situation. Contractor

       filed the Wisconsin Action to enforce the arbitration clause and did not act

       inconsistently with its right to arbitrate. Accordingly, the trial court erred in

       determining that Contractor waived its right to demand arbitration and in

       refusing to stay the proceedings pending arbitration.

       Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023        Page 17 of 20
       2. Surety’s Right to Enforce the Arbitration Clause in the
       Construction Contract
[34]   The parties disagree about whether Surety can demand arbitration under the

       Construction Contract, where Surety was a non-signatory to the Construction

       Contract but the Bonds expressly incorporated the Construction Contract by

       reference. 6 They also cannot agree on whether this court has a say in the

       matter, with Owner asking us to decide whether there is an agreement to

       arbitrate between it and Surety, and Appellants arguing that this determination

       is for the arbitrator.

[35]   We need not reach the complex arguments presented by the parties, as Surety’s

       purported right to demand arbitration was offered by Appellants only as an

       alternative basis to reach arbitration. Indeed, Owner indicates in its appellate

       brief: “Surety is attempting to rehabilitate Contractor’s waiver and backdoor

       Owner into arbitration when the clear language in the Bonds state otherwise.”

       Appellee’s Brief at 34. We, however, have found that Contractor can go through

       the front door.

       6
         §1 of the Performance Bond provides: “The Contractor and Surety, jointly and severally, bind themselves
       … to the Owner for the performance of the Construction Contract, which is incorporated herein by
       reference.” Appellants’ Appendix Vol. 2 at 114. § 1 of the Payment Bond similarly provides: “The Contractor
       and Surety, jointly and severally, bind themselves … to the Owner to pay for labor, materials and equipment
       furnished for use in the performance of the Construction Contract, which is incorporated by reference,
       subject to the following terms.” Id. at 122.

       Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023                          Page 18 of 20
       3. Proper Venue for Arbitration
[36]   The Construction Contract provides that arbitration “shall be conducted in

       Fond du Lac County, Wisconsin unless expressly prohibited by law, in which

       case mediation [sic] shall be held in the place where the Project is located.”

       Appellants’ Appendix Vol. 2 at 111.

[37]   Owner argues that Ind. Code § 32-28-3-17 expressly prohibits arbitration in

       Wisconsin and thus Indiana is the proper venue for the arbitration. This statute

       provides: “A provision in a contract for the improvement of real estate in

       Indiana is void if the provision … requires litigation, arbitration, or other

       dispute resolution process on the contract occur in another state.”

[38]   Appellants acknowledge the statute but note that where the FAA applies, as in

       this case, courts have consistently found such state statutes preempted by

       federal law. See LaSalle Grp., Inc. v. Electromation of Delaware Cnty., Inc., 880

       N.E.2d 330, 332 (Ind. Ct. App. 2008) (holding that I.C. § 32-28-3-17 is

       preempted by the FAA because it “presents an obstacle” to “congressional

       intent to ‘foreclose state legislative attempts to undercut the enforceability of

       arbitration agreements’”) (quoting Southland Corp. v. Keating, 465 U.S. 1, 16

       (1984)); see also OPE Int’l LP v. Chet Morrison Contractors, Inc., 258 F.3d 443, 447

       (5th Cir. 2001) (similar statute found preempted by FAA “because the

       Louisiana statute conditions the enforceability of arbitration agreements on

       selection of a Louisiana forum; a requirement not applicable to contracts

       generally”); Sterling Const. Corp. v. SOS Const. & Roofing, Inc., 2015 WL 2189588,

       Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023       Page 19 of 20
       at *3 (N.D. Ind. May 11, 2015) (“As the Supreme Court has made clear, the

       [FAA] preempts any state law that is geared towards invalidating arbitration

       agreements.”).

[39]   Owner attempts to distinguish the cases finding preemption by noting that the

       Construction Contract here provided for a venue alternative if arbitration in

       Wisconsin was prohibited by law. But Owner unsuccessfully made this same

       argument in the Wisconsin Action and then did not appeal that court’s order

       compelling arbitration. As a result, arbitration is currently proceeding in

       Wisconsin. We will leave it to the arbitrator to decide if the matter should be

       transferred to an arbitrator in Indiana.

[40]   We reverse and remand with instructions for the trial court to stay the litigation

       pending arbitration.

       May, J. and Foley, J., concur.

       Court of Appeals of Indiana | Opinion 23A-PL-654 | December 27, 2023    Page 20 of 20