Court Opinion

ID: 9566957
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:45:26.046489+00
Date Added: 2024-06-11T09:41:56.530799
License: Public Domain

ON PETITIONS FOR REHEARING PETITIONS DENIED
METZGER, Judge,
dissenting from the denial of the petitions for rehearing.
I would grant the petitions for rehearing and, therefore, withdraw my concurrence in the original opinion.
The majority concludes that the defendants waived their contractual right to arbitration both as a matter of law and as a matter of fact. In my view, the law and the facts here compel a different result.
I.
The controlling law in effect when this case was pending would have caused any request for arbitration to be denied. For well over a year, plaintiff's complaint asserted both arbitrable and non-arbitrable claims. The alleged violations of federal securities laws were not arbitrable, Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953); the alleged violations of state securities laws were not arbitrable, Sandefer v. District Court, 635 P.2d 547 (Colo.1981); and the alleged racketeering claims were not arbitrable. See S.A. Mineracao Da Trindade-Samitri v. Utah International, Inc., 576 F.Supp. 566 (S.D.N.Y.1983), aff'd on other grounds, 745 F.2d 190 (2d Cir.1984). Thus, during the pend-ency of these claims, any request for arbitration would have been futile.
However, the majority concludes that arbitration, if requested, would have been allowed as a result of the holding in Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). I disagree.
The unique facts in that case make it distinguishable from the issues here, and render its holding inapposite. Moses stands only for the proposition that, if there are two defendants, and only one defendant has an arbitration agreement with the plaintiff, the arbitration agreement must be enforced with respect to that defendant, “notwithstanding the presence of other persons who are parties to the underlying dispute.” In this case, all defendants had an arbitration agreement with the plaintiff; therefore, the intertwining doctrine announced in Wilko v. Swan, supra, and Sandefer v. District Court, supra, controlled, and any request for arbitration would have been futile, as a matter of law.
*582II.
The majority also concludes that the fact of defendants’ participation in pretrial discovery constituted a waiver of arbitration as a matter of law. Again, I disagree.
A defendant’s right to arbitrate will be deemed waived if he has acted inconsistently with it and prejudice would accrue to the other parties. Red Sky Homeowners Ass’n v. Heritage Co., 701 P.2d 603 (Colo.App.1984). The majority relies on Norden v. E.F. Hutton & Co., 739 P.2d 914 (Colo.App.1987) for the assertion that the issue of waiver is a matter of law. That proposition is true only if the facts are undisputed. See Cordillera Corp. v. Heard, 41 Colo.App. 537, 592 P.2d 12 (1978), aff'd, 200 Colo. 72, 612 P.2d 92 (1980). However, the court in Norden went on to not that: “[Wjhether the defendants’ pursuit of litigation manifested their intent to waive the arbitration clause, is a factual determination to be made by the trial court.” Thus, where intent is an issue, the issue remains one of fact, and we should defer to the trial court’s findings in that regard. Cordillera Corp. v. Heard, supra.
The record discloses that both plaintiff and defendants engaged in extensive discovery from the filing of the initial complaints in early 1983 until the fall of 1984, when the second amended complaint contained only non-arbitrable claims. In my view, until the plaintiff's claims were properly postured, all parties were entitled to engage in discovery, and these activities did not constitute a waiver of the right to assert arbitration.
Defendants filed motions to stay the trial proceedings and invoked the arbitration clause in early 1985. I believe the waiver issue should be analyzed by examining the activities of the parties between the fall of 1984 and early 1985, the only time period when arbitration was available as a matter of law. The record indicates that both sides conducted discovery during that brief period.
The trial court made, in essence, a finding of fact that the defendants' actions during those few months did not manifest an intent to waive arbitration. Since that factual determination is supported by the record, it should not be overturned on appeal. Cordillera Corp. v. Heard, supra.
Moreover, the plaintiff’s only assertion relative to being prejudiced by defendants is that defendants engaged in discovery during this time. However, since plaintiff also engaged in discovery during that time, no prejudice has been shown. See Norden v. E.F. Hutton & Co., supra.
Consequently, I would affirm the trial court’s order requiring arbitration and would further affirm the order confirming the arbitration decision.