Third Circuit interprets Act 312
In
Texas -- Right to Arbitate Waived Without Proof of Prejudice to Opposing Party
The Supreme Court of Texas has never before found a waiver of the right to arbitrate, but in a recent five-to-four decision likely to attract multiple friend-of-the court briefs on rehearing, the court vacated an $800,000 arbitration award in favor of two homeowners and remanded their claims for trial based on the conclusion of five justices that the homeowners had waived their right to arbitrate by their pre-arbitration litigation conduct. Perry Homes v. Cull, No. 05-0882, 2008 Tex. LEXIS 423, 2008 WL 1922978 (Tex. May 2, 2008). The court reaffirmed its prior holding that prejudice to the opposing party must be shown to establish a waiver of the right to arbitrate, but in this instance the five-justice majority inferred that prejudice resulted from the homeowners' litigation conduct.
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