Johnson Assocs. Corp. v. HL Operating Corp.
Plaintiffs sought damages for breach of contract and unjust enrichment. Hartmann counterclaimed for breach of contract. The parties unsuccessfully exchanged multiple settlement offers. Three days before an agreed-upon discovery deadline, Hartmann notified plaintiffs that it intended to exercise its right to arbitrate as provided by their contract. When plaintiffs failed to respond, Hartmann filed a motion to compel arbitration. Plaintiffs served discovery responses on Hartmann in accordance with the agreed deadline and continued to seek discovery from Hartmann while the motion was pending. When Hartmann served discovery responses, it stipulated that it was not waiving its right to arbitrate. The court held that Hartmann had waived its right to compel arbitration by obtaining an extension of time within which to file an answer; asserting 10 affirmative defenses and a counterclaim; engaging in a judicial settlement conference and informal efforts to resolve the case; requesting adjustments of the Case Management Order; and serving discovery requests and that those actions prejudiced plaintiffs. The Sixth Circuit affirmed. Hartmann’s actions were completely inconsistent with any reliance on its right to arbitration and belated assertion of that right caused plaintiffs actual prejudice in the form of unnecessary delay and expense. View "Johnson Assocs. Corp. v. HL Operating Corp." on Justia Law