Divided Court Holds That Developer Waived Its Right To Arbitrate

By a 4-2 decision, the West Virginia Supreme Court held in Dan Ryan Builders, Inc. v. Williams that a real estate developer waived its right to compel arbitration of claims brought by purchasers of lots and homes alleging “development-wide soil movement, which caused damage to respondents’ properties.” Relying on stipulations signed by the parties, the lower court in 2012 denied the developer’s motion to compel arbitration, under the following conditions:

petitioners would not incur any negative consequences, such as waiver or estoppel, of their “contention that the case should be ordered to arbitration[]” by their participation in discovery during the appeal process. As the Agreed Order reflects, “participation by the defendants in discovery and other pretrial phases of the case in this Court will not preclude the defendants from seeking appellate review of the Court’s arbitration ruling . . . .”

The litigation continued for six years, at which time the developer filed a renewed motion to compel arbitration.

The majority held that the renewed motion was appropriately denied by the lower court based on waiver, while an emphatic dissent argued that, under the circumstances before it, “petitioners never intentionally relinquished their right to arbitration or appeal, regardless of how many depositions they took, how many discovery requests they served, or how many pleadings and motions they filed.”


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