Another decision about arbitration - what a mess.

In a recent opinion by the Cuyahoga County Court of Appeals, the Appeals Court held that a part may invoke a contract provision requiring arbitration (vs. a lawsuit)  - even if a lawsuit between the parties has been pending for 16 months. In Pinnacle Condominiums Unit Owners Association v. 701 Lakeside LLC, the Appeals Court affirmed a trial court's ruling that "stayed" a long-pending lawsuit between two parties so that the parties can participate in "binding arbitration" of their legal dispute.  Binding arbitration involves a private arbitrator (paid for by the parties)  who hears the evidence and each side's story, and the ruling made by the arbitrator is "binding" on the parties in that they cannot(for the most part)  appeal that ruling for any errors they believe were made in the arbitration process. What was important and unique about this case was that the Court rejected an argument by one of the parties that the contract provision calling for arbitration had been "waived" by both parties participating in a court lawsuit for 16 months. What is sad about this situation is that the parties essentially spent a good amount of time and money in the court lawsuit - only to essentially have all of that work, money and time evaporate when one of the parties eventually decided to request arbitration. To make matters somewhat worse, the filing fees and arbitrator fees for this out-of-court arbitration are going to be much larger than the $100 filing fee and "free" tax-payor paid service that a judge offers.

Suggestion (as we have made before when addressing arbitration issues on our blog here): Read your contracts BEFORE you sign them and even AFTER you sign them.