2021 Ohio 1827
Ohio Ct. App.2021Background
- Crosscut Capital (Arizona LLC) sued Nicholas DeWitt (Ohio resident) in Franklin County for breach of fiduciary duty and breach of an LLC Operating Agreement (WKND Property Group, LLC) that contained an arbitration clause.
- DeWitt filed an answer and counterclaim on July 2, 2019 (did not assert arbitration as a defense) and thereafter actively participated in litigation: filed motions, opposing memoranda, discovery requests, and served interrogatories/requests for production.
- Crosscut served requests for admissions and later moved to compel discovery (Dec. 3, 2019), asserting DeWitt had not responded.
- DeWitt waited over six months after filing his answer/counterclaim and filed a motion to compel arbitration and stay proceedings on Dec. 18, 2019.
- The trial court denied DeWitt’s motion to compel arbitration (finding waiver based on the totality of circumstances) and granted Crosscut’s motion to compel discovery; DeWitt appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether DeWitt waived the right to arbitrate | Crosscut: DeWitt waived arbitration by filing an answer/counterclaim, failing to plead arbitration, litigating extensively, and delaying over six months before moving to compel arbitration | DeWitt: He timely moved to compel arbitration and did not act inconsistently with the arbitration right (relied on analogous cases like Murtha) | Court: No abuse of discretion; under the totality of the circumstances DeWitt waived arbitration (answer/counterclaim, extensive participation, 6+ month delay, omission of arbitration defense) |
| Correct standard of review for waiver | Crosscut: Waiver is fact-driven and reviewed for abuse of discretion | DeWitt: Trial court applied incorrect standard (argued on appeal) | Court: Applied abuse-of-discretion standard for waiver issues and affirmed trial court |
| Crosscut’s procedural requests (supplement record; disregard assignment; App.R. 23 sanctions) | Crosscut: Sought supplementation, requested disregarding DeWitt's brief for App.R. noncompliance, and asked for appellate sanctions | DeWitt: Opposed | Court: Denied supplement as moot, denied request to disregard assignment, declined to award App.R. 23 sanctions |
Key Cases Cited
- Hayes v. Oakridge Home, 122 Ohio St.3d 63 (2009) (recognizes strong public policy favoring arbitration)
- Taylor Bldg. Corp. of Am. v. Benfield, 117 Ohio St.3d 352 (2008) (presumption favoring arbitration when a claim falls within the arbitration provision)
- Ignazio v. Clear Channel Broadcasting, 113 Ohio St.3d 276 (2007) (all doubts should be resolved in favor of arbitration)
- Kelm v. Kelm, 68 Ohio St.3d 26 (1993) (arbitration is an expeditious and economical dispute-resolution method)
- Morris v. Morris, 189 Ohio App.3d 608 (2010) (discusses waiver elements, factors for totality-of-circumstances analysis, and abuse-of-discretion review)
- Blakemore v. Blakemore, 5 Ohio St.3d 217 (1983) (defines abuse-of-discretion standard)