Diamante v. Dye
2013 Ark. App. 630
| Ark. Ct. App. | 2013Background
- Diamante, a Private Membership Golf Club, LLC, opposed arbitration by challenging the denial of its motion to compel arbitration after a declaratory judgment petition.
- Appellees Gary and Linda Dye purchased Lot 5, Block 20 in Diamante and signed a contract that membership and dues were governed by the Club's by-laws, rules, and Supplemental Declaration.
- The Supplemental Declaration requires dues and membership subject to the Club's provisions, with liens and foreclosures available for unpaid dues.
- By-laws adopted in 2006 added a broad arbitration clause for disputes not involving dues or small-claims proceedings, to be administered by the AAA.
- Appellees amended their petition in 2012 to allege a new breach involving non-full golf members, triggering the Club’s motion to compel arbitration on September 19, 2012, which the circuit court denied.
- Appellate review proceeded de novo on the record, with the club’s arbitration defense evaluated under a three-factor waiver test.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Agreement to arbitrate exists | Dye contract lacks arbitration agreement post-2006 by-laws. | Arbitration clause in by-laws and amended terms create mutual assent. | Yes, valid arbitration agreement exists. |
| FAA applies due to interstate commerce | No FAA applicability since events occurred in Arkansas with Arkansas parties. | Club's nationwide character and benefits render the FAA applicable. | FAA applies. |
| Waiver of right to arbitrate | Club did not waive; seven months is not excessive, limited discovery. | Club strategically delayed, incurred litigation costs for appellees, causing prejudice. | Club waived its right to compel arbitration. |
Key Cases Cited
- Langer v. Pest Mgmt., Inc., 869 S.W.2d 550 (Ark. 2007) (FAA applicability to interstate-transaction despite lack of explicit contemplation)
- Tinder v. Pinkerton Sec., 305 F.3d 728 (7th Cir. 2002) (amendments to contracts and notice enforce arbitration terms)
- Heide v. Advoca, Inc., 378 S.W.3d 779 (Ark. App. 2010) (three-factor test for waiver of arbitration right)
- LegalZoom.com, Inc. v. McIllwain, 429 S.W.3d 261 (Ark. 2013) (threshold questions for compelling arbitration)
- Tyson Foods, Inc. v. Archer, 147 S.W.3d 681 (Ark. 2004) (FAA applicability tied to whether arbitration agreement is valid)
- Hot Spring County Medical Center v. Arkansas Radiology Affiliates, P.A., 288 S.W.3d 676 (Ark. App. 2008) (arbitration favored as policy)
- Sumner v. Alltel Corp., 257 S.W.3d 566 (Ark. App. 2007) (elements of contract formation and mutual assent for arbitration)