J. Cumby Construction, Inc. v. Mastin's, Inc., 2:20-cv-00018

Plaintiff J. Cumby Construction filed a Tennessee state-court suit (Feb. 13, 2020) against Mastin’s and Federated seeking indemnity and alleging breach of contract and bad faith arising from an earlier Alabama personal-injury suit by an employee (Ralph Gazaway).
Federated removed the case to federal court; Mastin’s answered and asserted defenses including res judicata and collateral estoppel.
Cumby initiated AAA arbitration against Mastin’s 42 days after filing the Tennessee suit, invoking a subcontract provision requiring mediation then allowing Contractor to elect arbitration; Mastin’s objected, arguing Cumby waived arbitration by suing.
Cumby moved to amend its complaint to add an express reservation of its right to arbitrate and moved to compel arbitration; Mastin’s moved to enjoin or stay arbitration pending a judicial determination of arbitrability.
The court applied the Federal Arbitration Act and Sixth Circuit waiver precedent (requiring both inconsistent conduct and actual prejudice), concluded Cumby did not waive arbitration, granted leave to amend, granted the motion to compel arbitration, denied Mastin’s motion, and stayed/administratively closed the case pending arbitration.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Leave to amend to add arbitration reservation	Leave should be freely granted; omission was clerical; amendment merely reserves arbitration	Amendment is futile because Cumby already waived arbitration; amendment prejudices Mastin’s	Granted — Rule 15 favors leave; amendment not futile and no undue prejudice shown
Compel arbitration under subcontract clause	Subcontract’s dispute-resolution clause covers Cumby’s indemnity claim; FAA requires enforcement and a stay	Cumby waived the right by filing suit and defending in court; arbitration would create duplicative/multiple-forum problems	Granted — FAA and federal policy favor arbitration; court compelled arbitration and stayed the case
Waiver by litigation conduct and delay (and prejudice)	No waiver: actions were limited (answers, pro hac vice, mediation was contractually required, tolling agreement preserved rights), and arbitration was asserted promptly after removal	Waiver: filing suit, participating in mediation, and incurring defense costs show inconsistent conduct and caused prejudice	No waiver — waiver requires both inconsistent conduct and actual prejudice; neither element established here

Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983) (doubts about arbitrability resolved in favor of arbitration and arbitration agreements enforced even if piecemeal resolution results)
Hurley v. Deutsche Bank Trust Co. Americas, 610 F.3d 334 (6th Cir. 2010) (waiver requires inconsistent conduct and actual prejudice)
Johnson Assocs. Corp. v. HL Operating Corp., 680 F.3d 713 (6th Cir. 2012) (failure to assert arbitration can suggest intent to litigate but waiver still requires prejudice)
Aircraft Braking Systems Corp. v. Local 856, 97 F.3d 155 (6th Cir. 1996) (arbitrators are bound by preclusive effect of prior federal judgments)
Glazer v. Lehman Bros., 394 F.3d 444 (6th Cir. 2005) (waiver of arbitration is not lightly inferred)
O.J. Distrib., Inc. v. Hornell Brewing Co., 340 F.3d 345 (6th Cir. 2003) (recognizing strong federal policy favoring arbitration)
Leadertex, Inc. v. Morganton Dyeing & Finishing Corp., 67 F.3d 20 (2d Cir. 1995) (pretrial expense and delay alone do not constitute sufficient prejudice to find waiver)
Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Jaros, 70 F.3d 418 (6th Cir. 1995) (arbitration awards may be vacated for manifest disregard of law)