John A. Becker Co. v. Jedson Eng'g, Inc.
121 N.E.3d 788
| Ohio Ct. App. | 2018Background
- Jedson (general contractor) purchased lighting materials from Becker; Jedson signed Becker’s Credit Application on April 20, 2016 and submitted a Purchase Order on April 21 that included an arbitration clause favoring arbitration in Cincinnati at buyer’s option.
- Becker delivered materials June 7, 2016; Jedson failed to pay after it experienced payment disputes with its owner (CP Kelco), leaving Becker unpaid.
- Related multi-party litigation was filed in Oklahoma by another supplier; Jedson later filed (and voluntarily dismissed) third-party claims against Becker in the Oklahoma action.
- Becker sued Jedson in Ohio (Dec. 2016) for breach of contract; Jedson initially sought extensions, moved to dismiss or stay (forum non conveniens, comity, failure to join CP Kelco), and did not invoke arbitration for >9 months.
- While the Ohio court held the contract likely granted Jedson a right to arbitrate, the trial court denied a stay, finding Jedson waived arbitration by actively participating in litigation and delaying invocation of arbitration; appellate court affirmed.
Issues
| Issue | Plaintiff's Argument (Becker) | Defendant's Argument (Jedson) | Held |
|---|---|---|---|
| Whether Jedson waived the contractual right to arbitrate | Becker argued Jedson implicitly waived arbitration by litigating and delaying assertion of arbitration | Jedson argued it retained the contractual right and timely sought stay pending arbitration once appropriate | Court held Jedson waived arbitration based on totality of circumstances (delay >9 months, active litigation participation, inconsistent acts) |
| Whether arbitration clause was part of the parties’ contract (Becker cross-appeal) | Becker argued its quote + credit agreement were the offer and Jedson’s PO terms (including arbitration) materially altered the contract, so arbitration was not binding | Jedson relied on Purchase Order terms to assert arbitration right | Court declined to decide on the contract-formation question on appeal as interlocutory; result would be same (no stay), so cross-appeal not entertained |
Key Cases Cited
- Harsco Corp. v. Crane Carrier Co., 122 Ohio App.3d 406, 701 N.E.2d 1040 (Ohio Ct. App.) (courts hesitate to infer waiver of arbitration; distinguishes mutual arbitration agreements from unilateral-option clauses)
- Morris v. Morris, 189 Ohio App.3d 608, 2010-Ohio-4750, 939 N.E.2d 928 (Ohio Ct. App.) (party asserting waiver bears burden; requests inconsistent with arbitration may support waiver)