Precision Builders, Inc. v. A.F. Global Revest Ind, 642 F. App'x 395

Precision Builders sued Olympic Group and others under the Miller Act for unpaid subcontract work; Precision later amended to add Maurice Hurst individually.
Olympic initially moved to dismiss for improper venue based on a state-court forum-selection clause in the subcontract (which also contained an arbitration clause); the court denied that motion and litigation proceeded in federal court.
Olympic’s counsel withdrew in April 2014; Olympic failed to secure new counsel, the district court struck Olympic’s answer and counterclaim, and the clerk entered default against Olympic; the court later entered default judgment and assessed damages and fees.
Litigation continued against Hurst and another defendant; extensive discovery and pretrial preparation occurred and a bench trial was scheduled for September 2015.
Two weeks before trial (September 2015) Olympic and Hurst obtained counsel and moved to: (1) compel arbitration/stay proceedings, (2) set aside the default judgment, and (3) dismiss under Rule 19 for failure to join an indispensable party. The district court summarily denied all three motions.
On appeal the Fifth Circuit dismissed the appeals of the Rule 19 denial and the motion to set aside default judgment for lack of jurisdiction, but reached the interlocutory appeal of the denial to compel arbitration under the FAA and affirmed that denial on waiver grounds, then remanded.

Issue	Plaintiff's Argument (Precision)	Defendant's Argument (Olympic/Hurst)	Held
Whether the denial of the motion to compel arbitration is immediately appealable	Denial is appealable under the FAA; litigation in federal court should continue	Court below denied arbitration; defendants appeal	Denial of arbitration is immediately appealable under FAA; Fifth Circuit exercised jurisdiction and reviewed de novo
Whether Olympic/Hurst may compel arbitration (including whether they fall under the subcontract)	Precision: Olympic is precluded by default judgment; Hurst was not a party to subcontract; both waived arbitration	Olympic: subcontract arbitration applies; Hurst: may invoke clause; alternatively default should be set aside	Court assumed arguendo eligibility but held Olympic/Hurst waived arbitration by substantially invoking litigation and causing prejudice; affirmed denial
Whether appeals of denial of Rule 19 joinder and denial of motion to set aside default judgment are reviewable now	Precision: those interlocutory orders are not separately appealable	Olympic/Hurst: sought immediate review	Fifth Circuit dismissed these appeals for lack of jurisdiction (non-final, no Rule 54(b) certification)

Memon v. Allied Domecq QSR, 385 F.3d 871 (5th Cir. 2004) (business entities must appear through licensed counsel in federal court)
Sw. Elec. Power Co. v. Certain Underwriters at Lloyds of London, 772 F.3d 384 (5th Cir. 2014) (jurisdictional principles for appeals and interlocutory review under FAA)
In re Mirant Corp., 613 F.3d 584 (5th Cir. 2010) (de novo review of district court’s denial to compel arbitration and FAA appealability)
Freudensprung v. Offshore Tech. Servs., Inc., 379 F.3d 327 (5th Cir. 2004) (appellate courts may affirm on any ground supported by the record)
Elizondo v. Green, 671 F.3d 506 (5th Cir. 2012) (final-judgment requirement for appellate jurisdiction)
McLaughlin v. Miss. Power Co., 376 F.3d 344 (5th Cir. 2004) (interlocutory default-judgment issues and appealability)
Lincoln Property Co. v. Roche, 546 U.S. 81 (U.S. 2005) (Rule 19 concerns party-joinder, not subject-matter jurisdiction)
Petroleum Pipe Ams. Corp. v. Jindal Saw, Ltd., 575 F.3d 476 (5th Cir. 2009) (standard for waiver of arbitration by substantial invocation of judicial process)
Nicholas v. KBR, Inc., 565 F.3d 904 (5th Cir. 2009) (prejudice factors for arbitration waiver: delay, expense, and damage to legal position)
Republic Ins. Co. v. PAICO Receivables, LLC, 383 F.3d 341 (5th Cir. 2004) (late invocation of arbitration near trial can constitute waiver)