A Florida appellate court reversed the lower court’s decision and determined that a development company had waived its right to arbitrate by conducting discovery on the merits of the case.

In Olson Electric Co. v. Winter Park Redevelopment Agency, No. 5D07-3915, 2008 WL 2774449 (Fla. Dist. Ct. App. July 18, 2008), Olson sued Winter Park for breach of contract and foreclosure of a construction lien. Winter Park argued that Olson’s claims were subject to the parties’ arbitration agreement. Nevertheless, Winter Park proceeded to file discovery-related pleadings directed at the merits of the case.

After initiating discovery, Winter Park filed a motion to compel arbitration. The trial court granted the motion. Olson appealed, arguing that the lower court erred in ordering the parties to proceed to arbitration. The Court agreed with Olson.

According to the Court, once Winter Park argued that the claims were subject to arbitration, Winter Park should have immediately filed a motion to compel arbitration under the Florida’s Arbitration Code. However, instead of immediately filing a motion to compel, Winter Park initiated discovery on the substantive issues of the lawsuit.

The Court held that under the totality of the circumstances, Winter Park had waived its right to arbitration. More specifically, by initiating discovery that targeted the merits of the case, Winter Park invoked the judicial process. The Court thus reversed the lower court’s decision and remanded the case for further proceedings.