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An appellate court in Ohio held that under Ohio law, the waiver of the right to arbitrate does not require prejudice to the opposing party.
In G.A. White Enterprises v. Black, slip copy, No. 06-CA-95, 2007 WL 588998 (Ohio Ct. App. Feb. 23, 2007), G.A. White Enterprises ("Custom Homes") agreed to construct a home for Derek and Julie Black ("the Blacks"). Custom Homes filed suit after a dispute arose and subsequently requested mediation and then requested arbitration approximately nine months after it had filed suit. Its motion to compel arbitration was denied based on the finding that it had waived its right to arbitrate. Custom Homes appealed.
The Court held that Custom Homes had waived its right to arbitrate. Under Ohio law, a showing of prejudice against the opposing party is not necessary to prove waiver. The Court reasoned that even if a showing of prejudice were necessary to prove waiver, prejudice was shown to the Blacks. The Blacks had already prepared and submitted many documents in preparation for litigation during the nine month interval between their filing against Custom Homes and Custom Homes' motion to compel arbitration.
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