Joca-Roca Real Estate, LLC v. Brennan
United States Court of Appeals, First Circuit
772 F.3d 945 (2014)
Joca-Roca Real Estate, LLC (plaintiff) entered an asset purchase agreement with Robert Brennan (defendant) containing a binding arbitration clause for all disputes, but when a dispute arose, Joca-Roca sued Brennan in federal court for fraud and breach of contract instead; Brennan raised the arbitration clause as an affirmative defense but neither side pursued arbitration, and the parties instead spent eight months in discovery and trial preparation, including multiple depositions, extensive document production, and several court conferences. Nine months after filing suit - near the end of discovery and just weeks before summary-judgment motions were due - Joca-Roca abruptly moved to stay the court proceedings and compel arbitration, offering no explanation for the delay; the magistrate judge denied the stay, the district court affirmed, and Joca-Roca appealed.
Whether a party may impliedly waive a contractual right to arbitrate if the party both acts inconsistently with the right and causes prejudice to the other side.