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Michigan Appellate Court Rules That, Absent Proof of Prejudice, Defendant's Filing of a Cross-Complaint Does Not Constitute a Waiver of Arbitration

Universal Acad. v. Berkshire Dev., 2017 Mich. App. LEXIS 975 (Ct. App. June 20, 2017)

Author: Alex Corey

8/24/2017

Read the full post at Constructlaw

Michigan Appellate Court Rules That, Absent Proof of Prejudice, Defendant's Filing of a Cross-Complaint Does Not Constitute a Waiver of Arbitration

The dispute arose out of an agreement between Universal Academy (Universa") and Berkshire Development (Berkshire), under which Berkshire agreed to provide demolition services to Universal and Hamadeh Education Services (HES). The agreement also contained an arbitration provision which provided in part:

In the event of a dispute between Contractor and the Owner that cannot be resolved, the parties agree to binding arbitration with the American Arbitration Association in accordance with the Construction Industry's Rules of the American Arbitration Association in effect as of the date of this Agreement.

The agreement was terminated by Universal, alleging material breaches by Berkshire. Following termination, subcontractors for the project filed a complaint against Berkshire, Universal, and HES, requesting foreclosure of construction liens and payment for services. In response, Berkshire filed a cross-complaint against Universal and HES, requesting foreclosure of its lien and asserting claims of promissory estoppel and fraudulent inducement. Five months after it filed the cross-complaint, Berkshire filed a motion to enforce the arbitration agreement between it and Universal.