Okorafor v. UNCLE SAM & ASSOCIATES, INC.
295 S.W.3d 27 | Texas Court of Appeals, 1st District (Houston) | 2009
What This Case Means for Subcontractors
A homeowner signed a contractor agreement with an arbitration clause but then filed a lawsuit with aggressive counterclaims and discovery tactics. When she later tried to force arbitration, the court refused because she had already substantially used the court system. The Texas appeals court upheld this decision, ruling that a party can lose arbitration rights by aggressively pursuing litigation first.
Key Takeaways
- •Don't file counterclaims or aggressive discovery requests if you want to arbitrate later—courts see this as waiving your arbitration right
- •If a contract has an arbitration clause, move to arbitration early and clearly, before taking litigation steps like filing counterclaims
- •Courts will enforce arbitration clauses, but only if you haven't already substantially used the court system to the other party's disadvantage
Waiver asks whether a party substantially invoked judicial process to opponent's detriment.
Frequently Asked Question
Can I file a lawsuit and then switch to arbitration if my contract requires it?
No. If you file counterclaims, pursue discovery, or aggressively use the court system, you may lose your right to arbitrate even if the contract requires it. Courts see this as waiving arbitration. Move to arbitration early and clearly before taking any litigation steps.
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