Northland Ins. Co. v. Kellogg, 84508

• Decision Date: 23 May 1995
• Docket Number: No. 84508,No. 4,84508,4
• Citation: 897 P.2d 1161,1995 OK CIV APP 84
• Parties: 1995 OK CIV APP 84 NORTHLAND INSURANCE COMPANY, Appellant, v. Billy G. KELLOGG d/b/a Kellogg Insurance Agency, Appellee. Court of Appeals of Oklahoma
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

Page 1161

897 P.2d 1161

1995 OK CIV APP 84

NORTHLAND INSURANCE COMPANY, Appellant, v. Billy G. KELLOGG d/b/a Kellogg Insurance Agency, Appellee.

No. 84508.

Released for Publication by Order of the Court

of Appeals of Oklahoma, Division No. 4.

Court of Appeals of Oklahoma.

May 23, 1995.

Appeal from the District Court of Atoka County, Oklahoma; Doug Gabbard II, Trial Judge.

Plaintiff filed a civil action seeking damages for negligence and breach of fiduciary duty. After defendant had answered, considerable discovery had been effected and opposing summary judgment motions filed, plaintiff filed a motion to compel arbitration as provided by the agency contract. The trial court found that plaintiff had waived its contractual right to arbitration.

AFFIRMED.

Brently C. Olsson, Huckaby, Fleming, Frailey, Chaffin, Cordell, Greenwood & Perryman, Oklahoma City, for appellant.

Ray E. Zschiesche, Phillips, McFall, McCaffrey, McVay & Murrah, Oklahoma City, for appellee.

OPINION

STUBBLEFIELD, Judge.

This is a permissable appeal from an interlocutory order in which the trial court overruled plaintiff's motion to compel arbitration. After a review of the record on appeal and applicable law, we affirm.

Plaintiff Northland Insurance Company initiated this action by filing its petition seeking damages from Defendant Billy G. Kellogg d/b/a Kellogg Insurance Agency, Northland's agent, for alleged negligence and breach of fiduciary duty. Northland requested a jury trial.

Defendant answered, and the cause proceeded through considerable discovery, opposing summary judgment motions and pretrial conference. However, approximately ten months after filing the lawsuit, Plaintiff, citing provisions of the agency contract, filed a motion to compel arbitration. Defendant resisted the motion, and the trial court in a well-delineated order found that Plaintiff had waived its right to arbitration. Plaintiff appeals.

Plaintiff's sole allegation of error is that the trial court erred in concluding that it had waived its right to arbitration. There is scant Oklahoma law on the subject. However in Southland Corp. v. Keating, 465 U.S. 1, 104 S.Ct. 852, 79 L.Ed.2d 1 (1984), the Supreme Court ruled invalid a state law that limited the applicability of arbitration in a franchise contract, and, by that ruling, a body of substantive federal law was made applicable to both federal and state courts in construing and enforcing any contract that falls with the Federal Arbitration Act. Id.; 9 U.S.C. §§ 1-15 (1988).

Review of an order finding that a right to arbitration had been waived is a mixed question of fact and law. The review of whether the trial court applied the correct legal standards is a de novo review for correctness, Frye v. Paine, Webber, Jackson & Curtis, Inc., 877 F.2d 396, 398 (5th Cir.1989), cert. denied, 494 U.S. 1016, 110 S.Ct. 1318, 108 L.Ed.2d 493 (1990), while the review of the trial court's determination of the existence of facts supporting waiver is deferential in nature. Valero Refining, Inc. v. M/T Lauberhorn, 813 F.2d 60, 65 (5th Cir.1987); Ohio-Sealy Mattress Mfg. Co. v. Kaplan, 712 F.2d 270, 273 (7th Cir.1983), cert. denied, 464 U.S. 1002, 104 S.Ct. 509, 78 L.Ed.2d 698 (1983).

Under the Federal Arbitration Act and the Uniform Arbitration Act adopted by Oklahoma, 15 O.S.1991 §§ 801-818, there is a strong presumption in favor of provisions for arbitration. Thus, the court in Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 (1983), stated that "questions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration."

Although waiver of contractual arbitration provisions is not easily inferred, Carcich v. Rederi A/B Nordie, 389 F.2d 692, 696 (2d Cir.1968), it has been established that a party may waive, modify or abandon a contractual right to arbitration. S & H Contractors v. A.J. Taft Coal Co., Inc., 906 F.2d 1507, 1514 (11th Cir.1990), cert. denied, 498 U.S. 1026, 111 S.Ct. 677, 112 L.Ed.2d 669 (1991); Demsey & Associates v. Steamship Sea Star, 461 F.2d 1009, 1017 (2d Cir.1972). The party asserting waiver has the burden of proof regarding that issue. Page v. Moseley, Hallgarten, Estabrook & Weeden, Inc., 806 F.2d 291, 293-94 (1st Cir.1986).

While no uniform test has been formulated for the determination of waiver, there is a six-factor test that essentially encompasses the various tests adopted in most jurisdictions. Peterson v. Shearson/American Express, Inc., 849 F.2d 464, 467-68 (10th Cir.1988); Jones Motor Co. v. Chauffeurs, Teamsters and Helpers Local Union No. 633 of New Hampshire, 671 F.2d 38, 44 (1st Cir.1982), cert. denied, 459 U.S. 943, 103 S.Ct. 257, 74 L.Ed.2d 200 (1982). Those factors are: (1) whether a party has taken actions that are inconsistent with a right to arbitrate; (2) whether the issue of arbitration was raised only after there had been significant preparation for litigation; (3) whether the trial date is near or there has been a long delay in raising the issue of contractual arbitration rights; (4) whether the party invoking the arbitration right has filed pleadings in the litigation without seeking a stay of the proceedings; (5) whether the party seeking arbitration has engaged in discovery proceedings that are not available in arbitration or participated in other "important intervening steps;" and, (6) whether the opposing party has been prejudiced by the delay. Peterson, 849 F.2d at 467 (citing Reid Burton...