arbitration substantially participates in litigation to a point inconsistent with an intent to arbitrate and this participation results in prejudice to the opposing party."), cert. denied, 133 L. Ed. 2d 845, 116 S. Ct. 915 (1996); Price v. Drexel Burnham Lambert, Inc., 791 F.2d 1156, 1161 (5th Cir. 1986)("where a party fails to demand arbitration during pretrial proceedings, and, in the meantime, engages in pretrial activity inconsistent with an intent to arbitrate, the party later opposing a motion to compel arbitration may more easily show that its position has been compromised, i.e. prejudiced"), quoted in Hoxworth, 980 F.2d at 926. In addition, Defendants (1) vigorously contested the merits of Plaintiff's claims in their motion to dismiss (granted in part by our Order dated July 19, 1996), (2) assented to our pre-trial orders, and (3) gave no notice prior to filing this motion, to our knowledge, that it intended to seek arbitration. In all, Plaintiff has allegedly already incurred almost $ 100,000 in attorney's fees in the course of this litigation.
Finally, we agree with Plaintiff that this case is quite similar on its facts to Hoxworth, in which the Third Circuit held that defendants waived their right to arbitration by "actively litigating [their] case for almost a year." 980 F.2d at 925. There, as here, the defendants participated in pretrial proceedings, filed a motion to dismiss, took multiple depositions, and prompted plaintiffs to file discovery motions by their conduct during discovery. Id. at 925-26.
See also National Foundation for Cancer Research v. A.G. Edwards & Sons, 261 U.S. App. D.C. 284, 821 F.2d 772, 777 (D.C.Cir. 1987) ("Substantial invocation of the litigation process," combined with "forc[ing the opposing party] to litigate the substantive issues in the case, including its arbitrable claims," is sufficient prejudice to constitute a waiver), quoted in Hoxworth, 980 F.2d at 926; Miller Brewing Co.v. Fort Worth Distrib. Co., 781 F.2d 494, 497 (5th Cir. 1986)("Substantially invoking the litigation machinery qualifies as the kind of prejudice ... that is the essence of waiver."), quoted in Hoxworth, 980 F.2d at 926. We also find that the two pre-Hoxworth district court opinions that Defendants cite are not persuasive.
We therefore hold that Defendants, by actively litigating this action for the past seven months, have waived their right to compel arbitration at this late date. Accordingly, Defendants' motion is denied. An appropriate Order follows.
AND NOW, this 20th day of November, 1996, upon consideration of Defendants' Motion to Stay this Action Pending Arbitration of Arbitrable Issues Asserted in Plaintiff's Complaint, and Plaintiff's Response thereto, it is hereby ORDERED that Defendants' Motion is DENIED.
BY THE COURT:
J. CURTIS JOYNER, J.