February 25, 2020

February 24, 2020

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Intervenor-Defendant Obtains Stay of SDNY Action in Favor of Arbitration 14 Months After Complaint Filed

The plaintiff and intervenor-defendant entered into a contract wherein they agreed to arbitrate claims arising out of the contract. Following a dispute, the plaintiff asserted that the intervenor-defendant had waived its right to arbitration. To determine whether arbitration was waived, the district court considered: “(1) the time elapsed from when litigation was commenced until the request for arbitration; (2) the amount of limitation to date, including motion practice and discovery; and (3) proof of prejudice.” The court concluded that, in light of the strong presumption in favor of arbitration, and despite the 14-month delay in applying for a stay, the plaintiff “failed to show that it has suffered prejudice as a result of the delay, or will suffer prejudice by proceeding to arbitration.” The case was stayed pending the conclusion of arbitration pursuant to the terms of the parties’ contract.

United States ex rel. Preferred Masonry Restoration, Inc. v. Int’l Fidelity Ins. Co., No. 7:17-cv-01358 (S.D.N.Y. Aug. 30, 2019).

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About this Author

Nora A. Valenza-Frost, Carlton Fields, Insurance lawyer

Nora Valenza-Frost represents U.S. and international insurers and reinsurers in arbitration and litigation involving complex claims, coverage and regulatory issues across all lines of business.

Nora provides coverage opinions for claims involving several lines of business, including commercial general liability (CGL), professional liability, directors and officers liability (D&O), contractor’s protective professional indemnity (CPPI), errors and omissions (E&O), excess and surplus lines, property, workers’ compensation, business interruption, life and health, pollution,...