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LandSouth Construction, LLC v. Lake Shadow Limited, LLC
Citations: 693 S.E.2d 608; 303 Ga. App. 413; 2010 Fulton County D. Rep. 1332; 2010 Ga. App. LEXIS 363Docket: A10A0551
Court: Court of Appeals of Georgia; April 6, 2010; Georgia; State Appellate Court
LandSouth Construction, LLC appeals the trial court's denial of its motion to dismiss a complaint from Lake Shadow Limited, LLC and to compel arbitration, arguing that the court incorrectly determined it had waived its arbitration rights due to actions taken in a related case. The original contract between the parties included a binding arbitration provision. After a dispute arose regarding payments for a condominium project, LandSouth filed a mechanic's lien and a lawsuit in Gwinnett County, seeking to foreclose the lien without invoking arbitration. Following mediation, the dispute was settled, and the lawsuit was dismissed. Subsequently, Lake Shadow filed a new complaint alleging construction defects and breach of contract. The trial court ruled that LandSouth waived its right to arbitration by not asserting it in the earlier lawsuit, except for the lien-related claims, which were legally required to be filed in court. On appeal, LandSouth argues that the trial court erred in its waiver ruling, emphasizing that waiver requires clear intent from both parties, and citing precedent that supports the right to arbitrate even after filing a lien foreclosure action. The appellate court found merit in LandSouth's argument and reversed the trial court's order, remanding the case for further proceedings. In October 2007, LandSouth filed a lawsuit in Gwinnett County to perfect its lien for $526,902.92 against Lake Shadow, complying with the lien statute requiring such action within 12 months of the claim becoming due (former OCGA § 44-14-361.1(a)(3)). LandSouth's complaint included claims for breach of contract, quantum meruit, and unjust enrichment, but did not seek multiple recoveries of the same amount. The court found that LandSouth did not waive its arbitration rights by filing the lawsuit, as the lien statute necessitated the action. Lake Shadow failed to show any prejudice from this lawsuit, as it did not file an answer or engage in significant discovery, and the dispute was settled through mediation within six months. The contract, incorporating AIA Document A201-1997, stipulated that actions or inactions by parties do not constitute a waiver of rights unless explicitly agreed in writing. The trial court's ruling that LandSouth waived its arbitration rights was deemed erroneous, leading to a reversal of the order and remand for further proceedings.