This is an interlocutory appeal from the trial court’s stay and order for mandatory arbitration under the Federal Arbitration Act, because Mary L. Rose Wise and Nell Lackerman, plaintiffs, contend that Tidal Construction Company, Inc.’s inconsistent actions proceeding with discovery, motion for summary judgment, entry of a pre-trial order, and jury selection waived the right to arbitration.1 Finding that Tidal Construction’s inconsistent conduct constituted a waiver of the arbitration agreement, we reverse. On October 16, 2000, the builder-sellers, Tidal Construction Company, Inc., C. L. Stafford Building Contractor, Inc., and C. L. Stafford were sued by the purchasers Mary L. Rose Wise and Nell Lackman for negligence, negligence per se, breach of implied warranty of good workmanship, and breach of contract as to the implied duty of good workmanship for estimated special damages of $199,000, because the new house, which was sold to them for $138,000 was built over a buried wood debris field. On December 5, 2000, Tidal Construction answered and stated “this matter may be subject to mandatory binding arbitration pursuant to the contract or contracts between this sec parties and should be dismissed.” The parties proceeded with litigation and went through extensive discovery, including some eight depositions. On October 24, 2001, Tidal Construction moved for summary judgment based upon the discovery. In November of 2001, the case came on the trial calendar but was continued by agreement to complete discovery. On February 13, 2002, the parties entered into a consolidated pre-trial order without Tidal Construction again raising the issue of mandatory arbitration. On February 20, 2002, the trial court set the case for trial on the calendar for March 21-April 17, 2002. Finally, on March 7, 2002, Tidal Construction moved for a stay for mandatory arbitration and to amend the pre-trial order to assert such defense. The plaintiffs dismissed their warranty claims under the construction contract; also, they dismissed the claims against Stafford and his company to avoid the arbitration issue. On March 20, 2002, the parties struck a jury for the special trial set for April 21, 2002. On September 18, 2002, the trial court granted the stay and ordered arbitration, which earlier order had been misfiled and not sent to the parties. By March 7, 2002, when Tidal Construction filed its demand for arbitration, the plaintiffs’ trial preparation expenses exceeded $11,000.
The basis for Tidal Construction’s demand for mandatory arbitration was: on March 16, 1997, the parties entered into a sales contract, providing the special condition that the “SELLER TO FURNISH A 2/10 HOME WARRANTY.” On March 26, 1997, Tidal Construction complied by issuing a “Workmanship/Systems and Structural Limited Warranty,” which was administered by the Home Buyers Warranty Corporation and insured by National Home Insurance Company, foreign corporations; Mary L. Rose signed the application for this home enrollment under this express warranty. Attached to the application was the “Home Buyers Warranty Booklet,” which included mandatory arbitration of all claims arising in warranty, contract, fraud, or tort under the FAA. The express written warranty was issued to the plaintiffs as part of the sale contract, which incorporated the warranty booklet with the mandatory arbitration clause under the FAA.
