| | | Other States have either limited or declined to follow the | | Prima Paint doctrine on separability. Rosenthal v. Great W. | | Fin. Sec. Corp., 14 Cal. 4th 394, 58 Cal.Rptr. 2d 875, 926 | | P.2d 1061 (1996); Goebel v. Blocks and Marbles Brand Toys, | | Inc., 568 N.E.2d 552 (Ind. 1991); City of Wamego v. L.R. Foy | | Constr. Co, 675 P.2d 912 (Kan. Ct. App. 1984); George Engine | | Co. v. Southern Shipbuilding Corp., 376 So. 2d 1040 (La. Ct. | | App. 1977); Holmes v. Coverall N. Am., Inc., 633 A.2d 932 (Md. | | 1993); Atcas v. Credit Clearing Corp. of Am., 197 N.W.2d 448 | | (Minn. 1972); Shaw v. Kuhnel & Assocs., 698 P.2d 880 (N.M. | | 1985); Shaffer v. Jeffery, 915 P.2d 910 (Okla. 1996) | | (recognizing that majority of States apply the doctrine of | | separability but declining to follow the doctrine); Frizzell | | Const. Co. v. Gatlinburg L.L.C., 9 S.W.3d 79 (Tenn. 1999). |
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| | | 5. Waiver is one area where courts, rather than arbitrators, | | often make the decision as to enforceability of an arbitration | | clause. However, because of the public policy favoring | | arbitration, a court normally will only find a waiver of a | | right to arbitrate where a party claiming waiver meets the | | burden of proving that the waiver has caused prejudice. | | Sedillo v. Campbell, 5 S.W.3d 824 (Tex. Ct. App. 1999). For | | instance, where a plaintiff brings an action against a | | defendant in court, engages in extensive discovery and then | | attempts to dismiss the lawsuit on the grounds of an | | arbitration clause, a defendant might challenge the dismissal | | on the grounds that the plaintiff has waived any right to use | | of the arbitration clause. S&R Co. of Kingston v. Latona | | Trucking, Inc., 159 F.3d 80 (2d Cir. 1998). Allowing the court | | to decide this issue of arbitrability comports with the | | separability doctrine because in most instances waiver | | concerns only the arbitration clause itself and not an attack | | on the underlying contract. It is also a matter of judicial | | economy to require that a party, who pursues an action in a | | court proceeding but later claims arbitrability, be held to a | | decision of the court on waiver. |
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| | | 6. Section 6(d) follows the practice of the American | | Arbitration Association and most other arbitration | | organizations that if a party challenges the arbitrability of | | a dispute in a court proceeding, the arbitration organization | | or arbitrators in their discretion may continue with the | | arbitration unless a court issues an order to stay the | | arbitration or makes a final determination that the matter is | | not arbitrable. |
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| | | 7. Contracts of adhesion and unconscionability: Unequal | | bargaining power often affects contracts containing | | arbitration provisions involving employers and employees, | | sellers and consumers, health maintenance organizations and | | patients, | | franchisors and franchisees, and others. |
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