LD 1218
pg. 22
Page 21 of 94 An Act To Enact the Revised Uniform Arbitration Act Page 23 of 94
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LR 468
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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).

 
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.

 
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.

 
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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