TYLER – An appeals court has affirmed a trial court's ruling that denied a motion to compel arbitration in a dispute over a roof warranty.
On Feb. 6, the 12th Court of Appeals at Tyler affirmed the 7th Judicial District Court of Smith County's ruling that denied a motion to compel arbitration entered by First Avenue Inc., doing business as Highland Commercial Roofing, in its suit against JKS-Tyler 1044 LLC. The Court of Appeals ruled that the trial court did not abuse its discretion by overruling the motion.
"If the court determines that a party to the arbitration is also a party to litigation in a pending court action or special proceeding with a third party as set forth under subdivision (c) (of the California Arbitration Act), the court may refuse to enforce the arbitration agreement and may order the intervention or joinder of all parties in a single action," Chief Justice James Worthen wrote in the ruling. "Here, in overruling Highland’s motion to compel, the trial court refused to enforce the arbitration agreement. At oral argument of this matter, JKS’s attorney represented to this court that all necessary parties have been joined in the underlying suit. Highland did not dispute this assertion. Thus, we conclude that the trial court’s order complies."
According to the ruling, JKS and Highland entered into a contract for the installation of a waterproof membrane over an existing roof on a commercial building owned by JKS in Tyler. According to the warranty, the roof would be leak-free for 15 years, the ruling states. The contract also included an arbitration agreement and clause "setting forth that the governing law for any disputes would be that of the state of California," according to the ruling.
JKS contends that the roof began leaking within five years of the installation. The company then contacted Highland asking it to honor the warranty on the membrane. However, the ruling states Highland refused, "arguing that a third party hired to maintain climate control units on the roof improperly maintained the units, which caused the membrane to be damaged, resulting in the leak."
In its motion to compel arbitration, Highland argued that JKS failed to meet its burden of proof under the California Arbitration Act.