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KB Home Waived Its Right to Compel Arbitration as to Class Members

On November 2, 2012, Judge Jolly, with the North Carolina Business Court, issued an order in Elliott et al v. KB Home Raleigh/Durham, Inc.  on KB Home Raleigh/Durham, Inc.'s ("KB Home") Motion to Stay and Compel Arbitration as to the named plaintiffs and absent class members.  The Court agreed that, while KB Home had a valid arbitration clause with each homeowner, KB Home had waived its right to seek arbitration because of its delay in seeking arbitration and the prejudice to homeowners who had been litigating the case for almost three and a half years before KB Home moved to compel arbitration. During that time, the parties had attended more than twenty depositions across the country and participated in four hearings including a hearing on Plaintiffs' Motion to Certify as a Class Action which had been granted on February 27, 2012.
In its Motion to Stay and to Compel Arbitration (which was not filed until two months after Judge Jolly granted Plaintiffs' Motion to Certify the Class Action), KB Home argued that it could not have asserted its arbitration rights against the unnamed class members until the class was certified and that it hadn't delayed in moving to compel arbitration. However, Judge Jolly  stated that KB Home's argument reeked of "gamesmanship."   Ruling otherwise, he stated would give KB Home a "second bite at the apple" to relitigate the class certification decision with the unnamed plaintiffs. You can read Judge Jolly's opinion in full here.