Texas Supreme Court Rules that Homeowners Waived Right to Arbitration

AUSTIN, Texas - The Texas Supreme Court ruled on May 2 that homeowners waived a contractual right to arbitrate by engaging in substantial litigation before invoking the arbitration clause on the eve of trial. Perry Homes v. Cull, et ux., No. 05-0882 (Texas Sup. Ct.).

The high court vacated an $800,000 arbitration award and ordered a "prompt trial" on construction defect claims brought by Robert E. and S. Jane Cull against developer Perry Homes and two warranty companies.

The Culls purchased a home from Perry Homes in 1996 for $233,730, that was subject to a separate warranty agreement with Home …