Lemon Drop Properties, LLC. v. Pass Marianne, LLCAnnotate this Case
This case was an interlocutory appeal from a circuit court which granted the "Motions to Compel Arbitration" of Pass Marianne, LLC (Pass) and Alfonso Realty, Inc. (Alfonso). On appeal, the Supreme Court considered: (1) whether Pass waived its right to arbitration, and (2) whether a principal’s waiver of its contractual right to arbitrate operates to waive that right for its agent. In 2005, Pass entered into a contract with Carl E. Woodward, LLC (Woodward) for the construction of a new condominium development, Pass Marianne Condominiums, in Pass Christian, Mississippi. In February, Pass and Lemon Drop Properties, LLC (Lemon Drop) entered into a "Preconstruction Sales and Purchase Agreement" for Unit No. 209 within the Pass Marianne Condominiums. Because of Hurricane Katrina, construction of the Pass Marianne Condominiums was not completed until 2007. On October 3, 2007, Pass executed a warranty deed conveying Unit No. 209 to Lemon Drop, and Woodward furnished a "Warranty of Completion of Construction" to Lemon Drop. On October 28, 2008, Lemon Drop filed a Complaint in the circuit court against Pass and Woodward, which sought, inter alia, rescission of the Agreement due to alleged defects in design and construction. Upon review, the Supreme Court concluded that while Pass waived its right to compel arbitration, that waiver was not imputed to its agent, Alfonso. As there was no evidence of waiver by Alfonso, it should have been entitled to proceed in arbitration. Therefore, as to Alfonso the Court affirmed the circuit court's order granting arbitration was affirmed. But regarding Pass, Court reversed and remanded the circuit court's order for further proceedings.