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Diamante v. Dye

Supreme Court of Arkansas

May 28, 2015

DIAMANTE, LLC, APPELLANT
v.
GARY DYE and LINDA DYE, APPELLEES

Editorial Note:

This opinion is uncorrected and subject to revision before publication in the printed official reporter.

APPEAL FROM THE SALINE COUNTY CIRCUIT COURT. NO. 63CV-12-90. HONORABLE GARY M. ARNOLD, JUDGE.

Rose Law Firm, a Professional Association, by: Richard T. Donovan and Betsy Turner-Fry; and McMillan, McCorkle, Curry & Bennington, LLP, by: Philip McCorkle, for appellant.

Terry P. Diggs, Lawyer, P.A., by: Terry P. Diggs, for appellees.

JOSEPHINE LINKER HART, Associate Justice. Special Justice DAVID STERLING joins. Special Justice PAUL BYRD dissents. DANIELSON and WOOD, JJ., not participating.

OPINION

JOSEPHINE LINKER HART, Associate Justice

Diamante, LLC (Diamante) appeals an order of the Saline County Circuit Court denying its motion to compel arbitration with unnamed class members. On appeal, Diamante argues that the circuit court (1) erred in denying its motion to compel arbitration of the unnamed class members on the ground that Diamante had waived its right to arbitrate those claims; and (2) the court of appeals's finding in the first arbitration opinion that the arbitration provision in the club's bylaws is valid and enforceable as law of the case and therefore binding on the unnamed class members. The appellees have filed with this court, and we have taken as part of this case, a separate motion to dismiss this appeal. They assert that (1) this is the second appeal relating to arbitration by Diamante; the first, filed in the court of appeals, affirmed the circuit court's finding that a delay of seven months waived its right to arbitrate, and the current case involves a delay of at least ten months; and (2) a trial on the merits was completed in this case and, as of the filing of the class's motion on August 21, 2014, the parties were awaiting the circuit court's decision. Appellees contend that this appeal is either moot or frivolous. We have jurisdiction over this appeal pursuant to Arkansas Supreme Court Rule 1-2(a)7 (2014), and Arkansas Rule of Appellate Procedure--Civ. 2(a)(12) (2014).

A review of the procedural history of this case is necessary for a full understanding of the issues. Diamante operates a private-membership golf club located in Hot Springs Village. There are approximately 450 privately owned lots around the golf course and clubhouse. The lots are in two subdivisions, the Diamante Subdivision and the Diamante Villas Subdivision. Supplemental declarations of covenants and restrictions (supplemental declarations) are on file in the Saline County land records. The supplemental declarations run with the land and create certain obligations and restrictions referred to as " tie-in rights." Among those tie-in rights are requirements that lot owners become " Full Golf Members" of the Diamante Country Club (the Club); pay monthly dues to the Club; and grant Diamante a lien and foreclosure right with respect to the lot that arises in the event of failure to pay the monthly Club dues.

Initially, Gary Dye and Linda Dye were the only plaintiffs in the lawsuit. They filed a declaratory-judgment complaint on February 3, 2012, asking the circuit court to declare the tie-in rights unenforceable. On March 9, 2012, Diamante filed a motion to dismiss based on the statute of limitations. After the circuit court denied the motion, on May 21, 2012, Diamante filed its response to the Dyes' declaratory-judgment complaint.

On May 31, 2012, the Dyes moved to certify the other property owners in the Diamante subdivision as class members. Diamante filed a response and moved that the certification be held in abeyance pending discovery concerning the proposed class.

The Dyes, still acting as individuals, amended their complaint on September 10, 2012. Nine days later, Diamante filed a response that included a motion to compel arbitration with the Dyes. On September 24, 2012, the Dyes filed a response to the motion to compel arbitration, asserting that the agreement to arbitrate was contained solely within the bylaws and not in the supplemental declarations, and therefore the agreement did not run with the land, and that, even if there was a valid agreement to arbitrate, Diamante had waived enforcement by submitting to the jurisdiction of the court to decide the controversy.

That same day, Diamante moved for a continuance of the class-certification hearing and requested that the proceedings be stayed pending a ruling on its motion to compel arbitration. On September 25, 2012, the Dyes filed a response, opposing the continuance and stay. In it, they reasserted that there was no valid agreement to arbitrate and, alternatively, if there was a valid agreement, it was waived by Diamante's participation in the lawsuit. The Dyes amended their response on October 1, 2012.

On November 14, 2012, the circuit court denied Diamante's motion to compel arbitration with the Dyes' as individual plaintiffs. It found that Diamante had waived arbitration by unnecessary delay that prejudiced the Dyes. Further, the circuit court found that there was no valid arbitration agreement. Diamante filed a notice of appeal from this order on December 7, 2012. On November 6, 2013, the court of appeals affirmed. Diamante v. Dye, 2013 Ark.App. 630, 430 S.W.3d 196. While it found a valid agreement to arbitrate, it held that Diamante's delay of seven months between the filing of the original complaint and ...


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