Thornburgh Resort Co., LLC v. Loyal Land, LLC

Under ORS 36.620(2), the existence of a waiver is a condition precedent to arbitrability. Consequently, ORS 36.620(3) requires that the determination of whether or not the right to arbitrate has been waived be made by an arbitrator, not by the courts.

Thornburgh appealed an order denying its petition to compel Loyal Land, LLC to arbitrate, per the "Investment Agreement" executed by the parties. Thornburgh assigned error to the trial court's finding that Thornburgh, by waiting three years after litigation commenced to enforce the arbitration clause, had waived the provision. Thornburgh argued that the trial court (1) failed to follow Oregon contract law by not recognizing the parties' contractual agreement to arbitrate, and (2) failed to grant Thornburgh the right to arbitrate pursuant to provisions of Oregon's Uniform Arbitration Act, ORS 36.600 to 36.740. In overturning the trial court, the Court focused on its decision in Livingston v. Metropolitan Pediatrics, LLC, 234 Or. App. 137, which held that the issue of waiver is a "condition precedent to arbitrability." ORS 36.620(3) provides that "an arbitrator shall decide whether a condition precedent to arbitrability has been fulfilled." The Court held the trial court erred when it denied the petition to compel arbitration on a basis that was solely reserved for the arbitrator. Reversed and remanded.