Ericksen v. Maine Coast Kitchen Design, Inc.

STATE OF MAINE SUPERIOR COURT
CUMBERLAND, ss. CIVIL ACTION
Docket No. CV-2021-190
)
JOHN ERICKSEN and KATHRYN )
ERICKSEN, )
)
Plaintiffs, )
) ORDER ON DEFENDANTS'
V. ) MOTION FOR PARTIAL SUMMARY
) JUDGMENT
MAINE COAST KITCHEN )
DESIGN, INC. and TINA )
RICHARDSON, )
)
Defendants. )

This matter is before the Court on Defendants Maine Coast Kitchen Design, Inc.

("MCKD") and Tina Richardson's Motion for Partial Summary Judgment. Defendants

request entry of summary judgment in their favor on Count XI of Plaintiffs John and

Kathryn Ericksen's Complaint, which pleads a fraud claim. Defendants also move for an

award of attorney's fees. Plaintiffs oppose the motion.

During the pendency of Defendants' motion, the Court granted Plaintiffs' Motion

for Leave to Amend Complaint. The Court will consider Defendants' motion with respect

to Count VI of Plaintiffs' First Amended Complaint, which pleads a fraud claim

substantially similar to former Count XI. For the following reasons, the Court grants

Defendants' Motion for Partial Summary Judgment.

I. Facts

The following facts are drawn from the parties' statements of material fact and

responses to those statements of material fact, and note qualifications, denials, and

objections where relevant.

Page 1 of 8
In April 2019, Ms. Ericksen engaged MCKD to design and execute a renovation

project for Plaintiffs' home ("the Project"). (Defs.' Supp'g S.M.F. 'l[ 1.) Ms. Richardson was

the individual authorized by MCKD to communicate with Plaintiffs regarding contracts

for the Project. (Defs.' Supp'g S.M.F. 'l[ 2.) Ms. Ericksen met with Ms. Richardson at

MCKD's showroom. (Pls.' Opp. S.M.F. 'l[ 3.) Ms. Richardson assured Ms. Ericksen that

MCKD was the best value among its competitors and would not overspend on the

Project.' (Pls.' Opp. S.M.F. 'l[ 3.) After Ms. Ericksen explained her ideas for her kitchen

remodel, Ms. Richardson told her that a budget of $150,000 would be appropriate. (Pls.'

Opp. S.M.F. 'l[ 4.) The Project's original budget of $150,000 was for a scope of work limited

to the kitchen, half-bath, and mudroom. (Pls.' Opp. S.M.F. 'l[ 5.)

Ms. Ericksen signed the nonrefundable retainer agreement and remodeling

contract ("the Contract") with MCKD on April 11, 2019, in part based on Ms. Richardson's

promises not to overspend the budget. (Pls.' Opp. S.M.F. 'l[ 6.) Ms. Ericksen also relied on

Ms. Richardson's expertise and assurances that MCKD was the best value among its

competitors and that it would not overspend the budget. (Pls.' Opp. S.M.F. 'l[ 10.)

The Contract states: "It is not unusual for clients to request modifications after

seeing the design presented .... Often such modifications may result in costs that exceed

a client's Target Budget." (Pls.' Opp. S.M.F. 'l[ 7; Pls.' Ex. A at 3.) The Contract provides:

"[I]f such modifications result in a price increase beyond that which Client wishes to

spend, Client acknowledges Client's understanding that Client has the absolute right to

choose a Target Budget based design rather than a subsequently modified design the cost

of which exceeds the stated Target Budget." (Pls.' Opp. S.M.F. 'l[ 8; Pls.' Ex. A, at 3.) The

1The portions of Tina Richardson's Affidavit cited by Defendants do not directly support Defendants'
qualification, so the fact is deemed admitted without qualification.

Page 2 of 8
Contract also provides: "Client has the right to forego any requested changes that have

caused an increase in the budget." (Pis.' Opp. S.M.F. '![ 9; Pis.' Ex. A, at 1.)

Throughout the spring and summer of 2019, Plaintiffs made advance payments to

Defendants. (Pis.' Opp. S.M.F. '![ 15.) By the end of May 2019, Ms. Ericksen agreed to an

increased scope of work and a revised budget of $200,000 for the Project. (Pis.' Opp.

S.M.F. '![ 11.) Later, Plaintiffs rescinded at least some of these modifications and made

other reductions to the scope of the Project. (Pis.' Opp. S.M.F. '![ 12; Defs.' Resp. to Pis.'

Opp. S.M.F. '![ 12.) The parties dispute the timing of these reductions and whether they

were significant enough to offset the earlier increases and costs already incurred. (Pis.'

Opp. S.M.F. '!['![ 12, 13; Defs.' Resp. to Pis.' Opp. S.M.F. '![ 12.)

Ms. Ericksen met with Ms. Richardson on August 8, 2019, to review the reductions

in scope and changes in cost. 2 (Pis.' Opp. S.M.F. '![ 16.) At the meeting, Ms. Richardson

told Ms. Ericksen to "trust the process," and gave Ms. Ericksen information she requested

about the process. (Pis.' Opp. S.M.F. '!['![ 18, 20; Defs.' Resp. to Pis.' Opp. S.M.F. '![ 20.) Ms.

Ericksen relied on these assurances and did trust Ms. Richardson. 3 (Pis.' Opp. S.M.F. '![

21.) Ms. Ericksen also trusted and relied on Defendants to reconcile the Project's cost with

the reduced scope of work. (Pis.' Opp. S.M.F. '!['![ 14, 22.)

On September 27, 2019, Plaintiffs further reduced the scope by canceling all work

in the mudroom. (Pis.' Opp. S.M.F. '![ 24.) Plaintiffs again relied on Defendants' promises

to account for this reduction in the Project's final cost. (Pis.' Opp. S.M.F. '![ 24.)

2 Paragraphs 16, 25, 28, and 42 of Plaintiffs' Statement of Material Facts are deemed admitted because
Defendants failed to support their qualifications with any citation to the record.
3 Contrary to Defendants' objections to paragraphs 21 through 24 of Plaintiffs' Opposing Statement of

Material Fact, the subjective motivations or state of mind of an affiant are a proper subject of an affidavit
and statement of material fact, even if the affiant is not disinterested. See Stanley v. Hancock CnhJ. Comm'rs,
2004 ME 157, 'l['l[ 18-19, 864 A.2d 169. These statements are deemed admitted because Defendants failed to
properly controvert them.

Page 3 of 8
In November 2019, Plaintiffs requested another meeting with Ms. Richardson to

address concerns over the pricing of the Project and the reduced scope of work. (Pis.'

Opp. S.M.F. '![ 27.) During the November 2019 meeting, Ms. Richardson told Ms. Ericksen

to "follow the process." (Pis.' Opp. S.M.F. '![ 28.) MCKD refused to start work on the

Project unless and until Plaintiffs made a payment of $59,167, which Plaintiffs paid to

prevent Defendants from quitting the Project. (Pis.' Opp. S.M.F. '![ 31.) A week later,

Defendants demanded an additional $15,000, which Plaintiffs paid.4 (Pls.' Opp. S.M.F. '![

32.)

In late November, Defendants presented Plaintiffs with a final demand for

payment of $14,120. (Pls.' Opp. S.M.F. '![ 33.) Plaintiffs refused to make this payment. (Pis.'

Opp. S.M.F. '![ 34.) In December 2019, Defendants refused to meet with Plaintiffs to

discuss the Project and accounting. 5 (Pls.' Opp. S.M.F. '![ 38.)

Ultimately, Defendants did not complete the Project. (Pis.' Opp. S.M.F. '!['![ 39, 41.)

The parties dispute whether Defendants "walked off" the Project or whether Plaintiffs

refused to allow Defendants entry to the worksite to complete the Project. (Pls.' Opp.

S.M.F. '![ 34; Defs.' Resp. to Pls.' S.M.F '!['![ 34, 39, 41.) Plaintiffs paid Defendants a total of

$209,551.80. (Pis.' Opp. S.M.F. '![ 44.) Although Plaintiffs partially paid for flooring,

cabinetry, plumbing, labor, and stone material and installation, there is an outstanding

balance of $14,120. (Pis.' Opp. S.M.F. '![ 40; Defs.' Resp. to Pls.' Opp. S.M.F. '![ 40.)

The parties dispute whether the reductions in the scope of work were accounted

for in the Project budget.' (Pls.' Opp. S.M.F. '![ 36; Defs.' Resp. to Pis.' Opp. S.M.F. '![ 36.)

4 The portions of the record cited by Defendant do not directly support their denial of Plaintiffs' Statement
of Material Fact. It is deemed admitted.
5 Defendants failed to properly controvert this statement. It is deemed admitted.
6 Paragraph 37 of Plaintiffs' Statement of Material Fact is not admitted because the portion of the record to

which it cites appears not to be based on personal knowledge.

Page 4 of 8
The parties also dispute whether the scope of the final project included less work than

the original design or whether the increases in budget and scope over the course of the

Project offset the subsequent reductions. (Pis.' Opp. S.M.F. '![ 26; Defs.' Resp. to Pis.' Opp.

S.M.F. '![ 26.)

Defendants state that neither Ms. Richardson nor any owner, employee, or agent

of MCKD made any intentional misrepresentation to Plaintiffs regarding the Project.

(Defs.' Supp'g S.M.F. '!['![ 3-6.) Plaintiffs deny this statement and contend that Defendants

promised to allow Plaintiffs to reduce the budget and urged Plaintiffs to "trust the

process," but ultimately completed less work than was included in the $150,000 Target

Budget at a cost of $209,551.80. (Pis.' Resp. to Defs.' Supp'g S.M.F. '!['![ 3-6.)

II. Summary Judgment Standard

A party is entitled to summary judgment when review of the parties' statements

of material facts and the record to which the statements refer demonstrates that there is

no genuine issue as to any material fact in dispute, and that the moving party is entitled

to judgment as a matter of law. M.R. Civ. P. 56(c); Dyer v. Dep't ofTransp., 2008 ME 106, '![

14, 951 A.2d 821. A contested fact is material if it could potentially affect the outcome of

the case. Dyer, 2008 ME 106, '![ 14, 951 A.2d 821. A genuine issue of material fact exists if

the claimed fact would require a factfinder to "choose between competing versions of the

truth." Id. (quoting Farrington's Owners' Ass'n v. Conway Lake Resorts, Inc., 2005 ME 93, '![

9, 878 A.2d 504).

When deciding a motion for summary judgment, the court reviews the evidence

in the light most favorable to the non-moving party. Id. The evidence offered in support

of a genuine issue of material fact "need not be persuasive at that stage, but the evidence

Page 5 of 8
must be sufficient to allow a factfinder to make a factual determination without

speculating." 7 Est. of Smith v. Cumberland County, 2013 ME 13, 'l[ 19, 60 A.3d 759.

III. Discussion

A. Count VI, Fraud

Defendants move for summary judgment on Plaintiffs' fraud claim. As the moving

party, Defendants bear the burden of demonstrating that the summary judgment record

does not establish a prima facie case of fraud. Est. of Frost, 2016 ME 132, 'l[ 23, 146 A.3d

118.

To prevail on a fraud claim, a plaintiff must prove that a defendant made "(1) ...

a false representation (2) of a material fact (3) with knowledge of its falsity or in reckless

disregard of whether it is true or false (4) for the purpose of inducing another to act or to

refrain from acting in reliance on it, and (5) the other person justifiably relies on the

representation as true and acts upon it to the damage of the plaintiff." Cianchette v.

Cianchette, 2019 ME 87, 'l[ 20,209 A.3d 745 (quoting Drilling & Blasting Rock Specialists, Inc.

v. Rheaume, 2016 ME 131, 'l[ 17, 147 A.3d 824). Historically, a false promise to perform in

the future did not constitute a false statement of a material fact. See Shine v. Dodge, 130

Me. 440, 443, 157 A. 318, 319 (1931).

In Cianchette v. Cianchette, however, the Law Court adopted a broader formulation

of the rule, consistent with the Restatement (Second) of Torts: "One who fraudulently

makes a misrepresentation of fact, opinion, intention or law for the purpose of inducing

another to act or to refrain from action in reliance upon it, is subject to liability to the other

in deceit for pecuniary loss caused to him by his justifiable reliance upon the

7Each party's statements must include a reference to the record where "facts as would be admissible in
evidence" may be found. M.R. Civ. P. 56(e). A party's opposing statement of material facts "must explicitly
admit, deny or qualify facts by reference to each numbered paragraph, and a denial or qualification must
be supported by a record citation." Stanley, 2004 ME 157, 'I[ 13, 864 A.2d 169.

Page 6 of 8
misrepresentation." 2019 ME 87, '![ 23, 209 A.3d 745 (quoting Restatement (Second) of

Torts§ 525 (Am. L. Inst. 1977)). Thus, "fact" includes one's "state of mind, such as the

entertaining of an intention." Id. '![ 25 (quoting Restatement (Second) of Torts§ 525 cmt.

d). The Law Court emphasized, however, that a false representation of an intention to

perform under a contract is actionable as a tort only when "the intent to not perform [is]

present at the time the parties are entering into the contract." Id. '![ 26.

Plaintiffs argue that the summary judgment record establishes that Defendants

"committed fraud when: (1) they induced [Plaintiffs] to enter into the Contract on the

false material promise which provided for the right to downsize the Project's scope of

work to reduce costs, and (2) when, in response to [Plaintiffs'] concerns that those

contractual promises were not being honored [Ms.] Richardson repeatedly told Ms.

Ericksen to 'trust' her and 'trust the process,' obviously indicating that [] Defendants

would fully reconcile the reduced scope with cost, and induced [Plaintiffs] to continue to

make payments." (Pis.' Opp'n to Defs.' Mot. Partial Summ. J. 6-7.)

Under the rule adopted in Cianchette, a false promise to allow Plaintiffs to reduce

costs by reducing the scope of work could constitute a fraudulent misrepresentation only

if Defendants intended not to honor the promise when they entered into the Contract.

There is no evidence in the record from which a factfinder could reasonably find the

existence of such an intent without speculating. See Beaulieu v. Aube Corp., 2002 ME 79, '![

31, 796 A.2d 683 ("When there is so little evidence tending to show a critical element of a

plaintiff's claim that the jury would have to speculate in order to return a verdict for the

plaintiff, a defendant is entitled to a summary judgment.").

Similarly, Ms. Richardson's statements that Plaintiffs should "trust the process" in

response to Plaintiffs' concerns about the accounting of reductions may constitute fraud

Page 7 of 8
under the broader rule only if Ms. Richardson intended not to account for the reductions

when she made these statements. Again, there is no evidence of such an intent.

In sum, Defendants have met their burden of establishing that the summary

judgment record is devoid of evidence of at least one element of fraud and that there are

no genuine disputes of any material fact.

B. Attorney's Fees

Defendants request an award of attorney's fees incurred in defending against

Plaintiffs' fraud claim. M.R. Civ. P. ll(a) provides the Court with discretion to award

reasonable expenses, including attorney's fees, if a pleading is signed with intent to defeat

the purpose of the rule. The Court is not persuaded that Plaintiffs' fraud claim was

frivolous or brought in bad faith. Accordingly, Defendants' request is denied at this time.

IV. Conclusion

For the foregoing reasons, Defendants are entitled to summary judgment on

Plaintiffs' fraud claim.

The entry is:

Defendants' Motion for Partial Summary Judgment is GRANTED. Summary
judgment is entered in favor of Defendants on Count VI of Plaintiffs' First
Amended Complaint. Defendants' request for attorney's fees is DENIED.

The Clerk is directed to incorporate this Order into the docket by reference

pursuant to Maine Rule of Civil Procedure 79(a).

a Kennedy, Justic
uperior Court

Page 8 of 8
STATE OF MAINE SUPERIOR COURT
CUMBERLAND, ss. CIVIL ACTION
Docket No. CV-2021-190
)
JOHN ERICKSEN and KATHRYN )
ERICKSEN, )
)
Plaintiffs, )
) ORDER ON PLAINTIFFS' MOTION
V. ) FOR LEAVE TO AMEND
) COMPLAINT
MAINE COAST KITCHEN )
DESIGN, INC. and TINA )
RICHARDSON, )
)
Defendants. )

This matter is before the Court on Plaintiffs John and Kathryn Ericksen's

("Plaintiffs") Motion for Leave to Amend Complaint. Defendants Maine Coast Kitchen

Design, Inc. ("MCKD") and Tina Richardson oppose the motion. For the following

reasons, the Court grants Plaintiffs' Motion for Leave to Amend Complaint.

M.R. Civ. P. 15(a) provides that leave to amend "shall be freely given when justice

so requires." Undue delay, bad faith, undue prejudice, and futility of amendment are

grounds for denial of a motion to amend. Montgomery v. Eaton Peabody, LLP, 2016 ME 44,

'l[ 13, 135 A.3d 106.

The Court's scheduling order provides for a June 2, 2022 deadline for amendment

of the pleadings. Plaintiffs filed the pending motion on June 2, 2022. Plaintiffs seek leave

to add an eighth count for violation of the Unfair Trade Practices Act, 5 M.R.S. §§ 205-A

to 213 ("UTPA"), to their Complaint. The existing counts of their Complaint concern a

construction contract for renovations to be performed in Plaintiffs' home by MCKD, and

alleged breaches of that contract.

Page 1 of 3
Defendants contend that Plaintiffs have failed to offer adequate justification for

the timing of the proposed amendment. (Defs.' Opp'n 1.) Plaintiffs need not necessarily

provide an explicit justification for the timing, unless it would otherwise appear that they

are acting in bad faith or for delay. Here, the timing is explained at least in part by the

fact that Plaintiffs issued a settlement offer, as required by 5 M.R.S. § 213(1-A), on April

12, 2022. The pending motion was, therefore, filed shortly after the expiration of UTP A's

thirty-day settlement period. See 5 M.R.S. § 213(1-A). Defendants have not informed the

Court of any other facts suggesting bad faith, and none are apparent from the motion

itself.

Defendants further argue that granting the motion would unduly prejudice them

because "the Parties have engaged in significant discovery tailored to existing claims."

(Defs.' Opp'n 2.) However, as Plaintiffs emphasize, the UTPA claim arises from the same

set of operative facts as Plaintiffs' existing claims. Moreover, the current scheduling order

sets a discovery deadline of October 2, 2022. Although Defendants suggest that they may

need to reopen the deposition of Kathryn Ericksen and that additional written discovery

requests may be served, this does not rise to undue prejudice. See Montgomery, 2016 ME

44, 'l[ 14, 135 A.3d 106 (affirming denial of motion to amend on undue delay and undue

prejudice grounds where the proposed third amended complaint was filed over three

years after the original complaint and would have "completely change[d] the nature of

the malpractice case"); Drinkwater v. Patten Realty Corp., 563 A2d 772, 778 (Me. 1989)

(affirming denial of motion to amend on undue prejudice grounds where the motion was

filed more than three years after commencement of the action and only five days before

scheduled trial date).

In sum, no grounds exist for denial of the pending motion. Accordingly, the Court

grants Plaintiffs' Motion for Leave to Amend Complaint.

Page 2 of 3
The entry is:

Plaintiffs John and Kathryn Ericksen's Motion for Leave to Amend
Complaint is GRANTED. Plaintiffs' First Amended Complaint, attached as
Exhibit A to the Motion for Leave to Amend Complaint, is hereby accepted.
Defendants shall answer Plaintiffs' First Amended Complaint within 10
days of the date that this Order is docketed.

The Clerk is directed to incorporate this Order into the docket by reference

pursuant to Maine Rule of Civil Procedure 79(a).

Mary~ y Kennedy, ~~sti/
Majn Superior Cou/
/

Page3 of 3
STATE OF MAINE SUPERIOR COURT
CUMBERLAND, ss. CIVIL ACTION
DOCKET NO. CV-21-190

JOHN ERICKSEN and )
KATHRYN ERICKSEN, )
)
Plaintiffs, ) ORDER ON DEFENDANT'S MOTION TO
) DISMISS AND COMPEL ARBITRATION
v. ) AND/OR STAY PENDING ARBITRATION
)
MAINE COAST KITCHEN ) REC'D CUMB CLERKS OFC
DESIGN, INC. and TINA ) SEP 27 '21 PMl:51
RICHARDSON,

Defendants.

This matter is before the court on Defendants, Maine Coast Kitchen Design, Inc.

("MCKD") and Tina Richardson's, Motion to Dismiss and Compel Arbitration and/ or

Stay Pending Arbitration. After due consideration, Defendants' Motion is denied.

I. Factual Background

This action arises from a project to renovate Plaintiffs, John and Kathryn

Ericksen's, home at 2 Gilman Road Extension, Standish, Maine ("the Project"). (Comp!.

'll'll 1, 2.) MCKD is a Maine corporation with its principal place of business at 17 Little
Wing Lane, Gorham, Maine. (Comp!. 'lI 10.) Defendant Richardson is the owner and

president of MCKD. (Comp!. 'lI 11.) In April 2019, Plaintiffs and MCKD entered into a

contract for completion of the Project ("the Contract"). (Comp!. 'lI 14.) Amid a payment

dispute, MCKD walked off the Project prior to completion. (Comp!. 'll'll 59, 61-63, 71.)

Paragraph lO(e) of the Contract ("the Arbitration Clause") provides that:

In the event that a dispute should subsequently arise between the. Parties
respecting this agreement, each of the Parties agrees to submit such dispute to
mediation by a neutral in Cumberland County, Maine; and in the event that such
dispute cannot be resolved during such mediation, each of the Parties agrees to
submit the dispute to binding arbitration by a mutually agreeable arbitrator and
heard and decided under the rules of the American Arbitration Association, and

Page I of6
that the cost of such binding arbitration, including reasonable attorney's fees and
the prevailing party's costs of the unsuccessful mediation, shall be borne by the
non-prevailing party as determined by the arbitrator; and, in the event that the
Parties cannot mutually agree on an arbitrator, each shall initially bear the expense
to designate an arbitrator, and those two arbitrators shall designate the arbitrator
who will hear and decide the dispute, the costs of which shall be reimbursed to
the prevailing party as part of the costs of arbitration.

(Pl.'s Ex. A, at 5.) Pursuant to that provision, the parties engaged in mediation on July

12, 2020. (Comp!. 'l[ 73.) On September 10, 2020, Plaintiffs served a demand for arbitration

on counsel for Defendants. (Comp!. 'l[ 74.) Defendants did not respond to the Demand

for Arbitration. (Comp!. 'l[ 76.)

On September 23, 2020, Plaintiffs filed a Demand for Arbitration with the

American Arbitration Association("AAA") and paid the entire filing fee. (Comp!. 'l[ 77.)

AAA opened an arbitration matter (case no. 01-20-0014-9981) and scheduled a case

management conference for October 27, 2020. (Comp!. 'l['l[ 80, 81.) Defendants' counsel

was served with the AAA Demand for Arbitration and provided with notice of the case

management conference. (Comp!. 'l['l[ 79, 82.) Defendants did not appear at the case

management conference. (Comp!. 'l[ 83.) On October 30, 2020, AAA sought Defendants'

position on selection of an arbitrator. (Comp!. 'l[ 85.) Each party designated their

preferred arbitrator, but the parties failed to agree on an arbitrator. (Comp!. 'l[ 86.)

Pursuant to the Arbitration Clause, Plaintiffs then designated Jerrol Crouter to

work with Defendant's designated arbitrator to select the arbitrator who would

ultimately resolve the dispute. (Comp!. 'l[ 87.) Despite AAA's attempts to reach

Defendants on the matter, Defendants failed to designate an arbitrator as required by the

Arbitration Clause. (Comp!. 'l['l[ 88, 89.)

After Defendants failed to respond to AAA' s correspondence, Plaintiffs requested

a stay of the Arbitration. (Comp!. 'l[ 91.) AAA contacted Defendants' counsel on May 10,

Page 2 of 6
2021, regarding their position on the requested stay. (Compl. cir 92.) Defendants did not

promptly respond. (Compl. cir 93:)

Plaintiffs then filed the Complaint in this action on May 17, 2021. Defendants have

filed a Motion to Dismiss and Compel Arbitration and/ or Stay Pending Arbitration.

Plaintiffs argue in their Opposition that Defendants have waived their rights to arbitrate

and that the court should deny Defendants' Motion on that basis. If the court compels

the parties to arbitrate, then Plaintiffs request that the court stay this action and award

Plaintiffs attorney fees in connection with filing the Complaint.

II. Motion to Compel Arbitration Standard

When a contract involving interstate commerce contains a mandatory arbitration

provision, the Federal Arbitration Act governs, and ordinarily preempts state law. 9

U.S.C § 2; Stenzel v. Dell, Inc., 2005 ME 37, cir 7, 870 A.2d 133. "In deciding whether an

arbitration clause is enforceable in the first place, however, courts apply state contract

law principles." Id.; see Perry v. Thomas, 482 U.S. 483, 493 n.9 (1987) ("[S]tate law, whether

of legislative or judicial origin, is applicable if that law arose to govern issues concerning

the validity, revocability, and enforceability of contracts generally").

"Maine has a broad presumption favoring substantive arbitrability." Roosa v.

Tillotson, 1997 ME 121, cir 3, 695 A.2d 1196. Accordingly, a court will generally compel

arbitration "if.(1) the parties have genera1ly agreed to arbitrate disputes, and (2) the party

seeking arbitration presents a claim that, on its face, is governed by the arbitration

agreement." Id.. However, Maine's Uniform Arbitration Act1 provides that agreements

1Maine courts may use case law interpreting the Federal Arbitration Act to guide their
interpretation of Maine's Uniform Arbitration Act's similar provisions. See HL 1 LLC v.
Riverwalk, LLC, 2011 ME 29, cir 22, 15 A.3d 725.

Page 3 of 6
to arbitrate may be nullified "upon such grounds as exist at law or in equity for the

revocation of any contract." 14 M.R.S. § 5927 (2021); Snow v. Bernstein, 2017 ME 239, 'I[ 10,

176 A.3d 729.

III. Discussion

A. Waiver of Arbitral Rights

Contractual rights to arbitrate may be waived expressly or impliedly. Joca-Roca

Real Estate, LLC v. Brennan, 772 F.3d 945, 948 (1st Cir. 2014). A party may impliedly waive

its contractual right to arbitrate by "undertaking a course of action inconsistent with its

present insistence" on arbitration, if prejudice to an opposing party results. Saga

Commc'ns of New England, Inc. v. Voornas, 2000 ME 156, 'I[ 12,756 A.2d 954. For example,

a party who has litigated substantial issues going to the merits of arbitrable claims has

likely waived its right to arbitrate. See id. Waiver is not to be lightly inferred and courts

must resolve doubts in favor of arbitration. Id. 'I[ 11.

In addition to conduct that implies waiver, a majority of courts require a showing

of prejudice to find waiver. See id. 'I[ 16. Prejudice exists when a party delays invoking

the right to arbitrate and thereby causes unfair damage to an opposing party's legal

position or causes an opposing party to incur unnecessary delay or expense. Id. 'I[ 17.

Neither delay alone nor expenses that would also have been incurred in the course of

arbitration is sufficient to show prejudice. Id. However, prejudice may be found where

a party's conduct suggests a "deliberate strategy unilaterally designed to delay the

arbitration proceedings" and an opposing party has incurred any unnecessary expenses

as a result. Tyco Int'l (U.S.) Ltd. v. Swartz, 422 F.3d 41, 46 (1st Cir. 2005).

Tne parties do not dispute the validity or applicability of the Arbitration Clause.

Rather, Plaintiffs argue that this Court should not enforce the Arbitration Clause because

Defendants have waived their right to arbitrate under the Contract. Defendants argue
Page 4 of 6
that (1) they have not, by their conduct, waived the Arbitration Clause and (2) no

prejudice has or will result to Plaintiffs if the parties are compelled to arbitrate this matter.

U~,like the majority of cases in which Maine and federal courts have found waiver,

Defendants did not insist on engaging in litigation for a substantial period before

invoking the right to arbitration.· Nevertheless, Defendants have engaged in conduct

inconsistent with their present insistence on arbitration by failing to meaningfully

participate in the arbitration process prior to the filing of the Complaint. See id. at 46

("Swartz should not be allowed to reject the Tyco demand for arbitration,stand idle, then

submit a motion to compel arbitration after Tyco has been required to commence a court

. .....
procee d mg ")

The delay endured by Plaintiffs, as well as the expenses incurred in filing the

Complaint and in requesting a stay of arbitration, would not have been necessary but for

Defendants' failure to participate in the arbitration process. In light of Defendants'

dilatory conduct, the fact that compelling arbitration now would cause Plaintiffs to be

"out" its.expenses of filing the Complaint demonstrates prejudice. See Stanley v. A Better

Way Wholesale Autos, Inc., No. 17-1215, 2018 U.S. Dist. LEXIS 137645, at *18-19 (D. Cmm.

Aug. 15, 2018) ("Stanley has shown prejudice due to excessive cost and time delay based

on those costs she incurred resulting from ABW's refusal to participate in the AAA

arbitration." (quotations omitted)). Thus, Defendants have waived their arbitral rights.

IV. Conclusion

For the foregoing reasons, Defendants have waived their contrachial rights to

arbitrate. Accordingly, the Court denies Defendants' Motion.

The entry is:

Defendants' Motion to Dismiss and Compel Arbitration and/ or Stay Pending

Arbitration is DENIED.
Page 5 of6
The Clerk is directed to incorporate this Order into the docket by referenr:e

pursuant to Maine Rule of Civil Procedure 79(a).

OJ/) .f', /·1 ~'I
c"'x~(=,t~""'-'­
Dated: -~·+-71-i~'~_.L._/_,,c...·...
r / / 1
/ // MaryS7ua Kennedy, Justice
' M}ilfne uperior Court
/
(.-,"'/

Page 6 of 6