Perry Homes v. Cull

Robert and Jane Cull (plaintiffs) purchased a home and home warranty from Perry Homes and its affiliated warranty companies (collectively, warranty companies) (defendants). The home warranty included an arbitration provision stating that all disputes were subject to the Federal Arbitration Act (FAA) and would be resolved by the American Arbitration Association. The Culls sued the warranty companies, alleging structural and drainage issues under the warranty. The warranty companies sought arbitration, which the Culls opposed. Without a ruling regarding arbitration, the parties undertook 14 months of motion filings, depositions, and other discovery. Shortly before trial, the Culls moved the court to compel the arbitration they initially opposed. Finding no prejudice to the warranty companies, the trial court granted the motion to compel four days before trial. After a year of arbitration, an award was issued in favor of the Culls. The warranty companies requested the award to be vacated, arguing that the Culls waived their right to arbitration by substantially invoking litigation. The Culls argued that the court could not review the warranty companies’ petition because arbitration had already occurred. The trial court declined to vacate the award, and the court of appeals affirmed. The warranty companies petitioned the Texas Supreme Court for review.