01-3862 Ernst & Young LLP v. Baker O'Neal Holdings, Inc.

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“Ernst & Young had actively participated in the plan confirmation process prior to seeking arbitration. We believe that Ernst & Young’s particular acts of participation were sufficient to waive its right to arbitrate. Neither the bankruptcy court nor the district court found any reason why Ernst & Young might not have asserted its desire to arbitrate at an earlier date. We agree, and because we find no error in the lower court’s assessment of the situation, we are similarly unable to excuse Ernst & Young’s delay. Ernst & Young’s failure to assert its desire to preserve its rights to arbitrate claims-while having already filed an objection, which revealed an intent to pursue litigation-cannot amount to ‘all it could reasonably have been expected to do to make the earliest feasible determination of whether to proceed judicially or by arbitration.’ Cabinetree, 50 F.3d at 391. Because Ernst & Young’s actions were inconsistent with its claimed right to arbitrate and because Ernst & Young’s actions were not exercised in a diligent manner, we find any right to compel such a proceeding waived.”

Affirmed.

Appeal from the United States District Court for the Southern District of Indiana, Hamilton, J., Kanne, J.