Today the Mississippi Supreme Court reversed, in part, a summary judgment which had been rendered in a misrepresentation/failure to disclose construction defects action.  In Lemon Drop Properties, LLC v. Pass Marianne, LLC et al, the firm's client purchased a condominium unit from the defendant-developer located on the Mississippi Gulf Coast.  Subsequent to the purchase, the plaintiff learned the developer had sued the general contractor, alleging defects in the condo project construction, about two months before Lemon Drop closed on its unit.  The developer never disclosed to Lemon Drop prior to closing (1) the alleged construction defects, or (2) the litigation against the general contractor.

The lower court held an arbitration clause in the developer's purchase agreement required Lemon Drop's claims be arbitrated.  On appeal, the Supreme Court agreed with Lemon Drop that the developer waived its right to arbitrate when it actively participated in the litigation.  But in a issue of first impression in Mississippi, the Supreme Court held the developer's waiver of arbitration was not binding on its agent-realtor which had been recently added as a co-defendant.

Stephen Burrow and Jason Payne represented Lemon Drop on appeal.  You can read the entire decision by clicking here.