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What are my options if I have to arbitrate and I am being sued by the same people i am arbitrating?

Salt Lake City, UT |

I purchased a franchise that I discovered was teaching us to illegally charge for certain services rendered according to state law.The franchisor made no effort to right the illegality issues I filed a suit but there was an arbitration clause in the agreement and the judge dismissed the case to arbitration. Our biggest claim, was that the contract was null and void due to illegal payments. the franchisor attempted to bring counterclaims but the judge also stayed those to arbitration. I had not fyet iled arbitration to prove the illegality of the contract and the franchisor filed a new lawsuit with the claims that they were attempting to bring in my suit. I now have to defend myself in own arena and bring claims in another.Thoughts on how to get out of this mess other than consolidation?

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Attorney answers 2


I am not a Utah attorney and cannot provide you legal advise on what to do in this case. I also provide services as an arbitator. If the contract requries arbitration, both sides have to go to arbitration. However, you can waive the arbitration requirement in many states by defending a law suit. Once a right is waived you cann't generally get it back.

You need to file something with the court demanding the second case be sent to arbitration. While it could be done as two separate arbitrations I can't see the sense in dong so. They could have also filed a counterclaim in the arbitration you stated.

If you don't have a local attorney, you need to get one as the issues in a case such as yours can be tricky.


Show your contract and the pleading history to a good franchise litigation attorney. Normally, except for things like trademark disputes, etc., both parties to a franchise agreement agree to binding arbitration of all disputes. In the current lawsuit, you want to make sure you don't waive your right to arbitration.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

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