CASTLE ROCK v. PERRY

── CASTLE ROCK v. PERRY ── Court: Court of Appeals of Arizona Date: April 20, 2026 Category: General NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. IN THE ARIZONA COURT OF APPEALS DIVISION ONE CASTLE ROCK HOMES, LLC, Plaintiff/CounterDefendant/Appellant, v. BARBARA PERRY, et al., Defendants/CounterClaimants/Appellees. No. 1 CA-CV 25-0678 FILED 04-20-2026 Appeal from the Superior Court in Maricopa County No. CV2024-005948 The Honorable Melissa Iyer Julian, Judge AFFIRMED COUNSEL Schern Richardson Finter, PLC, Mesa By Aaron M. Finter and M. Rob Somers Counsel for Plaintiff/CounterDefendant/Appellant Guidant Law, PLC, Tempe By Gary Michael Smith and Mark A. Hanson Counsel for Defendants/CounterClaimants/Appellees  CASTLE ROCK v. PERRY, et al. Decision of the Court MEMORANDUM DECISION Judge Veronika Fabian delivered the decision of the Court, in which Presiding Judge Michael J. Brown and Chief Judge Randall M. Howe joined. F A B I A N, Judge: ¶1 Castle Rock Homes, LLC (“Contractor”) appeals the superior court’s order denying its motion to compel arbitration of counterclaims asserted by Barbara Perry and Derek Hayes (“Owners”). Because Contractor waived its right to arbitrate, this Court affirms. FACTS AND PROCEDURAL HISTORY ¶2 Contractor offers residential design and contractor services. It provided labor, materials, equipment, and professional services to construct a single-family residence on Owners’ property. ¶3 The parties entered two construction contracts, each containing the same arbitration provision: Should any dispute arise relative to the performance of this contract that the parties cannot resolve, the dispute shall be referred to a single arbitrator acceptable to the builder and the buyer. If the builder and the buyer cannot agree upon an arbitrator, the dispute shall be referred to the American Arbitration Association for resolution. All attorney fees that shall be incurred in the resolution of disputes shall be the responsibility of the party not prevailing in the dispute. ¶4 After construction of the Owners’ residence, a dispute arose between the parties about alleged defects in the home and payment for Contractor’s work. ¶5 Contractor filed a complaint in superior court alleging claims for (1) foreclosure of a materialmen’s lien it had filed against the property and (2) unjust enrichment. A few days later, Owners’ attorney wrote to Contractor’s attorney asking whether Contractor intended to stay the lawsuit to invoke the arbitration clause. When Contractor did not, Owners answered and alleged ten counterclaims against Contractor, including breach of contract, breach of fiduciary duty, fraud, and wrongful lien. 2  CASTLE ROCK v. PERRY, et al. Decision of the Court Contractor filed an answer to the counterclaims but did not invoke arbitration. ¶6 One year later, Contractor filed a motion to dismiss Owners’ counterclaims, arguing the court lacked subject matter jurisdiction because the parties’ contract required them to arbitrate those claims. Owners asserted Contractor waived its right to invoke the arbitration provision by stipulating to a bench trial and substantially participating in the litigation. After filing a reply in support of the motion to dismiss, Contractor moved the superior court to stay the case until it ruled on the motion to dismiss,