KAREN CHAVIS, ETC. VS. NORWOOD TERRACE HEALTH CENTER, LLC (L-0274-18, MIDDLESEX COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1442-19
KAREN CHAVIS, Individually,
and as General Administrator
Ad Prosequendum of the
Estate of KAY FOWLER,
Plaintiff-Respondent,
v.
NORWOOD TERRACE HEALTH
CENTER, LLC, NORWOOD
TERRACE NURSING AND
REHABILITATION CENTER, LLC,
and ARISTA CARE AT NORWOOD
TERRACE, LLC,
Defendants-Appellants.
_______________________________
Submitted April 29, 2020 – Decided May 4, 2021
Before Judges Fuentes and Haas.
On appeal from the Superior Court of New Jersey, Law
Division, Middlesex County, Docket No. L-0274-18.
Marks, O'Neill, O'Brien, Doherty & Kelly, PC,
attorneys for appellants (Melissa J. Brown and Amanda
A. King, on the briefs).
Anglin, Rea & Cahalane, PA, attorneys for respondent
(Patrick H. Cahalane, on the brief).
The opinion of the court was delivered by
FUENTES, P.J.A.D.
In this nursing home malpractice and wrongful death case, defendants
argue the Law Division erred in denying their motion to enforce an arbitration
clause included in the Admission Agreement executed by decedent at the time
of her admission into the nursing home. We disagree. Based on the undisputed
salient facts of this case and mindful of the standards established by the Supreme
Court in Cole v. Jersey City Medical Center, 215 N.J. 265, 280-81 (2013), we
hold the trial court correctly found defendants waived their right to enforce the
arbitration clause in the Admission Agreement.
On January 15, 2018, plaintiff Karen Chavis, individually and in her
capacity as Administrator ad Prosequendum of the Estate of her late mother Kay
Fowler, filed a civil action against defendants Norwood Terrance Health Center,
LLC, Norwood Terrace Nursing and Rehabilitation Center, LLC, and Arista
Care at Norwood Terrace, LLC. Plaintiff alleges that her mother received
negligent, substandard care when she was a resident in defendants' nursing home
from February 9, 2016 through March 23, 2016. Defendants' failure to provide
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her with the care she required caused her great pain and distress, and ultimately
resulted in her death. Plaintiff's theory of liability includes, but it is not limited
to, nursing care malpractice, common law professional negligence, violation of
the rights afforded to residents of nursing homes under N.J.S.A. 30:13-1 to -19,
and the Wrongful Death Act, N.J.S.A. 2A:31-1 to -6.
On February 16, 2018, defendants filed a responsive pleading in which
they asserted eighteen separate affirmative defenses that claim plaintiff's cause
of action is barred by the relevant statute of limitations, assumption of the risk
doctrine, the entire controversy doctrine, res judicata, and/or collateral estoppel.
In this list of affirmative defenses, defendants did not mention or allude to the
existence of an arbitration, forum selection clause in the Admission Agreement
that deprived the trial court of jurisdiction to adjudicate the dispute. Finally,
defendants responsive pleading expressly demands "a trial by jury on all issues."
After joinder of issue, the court set March 8, 2020 as the discovery end
date and scheduled the trial to start on April 13, 2020. Defendants did not seek
to enforce the arbitration clause until November 5, 2019, 658 days after
plaintiff's filed her complaint and 627 days after defendants filed their
responsive pleading denying plaintiff's allegations and demanding a trial by
jury.
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The arbitration clause is located at the end of the Admission Agreement,
directly above the line provided for the resident's signature. We include the
arbitration clause here exactly the way it appears in the Agreement:
EXCEPT FOR THE FACILITY'S EFFORTS TO
COLLECT MONIES DUE FROM RESIDENT AND
FACILITY'S OPTION TO DISCHARGE RESIDENT
FOR SUCH FAILURE, WHICH THE PARTIES
AGREE MAY BE HEARD BY A COURT OF
COMPETETNT JURISDICTION IN THE CITY OR
COUNTY WHERE THE FACILITY IS LOCATED
ANY DISPUTE BETWEEN US SHALL BE
DECIDED EXCLUSIVELY BY ARBITRATION
AND NOT IN COURT OR BY A JURY
TRIAL. DISCOVERY AND RIGHTS TO APPEAL IN
ARBITRATION ARE GENERALLY MORE
LIMITED THAN IN A LAWSUIT, AND OTHER
RIGHTS THAT A PARTY WOULD HAVE IN
COURT MAY NOT BE AVAILABLE IN
ARBITRATION. Any claim or dispute, whether in
contract, tort, statute or otherwise (including the
interpretation and scope of this clause, and the
arbitratability [sic] of the claim or dispute), between the
resident and the Facility or its employees, agents,
successors or assigns, and related or affiliated parties if
any, which arise out of or relates to this agreement or
any related or resulting agreement, transaction or
relationship (including any such relationship with
parties who do not sign this agreement) shall be solved
by arbitration and not by court action. Any claim or
dispute is to be arbitrated by a single arbitrator on an
individual basis, and not as a class action, and
according to the rules of the America Arbitration
Association.
[Emphasis added.]
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Defendants' motion to enforce the arbitration clause and dismiss plaintiff's
complaint came for oral argument before the Law Division on November 22,
2019. Defense counsel made the following argument to the motion judge:
There's no waiver. There certainly was not intentional
waiver of the right to pursue arbitration in this matter.
There was a strategic delay while we awaited plaintiff's
deposition in this matter. While there's been some delay
here, discovery is not as far along as the amount of time
that's passed may indicate. We have completed written
discovery and plaintiff's deposition. That's really it. No
defense depositions, no expert discovery.
[Emphasis added.]
In response, plaintiff's counsel specifically noted defense counsel's
admission that it was a "defense strategy" to delay bringing this matter to the
attention of the court in a motion to enforce the arbitration provision. Plaintiff's
counsel also emphasized the arbitration agreement's mandate requiring the
arbitrator to use America Arbitration Association's (AAA) rules was
inconsistent with this court's decision in Kleine v. Emeritus at Emerson, in
which we noted that as of January 1, 2013, AAA "would 'no longer accept the
administration of cases involving individual patients without a post-dispute
agreement to arbitrate.'" 445 N.J. Super. 545, 552 (App. Div. 2016). The record
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shows, however, that defense counsel disputed the accuracy of plaintiff
counsel's claims concerning the availability of AAA arbitration.
After summarizing the parties' legal positions, the motion judge's ruling
consisted of the following cryptic statement:
[T]his [c]ourt finds that defendants have waived their
right to enforce the arbitration. The complaint was filed
in January 2018. One year and ten months have passed
since that time. Defendants have answered the
complaint and participated in almost two years of
discovery, responded to its motion practice and did not
oppose an extension of discovery, albeit they did
oppose the amount of time that it would be extended.
Furthermore, more striking than (indiscernible) issue of
arbitration in their answer to the claim. As such,
plaintiffs would be prejudiced by this late change in
litigation strategy. Therefore, defendant's motion is
denied.1
The Supreme Court made clear in Cole that "[a]ny assessment of whether
a party to an arbitration agreement has waived that remedy must focus on the
totality of the circumstances." 215 N.J. at 280. This is not a mechanical
exercise. It is "by necessity, a fact-sensitive analysis." Ibid. The Court listed
the following factors to guide the analysis:
1
Although we reach the same conclusion as the trial judge, we urge our
colleague to conduct a more thorough analysis as required by Rule 1:7-4(a) in
future similar cases.
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(1) the delay in making the arbitration request; (2) the
filing of any motions, particularly dispositive motions,
and their outcomes; (3) whether the delay in seeking
arbitration was part of the party's litigation strategy; (4)
the extent of discovery conducted; (5) whether the party
raised the arbitration issue in its pleadings, particularly
as an affirmative defense, or provided other notification
of its intent to seek arbitration; (6) the proximity of the
date on which the party sought arbitration to the date of
trial; and (7) the resulting prejudice suffered by the
other party, if any. No one factor is dispositive. A
court will consider an agreement to arbitrate waived,
however, if arbitration is simply asserted in the answer
and no other measures are taken to preserve the
affirmative defense.
[215 N.J. at 280-81 (emphasis added).]
Because the trial court's decision rested entirely on a question of law, our
review is de novo. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540
(1995). Here, a number of significant factors militate in favor of finding
defendants waived their right to enforce the arbitration clause. Despite its
conspicuous placement in the Admission Agreement, defendants did not
include, or even mention, the arbitration clause in their responsive pleading.
Even more compelling, defendants affirmatively demanded a jury trial as the
forum to adjudicate this dispute. From this moment forward, defendants
proceeded to litigate this case in the Law Division over a period of 627 days.
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Indeed, defense counsel admitted this delay was part of defendants' "trial
strategy."
The Court in Cole noted that an agreement to arbitrate is waived "if
arbitration is simply asserted in the answer and no other measures are taken to
preserve the affirmative defense." 215 N.J. at 281. Defendants' litigation
behavior here is far more egregious because they: (1) did not assert the
arbitration agreement in their answer; (2) affirmatively demanded a jury trial in
their pleadings; and (3) strategically waited nearly two years to take any
measures to enforce the arbitration provision. Under these circumstances,
waiver is axiomatic.
Affirmed.
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