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

K
                                NOT FOR PUBLICATION WITHOUT THE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
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                                                        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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                                          3
      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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                                        4
 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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                                         5
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.
                                                                           A-1442-19
                                        6
            (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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