NANCY SILVERA, ETC. VS. ARISTACARE AT CHERRY HILL, LLC (L-4030-19, CAMDEN 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NOT FOR PUBLICATION WITHOUT THE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-0519-20
NANCY SILVERA, by her
power of attorney, MAGGIE
TURNER,
Plaintiff-Respondent,
v.
ARISTACARE AT CHERRY
HILL, LLC, ARISTACARE AT
CHERRY HILL, LLC, d/b/a
ARISTACARE AT CHERRY
HILL, SHARON SCHWARZKOPF,
individually, and as agent, servant,
employee, licensee, owner, officer,
administrator and/or member of the
governing body of ARISTACARE
AT CHERRY HILL, LLC, d/b/a
ARISTACARE AT CHERRY HILL,
ARISTACARE HEALTH
SERVICES, individually and as agent,
servant, employee, licensee, owner,
officer, member of the governing
body and/or the corporation or other
legal entity involved with the care
provided and/or assisted in the
management and/or operation and/or
ownership of ARISTACARE AT
CHERRY HILL, LLC, d/b/a
ARISTACARE AT CHERRY HILL,
ARISTACARE, LLC, individually
and as agent, servant, employee,
licensee, owner, officer, member of
the governing body and/or the
corporation or other legal entity
involved with the care provided
and/or assisted in the management
and/or operation and/or ownership of
ARISTACARE AT CHERRY HILL,
LLC, d/b/a ARISTACARE AT
CHERRY HILL,
Defendants-Appellants.
_______________________________
Argued March 15, 2021 – Decided March 30, 2021
Before Judges Fasciale and Mayer.
On appeal from the Superior Court of New Jersey, Law
Division, Camden County, Docket No. L-4030-19.
Charles M. Scheuerman argued the cause for appellants
(Marks O'Neill O'Brien Doherty & Kelly, attorneys;
Frances Wang Deveney, of counsel; Daniel L. Krisch,
on the briefs).
Stephanie V. Shreibman argued the cause for
respondent (Dansky Katz Ringold & York, PC,
attorneys; Stephanie V. Shreibman, on the brief).
PER CURIAM
Defendants appeal from a September 25, 2020 order denying their motion
to dismiss plaintiff's complaint and compel arbitration. We conclude the judge
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erred by finding the arbitration agreement invalid for lack of mutual assent. We
therefore reverse and remand.
Nancy Silvera was a resident in defendant AristaCare at Cherry Hill LLC's
(AristaCare) nursing home facility from April 6, 2015 through April 22, 2018.
Prior to her admission, AristaCare required that Nancy enter into a Long-Term
Admission Agreement (the admission agreement). Nancy's daughter and power
of attorney, Maggie Turner (plaintiff), completed and signed the agreement with
defendants. The admission agreement contains an arbitration agreement located
directly above the signature line, which reads as follows:
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
[COMPETENT] 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
arbitrability of the claim or dispute), between the
resident and the Facility or its employees, agents,
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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 American Arbitration
Association [AAA]. [1]
On October 8, 2019, plaintiff filed a nursing home malpractice lawsuit
against AristaCare after Nancy fell from her bed while being changed by a nurse.
Plaintiff amended her complaint on November 11, 2019. Thereafter, defendant
filed an answer, asserting the following affirmative defense: "[t]his court lacks
jurisdiction due to the existence of a binding arbitration agreement , . . . and
[a]nswering [d]efendants reserve the right to move to compel arbitration and
dismiss this case." On August 28, 2020, nine months after plaintiff filed her
amended complaint, defendants filed their motion to dismiss plaintiff's
complaint and compel arbitration. The judge conducted oral argument, rendered
an oral decision, and entered the order under review.
1
We note that the AAA ceased arbitrating nursing home disputes in 2003. The
AAA rules therefore cannot apply here. The inapplicability of AAA is not fatal
to the agreement. See Flanzman v. Jenny Craig, Inc., 244 N.J. 119, 135 (2020)
(indicating that the NJAA, which automatically applies, can be utilized to fill in
the missing information as to the arbitration process).
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On appeal, defendants raise the following points for this court's
consideration:
POINT I
THE [JUDGE] ERRED IN DETERMING THE
VALIDITY OF THE ARBITRATION AGREEMENT,
AS THE DECISION WAS FOR THE ARBITRATOR
PURSUANT TO THE DELEGATION CLAUSE IN
THE ARBITRATION AGREEMENT.
POINT II
ASSUMING THE [JUDGE] DID NOT ERR IN
DETERMINGING THE VALIDITY OF THE
ARBITRATION AGREEMENT, THE
ARBITRATION AGREEMENT WAS
NONETHELESS VALID AND ENFORCEABLE
UNDER THE FEDERAL ARBITRATION ACT
[FAA].
I.
We reject defendant's contention that the delegation clause, which
directed that questions of arbitrability be resolved by an arbitrator, precluded
the judge from ruling on validity of the arbitration agreement itself.2
2
On this record, the parties only dispute the judge's decision to rule on the
validity of the arbitration agreement, namely whether there was mutual assent.
The parties cite case law dealing with the judge's authority to rule on questions
of arbitrability, which is a separate and distinct interpretational issue as to
whether the claim in dispute is one that is arbitrable under the agreement. The
judge did not make findings about the validity and/or applicability of delegation
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We apply a de novo standard of review when determining the
enforceability of contracts, including arbitration agreements. Goffe v. Foulke
Mgmt. Corp., 238 N.J. 191, 207 (2019) (citing Hirsch v. Amper Fin. Servs.,
LLC, 215 N.J. 174, 186 (2013)). The enforceability of arbitration agreements
is a question of law, to which we need not give deference to the trial judge's
interpretative analysis. Morgan v. Sandford Brown Inst., 225 N.J. 289, 303
(2016) (citing Atalese v. U.S. Legal Servs. Grp. L.P., 219 N.J. 430, 445-46
(2014)).
It is well-settled that nursing home arbitration agreements are governed
by the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-16, which "overrides all
state policies and concerns, including the Nursing Home Act's express
prohibition against the enforcement of such agreements, N.J.S.A. 30:13-8.1."
Kleine v. Emeritus at Emerson, 445 N.J. Super. 545, 547 (App. Div. 2016)
clause as it relates to questions of arbitrability. If the parties seek to raise
whether the delegation clause "clear and unmistakably" evidences the parties'
intention to delegate questions of arbitrability under Henry Schein, Inc. v. Archer
& White Sales, Inc., ___ U.S. ___, ___, 139 S. Ct. 524, 530 (2019), and/or whether
the tort claim at issue is arbitrable under the agreement, they may develop a
record and do so on remand. At this juncture, and on this record, we will only
address the parties' arguments as to the judge's determination on mutual assent.
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(citing Marmet Health Care Ctr., Inc. v. Brown, 565 U.S. 530, 533 (2012)). This
court has articulated that
[d]espite its broad interpretation of the FAA and its
supremacy over specific state policies and practices, the
Supreme Court has recognized the fundamental
principle that arbitration is a matter of contract, thereby
permitting application of state contract law to ascertain
whether the parties had a meeting of the minds when
contracting, and whether a party, who has ostensibly
agreed to waive the right to trial by jury, has clearly and
unambiguously consented to arbitration[.]
[Id. at 448 (internal citations and quotation marks omitted).]
A delegation clause "can provide that an arbitrator, rather than a judge,
will decide such 'threshold issues' as whether the parties agreed to arbitrate a
legal claim brought by a plaintiff." Morgan, 225 N.J. at 303 (citing Rent-A-
Center W., Inc. v. Jackson, 561 U.S. 63, 68 (2010)). The parties may delegate
threshold arbitrability questions to the arbitrator, so long as their arbitration
agreement does so by "clear and unmistakable" evidence. Schein, 139 S. Ct. at530 (citing First Options, 514 U.S. at 944); see Rent-A-Center, 561 U.S. 63, 69
n. 1 (2010). However, "before referring a dispute to an arbitrator" to resolve
disputes as to arbitrability, the [judge first] determines whether a valid
arbitration agreement exists." Schein, 139 S. Ct. at 530 (citing 9 U. S. C. § 2);
see Martindale v. Sandvik, Inc., 173 N.J. 76, 83 (2002) (explaining that "the first
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step in considering [a] plaintiff's challenge to enforcement of an arbitration
requirement must be to determine whether a valid agreement exists").
Section 4 of the FAA provides that a judge must compel arbitration upon
being satisfied that the "making of the agreement is not in issue" and
affirmatively requires a judge to decide questions about the formation or
existence of an arbitration agreement, namely the element of mutual assent.
Indeed, the Third Circuit recently expounded on this threshold requirement in
MXM Constr. Co. v. N.J. Bldg. Laborers Statewide Benefit Funds, 974 F.3d 386(3d. Cir. 2020). Relying on Sandvik AB v. Advent Int'l Corp., 220 F.3d 104,
108-09 (3d Cir. 2010), and 9 U.S.C. § 4, the court held that "[judges] retain the
primary power to decide questions of whether the parties mutually assented to a
contract containing or incorporating a delegation provision." MXM, 974 F.3d
at 402. The court emphasized that "the text of Section 4 of the FAA—mandating
that the court be 'satisfied' that an arbitration agreement exists—tilts the scale in
favor of a judicial forum where a party rightfully resists arbitration on grounds
that it never agreed to arbitrate at all." Ibid.
Only after a judge makes a threshold determination that the agreement is
valid, or when formation is not otherwise in dispute, may the judge look to
whether there is "clear and unmistakable" evidence that the parties' intended to
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delegate arbitrability questions to the arbitrator. Schein, 139 S. Ct. at 528-29.
If such evidence exists, a judge may not override the contract, even if the judge
thinks that the argument that the arbitration agreement applies is "wholly
groundless," and must refer the matter to the arbitrator. Ibid. Guided by this
framework, the judge properly made a threshold validity determination.
II.
We next address defendants' contention that, even if the judge did not err
in determining the validity of the arbitration agreement, she erred in finding that
the agreement was invalid and enforceable under Atalese.
In accordance with the FAA "[judges] must place arbitration agreements
on an equal footing with other contracts . . . and enforce them according to their
terms." Flanzman, 244 N.J. at 132 (alteration in original) (quoting AT&T
Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011)). Moreover, any written
agreement to submit to arbitration "shall be valid, irrevocable, and enforceable,
save upon such grounds as exist at law or in equity for the revocation of any
contract." 9 U.S.C. § 2; see Martindale, 173 N.J. at 84-85. As detailed above,
we apply state contract law to ascertain whether the parties had a meeting of the
minds when contracting and whether a party has clearly and unambiguously
consented to arbitration. Atalese, 219 N.J. at 442.
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"An agreement to arbitrate, like any other contract, must be the product of
mutual assent, as determined under customary principles of contract law." Ibid.
(quoting NAACP of Camden Cnty. E. v. Foulke Mgmt., 421 N.J. Super. 404,
424 (App. Div. 2011)). "Mutual assent requires that the parties have an
understanding of the terms to which they have agreed," or, in other words, a
"meeting of the minds." Ibid. (quoting Morton v. 4 Orchard Land Trust, 180
N.J. 118, 120 (2004)). When analyzing the validity of an arbitration agreement,
there are "no prescribed set of words [that] must be included . . . to accomplish
a waiver of rights." Id. at 447. The Court emphasized that
when a contract contains a waiver of rights—whether
in an arbitration or other clause—the waiver must be
clearly and unmistakably established. Thus, a clause
depriving a citizen of access to the courts should clearly
state its purpose. We have repeatedly stated that the
point is to assure that the parties know that in electing
arbitration as the exclusive remedy, they are waiving
their time-honored right to sue.
[Id. at 444 (citations and internal quotation marks
omitted).]
Plaintiff signed the contract on behalf of Nancy as her power of attorney.
As part of the admissions agreement, plaintiff agreed to resolve any disputes
with AristaCare and any of its agents by way of arbitration. Applying Atalese,
the judge determined that the agreement was invalid and unenforceable for lack
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of mutual assent. The judge emphasized that the arbitration agreement did not
clearly reference its purpose and did not properly stand out. The judge specified,
"[i]t's got to stand out. It can't be on [p]age [nine] of a [ten] page agreement at
the bottom in the same lettering as every other paragraph or the font size of
every other paragraph. And, then, the first thing it tells [plaintiff] in the
arbitration clause is the exception that [defendants] get . . . to sue in court[.]"
The admissions agreement is twenty pages long. The arbitration
agreement appears on page nine at the end of the first major section of the
agreement. The section is titled "Arbitration," the font is bold, and half of the
paragraph is in capital letters. Plaintiff signature appears on the line
immediately below the agreement. The agreement clearly states its purpose,
specifies that arbitration is the exclusive forum to resolve disputes, save for
collections claims, and unambiguously states that plaintiff is giving up her right
to a jury trial. While it does exempt one type of claim from arbitration
(collection disputes), it does so up front and unambiguously articulates that any
other dispute "shall be decided exclusively by arbitration and not in court or by
a jury trial."
Plaintiff submitted an affidavit claiming no one explained to her what she
was signing and had the arbitration clause been "thoroughly . . . explained to
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[her]" she would have refused to sign. Defendants point out that plaintiff's
affidavit is self-serving and "assumes that someone at defendants' facility should
have proactively explained . . . the admissions agreement to her." Plaintiff is
educated and employed as a special education teacher. At the time of signing,
she was not suffering from any physical or mental limitations that impacted her
ability to read and comprehend the agreement, nor was there any allegation that
defendants acted improperly when entering into the agreement with plaintiff.
See Kernahan v. Home Warranty Adm'r of Florida, Inc., 236 N.J. 301, 321
(2019) (noting that "[a] party who enters into a contract in writing, without any
fraud or imposition being practiced upon him [or her], is conclusively presumed
to understand and assent to its terms and legal effect (quoting Rudbard v. N.
Jersey Dist. Water Supply Comm’n, 127 N.J. 344, 353 (1992))). Defendants
had no affirmative obligation to explain the document to plaintiff and plaintiff
presented no evidence that she did not actually understand the terms of the
agreement; she instead asserts that she would have benefited from an
explanation. Her signature immediately under the relevant section demonstrates
her assent to forego her right to a jury trial. Because the agreement clearly and
unambiguously signals to plaintiff that, by entering into the agreement she was
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surrendering her right to pursue her claims in court, the agreement satisfies the
dictates of Atalese.
III.
Finally, we reject plaintiff's contention that defendants waived their right
to arbitrate the dispute by acting inconsistent with their reserved right to
arbitrate the dispute.3
As arbitration agreements are contracts subject to the legal rules
governing construction, the Court has recognized that parties may waive their
right to arbitrate in certain circumstances. Cole v. Jersey City Med. Ctr., 215
N.J. 265, 276 (2013). However, "[w]aiver is never presumed[,]" and an
arbitration agreement "'can only be overcome by clear and convincing evidence
that the party asserting it chose to seek relief in a different forum.'" Ibid.(quoting Spaeth v. Srinivasan, 403 N.J. Super. 508, 514 (App. Div. 2008)).
In Cole, Supreme Court explained that "[a]ny assessment of whether a
party to an arbitration agreement has waived that remedy must focus on the
totality of the circumstances" by undertaking a fact-sensitive analysis. Id. at
280. When discerning whether a party waived an arbitration agreement, we must
3
This issue was not explicitly addressed by the judge, either by way of findings
of fact or conclusions of law.
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"concentrate on the party's litigation conduct to determine if it is consistent with
its reserved right to arbitrate the dispute." Ibid. Our analysis of this issue is
guided by the following non-exhaustive list of factors:
(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.
[Id. at 280-81.]
In Cole, the Court held that an employer waived its right to arbitrate
because it had been a party to the lawsuit for twenty-one months before seeking
to invoke the arbitration provision at issue, had not asserted the valid arbitration
agreement as an affirmative defense in its answer, and filed a motion to compel
arbitration just three days before trial. Id. at 281. Here, defendants raised the
existence of the arbitration agreement as an affirmative defense in their answer
and filed their motion to compel arbitration nine months after plaintiff's
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amended complaint. At this time, the parties were engaged in written discovery
with a discovery end date of June 28, 2021, neither party had filed dispositive
motions or conducted depositions, and no trial date had been set. Guided by the
Cole factors, and under the totality of the circumstances, defendants did not
waive their right to arbitrate the dispute.
Reversed and remanded. We do not retain jurisdiction.
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