ERIN MCDERMOTT VS. GENESIS HEALTHCARE, D/B/A SUMMIT RIDGE CENTER (L-6115-16, ESSEX COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-3585-17T4
ERIN MCDERMOTT,
M. STEPHEN MCDERMOTT,
and PATRICIA MCDERMOTT,
Plaintiffs-Respondents,
v.
GENESIS HEALTHCARE d/b/a
SUMMIT RIDGE CENTER,
Defendant-Appellant,
and
PRADIP S. SHAH, M.D., PHILIPPE
CHEMALY, D.O., HARESH KANE,
M.D., HELEN KELLMAN, L.P.N.,
BARBARA HUDNALL, L.P.N.,
BARBARA (BABBETT) FOGARTHY, R.N.,
JANET OKECHUKWU, R.N.,
JEAN HAMILTON, R.N.,
ISLANE CHARLES, R.N.,
FARAH ROMULUS, L.P.N.,
DAWN ROBINSON, L.P.N.,
FUNMILOLA ADEWALE, R.N.,
MARIE PICAUD, R.N.,
CORA-ANNE CHANDLER, R.N.,
ELIZABETH OYAREBU, R.N.,
NICOLETTE PHILIPPE, L.P.N.,
GRACE OKAFOR, L.P.N.,
ERIC NAMACHE, R.N.,
SYLVERIA OHIRI, R.N., and
ANNE JULES, L.P.N.,
Defendants.
_____________________________
Argued June 18, 2019 – Decided July 22, 2019
Before Judges Koblitz and DeAlmeida.
On appeal from the Superior Court of New Jersey, Law
Division, Essex County, Docket No. L-6115-16.
Shane P. Simon argued the cause for appellant
(Buchanan Ingersoll & Rooney, PC, attorneys; David
L. Gordon, Eric D. Heicklen and Shane P. Simon, of
counsel and on the brief).
Respondents have not filed a brief.
PER CURIAM
Defendant 20 Summit Street Operations, LLC d/b/a Summit Ridge Center
(Summit Ridge)1 appeals from a February 16, 2018 order denying its motion to
compel arbitration as well as a March 29, 2018 order denying reconsideration.
1
Counsel for Summit Ridge indicated that plaintiffs improperly pled Summit
Ridge as "Genesis Healthcare d/b/a Summit Ridge Center."
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Plaintiff Erin McDermott2 was a patient at Summit Ridge, a licensed skilled
nursing center. After denying defendant's request for limited discovery on the
issue, the motion court determined plaintiff was mentally incompetent when she
signed the arbitration agreement upon admission to Summit Ridge. The court
also determined that defendant had waived its right to arbitration in pre-motion
litigation by moving to set aside default. We disagree and remand for limited
discovery on the issue of plaintiff's competence to enter into the arbitration
agreement.
On the return date of the motion to compel arbitration in February 2018,
plaintiffs' counsel opposed arbitration, arguing for a plenary hearing to resolve
the "threshold issue" of Erin's mental capacity to enter into the contract. In
response, defendant sought limited discovery on this issue. The motion court,
however, adopted a position advocated by neither side, stating it did not need a
hearing, or further discovery, but could decide the issue based on the
certifications of Erin and her parents as well as the medical records submitted
by plaintiffs. The court also found it "a little disingenuous" for defendants to
move for arbitration after successfully vacating default. The court found
2
Erin McDermott and her parents are plaintiffs. We will refer to them by their
first names, intending no disrespect.
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plaintiff was prejudiced by the "inordinate" delay between the filing of the
complaint in September 2016 and the request for discovery concerning mental
capacity.3 The court found that when default was vacated in September 2017,
plaintiff was entitled to assume that the matter would proceed to a disposition
in court.
We review a decision to deny arbitration as of right, using a de novo
standard of review. GMAC v Pittella, 205 N.J. 572, 586-87 (2011); R. 2:2-
3(a)(3); Coast Auto. Grp., Ltd. v. Withum Smith & Brown, 413 N.J. Super. 363,
369 (App. Div. 2010).
Our Supreme Court recently reasserted, relying on Guidotti v. Legal
Helpers Debt Resolution, L.L.C., 716 F.3d 764 (3d Cir. 2013), that discovery
regarding the entry into an arbitration agreement is proper in the Superior Court.
Goffe v. Foulke Mgmt. Corp., ___ N.J. ___, ___ (2019) (slip op. at 31-35).
When the contract as a whole is attacked, not the situation here, the arbitrator
should decide the issue. Id. at 35.
The medical records relied upon by the court were attached to
certifications and did not directly address Erin's ability to enter into a n
3
The complaint was administratively dismissed, and then reinstated with
default granted in July 2017. That default was set aside in September 2017 and
a motion to compel arbitration filed in January 2018.
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arbitration contract. It is uncontested that at the time she was admitted to
Summit Ridge, Erin was a forty-three-year-old disabled adult, with many
physical and mental issues. Her ability to enter into an arbitration agreement
when she was admitted to Summit Ridge, however, is disputed. Plaintiff has the
burden of demonstrating by clear and convincing evidence that she was
incapacitated. Jennings v. Reed, 381 N.J. Super. 217, 227 (App Div. 2005)
(noting that a party moving to set aside an agreement "has the burden of proving
his incapacity or incompetence to contract or other extraordinary circumstance
sufficient to vitiate the agreement"). Agreements to arbitrate are treated like any
other contract. See, e.g., Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430,
442 (2014) ("An agreement to arbitrate, like any other contract, 'must be the
product of mutual assent, as determined under customary principles of contract
law.'") (quoting NAACP of Camden Cty. E. v. Foulke Mgmt., 421 N.J. Super.
404, 424 (App. Div. 2011)). Defendant is entitled to pursue limited discovery
on that issue. See Guidotti, 716 F.3d at 776 (When an agreement to arbitrate is
in issue, the parties should engage in limited discovery on the issue of
arbitrability before the court considers a renewed motion to compel arbitration.)
Additionally, defendant had to vacate default in order to pursue its claim
of arbitration, so to label such a tactic misleading to plaintiffs is not completely
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accurate. Extensive litigation prior to seeking to enforce an arbitration
agreement may defeat the motion. See Cole v. Jersey City Med. Ctr., 215 N.J.
265, 268-69, 283-84 (2013) (finding the defendant waived its ability to enforce
an arbitration agreement where it "engaged in all of the usual litigation
procedures for twenty-one months and, only on the eve of trial, invoked its right
to arbitrate"). Here, however, extensive litigation did not take place.
Reversed and remanded for further proceedings. We do not retain
jurisdiction.
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