Cole v. Jersey City Medical Center
215 N.J. 265
N.J.2013Background
- Cole, a CRNA, signed an employment agreement with Liberty that included an arbitration clause; Liberty was an independent contractor providing services to JCMC.
- JCMC discovered discrepancies in Cole’s medication accounting, suspended her privileges, and Liberty terminated her contract the same day.
- Cole sued JCMC for CEPA, defamation, tortious interference, and LAD; Liberty was later impleaded as a third-party defendant and then added as a direct defendant.
- Liberty did not raise arbitration in its defenses and proceeded with discovery, motions, and trial preparations.
- Liberty moved to compel arbitration three days before the scheduled trial after JCMC settled with Cole; the trial court granted the motion but the Appellate Division reversed.
- This Court held Liberty waived its right to arbitrate based on totality of circumstances and remanded for trial, affirming the Appellate Division as modified.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver of arbitration right by conduct | Liberty’s prolonged litigation and late arbitration demand show prejudice to Cole | Liberty did not prejudice; timing and discovery were independent of arbitration | Waiver found; Liberty’s 21-month delay and eve-of-trial motion support waiver |
| Equitable estoppel applicability | Estoppel applies to bar Cole’s claims from proceeding in court | Estoppel not necessary; waiver suffices to justify arbitration | Court avoided relying on equitable estoppel; waiver alone suffices |
| Impact of stay for JCMC claims | Stays would have been automatic and beneficial to efficiency | Stay discretionary; outcome uncertain in intertwined claims | Not needed to resolve; waiver governs arbitration right |
Key Cases Cited
- Hojnowski v. Vans Skate Park, 187 N.J. 323 (N.J. Supreme Court 2006) (arbitration favored; structure of arbitration)
- Martindale v. Sandvik, Inc., 173 N.J. 76 (N.J. Supreme Court 2002) (waiver and arbitration framework)
- Garfinkel v. Morristown Obstetrics & Gynecology Assocs., 168 N.J. 124 (N.J. Supreme Court 2001) (contract construction and arbitration waiver concepts)
- Wein v. Morris, 194 N.J. 364 (N.J. Supreme Court 2008) (guidance on stay and arbitration interplay; equitable considerations)
- Spaeth v. Srinivasan, 403 N.J.Super. 508 (App.Div. 2008) (fact-sensitive waiver analysis; non-dispositive factors)
- Knorr v. Smeal, 178 N.J. 169 (N.J. Supreme Court 2003) (waiver requires knowing relinquishment of a right; clear/unequivocal)
- Johnson v. Johnson, 204 N.J. 529 (N.J. Supreme Court 2010) (waiver in arbitration context; de novo review for legal standard)
- Paine-Webber Inc. v. Faragalli, 61 F.3d 1063 (3d Cir. 1995) ( Third Circuit factors for arbitration waiver)
- Hoxworth v. Blinder, Robinson & Co., 980 F.2d 912 (3d Cir. 1992) (multifactoring test for waiver in securities arbitration)
- Gavlik Constr. Co. v. H.F. Campbell Co., 526 F.2d 777 (3d Cir. 1975) (early adoption of totality-of-circumstances for waiver)
- PaineWebber, Inc. v. Faragalli, 61 F.3d 1063 (3d Cir. 1995) (factor-based waiver framework)