ESTATE OF EVELYN GREENSTEIN VS. REGENCY HERITAGE NURSING AND REHAB CENTER, LLC (L-0531-18, SOMERSET COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: March 3, 2020
• Docket: A-5494-18T3
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-5494-18T3

ESTATE OF EVELYN GREENSTEIN, through HARVEY GREENSTEIN, Administrator,

Plaintiff-Appellant,

v.

REGENCY HERITAGE NURSING AND REHAB CENTER, LLC, d/b/a REGENCY HERITAGE NURSING AND REHABILITATION CENTER,

Defendant-Respondent. ______________________________

Submitted February 12, 2020 – Decided March 3, 2020

Before Judges Whipple and Mawla.

On appeal from the Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-0531-18.

Stark & Stark PC, attorneys for appellant (Jonathan Lauri, of counsel and on the briefs).

Marks O'Neill O'Brien Doherty & Kelly, attorneys for respondent (Melissa Jennifer Brown and Amanda Alexandra King, on the brief). PER CURIAM

Plaintiff the Estate of Evelyn Greenstein appeals from a July 31, 2019

order granting defendant Regency Heritage Nursing and Rehabilitation Center's

motion to dismiss plaintiff's complaint in favor of arbitration. We affirm.

Greenstein was admitted to defendant's facility in 2013 because she

suffered from various ailments and required assistance with daily living

activities. Greenstein's daughter, Susan Lusk, accompanied her to defendant's

nursing home on the day of her admission.

Lusk alleged she was separated from her mother and taken to a conference

room by a staff member who handed her a large stack of documents to sign. The

staff member turned the pages of the document, pointed to them, and instructed

Lusk where to sign or initial on the agreement. Lusk alleged she was not given

time to read the agreement and the employee never mentioned the arbitration

clause or informed her that the document addressed legal matters.

The agreement contained an arbitration clause, which stated:

Arbitration. Any claim or dispute related to or arising from the Agreement of Resident's care at the Facility (whether based on contract or tort, in law or equity) shall be resolved by mandatory, final, binding arbitration in accordance with the rules of the American Arbitration Association ("AAA"), although the parties may choose to administer the arbitration through the arbitrator instead of the AAA; provided, however, that

A-5494-18T3 2 Resident/Responsible Party shall not be entitled to an award of exemplary or punitive damages. In agreeing to arbitration, Resident/Responsible Party acknowledges that Resident/Responsible Party understands that other options to arbitration exist, including but not limited to federal and state administrative remedies, and judicial remedies, and the Resident/Responsible Party further understands that these remedies are forever precluded, such that regardless of the nature of the complaint, it can only be resolved in arbitration. The right to a trial, and a trial by jury is of value and Resident/Responsible Party may wish to consult with counsel prior to signing this Agreement.

Any such arbitration must be requested in writing within one (1) year from the date of the party initiating the arbitration knew or should have known about the claim or dispute, or all claims arising from that dispute are forever waived. Any such arbitration (or court proceeding as applicable hereunder) shall be held in Somerset or Middlesex County, New Jersey. There shall be one arbitrator, who shall be either a retired New Jersey Superior Court judge or upon mutual consent one selected from the AAA roster of arbitrators with at least ten (10) years experience arbitrating commercial disputes. The arbitrator shall grant essential discovery. There shall be a pre-hearing management conference. The hearing shall be stenographically recorded. The arbitrator shall render written decision with findings of fact and conclusions of law. Judgment upon the award rendered through such arbitration shall be final and may be entered and enforced in any court having proper jurisdiction. Appeals can be taken for any issue cognizable under New Jersey law had the matter been tried to a court without a jury, except for discovery or evidential issues.

A-5494-18T3 3 The agreement also contained the following provision: "Binding

Agreement: This is a legally binding contract. The Resident and/or Responsible

Party may consult an attorney[,]" who can cancel the contract thereafter.

Additionally, the agreement contained a clause stating: "No waiver. Failure of

[defendant] to insist on strict compliance of any provision of this agreement

shall not be deemed to be a waiver of that section of any rights and remedies

available to [defendant]."

Lusk initialed the page with the arbitration language in three locations.

She also signed the end of the agreement. Directly above her signature was the

following language: "Signatures. By signing the undersigned intended to be

bound by the Agreement, and acknowledge that they have read it, have had all

questions posed to the Facility answered to their satisfaction, and have

voluntarily agreed to its terms."

Plaintiff alleged Greenstein had multiple falls and developed pressure

wounds during her stay in defendant's facility. These wounds worsened during

her stay until they required surgical debridement. Plaintiff also alleged

Greenstein suffered multiple bouts of dehydration, infections because staff did

not clean her, and resided in a room with bed bugs. She passed away in August

2016.

A-5494-18T3 4 Plaintiff's counsel sent three letters to defendant all dated January 29,

2018, advising plaintiff was represented, describing the injuries Greenstein

suffered at defendant's facility, and asserting defendant's negligence caused her

injuries. Counsel's letters demanded a preservation of all evidence and that

defendant's insurance company contact counsel.

In April 2018, plaintiff filed a four-count complaint against defendant in

the Law Division alleging two counts of negligence, violation of the New Jersey

Nursing Home Responsibilities and Rights of Residents Act, and wrongful

death. After filing its answer and exchanging answers to interrogatories,

defendant moved to dismiss the complaint and compel arbitration.

Following oral argument, Judge Michael J. Rogers issued a fifteen-page

written decision granting defendant's motion. The judge concluded Lusk had

authority to sign the document as the responsible party acting on behal f of

Greenstein. The judge found

defendant did not waive its right to insist on arbitration . . . [and] [c]orrespondence from [plaintiff's] attorneys . . . regardless of accusatory tone and demands for information, is insufficient in this context to constitute an arbitrable and ripe "claim or dispute" under the . . . agreement sufficient to trigger the arbitration limitations time period against the other party.

A-5494-18T3 5 In any event, under the terms of the arbitration agreement it was plaintiff's burden to file for arbitration.

The judge found the terms of the agreement were "clear and unambiguous.

Each party knows their respective rights and responsibilities." Furthermore, "by

signing the agreement, [Lusk] 'acknowledged that [she] . . . read it . . . and had

all questions posed to the facility answered to [her] satisfaction.'"

The judge concluded as follows:

This contract is moderate in its terms and not unfair to the resident. The resident benefits from procedural and substantive due process and, absent the right to trial by jury, enjoys a plethora of available remedies if the arbitration award is in plaintiff's favor. . . .

....

Lusk was competent to read and understand the agreement, and had the opportunity to do so. She acknowledged that she read the agreement. . . . The two-paragraph arbitration clause in question is conspicuous in form and unambiguous in content. The right to a jury trial is clearly waived and the available remedies and procedures set forth in detail. The right to counsel is explained in separate sections of the admission agreement as well as the resident's right to cancel the contract. [Lusk] does not assert that she was not provided a copy of the admission agreement and had ample opportunity [to] reflect upon it further under the advice of counsel should she choose to do so. . . . There is nothing unconscionable about the agreement.

A-5494-18T3 6 [Lusk's] statements in her unrebutted affidavit establish little more than her lack of scrutiny of the admission agreement and do not indicate any failure on the party of [defendant's] representative in presenting the agreement for her to sign.

The validity of arbitration agreements is a question of law and therefore

reviewed de novo. Barr v. Bishop Rosen & Co., Inc., 442 N.J. Super. 599, 605

(App. Div. 2015) (citing Hirsch v. Amper Fin. Servs., LLC, 215 N.J. 174, 186

(2013)). As a result, no special deference is owed to the trial court's findings.

Atalese v. U.S. Legal Servs. Grp., LP, 219 N.J. 430, 445-46 (2014). "The issue

of whether a party waived its arbitration right is a legal determination subject to

de novo review[,]" however, "the factual findings underlying the waiver are

entitled to deference and are subject to review for clear error." Cole v. Jersey

City Med., 215 N.J. 265, 276 (2013).

Plaintiff raises the following points on appeal: (1) defendant waived its

right to arbitration by failing to seek it in a timely manner, despite receiving

three notices of claim from plaintiff's counsel; (2) the judge re-wrote the

agreement when he concluded plaintiff had the burden to initiate arbitration; (3)

the agreement to arbitrate lacked mutual assent because the arbitration provision

was inconspicuous and not written in clear language, was a contract of adhesion,

did not explain plaintiff was waiving a jury trial, and used unclear terms to

A-5494-18T3 7 mislead plaintiff; (4) the arbitration provision is unconscionable because the

contract was thrust at Lusk during the admission process, not explained to her,

and she was not permitted a meaningful review of the document; and (5) the

agreement violates federal law.

Having considered plaintiff's arguments, we affirm substantially for the

reasons expressed in Judge Rogers' thorough and well-written decision. We add

the following additional comments.

The Supreme Court has "recognized that parties may waive their right to

arbitrate in certain circumstances." Cole, 215 N.J. at 276 (quoting Wein v.

Morris, 194 N.J. 364, 376 (2008)). Waiver must be "voluntary and [an]

intentional relinquishment of a known right." Knorr v. Smeal, 178 N.J. 169, 177

(2003); see also Cole, 215 N.J. at 276. "[W]aiver can occur implicitly if 'the

circumstances clearly show that the party knew of the right and then abandoned

it, either by design or indifference.'" Id. at 276-77 (quoting Knorr, 178 N.J. at

177). "Such a waiver must be done 'clearly, unequivocally, and decisively.'"

Ibid.

We agree there was no waiver here. The express language of the

agreement stated defendant did not waive its rights if it failed to enforce aspects

of the agreement. Moreover, defendant did not clearly, unequivocally, or

A-5494-18T3 8 decisively relinquish the right to arbitration. To the contrary, it asserted the

right to arbitration in its answer to the complaint and filed its motion promptly

after plaintiff instituted its lawsuit.

We also reject plaintiff's argument that it was somehow defendant's

burden to seek arbitration. As a general proposition, "courts should enforce

contracts as made by the parties." Vasquez v. Glassboro Serv. Ass'n, 83 N.J.

86, 101 (1980). The court must ascertain and give effect to the mutual intention

of the parties. Fletcher v. Interstate Chem. Co., 94 N.J.L. 332-33 (Sup. Ct.

1920). The language must be interpreted "'in accordance with justice and

common sense . . . .'" Krosnowski v. Krosnowski, 22 N.J. 376, 387 (1956)

(citation omitted).

Plaintiff's reading of the agreement, that defendant was required to initiate

arbitration to address plaintiff's claims, is convoluted. Defendant asserted no

claims against plaintiff. The agreement clearly stated arbitration was the sole

forum to resolve all disputes. Therefore, a common sense reading of the

agreement supports plaintiff's obligation to assert her claims in arbitration.

Contrary to plaintiff's argument, mutual assent was demonstrated. An

enforceable arbitration agreement requires mutual assent. Flanzman v. Jenny

Craig, Inc., 456 N.J. Super. 613, 621 (2018) (citing Atalese v. U.S. Legal Servs.

A-5494-18T3 9 Grp., LP, 219 N.J. 430, 442 (2014)). "Mutual assent to an agreement requires

mutual understanding of its terms." Atalese, 219 N.J. at 447.

"When a party enters into a signed, written contract, that party is presumed

to understand and assent to its terms, unless fraudulent conduct is suspected."

Stelluti v. Casapenn Enter., LLC, 203 N.J. 286, 305 (2010) (citing Rudbart v. N.

Jersey Dist. Water Supply Comm'n, 127 N.J. 344, 353 (1992)). Furthermore, "it

is clear that, in the absence of fraud, one who does not choose to read a contract

before signing it cannot later relieve himself of its burdens." Moreira Constr.

Co. v. Moretrench Corp., 97 N.J. Super. 391, 394 (App. Div. 1967).

As Judge Rogers found, neither party alleged fraud. Absent fraud, Lusk's

endorsement and signature of the agreement, including the clearly worded

arbitration provision, formed a binding agreement.

The contract was not unconscionable. Determining unconscionability

requires a fact-sensitive analysis. Delta Funding Corp. v. Harris, 189 N.J. 28,

39 (2006) (citing Muhammad v. Cty. Bank of Rehoboth Beach, DE, 189 N.J. 1,

15-16 (2006)). In its analysis, the court must consider: (1) the subject matter of

the contract; (2) the parties' relative bargaining positions; (3) the degree of

economic compulsion motivating the "adhering" party; and (4) the public

interests affected by the contract. Id. at 39-40 (citing Rudbart, 127 N.J. at 356).

A-5494-18T3 10 Here, the subject matter of the agreement was clearly explained in plain

language. Although Lusk signed the agreement during Greenstein's admission,

she conceded she never sought additional time to review the document, did not

ask questions of the staff member reviewing the document with her, nor had an

attorney review the document, despite the opportunity to do so. The degree of

economic compulsion and the public interests affected by the contract were not

applicable considerations here.

Finally, the agreement did not violate federal law. The Federal Arbitration

Act favors the enforcement of these agreements. 9 U.S.C. § 1-16; see also

N.J.S.A. 2A:23(b)(1)(32). It states mandatory arbitration provisions in a nursing

home or assisted living facility are enforceable if supported by consideration.

See also Marmet Health Care Ctr., Inc. v. Brown, 565 U.S. 530, 533 (2012).

Federal regulation also states a long-term care facility may "choose[] to

ask a resident . . . to enter into an agreement for binding arbitration" so long as

it complies with the requirements laid out in the regulation. 42 C.F.R. 483.70(n).

Those requirements include that the facility can neither make signing an

arbitration agreement mandatory for admission, nor make the resident's right to

remain in the facility contingent on signing a binding arbitration agreement. 42

C.F.R. 483.70(n)(1); 42 C.F.R. 483.70(n)(4). The facility must also make sure

A-5494-18T3 11 the agreement is explained to the resident or her representative in a language she

understands, the representative or resident acknowledges she understands the

agreement, the agreement provides for the selection of a neutral arbitrator and

venue convenient to both parties, and grants the resident or representative the

right to rescind the agreement within thirty days of signing it. 42 C.F.R.

483.70(n).

The agreement and its arbitration provision met the regulatory

requirements under federal law.

Affirmed.

A-5494-18T3 12