Are Pre-Dispute Agreements of Medical Malpractice Claims Enforceable?

According to the Appellate Division, YES 

pre-dispute agreements

Contract of adhesion

In the blue corner are plaintiff’s attorney and the New Jersey Association for Justice (“Justice” ). In the red corner are defense counsel and the Medical Society of New Jersey. This is a heavyweight  match between a gaggle of major players, plugging away for their constituencies.

The case involves Monica, a high risk pregnant lady,who  signs a Pre-Dispute Agreement(“Agreement”) waiving her right to a trial by judge or jury of any malpractice claims she, her husband (not a signatory), and unborn child may have against Dr. Fernandez. This Agreement was presented to Monica on her first visit to  Dr. Fernandez’s office,  along with the usual batch of insurance, and other forms to review and sign. The Agreement did allow for a fifteen (15) day “buyers remorse” period for Monica to unilaterally void the Agreement.

Plaintiff’s arguments are  summarized as follows:

The Appellate Division

Looked to the Arbitration Act, L. 2003, c. 95 (codified as N.J.S.A. 2A:23B-1 to -32), for a broad statement of policy with respect to issues and parties subject to binding arbitration agreements. The Court found the legislature’s intent to broadly favor arbitration; and refused to rule for a blanket exception to arbitatratioin for all medical malpractice cases.

An agreement to arbitrate is a contract, and subject to the usual contract defenses against enforceability; such as,  undue influence, and unconscionability, among others. The Supreme Court addressed unconscionability in the context of contracts of adhesion in Muhammad and Rudbart.

[3 A.3d 540]Muhammad, supra, 189 N.J. at 18, 912 A.2d 88; Rudbart, supra, 127 N.J. at 353-56, 605 A.2d 681. Contracts of adhesion are unique. ” [T]he essential nature of a contract of adhesion is that it is presented on a take-it-or-leave-it basis, commonly in a standardized printed form, without opportunity for the adhering party to negotiate except perhaps on a few particulars.” Rudbart, supra, 127 N.J. at 353, 605 A.2d 681 (internal quotations omitted). A contract of adhesion is ” ‘ [a] contract where one party … must accept or reject the contract….’ ” Ibid. (quoting Vasquez v. Glassboro Serv. Ass’n,83 N.J. 86, 104, 415 A.2d 1156 (1980)). ” Such a contract ‘ does not result from the consent of that party.’ ” Ibid. Consequently, a ” distinct body of law surrounding contracts of adhesion” has developed ” to determine whether and to what extent such nonconsensual terms will be enforced.” Id. at 353-54, 605 A.2d 681.

” For the most part, the unconscionability [involves] two factors: (1) unfairness in the formation of the contract, [procedural unconscionability] and (2) excessively disproportionate terms [,


Page 39substantive unconscionability].” Sitogum Holdings, Inc. v. Ropes,352 N.J.Super. 555, 564, 800 A.2d 915 (Ch.Div.2002); see Muhammad, supra, 189 N.J. at 15, 912 A.2d 88 (discussing Sitogum and employing the terms ” procedural” and ” substantive” unconscionability). ” Because adhesion contracts invariably evidence some characteristics of procedural unconscionability, … a careful fact-sensitive examination into substantive unconscionability” is generally required. Muhammad, supra, 189 N.J. at 16, 912 A.2d 88. Nonetheless, while substantive unconscionability is the focus when the contract is one of adhesion, ” overwhelming procedural unconscionability” is considered and the relevant facts are ” included and weighed in the overall analysis for unconscionability.” Id. at 16 n. 3, 912 A.2d 88; see Delta Funding Corp. v. Harris,189 N.J. 28, 39-40, 912 A.2d 104 (2006). Thus, ” [w]hen making the determination that a contract of adhesion is unconscionable and unenforceable, we consider, using a sliding scale analysis, the way in which the contract was formed and, further, whether enforcement of the contract implicates matters of public interest.” Stelluti v. Casapenn Enters, LLC,203 N.J. 286, 301 & n. 10, 1 A. 3d 678 (2010).”

The Decision of the Appellate Division

The Appellate Division reversed and remanded the case to the trial court, because the Appellate Division found the existence of facts that a jury may deem unconscionable.

pre-dispute agreements for medical malpractice case

Ssssh....I'm thinking

Commentary

I hate contracts of adhesion, and detest pre-dispute agreements to submit medical malpractice claims to arbitration. The Appellate Division held these evil agreements were generally enforceable because it was the intent of the N.J. Legislature.  The big but, is that these agreements were contracts,  and subject to the shopping list of contract defenses; including undue influence, and unconscionability. These defenses will be considered on a case-by-case basis.

The appellate division correctly ruled that Monica cannot waive the rights of her spouse and child to a trial by jury by signing this evil agreement.

Disclaimer: I am a true blue, dyed- in-the-polyester plaintiff’s attorney. I am biased in favor of victims of the carelessness of people, health care professionals, defective machines, and dangerous property; and prejudiced against contracts of adhesion and pre-dispute agreements.

[The case citation is, Moore v. Woman To Woman Obstetrics & Gynecology, L.L.C., 416 N.J.Super. 30, 3 A.3d 535 (N.J.Super.A.D. 2010) and Carlos Fernandez, M.D., and Premier Perinatal, L.L.C., Defendants-Respondents. Superior Court of New Jersey, Appellate Division. The case was decided on August 18, 2010].

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About Lawrence "Larry" Berezin

I retired from the private practice of law after a 35-year legal career and fight parking tickets for people like you and me. I love sharing valuable information and beating NYC parking tickets for the driving community

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