{"id":903274,"date":"2024-09-11T11:57:23","date_gmt":"2024-09-11T17:57:23","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=903274"},"modified":"2024-09-11T11:57:27","modified_gmt":"2024-09-11T17:57:27","slug":"waiver-of-arbitration-prejudice-may-be-included","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/waiver-of-arbitration-prejudice-may-be-included\/","title":{"rendered":"Yes, Prejudice May Be\u00a0Included\u00a0in a Court\u2019s Analysis of a Waiver of Arbitration"},"content":{"rendered":"\n<p>Bryan Hahm | <a href=\"https:\/\/www.gibbonslaw.com\/professionals\/bryan-hahm\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Gibbons<\/a><\/p>\n\n\n\n<p>In a recent published opinion,\u00a0<a href=\"https:\/\/www.njcourts.gov\/system\/files\/court-opinions\/2024\/a3120-22.pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><em>Marmo &amp; Sons General Contracting, LLC v. Biagi Farms, LLC<\/em><\/a>, the Appellate Division affirmed the trial court\u2019s finding that a party had waived its contractual right to compel arbitration. At issue was the non-moving party\u2019s assertion that the U.S. Supreme Court\u2019s 2022 decision in\u00a0<a href=\"https:\/\/www.supremecourt.gov\/opinions\/21pdf\/596us1r33_a86c.pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><em>Morgan v. Sundance, Inc.<\/em><\/a>\u00a0forbade considerations of prejudice in the seven-factor waiver analysis originally set forth in 2013 by the New Jersey Supreme Court in\u00a0<a href=\"https:\/\/law.justia.com\/cases\/new-jersey\/supreme-court\/2013\/a-6-12.html\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><em>Cole v. Jersey City Medical Center<\/em><\/a>.<\/p>\n\n\n\n<p><em>Cole<\/em>&nbsp;considered whether a party could invoke an arbitration clause 21 months after actively participating in litigation. In coming to the \u201cinexorable conclusion\u201d that the moving party\u2019s conduct had indeed waived its right to arbitration, the&nbsp;<em>Cole<\/em>&nbsp;court weighed seven factors, including the delay in requesting arbitration, whether any motions had been filed, and the extent of discovery conducted. Critically here, the seventh&nbsp;<em>Cole<\/em>&nbsp;factor is addressed to the resulting prejudice, if any, suffered by the non-moving party.<\/p>\n\n\n\n<p>In&nbsp;<em>Morgan<\/em>, the U.S. Supreme Court reviewed an Eighth Circuit precedent that expressly premised a waiver of arbitration upon a finding of prejudice. The Eighth Circuit\u2019s holding sprang from its desire to bolster the broader federal policy favoring arbitration. The Supreme Court, however, reversed, holding that the Federal Arbitration Act\u2019s \u201c\u2018policy favoring arbitration\u2019 does not authorize federal courts to invent special, arbitration-preferring procedural rules.\u201d \u201c[F]ederal policy is about treating arbitration contracts like all others,\u201d the Supreme Court reasoned, \u201cnot about fostering arbitration.\u201d<\/p>\n\n\n\n<p>The multifactor balancing test in&nbsp;<em>Cole<\/em>&nbsp;is plainly different from the procedural requirement addressed by&nbsp;<em>Morgan<\/em>, as the Appellate Division confirmed in&nbsp;<em>Marmo &amp; Sons<\/em>: \u201c<em>Morgan<\/em>&nbsp;[] disallow[ed] considerations of prejudice only if [prejudice] is used by a court as a&nbsp;<strong>necessary<\/strong>&nbsp;element for waiver in the arbitration context.\u201d (emphasis added). Because&nbsp;<em>Cole<\/em>&nbsp;does not mandate a showing of prejudice by the party opposing arbitration \u2013 but, rather, includes prejudice as a single non-dispositive factor to be considered by our courts \u2013 the&nbsp;<em>Cole<\/em>&nbsp;test remains good law.<\/p>\n\n\n\n<p>The bottom line: A court evaluating whether a party has <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/arbitration-waiving-the-right\/\">waived its right to arbitrate<\/a> may continue to factor into its calculus the prejudice to the party opposing arbitration that stems from the movant\u2019s delay.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bryan Hahm | Gibbons In a recent published opinion,\u00a0Marmo &amp; Sons General Contracting, LLC v. Biagi Farms, LLC, the Appellate Division affirmed the trial court\u2019s finding that a party had waived its contractual right to compel arbitration. At issue was the non-moving party\u2019s assertion that the U.S. Supreme Court\u2019s 2022 decision in\u00a0Morgan v. Sundance, Inc.\u00a0forbade&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/waiver-of-arbitration-prejudice-may-be-included\/\">Continue reading <span class=\"screen-reader-text\">Yes, Prejudice May Be\u00a0Included\u00a0in a Court\u2019s Analysis of a Waiver of Arbitration<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[41],"tags":[9895,42],"class_list":["post-903274","post","type-post","status-publish","format-standard","hentry","category-arbitration","tag-advise-consult","tag-arbitration-2","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Yes, Prejudice May Be\u00a0Included\u00a0in a Court\u2019s Analysis of a Waiver of Arbitration - Advise &amp; 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