News & Noteworthy

Authored - NJ Contract Law Update - Arbitration Waiver Will Not Be Lightly Found
MAY 10, 2013

In Lerner v. Heidenberg, ___ N.J.Super ___ 2013 WL 1830808 (N.J.App.Div. May 2, 2013), the Appellate Division agreed with the trial court that the following conduct did not constitute a waiver of the defendants' right to seek arbitration:

  1. Not objecting in the first instance to the plaintiff filing suit in court rather than filing an arbitration.
  2. Filing "an answer and five-count counterclaim" in court, including a count that "sought...dissolution of more than 30 additional entities".
  3. Filing defendant's own order to show cause regarding "distributions".
  4. The statements by defense counsel that "everything is interrelated and really has to be, it should be determined in one forum" by defense counsel (which obviously was ambiguous on the issue of which forum); "they've chosen this court and there is no reason to have it handled anywhere else; and "we prefer to be here", albeit (again) with the primary issue being 'having everything in one forum'.
  5. Judicial rulings on the injunction request and plaintiff's motions to dismiss.
  6. Waiting another week to then invoke arbitration informally.
  7. Waiting until mediation ended to formally compel arbitration, while (in the interim) agreeing to a discovery extension.
  8. "[O]ne day of depositions was completed".
  9. "The parties had exchanged requests for written discovery, but no responses were [sent]; and they had entered a stipulation to permit them to exchange electronic data".
  10. "One case management conference had been held".

The moral of the story is that arbitration waiver will not be lightly found.

Contact & Legal Disclaimer

Clark Alpert is the author of Guide to New Jersey Contract Law, published by the New Jersey Institute for Continuing Legal Education, originally published in 2007 and updated in November 2011. His updates on New Jersey contract law are based in recent issues and practical methods for addressing similar situations in your practice or business. They are not intended to serve as legal advice. Clark welcomes your questions and comments.

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