On appeal from Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-1558-09.
The opinion of the court was delivered by: Grall, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Grall, Messano and LeWinn.
Plaintiffs Monica and Kevin Moore are the parents of Koral Moore, who has Down Syndrome. Due to Monica's age, her pregnancy was considered high risk. Her doctor, defendant Lisa Vernon, M.D., practicing with defendant Woman to Woman Obstetrics & Gynecology, L.L.C., referred Monica to defendants Carlos Fernandez, M.D., and Premier Perinatal, L.L.C. (Premier). Plaintiffs filed a complaint alleging medical malpractice and seeking damages, including special damages for extraordinary medical expenses that will be incurred by Monica and Kevin during the child's infancy and by Koral thereafter.
This is an appeal from orders compelling arbitration of all three plaintiffs' claims against defendants Dr. Fernandez and Premier. Relying on an arbitration agreement signed by Monica Moore and Dr. Fernandez on Monica's first visit, which was on June 13, 2008, defendants Dr. Fernandez and Premier moved to dismiss the complaint for failure to state a claim. R. 4:6- 2(e). Due to defendants' reliance on matters outside the pleadings, the judge treated the motion as one for summary judgment. R. 4:6-2. For reasons stated on the record and in a written memorandum dated July 31, 2009, the judge entered an order compelling arbitration of plaintiffs' claims against Dr. Fernandez and Premier and dismissing the complaint without prejudice as to those defendants. The judge stayed the order for sixty days to permit plaintiffs to file an interlocutory appeal and to supplement the record with an additional certification. On August 11, 2009, plaintiffs moved for reconsideration. Dr. Fernandez and Premier opposed that motion, and the judge denied it for reasons stated on the record on September 11, 2009. The July 31 and September 11 orders do not address plaintiffs' claims against defendants Woman to Woman Obstetrics & Gynecology, L.L.C., and Lisa Vernon, M.D.
On plaintiffs' motion for leave to appeal, we followed Wein v. Morris, 194 N.J. 364, 380 (2008), and entered an order directing that the notice of motion be deemed a notice of appeal. We subsequently entered orders permitting both the New Jersey Association for Justice (the Association) and the Medical Society of New Jersey (the Society) leave to file a brief as amicus curiae.
Plaintiffs and the Association urge us to hold that all pre-dispute agreements to submit medical malpractice claims to binding arbitration are unenforceable. Their arguments are fairly summarized as follows: pre-dispute agreements to arbitrate medical malpractice claims are necessarily unconscionable contracts of adhesion; the waiver of rights of access to the court entailed in pre-dispute agreements to arbitrate medical malpractice claims cannot be knowing and voluntary; and the "undemocratic character" of arbitration's flexible rules and its closed proceedings will lead to distrust in the courts.
In essence these arguments for a general rule prohibiting pre-dispute arbitration agreements are based on the nature of the relationship between a doctor and patient; the importance of medical services and the state of mind of persons who seek them; the general fairness of pre-dispute arbitration agreements; and the wisdom of arbitration in general. These are questions of policy.
In our view, the Legislature has resolved these questions in the Arbitration Act, L. 2003, c. 95 (codified as N.J.S.A. 2A:23B-1 to -32). The Legislature's approval of arbitration agreements is broad. Subsection a of N.J.S.A. 2A:23B-6 provides: "An agreement contained in a record to submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract." (emphasis added). This provision clearly encompasses pre-dispute agreements to arbitrate.
Moreover, the Act does not prohibit agreements to arbitrate based upon the nature of the disputed claim. While the Legislature has excluded arbitration of certain labor disputes from the provisions of the Act, N.J.S.A. 2A:23B-3a, it has not prohibited arbitration of those labor disputes.
Finally, the Legislature has not overlooked cases in which a purported agreement to arbitrate should not be enforced because there was no agreement to arbitrate or because there are grounds to revoke an agreement to arbitrate. As discussed in the paragraphs that follow, the Act requires courts to address those issues on a case-by-case basis.
Arbitration is "'a creature of contract.'" Fawzy v. Fawzy, 199 N.J. 456, 469 (2009) (quoting Kimm v. Blisset, LLC, 388 N.J. Super. 14, 25 (App. Div. 2006), certif. denied, 189 N.J. 428 (2007)). An agreement to arbitrate is "valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract." N.J.S.A. 2A:23B-6a (emphasis added).
"The court shall decide whether an agreement to arbitrate exists . . . ." N.J.S.A. 2A:23B-6b. An agreement to arbitrate a claim must be a valid agreement. See Muhammad v. County Bank of Rehoboth Beach, De., 189 N.J. 1, 12 (2006) (noting the existence of "a valid arbitration agreement" is a "gateway" question requiring "judicial resolution" (internal quotations omitted)), cert. denied, 549 U.S. 1338, 127 S.Ct. 2032, 167 L.Ed. 2d 763 (2007). Moreover, the court must decide whether there is a "ground that exists at law or in equity for the revocation of a contract." N.J.S.A. 2A:23B-6a.*fn1
Courts decline to enforce an arbitration agreement that is not sufficiently clear as to the rights the party is waiving. "'In the absence of a consensual understanding, neither party is ...