Can A Personal Injury Defendant Waive Its Contractual Right To Arbitration?

Many private contracts contain arbitration provisions that require parties to submit any legal disputes to an arbitrator rather than a court. Such contracts are generally enforceable under federal and Florida law. That said, a party can effectively waive its right to arbitration by initiating or participating in litigation unilaterally.

In other words, let’s say you file a personal injury lawsuit against a defendant. The defense files an answer and actively participates in discovery and pre-trial motions. Then the day before the trial, the defense goes to the judge and says, “We actually have an arbitration agreement so the plaintiff should be forced to submit their case to an arbitrator.” At that point it is too late. The defense effectively waived its right to arbitration and the judge would deny such a motion.

Appeals Court: Boat Club Effectively Waived Arbitration by Filing Federal Lawsuit

The Florida Second District Court of Appeals recently addressed a similar situation. In Mirro v. Freedom Boat Club, LLC, the issue was whether a defendant in a state personal injury case waived its right to arbitration by initiating a separate, related lawsuit in federal court.

The defendant operates a boating club. The plaintiff was a paid member of said club. The membership agreement the plaintiff signed upon joining included a binding arbitration clause.

In October 2018, the plaintiff sustained injuries while on the defendant’s property. Specifically, she alleged that a defective ladder broke while she was climbing down into a rental boat. She sustained injuries as a result of the fall.

Responding to the plaintiff’s lawsuit, which she filed in Florida state court, the defendant argued that the arbitration agreement applied to the plaintiff’s claims. In response, the plaintiff noted the day before she filed her lawsuit in state court, the defendant filed its own complaint in federal court seeking a judicial declaration that it was not responsible for the plaintiff’s injuries under federal admiralty law. The plaintiff answered the federal lawsuit and filed her own counterclaim.

Despite this ongoing federal proceeding, the judge in the plaintiff’s state personal injury case ordered arbitration. The Florida judge reasoned that since the defendant’s federal lawsuit was based on admiralty law, it did not affect its right to arbitrate state-level personal injury claims.

The Second District disagreed. The appellate court said the defendant “acted inconsistently with—and thereby waived—its right to arbitration.” The federal lawsuit “squarely addressed arbitrable issues regarding its liability to [the plaintiff] for her personal injuries.” Indeed, the whole point of the federal admiralty lawsuit was to obtain a declaration that the defendant was not liable for the plaintiff’s injuries. As such, it constituted an effective waiver of any arbitration agreement between the parties, so the plaintiff could proceed with her state lawsuit.

Speak with a Florida Premises Liability Attorney Today

Corporate defendants are usually quick to invoke arbitration agreements to avoid a public trial. That is why it is important you work with an experienced Delray Beach personal injury lawyer who will zealously defend your rights. Contact Leifer & Ramirez today to schedule a free consultation with a member of our team.

Source:

scholar.google.com/scholar_case?case=9544435230763281773