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Moore v. Woman To Woman Obstetrics & Gynecology, L.L.C.

416 N.J. Super. 30, 3 A.3d 535 (App. Div. 2010)

ARBITRATION; PHYSICIANS — A pre-dispute agreement to arbitrate medical malpractice claims might be enforceable as a matter of law unless it was not consensual or it was unconscionable, or there was undue influence or other unfairness at the time of contract.

A woman with a high risk pregnancy was referred to a gynecologist. In order to be treated by the doctor, she was required to sign an agreement to arbitrate all claims, including pre-dispute medical malpractice claims. The agreement stated that the patient had a right to find other physicians who did not require arbitration agreements and it referenced a schedule containing a list of those physicians. The agreement also permitted the patient to cancel the agreement within fifteen days after execution. The patient signed the agreement, but did not recall receiving a copy of the agreement or a list of the alternative physicians.

The patient gave birth to a baby with Downs Syndrome. The patient sued the gynecologist for medical malpractice. The gynecologist moved for dismissal. The lower court entered an order compelling the patient to arbitrate the claim. The patient appealed.

The Appellate Division reversed the lower court’s decision, even though it held that pre-dispute agreements to arbitrate medical malpractice claims could be enforceable as a matter of law. It rejected the patient’s argument that all such agreements are unconscionable contracts of adhesion that cannot be knowingly and voluntarily entered into by the patient and physician. According to the Court, the Arbitration Act is broad in scope and provides that an agreement to submit any existing or subsequent controversy arising between two parties to an agreement is valid, enforceable, and irrevocable unless there are legal or equitable grounds for revoking the agreement. The Arbitration Act does not differentiate between agreements to arbitrate based on the nature of the claim. Therefore, the Court rejected the patient’s claim that agreements to arbitrate future medical malpractice claims were unconscionable per se. However, even if such agreements can be enforced, a court may decline to enforce an arbitration provision in the absence of a consensual agreement or in instances of undue influence or other unfairness at the time of contract.

The Court noted that an arbitration agreement is unconscionable if: (1) there was unfairness in the formation of the contract; and (2) there are excessively disproportionate terms. Determination of unconscionability is fact-specific. A court may consider the age, literacy, sophistication of the parties, complexities in the contract terms, and bargaining position in determining if a particular arbitration agreement is unconscionable.

Here, the Court found this particular arbitration agreement unconscionable for several reasons. The Court noted that the patient never received a copy of the signed agreement with the fifteen-day right to cancel, so she was not apprised of her rights to cancel. The Court also noted that the agreement contained waivers of persons not parties to the agreement, i.e., the patient’s husband and the unborn child. The spouse could not be bound to arbitrate when he was not a signatory to the agreement and did not consent to its terms. Lastly, the Court found that the agreement contained a one-sided waiver of rights wherein the patients agreed to arbitrate claims against other medical providers who were not parties to the agreement. Those medical providers could decline to arbitrate, but she could not. Based on these specific facts, the Court found this particular arbitration agreement unconscionable and therefore unenforceable.

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