JOHN RICCIARDI VS. ABINGDON CARE & REHABILITATION CENTER (L-1541-18, SOMERSET COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited . R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3255-18T1

JOHN RICCIARDI,

Plaintiff-Respondent,

v.

ABINGDON CARE &
REHABILITATION CENTER,
GREEN KNOLL CENTER,
OVERLOOK MEDICAL
CENTER, and ROBERT WOOD
JOHNSON UNIVERSITY
HOSPITAL AT SOMERSET,

Defendants,

and

KINDRED HOSPITAL,

Defendant-Appellant.

Submitted September 19, 2019 – Decided October 23, 2019

Before Judges Alvarez and Suter.

On appeal from the Superior Court of New Jersey, Law
Division, Somerset County, Docket No. L-1541-18.
 Farkas & Donohue, LLC, attorneys for appellant
(David C. Donohue, of counsel; Gary Warren Baldwin
II, on the briefs).

Stark & Stark, PC, attorneys for respondent (Sherri Lee
Warfel, of counsel; Alex J. Fajardo, on the brief).

PER CURIAM

Defendant Kindred Hospital appeals the February 19, 2019 order denying

its motion to dismiss plaintiff John Ricciardi's complaint and compel arbitration.

Because it is undisputed that the arbitration agreement was mixed in with a

number of other admission documents, it was not explained to Ricciardi, nor

was he given a copy, we affirm.

The facts are taken from the record on appeal and Ricciardi's unrefuted

affidavit submitted in opposition to Kindred's motion. Ricciardi was diagnosed

with multiple sclerosis (MS) and bipolar disorder in his late twenties. He was

fifty-three years old when transferred to Kindred, and had required twenty-four-

hour nursing home care for the thirteen years prior. Ricciardi has not worked in

sixteen years, has not driven a car in the last thirteen, or ever owned a house. A

brother holds his power of attorney. Ricciardi's complaint alleges that Kindred's

facility and staff negligence caused him to develop multiple advanced stage

pressure ulcers, resulting in "great pain, suffering, disability, loss of quality of

life and medical expense."

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 When admitted, the nursing staff assessed Ricciardi, finding he responded

appropriately to questions, was cooperative, followed instructions, and was not

confused, lethargic, uncooperative, restless, or anxious. Although Ricciardi's

severe medical conditions do have some effect on his cognition, he does not

claim that he was cognitively impaired at the time. He had been administered

various medications that affected his ability to concentrate, however, and at the

time of admission he was dizzy, nauseous, and light-headed.

While being admitted, Ricciardi was presented with twelve admission

documents requiring signature. The "Voluntary Alternative Dispute Resolution

Agreement Between Patient And Hospital[,]" (arbitration agreement) was

included in that packet. As instructed, Ricciardi signed the admission

paperwork in twelve different places. The time noted by his signatures indicated

he signed every document within one minute. Ricciardi was provided copies of

three admission documents, but not of the arbitration agreement. This despite

the fact the agreement stated his signature was not a precondition to treatment ,

and that he could cancel the arbitration agreement within five days.

The Kindred employee who walked Ricciardi through the process did not

explain the arbitration agreement. He was only told he needed to sign all the

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paperwork. Ricciardi's affidavit states he first learned of his waiver of his right

to a judicial forum only when Kindred filed the motion to dismiss the complaint.

In deciding the motion, the judge relied on the fact Kindred did not refute

Ricciardi's description of the manner in which he signed the document. The

judge said:

Every signature [on the documents] is noted to be
signed at the exact time, which leads to an inescapable
inference that [Ricciardi] did not read or comprehend
anything besides a possible brief summary of
everything. This is not a knowing and voluntary waiver
of his legal rights. [Ricciardi's] statements in his
affidavit as to what occurred upon admission are
unrebutted and relied upon by this court in determining
not to enforce the arbitration agreement.

For unknown reasons, Kindred admittedly did not
supply [Ricciardi] with a copy of the ADR agreement.
If [Ricciardi] was provided a copy he could have at
least had some time to read it and to deliberate upon it
within the five-day window to rescind the contract and
contact an attorney or a family member for consultation
and advice.

....

The issues are fact-sensitive. . . . [T]he ADR agreement
in this matter is procedurally and substantively
unconscionable as applied to [Ricciardi] when he
presented himself for admission to Kindred on August
15, 2017. The [c]ourt declines to enforce the arbitration
agreement under these circumstances, which are
unique, frankly, to [Ricciardi], and you need to look

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 carefully at his affidavit to see what happened to him
and what he realized was happening at the time.

On appeal, Kindred raises the following points:

POINT I – THE APPELLATE DIVISION HAS
JURISDICTION OVER THIS MATTER BECAUSE
THE TRIAL COURT ENTERED AN ORDER
DENYING ARBITRATION.

POINT II – NEW JERSEY PUBLIC POLICY
FAVORS ARBITRATION FOR RESOLVING
DISPUTES INCLUDING THOSE ARISING IN
HOSPITALS SUCH AS KINDRED HOSPITAL.

POINT III – THE CIVIL ACTION AGAINST
KINDRED HOSPITAL SHOULD HAVE BEEN
DISMISSED AND THE PARTIES' VOLUNTARY
ALTERNATIVE DISPUTE RESOLUTION
AGREEMENT SHOULD BE ENFORCED.

POINT IV – THE LAW DIVISION ERRED WHEN IT
FOUND THERE EXISTED PROCEDURAL
UNCONSCIONABILITY INVOLVED IN THE
FORMATION OF THE AGREEMENT AT ISSUE.

POINT V – THE LAW DIVISION ERRED WHEN IT
FOUND THERE EXISTED SUBSTANTIVE
UNCONSCIONABILITY IN THE AGREEMENT AT
ISSUE.

We address only one issue. We do not reach Kindred's other contentions,

concluding that the problems with the formation of the contract were so

consequential as to alone warrant denial of defendant's motion to dismiss and to

compel arbitration. The issue does not require much discussion in a written

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opinion, and additionally we rely on the judge's analysis of the matter. See R.

2:11-3(e)(1)(E).

We exercise de novo review of a trial court's legal decision on the

enforceability of an arbitration clause. Morgan v. Sanford Brown Inst., 225 N.J.

289, 302-03 (2016). "In reviewing such orders, we are mindful of the strong

preference to enforce arbitration agreements, both at the state and federal level."

Hirsch v. Amper Fin. Servs., LLC, 215 N.J. 174, 186 (2013).

It is black-letter law that arbitration is a favored means of dispute

resolution both under federal and state law. Atalese v. U.S. Legal Servs. Grp.,

219 N.J. 430, 440 (2014). States may, however, regulate arbitration agreements

under general contract principles. Id. at 441 (quoting Martindale v. Sandvik,

Inc., 173 N.J. 76, 85 (2002)). Accordingly, arbitration clauses may be

invalidated on grounds existing at law or equity that call for the revocation of

any contract. Ibid.

An arbitration agreement must be the product of mutual assent. Id. at 442

(quoting NAACP of Camden Cty. East v. Foulke Mgmt. Corp., 421 N.J. Super.

404, 424 (App. Div. 2011)). Mutual assent requires that all parties understand

the terms of the agreement they have signed. Ibid.

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 "Moreover, because arbitration involves a waiver of the right to pursue a

case in a judicial forum, 'courts take particular care in assuring the knowing

assent of both parties to arbitrate, and a clear mutual understanding of the

ramifications of that assent.'" Id. at 442-43 (quoting Knorr v. Smeal, 178 N.J.

169, 177 (2003)). Any contractual waiver of rights, including arbitration

provisions, must reflect that the parties have clearly and unambiguously agreed

to the terms. Id. at 443. The parties must have full knowledge of their rights

and show an intent to surrender those rights. Ibid. That did not occur here.

"An agreement to arbitrate 'must be the product of mutual assent, as

determined under customary principles of contract law.'" Barr v. Bishop Rosen

& Co., Inc., 442 N.J. Super. 599, 605-06 (App. Div. 2015) (quoting Atalese, 219

N.J. at 442). "Mutual assent requires that the parties understand the terms of

their agreement[,]" and where the "agreement includes a waiver of a party's right

to pursue a case in a judicial forum, 'clarity is required.'" Barr, 442 N.J. Super.

at 606 (quoting Moore v. Woman to Woman Obstetrics & Gynecology, LLC,

416 N.J. Super. 30, 37 (App. Div. 2010)).

Although the enforceability of an arbitration clause is reviewed de novo,

we rely upon the court's factual findings — "considered binding on appeal when

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supported by adequate, substantial and credible evidence." Rova Farms Resort,

Inc. v. Inv'rs Ins. Co. of Am., 65 N.J. 474, 484 (1984).

Having reviewed the record, we conclude there is ample evidence

supporting the trial court's findings of fact. And, as a matter of law, the

arbitration agreement lacked the mutuality of assent necessary for it to be

binding on both parties. Like Moore, the plaintiff in Woman to Woman,

Ricciardi was not given a copy of the agreement. Ricciardi was not given an

explanation of the agreement any more than was Moore. Ricciardi and Moore

were simultaneously presented a number of forms related to medical treatment

and the provision of services. Moore was not alerted by the person who obtained

her signature about arbitration, nor was Ricciardi.

Because Kindred failed to give him a copy of the document, Ricciardi,

like Moore, had no realistic opportunity in which to review the arbitration

agreement or consult about it with others. In Woman to Woman, Moore had

fifteen days to withdraw from the agreement, Ricciardi had only five. But since

neither was given a copy of the document, or had any idea regarding its content,

the time afforded to them was meaningless. As a practical matter, because

neither plaintiff knew what they were signing, the amount of time in which to

revoke made no difference.

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 Given the facts, as a matter of law, the agreement was unenforceable.

Therefore, Kindred's remaining arguments do not require discussion. We thus

affirm the judge's refusal to dismiss the complaint.

Affirmed.

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