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Affirming a trial court's denial of a motion to compel arbitration of a wrongful death claim, a Texas Appeals Court held that a hospital waived its arbitration rights by substantially litigating the case to where compelling arbitration would prejudice the decedent's relatives.
In In re Christus Spohn Health System Corp., No. 13-07-399-CV, 2007 WL 2199120, (Tex. App. July 31, 2007), Slough sued Spohn Health, a hospital, on December 16, 2005 for his wife's wrongful death. Spohn Health moved to compel arbitration on February 8, 2007 after a trial date had been set for the third time. The trial court denied the motion and Spohn Health appealed.
The Court held that Spohn Health waived its right to arbitrate by not timely requesting arbitration. Although there is a strong presumption against waiver of arbitration rights, a party waives its right to arbitrate if it substantially invokes the judicial process and the opposing party proves that it would suffer prejudice if the Court compels arbitration.
The Court found that Spohn Health substantially invoked the judicial process. Spohn Health did not seek arbitration until fourteen months after Slough filed the suit. Further, the parties substantially litigated the case by engaging in voluminous discovery.
Moreover, Spohn Health filed a third party petition, motion for contempt, and motion for sanctions illustrating that Spohn Health sought to achieve its desired outcome through the judicial process. Finally, the case was set for trial on three occasions prior to Spohn Health filing its motion to compel arbitration.
Additionally, the Court concluded that compelling arbitration would prejudice Slough. Slough's counsel booked over $350,000 in attorney fees preparing for trial. Further, Slough's attorney could have employed a different discovery strategy by limiting depositions and expenses in arbitration. Finally, prolonging the matter by starting over in arbitration would prejudice Slough and his children, as they were undergoing counseling to cope with the ordeal.
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