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A Florida appellate court determined that a nursing home defendant waived its right to arbitrate by engaging in discovery before filing a motion to compel arbitration.
In Estate of Orlanis ex rel. Marks v. Oakwood Terrace Skilled Nursing and Rehabilitation Center, No. 3D05-2366, 2007 WL 2428426 (Fla. Dist. Ct. App. Aug. 29, 2007), Orlanis and her daughter executed documents necessary to admit Orlanis into residence at Oakwood Terrace.
One of the documents was a standard admission agreement that included an optional arbitration provision. The arbitration provision stated that any claim arising out of the admission agreement would be arbitrated.
Parties to the agreement could opt-out of the arbitration provision, if both the patient and Oakwood Terrace crossed out and initialed the arbitration clause. The provision was not deleted from Orlanis’ agreement. Orlanis lived in Oakwood Terrace until her death, upon which Orlanis’ daughter brought suit against Oakwood Terrace for wrongful death, negligence, and statutory damages.
The lower court issued a non-final order compelling arbitration. On appeal, Orlanis challenged the enforceability of the arbitration provision. The Court noted that any defendant who seeks the benefits of the discovery rules prior to filing the motion to arbitrate forfeits the right to arbitrate.
The Court determined that Oakwood Terrace waived any right it had to compel arbitration by affirmatively engaging in discovery, before filing its motion to arbitrate. The discovery in question included interrogatories, inquires for production of documents and notices to produce issued to non-parties.
Since Oakwood Terrace availed itself to the benefit of discovery before arbitration was sought, the Court reversed the order to arbitrate.
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