ARBITRATION - AURORA HEALTHCARE, INC. V. RAMSEY
In
Aurora Healthcare, Inc. v. Ramsey, [Ms. 1091561, Oct. 21, 2011] __ So. 3d __(Ala. 2011), the Supreme Court
of Alabama held that a trial court erred by denying Defendant Aurora Healthcare,
Inc.'s motion to compel arbitration. This case arose out of the death
of Plaintiff's decedent, Mary Pettway, following her medical treatment
at a nursing home owned and operated by the defendants. At the nursing
home, an arbitration agreement was executed, along with other admission
documents on behalf Pettway. In November of 2005, Ramsey, in her capacity
as Administratrix of Pettway's estate, filed a complaint in the circuit
court against the defendants. The parties then engaged in litigation until
November 3, 2006, when the defendant filed a motion to compel arbitration.
Subsequently, the trial court entered an order denying the defendant's
motion to compel arbitration finding that the defendant had substantially
invoked the litigation process and that Ramsey had been prejudiced by
incurring significant attorney fees in participating in litigation. On
appeal, the Supreme Court of Alabama held that, because there is a strong
federal policy favoring arbitration, waiver of the right to compel arbitration
is not lightly inferred and the party seeking to prove waiver has a heavy
burden and must show both the defendant's substantial invocation of
the litigation process and resulting substantial prejudice. The Court
then held that, under the facts of this case, the plaintiff failed to
meet her burden since she did not produce any evidence supporting her
assertion that she suffered substantial prejudice by the defendant's
belated assertion of its arbitration rights. Therefore, the trial court
erred by denying the defendant's motion to compel arbitration. However,
the Supreme Court also held that it was unable to determine whether the
case was, in fact, due to be arbitrated because of issues associated with
the validity and scope of the arbitration agreement. The Court therefore
remanded the case to the trial court for further proceedings.
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