Uwaydah v. Van Wert County Hosp.

• Decision Date: 24 June 2002
• Docket Number: No. 3:00CV7640.,3:00CV7640.
• Citation: 246 F.Supp.2d 808
• Parties: Munir M. UWAYDAH, Plaintiff, v. VAN WERT COUNTY HOSPITAL, et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

246 F.Supp.2d 808

Munir M. UWAYDAH, Plaintiff, v. VAN WERT COUNTY HOSPITAL, et al., Defendants.

No. 3:00CV7640.

United States District Court, N.D. Ohio, Western Division.

June 24, 2002.

Munir M. Uwaydah, M.D., Santa Monica, CA, pro se.

Charles M. Murray, Michael P. Harvey, Patrick G. Warner, Timothy L. Sprague, Murray & Murray, Sandusky, for Munir M. Uwaydah, M.D., Plaintiff.

C. Philip Baither, III, Ted Kurt, Robison, Curphey & O'Connell, Toledo, OH, James L. Rogers, Eastman & Smith, Toledo, OH, for Van Wert County Hospital, Mark J. Minick, Defendants.

Gerald R. Kowalski, Cooper & Walinski, Toledo, OH, for Paulding County Hosp., movant.

Gary O. Sommer, Ronnie K. Purphree, Watkins, Bates & Carey, Toldedo, OH, for Medical College of Ohio, movant.

Richard S. Koblentz, Koblentz & Koblentz, Cleveland, OH, for Timothy L. Sprague, movant.

ORDER

CARR, District Judge.

Pending is a motion by the plaintiff, Munir M. Uwaydah, to stay or to compel arbitration. This court has jurisdiction pursuant to 28 U.S.C. § 1332. Resolution of this motion is governed by the Federal Arbitration Act, 9 U.S.C. § 1, et seq. For the following reasons, plaintiffs motion shall be denied. Plaintiffs request for sanctions pursuant to Fed.R.Civ.P. 11 shall be denied, without prejudice to renew.

BACKGROUND

This dispute arises from a medical services agreement (the "Agreement") between plaintiff, a medical doctor, and defendant Van Wert Hospital (the "Hospital"). The Agreement contains an arbitration provision:

Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration in the City of Toledo, Ohio, in accordance with the commercial arbitration rules of the American Arbitration Association. Such decision shall be binding upon the parties, and judgement [sic] upon the award rendered may be entered by any court having jurisdiction thereof.

(Doc. 70, Ex. A at 9).

In March, 2000, the Hospital filed suit against plaintiff in state court, alleging breach of the Agreement based on, among other things, plaintiffs failure to repay $412,244.51 in advanced compensation paid by the Hospital. The lawsuit was dismissed almost immediately after it was filed when the parties agreed to arbitration.

On October 13, 2000, plaintiff filed this suit in this court, and on January 17, 2001, the Hospital filed a counterclaim. Plaintiff made no mention of any desire or right to arbitrate in his complaint.

On July 31, 2001, plaintiff filed an amended complaint against the hospital, asserting diversity jurisdiction and alleging state tort claims.¹ Once again, plaintiff made no mention of any desire or right to arbitrate.

Since the filing of this action, recurrent discovery disputes have arisen between the parties, who, in accordance with our local rules and practice, called on me to resolve those disputes informally without the necessity of a formal motion to compel.² There have been at least three such discovery conferences. In addition, I was asked to review purportedly confidential documents in camera, and have issued two discovery orders. In addition, I have ruled on a motion for partial summary judgment.

After eighteen months of litigation before this court, plaintiff, citing the Agreement's arbitration clause, asserted—for the first time—his pending demand for arbitration. The Hospital opposes plaintiffs demand, arguing that plaintiff long ago waived any right to ask for arbitration. I find the Hospital's argument well-taken, and hold that plaintiffs institution, maintenance, and participation in this case manifested a clear and unequivocal waiver of any right to arbitrate that otherwise might have been available under the Agreement.

DISCUSSION>

Through the Arbitration Act, Congress has declared a national policy favoring arbitration and a strong presumption favoring arbitrability. See Ferro Corp. v. Garrison Indus., Inc., 142 F.3d 926, 932 (6th Cir.1998); Siam Feather & Forest Prods. Co., Inc. v. Midwest Feather Co., Inc., 503 F.Supp. 239, 241 (S.D.Ohio 1980), affd, 663 F.2d 1073 (1981) (Table). As the Sixth Circuit noted in Liskey v. Oppenheimer & Co., Inc., 717 F.2d 314, 319 (6th Cir.1983) (quoting Cunningham v. Dean Witter Reynolds, Inc., 550 F.Supp. 578, 584 (E.D.Cal.1982)), "The policy Congress intended to effectuate [through arbitration] was to avoid the unnecessary expense and delay of litigation where parties had provided for the more efficient process of arbitration ...."

Nonetheless, a party may waive its contractual right to arbitration as it can waive any other contractual provision. See Germany v. The River Terminal Ry. Co., 477 F.2d 546, 547 (6th Cir.1973); American Locomotive Co. v. Gyro Process Co., 185 F.2d 316, 318 (6th Cir.1950); Southern Sys., Inc. v. Torrid Oven Ltd., 105 F.Supp.2d 848, 852 (W.D.Tenn.2000); The Central Trust Co. v. Anemostat Prods. Div., 621 F.Supp. 44, 46 (S.D.Ohio 1985); Siam Feather, 503 F.Supp. at 242.

A waiver of the right to arbitrate may be expressed or implied. An implied waiver occurs "when the party actively participates in litigation or acts inconsistently with its rights to proceed with arbitration." Siam Feather, 503 F.Supp. at 242 (citing American Locomotive Co., 185 F.2d 316). While there is no bright-line rule as to what constitutes waiver, "[c]onduct such as filing responsive pleadings while not asserting a right to arbitration, filing a counterclaim, filing pretrial motions, engaging in extensive discovery, use of discovery methods unavailable in arbitration, and litigation of issues on the merit have all been considered by courts to amount to a waiver of the right to arbitration." Southern Sys., Inc., 105 F.Supp.2d at 854.

Here, the record amply supports the conclusion that plaintiff impliedly waived his right to arbitration by instituting and actively participating in this litigation and thereafter acting inconsistently with regard to any right to arbitrate he may have had. Without first seeking to assert a demand for arbitration, though the parties had agreed to do so shortly after the Hospital's state court suit had been dismissed, plaintiff filed the present lawsuit,³ amended his complaint, engaged in extensive discovery, used discovery methods unavailable in arbitration, participated in several discovery conferences with the court, responded to defendants' counterclaim and motion for partial summary judgment, and was provided with the court's rulings on various matters.

Both the parties and this court have expended much time and substantial resources on this matter for the past eighteen months. But for plaintiffs demand for arbitration, he would, after providing some additional discovery that he has been ordered over his objections to provide, have had to file a response to defendant's pending motion for summary judgment. This case, in other words, is on the brink of resolution either by dispositive motion or trial, which, pursuant to an order entered on October 11, 2001, had been set for September 3, 2002.⁴

In Cabinetree of Wisconsin, Inc. v. Kraftmaid Cabinetry, Inc., 50 F.3d 388, 390 (7th Cir.1995), the Seventh Circuit held that the election to proceed in a nonarbitrable forum acts as a "presumptive waiver" of the right to arbitrate. In that case, the court held that a party's decision to proceed in federal court without also seeking arbitration constituted an election to proceed in a nonarbitrable forum and, therefore, created a presumption of waiver. Id.; see also American Locomotive, 185 F.2d at 320 (stating that the filing of an action in a nonarbitrable forum is notice that the party is refusing to arbitrate the dispute under an arbitration provision); WorldSource Coil Coating, Inc. v. McGraw Constr. Co., Inc., 946 F.2d 473, 478 (6th Cir.1991) ("unless authorized by contract, submission of arbitrable issues in a judicial proceeding constitutes a waiver of the right to compel arbitration regardless of the prejudice to the other party.") (analyzing Illinois law).

Here, plaintiffs choice of this forum was not limited to seeking to enforce the arbitration clause in the Agreement. See American Locomotive, 185 F.2d at 320 (noting that a party can proceed under 9 U.S.C. § 4 for specific performance of an arbitration provision). Indeed, there is no indication that defendant would have refused a timely request to arbitrate. To be sure, it had filed suit in state court, but it had also acquiesced in an agreement to arbitrate and dismissal of that action.

In response to the Hospital's claim of waiver of the right to arbitrate, plaintiff asserts: 1) without a showing that defendant has incurred prejudice from plaintiffs failure to make a timely demand for arbitration, waiver cannot occur; and 2) pretrial expense and delay, without more, do not constitute prejudice sufficient to support waiver. Plaintiff cites several cases from other circuits in support of this argument. See Leadertex, Inc. v. Morganton Dyeing & Finishing Corp., 67 F.3d 20 (2d Cir.1995) ("[PJretrial expense and delay— unfortunately inherent in litigation—without more, do not constitute prejudice sufficient to support a finding of waiver."); Rush v. Oppenheimer, 779 F.2d 885, 887 (2d Cir.1985) ("[WJaiver of the right to compel arbitration due to participation in litigation may be found only when prejudice to the other party is demonstrated."); PaineWebber, Inc. v. Faragalli, 61 F.3d 1063, 1069 (3d Cir.1995) ("Prejudice is the touchstone for determining whether the right to arbitration has been waived."); Britton v. Co-op Banking Group, 916 F.2d 1405, 1412 (9th Cir.1990); Fisher v. AG. Becker Paribas, Inc., 791 F.2d 691, 694 (9th Cir.1986) (adopting a three prong test for determining waiver: 1) knowledge of an existing right to compel arbitration; 2) acts inconsistent with that right; and 3) prejudice to the opposing party resulting from the inconsistent acts).

In addressing plaintiffs first contention, that prejudice is determinative of waiver, it...