Waiver of a Right During Appeal When the Lower Court Rules that such a Right Does Not Exist?

Question

Let's say two parties enter into an arbitration agreement and one of the parties seeks to enforce the arbitration agreement while the second party seeks to annul it. The two parties appear in court and the judge rules that the arbitration agreement is invalid.

The party seeking to enforce the arbitration agreement appeals the decision to the Appellate Division. However, at the same time they are forced to act in a way that is inconsistent with the enforcement of the arbitration agreement. For example, suppose Party A sues Party B for a breach of contract for $50,000. Party B attempts to compel arbitration but the court denies the request. While the case is pending appeal, Party B counter sues Party A for $25,000 for breach of the same contract with the logic that until the higher courts reverse the decision of the lower courts, Party B wants the courts to get a full picture of their version of the story.

Could it be argued that Party B now forfeited their right to appeal by filling a suit in court against Party A and not waiting until the appeal is either accepted or denied?

Answer 1

Could it be argued that Party B now forfeited their right to appeal by filling a suit in court against Party A and not waiting until the appeal is either accepted or denied?

No, party B is not at risk of forfeiture of the appeal.

Party B may file in trial court a counterclaim and a motion for a stay pending appeal. In turn, a denial of that motion may be appealed. See NJ Court Rule 2:9-5(c). Party B ought to be explicit on his intent to enforce the arbitration agreement as to his counterclaim. Otherwise, the trial court might interpret the counterclaim as a "remaining claim" outside the scope of the appeal.

Even if the statute of limitations for B's counterclaim has expired by the time the appellate review has taken place, under NJ case law the counterclaim may still be allowed as recoupment against party A's claim. See Biddle v. Biddle, 163 N.J.Super. 455, 459-460 (1978).

Answer 2

No... I forget the specific term but in court you can bring in multiple points of contradiction that are all contradictory to your other arguments, but would not be contradicting to your case, because they all contradict your legal adversaries case. The example as I heard it is A man is bitten by a neighbor's Pit Bull and the man takes takes his neighbor to court for damages. The neighbor mounts his defense by saying 1.) I don't own that dog. 2.) If I did own a dog, I wouldn't own that breed of dog. 3.) I always keep my dogs on a leash when I take them out of the house and would pull it away before it bit someone. 4.) On the day in question my dog was in the kennel.

In this case, the defense would be valid because the Plaintiff would have to disprove all 4 statements, any one of which would impact the case against the neighbor. In a criminal case, the defendant doesn't have to prove his story is true, he just has to prove that the Prosecution's story isn't. In a civil case, both sides merely have to prove their story is more likely to be true than the other side's. What's more, none of those statements is contradictory, they only seem so (Neighbor doesn't own that dog (he dog sits for his sister). If he did own a dog, it would be a different breed (He doesn't like Pitt Bulls). He never takes a dog out of his house without putting a leash on the dog and maintains control of the dog (Because that's what any dog owner would do). The dog was in the kennel on the day of the incident (because for his own reasons, he can't dog sit for his sister.)).

In effect, to avoid damage, the argument of "That's not my dog" is to argue that the neighbor isn't the responsible party for the dog's behavior. The second argument is that the neighbor would never own a pit bull even if he did own a dog, the third would demonstrate that even when there is a dog that the neighbor is caring for, he does so in a responsible way AND the dog being in the kennel shows that the dog couldn't possibly have been the one who bit the plaintiff.

What's more, the defendant can counter sue his neighbor for harassment, who just plain hates Pit Bulls and has been shouting at defendant for daring to care for his sister's dog even on days where the dog is not on the man's property and instantly blamed the Defendant in court without considering the possibility that there could be another Pit Bull owner in the area and their Pit Bull got loose.

In OP's case, the filing of a countersuit is just "Hope for the Best, prepare for the worst". They could be filing because the appellant court's decision may not come out in the window of time they have before they lose the ability to file counter claims. In that case, if the appeal goes in their favor, the suit is dismissed as well as the countersuit and goes to arbitration. If it goes against them, they will be arguing their claim at the trial.