2

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?

1
  • This is asking what the law provides in particular circumstances. In no way is it a request for specific legal advice as the policy for this site defines that. It should not be closed. If closed I will vote to reopen. Feb 9, 2023 at 2:22

2 Answers 2

0

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).

2
  • I accepted this answer as the correct answer. I don't know who down voted it (I upvoted it). What is wrong with the answer? Personally, I would add that in order for a right to be waived the person must be aware that such a right exists. Since by definition the right does not exist until the Appellate Division reverses the decision of the lower court I would think it cannot constitute a waiver. Do you concur?
    – S.O.S
    Feb 9, 2023 at 22:51
  • @S.O.S "What is wrong with the answer?" Downvoting often stems from subjective bias, downvoters' misunderstanding of the law (or of the post), and other factors unrelated to the quality of an answer. "Since by definition the right does not exist until the Appellate Division reverses" The right exists by virtue of legislation, procedural law, and/or case law regardless of the lower court's inclination to enforce it. Rule 2:9-5(c) in and of itself reflects that a pending appeal is consistent with there being other [remaining] claims, i.e., that the latter don't strike an appeal. Feb 9, 2023 at 23:34
1

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.

1
  • There are some inaccuracies that, though departing altogether from the OP's question, might mislead the audience. For instance, the plaintiff does not "have to disprove all 4 statements". Instead, the defendant has the burden of proof of at least one of the defenses he raises or to disprove the plaintiff's claim. Likewise, a defendant is presumed innocent until proved guilty, which implies that the defendant does not have to disprove the prosecutor's story. The latter might be insufficient for convicting a defendant, which is different from disproving the prosecutor's assertions of fact. Feb 9, 2023 at 21:22

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .