Recently, in Weiss v. THI of New Mexico at Valle Norte, the New Mexico Court of Appeals looked into whether an arbitration clause in a nursing home resident contract can be used to avoid monetary sanctions awarded by the court in a pending nursing home abuse and neglect lawsuit.
In this case, the plaintiff‘s estate filed a wrongful death lawsuit against the defendant for nursing home neglect. After filing the lawsuit, the plaintiff began filing discovery requests.
Discovery in a personal injury lawsuit is the method where each party is able to request information from the opposing party. It typically takes the form of interrogatories (which are written questions that require an answer under oath), requests for documents and depositions (where a witness answers verbal questions under oath).
Here, the defendant produced some of the discovery requested by the plaintiff, but then began asking for several extensions and failed to produce any additional requested documents.
When the defendant refused to produce the discovery requested by the plaintiff, the plaintiff then filed a motion to compel discovery. A motion to compel is essentially a motion asking the court to require the other party to provide the requested discovery or pay monetary sanctions. In this case, the parties argued the motion to compel and the judge ordered the defendant to produce the discovery requested by the plaintiff.
Around the same time the judge ordered the discovery production, the defendant also discovered that the deceased nursing home resident‘s admission agreement included a clause requiring any disputes be settled through arbitration. As a result, the defendant filed a motion to compel arbitration and end the traditional lawsuit. After filing the motion to compel arbitration, the defendant also chose not to produce the discovery ordered by the judge.
When the defendant still did not produce the requested discovery, the plaintiff filed a motion for discovery sanctions, essentially asking the judge to impose a monetary penalty upon the defendant for failing to abide by the judge‘s order. The judge then denied the defendant‘s motion to compel arbitration, granted the plaintiff‘s motion for sanctions, imposed a $25,000 fine on the defendant and again ordered the defendant to produce the requested discovery.
The defendant appealed the judge‘s rulings. They argued that their motion to compel arbitration should have immediately stopped any obligation they had in the traditional lawsuit. New Mexico law provides that when a court receives a motion to compel arbitration, it should “on just terms” stay the traditional lawsuit until it can make a decision about whether arbitration is required. In other words, the traditional lawsuit does not automatically pause with the filing of a motion to compel arbitration, rather the court is simply required to assess whether the claim is subject to arbitration.
The Court of Appeals determined that the trial court had discretion as to whether it should stay the lawsuit while determining the issue of the arbitration clause. As a result, the defendant had no right to continue withholding the discovery, particularly after they were ordered to produce it by order of the judge. Without proper justification for failing to produce the discovery, the $25,000 fine imposed by the judge was also proper and right.
Related Reading:
Nursing Home Arbitration Provisions Must Not be “Unfairly” One-Sided in New Mexico
Discovery in a Personal Injury Lawsuit: Often Difficult and Expensive but Always Necessary!
Nursing Homes‘ Patient Records Often Neglected and Occasionally Deliberately Falsified