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United States Court of Appeals for the Third Circuit
July 13, 2016, Argued; September 8, 2016, Filed
[*293] SMITH, Circuit Judge.
] "A waived claim or defense is one that a party has knowingly and intelligently relinquished." Wood v. Milyard, 566 U.S. 463, 132 S. Ct. 1826, 1832 n.4, 182 L. Ed. 2d 733 (2012). How, then, can a party waive a right "in a situation in which no right existed[?]" Ackerberg v. Johnson, 892 F.2d 1328, 1333 (8th Cir. 1989). The answer is: it cannot. Every [**2] circuit to have answered this question has held that "a litigant [need not] engage in futile gestures merely to avoid a claim of waiver." Miller v. Drexel Burnham Lambert, Inc., 791 F.2d 850, 854 (11th Cir. 1986), abrogated on other grounds by Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 108 S. Ct. 1133, 99 L. Ed. 2d 296 (1988). We too adopt this position and therefore hold that futility can excuse the delayed invocation of the right to compel arbitration. Because we also conclude that any attempt to compel bipolar — that is, individual — arbitration in this case prior to the Supreme Court's decision in AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 131 S. Ct. 1740, 179 L. Ed. 2d 742 (2011), would have been futile, we will remand with instructions that the District Court compel bipolar arbitration of all Plaintiffs' arbitrable claims in accordance with its May 14, 2015, order and this opinion.
Plaintiffs represent a putative class of New Jersey real estate purchasers and refinancers who were overcharged between $70 and $350 in fees stemming from the recording of their deeds and mortgage instruments. Plaintiffs allege that the settlement agents — title agents and attorneys who were, in turn, agents of the Defendants — intentionally charged Plaintiffs more than the county clerk charged for recording these documents and pocketed the difference. Plaintiffs further allege that the class claims add up to over $50 million, exclusive [**3] of treble damages and interest.
On January 22, 2009, Plaintiffs filed a complaint in the U.S. District Court for the District of New Jersey alleging both breach of contract and violation of New Jersey law. In response, Defendants sought to dismiss a number of these claims and raised several affirmative defenses. They did not, however, seek to compel arbitration based on the arbitration clauses present in their contracts with Plaintiffs.1 While no explanation for this inaction was given, we conclude infra that an attempt to compel bipolar arbitration [*294] would have been futile under prevailing New Jersey law. Because arbitration was not sought, the case was litigated for two and a half years with the focus primarily on class certification. In that time, both sides conducted broad discovery and contested several substantive motions on their merits. Plaintiffs have also extensively documented their efforts in this case and note that they served over 130 non-party subpoenas and spent over $50,000 on experts before Defendants sought bipolar arbitration.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
836 F.3d 291 *; 2016 U.S. App. LEXIS 16489 **
ARTHUR CHASSEN; DEBORAH MEREDITH; JOEL OSTER; DENNIS SCRIMER; GLEN J. DALAKIAN; JACK HOFFMAN; DEBORAH HOFFMAN; KATHLEEN COOPER; RICHARD MURPHY, individually and on behalf of others similarly situated; AMI FELLER, Appellants v. FIDELITY NATIONAL FINANCIAL, INC., a Delaware corporation; FIDELITY NATIONAL TITLE INSURANCE COMPANY, a California corporation; CHICAGO TITLE INSURANCE COMPANY, a Missouri corporation; THE FIRST AMERICAN CORPORATION, a California corporation; FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation; LANDAMERICA FINANCIAL GROUP, INC., a Virginia corporation; TRANSNATION TITLE INSURANCE COMPANY, a Nebraska corporation; LAWYERS TITLE INSURANCE CORPORATION, a Nebraska corporation; STEWART INFORMATION SERVICES CORPORATION, a Delaware corporation; STEWART TITLE GUARANTY COMPANY, a Texas corporation; OLD REPUBLIC INTERNATIONAL CORPORATION, a Delaware corporation; OLD REPUBLIC TITLE INSURANCE GROUP, INC., a Delaware corporation; OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY, a Minnesota corporation; WEICHERT TITLE AGENCY
Notice: NOT PRECEDENTIAL OPINION UNDER THIRD CIRCUIT INTERNAL OPERATING PROCEDURE RULE 5.7. SUCH OPINIONS ARE NOT REGARDED AS PRECEDENTS WHICH BIND THE COURT.
Subsequent History: Decision reached on appeal by Chassen v. Fid. Nat'l Fin. Inc., 694 Fed. Appx. 105, 2017 U.S. App. LEXIS 14245 (3d Cir. N.J., Aug. 3, 2017)
Prior History: [**1] On Appeal from the United States District Court for the District of New Jersey. District Court No. 3-09-cv-00291. District Judge: The Honorable Peter G. Sheridan.
Chassen v. Fid. Nat'l Fin., Inc., 2014 U.S. Dist. LEXIS 6227 (D.N.J., Jan. 17, 2014)
arbitration, futile, bipolar, arbitration clause, unconscionable, district court, compel arbitration, contracts, arbitration agreement, waived, Plaintiffs', consumer, courts, class-arbitration, Defendants', clauses, factors, parties, waivers, motion to compel, proceedings, adhesion, insured, motion to compel arbitration, right to arbitration, adhesion contract, class action, take-it-or-leave-it, classwide, contested
Business & Corporate Compliance, Alternative Dispute Resolution, Arbitration, Waiver, Contracts Law, Contract Conditions & Provisions, Waivers, Federal Arbitration Act, Constitutional Law, Supremacy Clause, Federal Preemption, Federal Arbitration Act, Arbitration Agreements, Scope, Arbitrability, Evidence, Burdens of Proof, Allocation, Civil Procedure, Defenses, Demurrers & Objections, Affirmative Defenses, Arbitration & Award, Special Proceedings, Class Actions, Contracts Law, Defenses, Unconscionability, Pretrial Matters, Validity of ADR Methods, Types of Contracts, Adhesion Contracts, Inferences & Presumptions, Presumptions, Effects