Newirth v. Aegis Senior Communities, LLC, No. 17-17227 (9th Cir. 2019)
Annotate this CaseThe Ninth Circuit affirmed the district court's order denying Aegis' motion to compel arbitration in a class action alleging that Aegis engaged in a scheme to defraud seniors. Applying the federal law standard for waiver, the panel affirmed and held that the district court did not err in concluding that Aegis waived its right to arbitrate. In this case, Aegis knew of its right to compel arbitration, but made an intentional decision not to compel arbitration in order to take advantage of the judicial forum. Furthermore, plaintiffs incurred costs as a direct result.
Court Description: Arbitration. The panel affirmed the district court’s order denying Aegis Senior Communities, LLC’s motion to compel arbitration in a class action alleging that Aegis engaged in a scheme to defraud seniors. The panel applied a federal law standard for determining whether the arbitration agreement was waived. Under federal law, a party seeking to prove that the right to compel * The Honorable Donald W. Molloy, United States District Judge for the District of Montana, sitting by designation. NEWIRTH V. AEGIS SENIOR COMMUNITIES 3 arbitration has been waived must carry the burden of demonstrating: (1) knowledge of an existing right to compel arbitration; (2) intentional acts inconsistent with that existing right; and (3) prejudice to the person opposing arbitration from such inconsistent acts. Fisher v. A.G. Becker Paribas Inc., 791 F.2d 691, 694 (9th Cir. 1986). The panel held that because Aegis knew of its right to compel arbitration, but made an intentional decision not to compel arbitration in order to take advantage of the judicial forum, and because the plaintiffs were prejudiced by incurring costs in defending against Aegis’s motion to dismiss plaintiffs’ complaint, the district court did not err in concluding that Aegis waived its right to arbitrate.
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