[Cite as Smith v. Nationwide Mut. Ins. Co., 2018-Ohio-3758.]

IN THE COURT OF APPEALS OF OHIO 

TENTH APPELLATE DISTRICT 

Renard L. Smith, : 

 Plaintiff-Appellant, : 

 No. 17AP-245 

v. : (C.P.C. No. 16CV-9586)

Nationwide Mutual Insurance Company, : (REGULAR CALENDAR) 

 Defendant-Appellee. : 

 

D E C I S I O N 

Rendered on September 18, 2018 

 

On brief: Caryn Groedel & Associates, Co., LPA, Matthew S. 

Grimsley, and Caryn M. Groedel, for appellant. Argued: 

Matthew S. Grimsley. 

On brief: Bricker & Eckler LLP, Quintin F. Lindsmith, and 

Victoria Flinn McCurdy, for appellee. Argued: Quintin F. 

Lindsmith. 

 

APPEAL from the Franklin County Court of Common Pleas 

HORTON, J. 

{¶ 1} Plaintiff-appellant, Renard L. Smith, filed suit against defendant-appellee, 

Nationwide Mutual Insurance Company ("Nationwide"), in the Franklin County Court of 

Common Pleas, alleging claims arising from the parties' unsuccessful efforts to position 

Smith as a Nationwide insurance agent. Nationwide filed a motion to stay the proceedings 

based on an arbitration clause in an agreement between the parties. Smith appeals from 

the trial court's decision granting the motion to stay. For the following reasons, we affirm 

the trial court's decision. 

I. FACTUAL AND PROCEDURAL BACKGROUND 

{¶ 2} On October 6, 2016, Smith filed a complaint in the trial court alleging the 

following facts. In December 2011, representatives from Nationwide recruited Smith to join 
No. 17AP-245 2 

its Agency Capital Builder ("ACB") program, in which he was to receive the training and 

guidance necessary to one day open his own insurance agency. Nationwide's 

representatives told Smith that agents who completed the ACB program earned an annual 

salary of approximately $400,000, with established books of business valued at around $5 

million. Relying on these representations, Smith resigned from his employment and signed 

the ACB agreement. He did not receive a copy of the agreement from Nationwide until three 

months after signing it. (Oct. 6, 2016 Compl. at ¶ 1, 5-14.) 

{¶ 3} The ACB agreement stated that it terminated 26 months after being signed. 

However, a participant who met certain sales and premium quotas before its termination 

would be eligible to participate in a "Successor Program" and receive a $25,000 bonus to 

use towards opening an agency. (Compl. at ¶ 17.) The agreement also stated that Smith 

would receive marketing and sales training during the first three months of the program. 

Smith alleged that he did not receive any such training. (Compl. at ¶ 19.) 

{¶ 4} Smith alleged that Nationwide took a number of actions that interfered with 

his ability to succeed in the program. According to Smith, Nationwide "failed and refused 

to provide [him] with any training or guidance;" forced him to "stop selling insurance" and 

instead work on a business plan for his agency; and fired his sales manager, forcing him to 

work without one for over four months before assigning him to a new one with "no 

experience managing" agents. (Compl. at ¶ 20, 23 & 26.) Smith blamed Nationwide's 

actions for his inability to finish the ACB program within the time period required to qualify 

for a bonus. (Compl. at ¶ 27.) 

{¶ 5} Smith also alleged that after promising to do so, Nationwide refused to sell 

him an "established" book of business, and instead pushed him to buy two "small, 

distressed" books of business that had been serviced by unsuccessful members of the ACB 

program. (Compl. at ¶ 28.) According to Smith, Nationwide vastly overinflated the value of 

those books and, in reliance on those representations, he took out a loan to purchase them. 

Smith also asserted that "established books of business" were actually available, but that 

"Nationwide refused to offer" them to him because they were comprised of Caucasian 

policyholders and he was an African-American. (Compl. at ¶ 29.) Instead, Nationwide 

steered him to "focus" on minority communities. Id.
No. 17AP-245 3 

{¶ 6} On April 2, 2014, Nationwide sent Smith an agreement to memorialize his 

status as an insurance agent and the servicing of the books of business he purchased. The 

agreement was captioned "Advantage Program Independent Contractor/Exclusive Agent 

Master Agreement" (hereinafter "Advantage Agreement"). (Compl. at ¶ 34.) Smith alleges 

that he was told to electronically sign the Advantage Agreement the day it was sent, and 

that he was unable to print or download a copy of it because those features were "disabled." 

Id. Smith asked Nationwide for a copy "to discuss with an attorney prior to signing it," but 

the request was denied. (Compl. at ¶ 36.) Instead, Smith was told that if "he did not sign it, 

he would not own his business" and would be "terminated." Id. Fearing that he would lose 

the business he had grown during the ACB program, Smith signed the Advantage 

Agreement. He did not receive a copy of the 77-page agreement until "several months later," 

and alleged that he did not even know if the agreement that Nationwide eventually provided 

was the same document he signed. (Compl. at ¶ 39.) 

{¶ 7} The Advantage Agreement contained performance goals based on a book of 

business with a value of approximately $725,000. It also required Smith to obtain his Series 

6 and Series 63 licenses within six months, although Smith alleged that he was not informed 

of this requirement before leaving his pre-Nationwide employment. The Advantage 

Agreement characterized Smith as an independent contractor, but Nationwide controlled 

all aspects of his agency's business. According to Smith, Nationwide did not provide him 

with a full list of the policyholders in the books of business that he had purchased until over 

three months after signing the Advantage Agreement. During this time, he learned that over 

a quarter of the policies had been canceled or were being serviced by other agents. In 

addition, Smith failed to obtain the licensure required by the Advantage Agreement because 

he was working 60-70 hours per week to meet the agreement's performance goals. Smith 

alleged that Nationwide discriminated against him based on his race by providing similarlysituated Caucasian agents with books valued at $3 million or more, training, and guidance, 

and did not require them to obtain Series 6 or Series 63 licensure. (Compl. at ¶ 40-52.) 

{¶ 8} Smith alleges that on February 27, 2015, Nationwide terminated his 

"employment" and rescinded his books of business without compensating him for it. Smith 

filed suit against Nationwide on October 6, 2016. (Compl. at ¶ 54.) Based on the foregoing 

allegations, his complaint stated claims against Nationwide for fraudulent inducement, 
No. 17AP-245 4 

breach of contract, unjust enrichment, promissory estoppel, and race discrimination. 

(Compl. at ¶ 55-114.) 

{¶ 9} Citing the Advantage Agreement's arbitration clause, Nationwide filed a 

motion in the trial court on November 11, 2016 to dismiss, or, in the alternative, stay the 

proceedings pending arbitration under R.C. 2711.02. Smith opposed the motion, arguing 

that it was procedurally and substantively unconscionable, procured by fraud, and that 

Nationwide had breached the Advantage Agreement. 

{¶ 10} The trial court sustained Nationwide's motion and stayed Smith's lawsuit 

pending arbitration, citing the stay issued in another case between Nationwide and a former 

agent based on an "identical" arbitration clause. (Jan. 6, 2017 Entry.) 

{¶ 11} Smith appealed and asserts the following assignments of error: 

I. The trial court erred in staying this matter pending 

arbitration because the arbitration clause is both procedurally 

and substantively unconscionable. 

II. The trial court erred in staying this matter pending 

arbitration because the arbitration clause was procured by 

fraud. 

III. The trial court erred in staying this matter pending 

arbitration because the arbitration clause is unenforceable as 

the contract in which it is contained was materially breached. 

II. STANDARD OF REVIEW 

{¶ 12} An abuse of discretion standard applies to appellate review of a trial court's 

decision to stay or dismiss proceedings in favor of arbitration. White v. Equity, Inc., 191 

Ohio App.3d 141, 2010-Ohio-4743 (10th Dist.). However, "the proper standard of review of 

a determination of whether the arbitration agreement is enforceable in light of a claim of 

unconscionability is de novo, but any factual findings of the trial court must be accorded 

appropriate deference." Taylor Bldg. Corp. of Am. v. Benfield, 117 Ohio St.3d 352, 2008-

Ohio-938, ¶ 2. 

III. FIRST ASSIGNMENT OF ERROR 

{¶ 13} Smith's first assignment of error asserts that the trial court erred when it 

granted Nationwide's motion for a stay because the arbitration clause in the Advantage 

Agreement is both procedurally and substantively unconscionable. Smith points to 
No. 17AP-245 5 

language in the agreement that gives Nationwide the right to change or alter the rules of 

arbitration at any time and the "loser pays" provision to demonstrate both procedural and 

substantive unconscionability. He also argues that the arbitration clause is procedurally 

unconscionable because there was no meeting of the minds when he signed the agreement, 

based on his assertion that the essential terms pertaining to the cost of arbitration were 

unknown to him and that he "did not know what arbitration was" at the time. (Appellant's 

Brief at 22.) 

{¶ 14} In response, Nationwide argues that neither the provisions that Smith points 

to nor any undisclosed costs of arbitration demonstrate procedural unconscionability. 

Nationwide also points to a login record that contradicts Smith's assertions regarding the 

limited timeframe allowed to view the agreement and describes him as a "sophisticated 

business owner" who was not in an inferior bargaining position. (Appellee's Brief at 29.) 

{¶ 15} Under R.C. 2711.02(B), a court must stay any proceedings in which an "issue 

involved in the action is referable to arbitration under an agreement in writing for 

arbitration" upon application by one of the parties. Courts recognize that "[a] presumption 

favoring arbitration arises when the claim in dispute falls within the scope of the arbitration 

provision." Williams v. Aetna Fin. Co., 83 Ohio St.3d 464, 471 (1998). "An arbitration 

clause in a contract is generally viewed as an expression that the parties agree to arbitrate 

disagreements within the scope of the arbitration clause, and, with limited exceptions, an 

arbitration clause is to be upheld just as any other provision in a contract should be 

respected." Id.

{¶ 16} One such exception to enforcement of an arbitration clause is 

unconscionability, due to the fact that it is "ground for revocation of a contract." Taylor 

Bldg. Corp. at ¶ 32. "A party raising the issue of unconscionability must demonstrate both 

procedural and substantive unconscionability." Davis v. Beggs, 10th Dist. No. 08AP-432, 

2008-Ohio-6311, ¶ 12, citing Taylor Bldg. Corp. at ¶ 33. 

{¶ 17} The relevant provisions of the Advantage Agreement read as follows: 

All Controversies and Disputes Between the Parties 

Subject to Mandatory Binding Arbitration. Without 

affecting Nationwide's rights under Section 30(E) of this 

Agreement, any controversy, claim or dispute between Agent 

and Nationwide, including, but not limited to, any claims 

arising out of or relating to any aspect of the parties' 
No. 17AP-245 6 

relationship, before, during or after the cancellation of the 

Agreement, whether based upon contract, tort, statute, fraud, 

misrepresentation or any other legal theory, shall be 

adjudicated on an individualized agent by agent basis and not 

on a class or representative basis by mandatory binding 

arbitration pursuant to the Arbitration Procedures for 

Nationwide Agents (the "Arbitration Procedures") and those 

Nationwide Arbitration Rules (the "Nationwide Arbitration 

Rules") set forth on [the] Agent Gateway or such other place 

designated by Nationwide and accessible to Agent. Agent may 

obtain a copy of the Arbitration Procedures and the Nationwide 

Arbitration Rules from Nationwide at any time by submitting a 

written request to Agent's regional sales management or 

agtdisp@nationwide.com. Nationwide shall have the right to 

change, alter, amend or otherwise modify such Arbitration 

Procedures and/or the Nationwide Arbitration Rules at any 

time and from time to time and Agent acknowledges and agrees 

that any such change, alteration, amendment or limitation 

shall become effective on the date published by Nationwide. 

* * * 

Attorneys' Fees. In the event that Nationwide is successful in 

any arbitration, suit or proceeding brought or instituted to 

enforce any of the provisions of this Agreement or any SubAgreement, or on account of any damages sustained by 

Nationwide by reason of a violation of the terms or provisions 

of this Agreement or any Sub-Agreement, Agent agrees to pay 

to Nationwide all reasonable attorneys' fees and expenses 

incurred in the prosecution or defense of such action or 

proceeding, unless prohibited or limited by applicable law. 

(Oct. 6, 2016 Compl., Ex. 2 at ¶ 35-36.) 

{¶ 18} We first consider Smith's arguments concerning procedural 

unconscionability, guided by the following principles: 

In determining whether an arbitration provision is 

procedurally unconscionable, courts consider the 

circumstances surrounding the contracting parties' bargaining, 

such as the parties' age, education, intelligence, and business 

acumen and experience. Additional considerations include 

who drafted the contract, whether alterations to the contract 

were possible, whether the terms were explained to the weaker 

party, and whether the party challenging the provision was 

represented by counsel. The crucial question is whether each 
No. 17AP-245 7 

party to the contract had a reasonable opportunity to 

understand the terms of the contract. 

(Citations omitted.) Tami Shearer, DVM v. VCA Antech, Inc., 10th Dist. No. 11AP-44, 2011-

Ohio-5171, ¶ 24. 

{¶ 19} As an initial matter, we consider Smith's contention that several portions of 

the arbitration provision are "both procedurally and substantively unconscionable." 

(Emphasis sic.) (Appellant's Brief at 17.) Smith first points to the provision allowing 

Nationwide "the right to change, alter, amend or otherwise modify [the] Arbitration 

Procedures and/or the Nationwide Arbitration Rules at any time." Id. Citing Arnold v. 

Burger King, 8th Dist. No. 101465, 2015-Ohio-4485, Smith argues that this provision is 

procedurally unconscionable because it allowed Nationwide to make alterations to the 

contract. Id.

{¶ 20} However, Arnold held only that a similar provision was substantively 

unconscionable. Id. at ¶ 97 & 104 (finding an arbitration provision substantively 

unconscionable where an employee "would not, at the time of signing, be able to identify 

the applicable rules and regulations or know what terms and conditions applied if an 

arbitration was filed since the rules could be revised at any time without notice"). In a 

footnoted observation, the Eighth District Court of Appeals stated that the provision "may 

also be considered [to possess] an element of procedural unconscionability as it involves 

the acquiescence to future, unknown, and uncontrollable terms, subject to change without 

notice at any time." Id. at ¶ 97, fn. 10. We respectfully disagree with this characterization. 

Procedural unconscionability concerns "whether alterations to the contract were possible" 

during the formation of the contract containing the arbitration provision. Tami Shearer, 

DVM at ¶ 24. See also Corl v. Thomas & King, 10th Dist. No. 05AP-1128, 2006-Ohio-2956, 

¶ 31 (noting that, unlike substantive unconscionability, "procedural unconscionability 

concerns the formation of the agreement"). In contrast, "the right to change, alter, amend 

or otherwise modify [the] Arbitration Procedures and/or the Nationwide Arbitration Rules 

at any time" is a substantive right that Nationwide may invoke during future disputeresolution proceedings between the parties, not one that it could invoke during the 

formation of the Advantage Agreement. Accordingly, this provision does not support 

Smith's argument for procedural unconscionability. 
No. 17AP-245 8 

{¶ 21} Smith also argues that the attorneys' fee provision is both procedurally and 

substantively unconscionable. However, in both cases cited to support this argument, the 

provisions were found to be procedurally unconscionable because of the circumstances 

surrounding the formation of the contracts, and the "loser pay" provisions were evidence 

only of substantive unconscionability. DeVito v. Autos Direct Online, Inc., 8th Dist. No. 

100831, 2015-Ohio-3336, ¶ 32 (en banc) (finding a "loser-pay provision" in consumer 

contract procedurally unconscionable because it was "adhesive," with "little meaningful, 

face-to-face opportunity for understanding, negotiating, or altering the terms"); Small v. 

HCF of Perrysburg, Inc., 159 Ohio App.3d 66, 2004-Ohio-5757, ¶ 28 (6th Dist.) (finding 

procedural unconscionability where a provision was signed by a widow at the insistence of 

a nursing care center where her husband sustained injuries leading to his death, as she 

signed while "under a great deal of stress" with no explanation of the agreement or 

opportunity to consult an attorney). In both cases, procedural unconscionability did not 

arise from the fee-shifting character of the provision. Again, this is a substantive right that 

is not evidence of procedural unconscionability. 

{¶ 22} Smith also argues that the arbitration provision is procedurally 

unconscionable because it "is devoid of any information pertaining to the cost of 

arbitration," which he believes is an essential term required for the parties to reach a 

meeting of the minds. (Appellant's Brief at 21.) Smith cites his affidavit, in which he states: 

"At the time I signed the Advantage Agreement, Nationwide did not provide me with a 

description of the cost of arbitration, and I did not know that there would be a cost." 

(Nov. 21, 2016 Pl.'s Memo. Contra Def.'s Mot. to Dismiss or Stay Pending Arbitration, Ex. 1 

at ¶ 12.) 

{¶ 23} In Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79, 92 (2000), the 

United States Supreme Court held that where "a party seeks to invalidate an arbitration 

agreement on the ground that arbitration would be prohibitively expensive, that party bears 

the burden of showing the likelihood of incurring such costs." Without any record 

demonstrating how the party resisting arbitration would be "saddled with prohibitive 

costs," the mere fact that there were undisclosed costs "is too speculative to justify the 

invalidation of an arbitration agreement." Id. at 91. Here, as well, Smith points to no data 

in the record concerning costs. Furthermore, Smith does not contend that he would not 
No. 17AP-245 9 

have entered into the agreement if the cost of arbitration had been known to him at the 

time he signed it. See Corl at ¶ 33 (rejecting costs as evidence of unconscionability where 

appellant cited only the filing fee, and no other evidence "that the costs of arbitration would 

be so substantial as to deter her from bringing her claim or that arbitration is an 

unreasonable alternative to litigation in a judicial forum"). For these reasons, Smith's 

assertion that this term was unknown to him is insufficient to demonstrate that he and 

Nationwide failed to reach a meeting of the minds. 

{¶ 24} Smith also points to the "difference in bargaining power" between himself 

and Nationwide, which he characterizes as "quite stark." (Appellant's Brief at 22.) Smith 

claims that he had only two options when presented with the Advantage Agreement: sign it 

or "be terminated and forfeit the book of business" he had built. Id. He also claims that he 

"did not know what arbitration was at the time he signed the Advantage Agreement." Id.

{¶ 25} Undoubtedly, some difference in bargaining power between Smith and 

Nationwide exists. However, Smith does not argue that the Advantage Agreement is a 

contract of adhesion.1 Nor is it a consumer contract, which "necessarily engenders more 

reservations than an arbitration clause in a different setting, such as in a collective 

bargaining agreement, a commercial contract between two businesses, or a brokerage 

agreement." Williams at 472. The Advantage Agreement is more akin to a commercial 

contract, as its purpose is to create an insurance agency business for the independent 

contractor. (Oct. 6, 2016 Compl., Ex. 2 at 1.) Furthermore, Smith had previously contracted 

with Nationwide when he entered into the ACB program. He worked with Nationwide for 

over two years before it presented him with the offer to enter the Advantage Program and 

become an independent agent. Given this familiarity with Nationwide and Smith's 

"business acumen and experience" in dealing with the company, we cannot conclude that 

the difference in bargaining power between the parties was great enough to support a 

finding of procedural unconscionability. Tami Shearer, DVM at ¶ 24. 

 

1 Smith's reply brief asserts that the Advantage Agreement has a "one-sided, adhesive nature," and suggests 

for the first time that it is one of adhesion. (Reply Brief at 18.) An appellant may not raise a new argument 

in a reply for the first time. In re Fuel Adjustment Clauses for Columbus S. Power Co., 140 Ohio St.3d 352, 

2014-Ohio-3764, ¶ 37. 

 
No. 17AP-245 10 

{¶ 26} In his final argument addressing procedural unconscionability, Smith asserts 

that Nationwide presented him with the 70-page Advantage Agreement on April 2, 2014 

and told him he had to sign it the same day. (Appellant's Brief at 23.) In response, 

Nationwide cites to an exhibit it presented in the trial court of a time-stamped log showing 

that Smith was sent an invitation to view the documents on March 28, 2014, but did not 

view them until April 2, 2014. On that day, he viewed them in the late morning, then again 

nine hours later before signing them. (Appellee's Brief at 26-28.) In reply, Smith asserts 

that his "recollection is different" than the log and points to his inability to print the 

documents out. (Reply Brief at 12.) 

{¶ 27} Regardless of whether Smith was able to physically print out the documents, 

he had five days to review the contents of the Advantage Agreement, as well as all of the 

arbitration rules and procedures. "A party entering a contract has a responsibility to learn 

the terms of the contract prior to agreeing to its terms." Estate of Brewer v. Dowell & Jones, 

Inc., 8th Dist. No. 80563, 2002-Ohio-3440, ¶ 13. While these circumstances were perhaps 

not ideal, they do not amount to a level of procedural unconscionability that would justify 

not enforcing the arbitration clause that Smith had the opportunity to read and understand 

before signing it. Accordingly, we reject the argument that the circumstances of the 

formation of the arbitration clause in the Advantage Agreement were procedurally 

unconscionable. 

{¶ 28} Because Smith cannot demonstrate that the arbitration clause was 

procedurally unconscionable, we need not address the issue of substantive 

unconscionability, as he must show both to demonstrate the overall unconscionability of 

the clause. Taylor Bldg. Corp. at ¶ 33. "The failure to demonstrate either type of 

unconscionability alleviates the need to address the other." Tami Shearer, DVM at ¶ 29. 

See also Taylor Bldg. Corp. at ¶ 52 (stating that "[t]he conclusion that the arbitration clause 

here is not procedurally unconscionable defeats the [plaintiffs'] contention that the 

arbitration clause is unenforceable due to unconscionability"). Because the arbitration 

clause in the Advantage Agreement was not unconscionable, the trial court did not err by 

granting Nationwide's request for a stay pending arbitration. Accordingly, the first 

assignment of error is overruled. 
No. 17AP-245 11 

IV. SECOND ASSIGNMENT OF ERROR 

{¶ 29} In his second assignment of error, Smith argues that the trial court erred by 

granting the stay pending arbitration because the Advantage Agreement was procured by 

fraud. Because a court must determine that a contract is valid and enforceable before 

sending it to arbitration, Smith argues that the trial court erred by not analyzing his 

allegations of fraud. (Appellant's Brief at 27-28.) 

{¶ 30} "To defeat a motion for stay brought pursuant to R.C. 2711.02 a party must 

demonstrate that the arbitration provision itself in the contract at issue, and not merely the 

contract in general, was fraudulently induced." ABM Farms, Inc. v. Woods, 81 Ohio St.3d 

498 (1998), syllabus. "Because the arbitration clause is a separate entity, an alleged failure 

of the contract in which it is contained does not affect the arbitration provision itself." Battle 

v. Bill Swad Chevrolet, 140 Ohio App.3d 185, 189 (10th Dist.2000), citing ABM Farms, Inc. 

We have previously held that "it is unavailing for a party to argue that 'an R.C. 2711.02 

motion for stay can be defeated by an assertion that the contract in general was fraudulently 

induced and by requesting rescission thereof.' " Gordon v. OM Fin. Life Ins. Co., 10th Dist. 

No. 08AP-480, 2009-Ohio-814, ¶ 9, quoting Battle at 190. 

{¶ 31} As set forth in the complaint, Smith's fraud allegations only concern the 

Advantage Agreement as a whole, not the arbitration provision. He alleges that the 

Advantage Agreement as a whole "was procured by fraud." (Compl. at ¶ 56.) In count one, 

where Smith details his fraud claim, he alleges that Nationwide made multiple false 

representations to induce him to join the ACB program and the Advantage Program and to 

sign the agreements, including misrepresenting the value of the book of business he was 

required to buy, his responsibilities under the Advantage Agreement, and his potential 

income from participating in the program. (Compl. at ¶ 59-68.) However, the fraud 

allegations do not even mention the arbitration agreement. Under ABM Farms, Inc. and 

Battle, these allegations do not defeat the validity of the arbitration provision in the 

Advantage Agreement. Accordingly, the trial court did not err by granting the stay pending 

arbitration, and the second assignment of error is overruled. 

V. Third Assignment of Error 

{¶ 32} In Smith's third assignment of error, he argues that the trial court should not 

have granted a stay pending arbitration because Nationwide's breach of the Advantage 
No. 17AP-245 12 

Agreement rendered it unenforceable. Citing Waste Mgt., Inc. v. Danis Indus. Corp., 257 

F.Supp.2d 1076 (S.D.Ohio 2003) and Midwest Payment Sys., Inc. v. Citibank Fed. Savs. 

Bank, 801 F.Supp. 9 (S.D.Ohio 1992), Smith claims that he is not bound by the arbitration 

provision because Nationwide materially breached the Advantage Agreement by failing to 

comply with a number of its obligations under the contract. (Compl. at ¶ 28-30.) 

{¶ 33} Neither Waste Mgt. nor Midwest Payment Sys., Inc. addressed a dispute 

over the arbitrability of a contract or the enforcement of an arbitration provision. Both cases 

concerned contract disputes resolved by trial courts on summary judgment. No party 

sought or resisted arbitration in either case. Waste Mgt. at 1088-89 (sustaining in part and 

overruling in part a motion for partial summary judgment, ruling that the defendant 

materially breached its obligation to indemnify the plaintiff for any liability arising from 

sale of a landfill); Midwest Payment Sys., Inc. at 13 (ruling that the defendant repudiated 

a contract between a bank it had acquired and the plaintiff by transferring data processing 

services to another vendor). Neither case supports Smith's argument, which assumes that 

a trial court must make a factual finding concerning a party's allegation of breach before 

issuing a stay for the arbitration of their dispute. Simply put, litigating the issue of breach 

to determine an agreement's arbitrability would defeat the purpose of arbitration, which is 

"to avoid needless and expensive litigation." Springfield v. Walker, 42 Ohio St. 543, 546 

(1885). 

{¶ 34} The allegation that Nationwide materially breached the Advantage 

Agreement is a "controversy, claim or dispute between [Smith] and Nationwide * * * based 

upon contract" that must "be adjudicated * * * by mandatory binding arbitration," not by 

the trial court. (Oct. 6, 2016 Compl., Ex. 2 at ¶ 35.) Smith is free to argue in arbitration that 

a proposition of contract law set forth in Waste Mgt. or Midwest Payment Sys., Inc.

controls, and he may urge the arbitrator to apply the principle to the parties' dispute. 

However, the trial court did not err by declining to do so. Accordingly, the third assignment 

of error is overruled. 

VI. CONCLUSION 

{¶ 35} Based on our de novo review of the arbitration clause in the parties' 

agreement, we conclude that it was not unconscionable. Furthermore, Smith's claims of 

fraud and material breach of the agreement do not defeat Nationwide's right to have the 
No. 17AP-245 13 

arbitration clause enforced. For these reasons, the trial court did not abuse its discretion 

when it granted Nationwide's motion to stay pending arbitration and refer Smith's claims 

to arbitration. Accordingly, Smith's three assignments of error are overruled, and the 

judgment of the Franklin County Court of Common Pleas is affirmed. 

Judgment affirmed. 

KLATT and DORRIAN, JJ., concur. 

_________________