IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

September 24, 2013 Session

JONATHAN BURKE SKELTON v. FREESE CONSTRUCTION

COMPANY, INC.

Direct Appeal from the Chancery Court for Rutherford County

No. 90031CV Robert E. Corlew, III, Chancellor

No. M2012-01935-COA-R3-CV - Filed December 9, 2013

This appeal involves the enforceability of an arbitration agreement between the parties. The

trial court found the agreement was not unconscionable, but that the defendant had waived

its right to enforce the agreement. We reverse the decision of the chancery court and we

remand for entry of an order compelling arbitration.

Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Chancery Court Reversed

and Remanded

ALAN E.HIGHERS,P.J.,W.S., delivered the opinion of the Court, in which DAVID R. FARMER,

J., joined, and HOLLY M. KIRBY, J., concurred in result only.

J. Timothy Crenshaw, Nashville, Tennessee, for the appellant, Freese Construction Company,

Inc.

Timothy H. Nichols, Nashville, Tennessee, for the appellee, Jonathan Burke Skelton
OPINION

I. FACTS & PROCEDURAL HISTORY

This appeal involves the enforceability of an arbitration agreement between the

parties. The defendant, Freese Construction Company, Inc. (“Defendant” or “Freese”), acted

as the general contractor for construction of the Murfreesboro Medical Clinic. In 2008,

Outdoors Unlimited, LLC entered into a Subcontract Agreement with Freese to provide

landscaping and irrigation improvements for the project.

The Subcontract Agreement identified “Outdoors Unlimited, LLC” as the

“Subcontractor” and Freese as the “Contractor[,]” and it included the following arbitration

clause:

Notwithstanding any dispute clauses contained in the General Conditions or

the contract with the Owner, the Subcontractor agrees that in the event of a

dispute between the Subcontractor and Contractor, the dispute may be

submitted to arbitration at the sole option of Contractor. Arbitration shall be

binding and held in accordance with rules and procedures to be agreed by the

parties. If no agreement can be reached within twenty (20) days of demand,

the arbitration will be held in accordance with the Construction Industry Rules

of the American Arbitration Association which are in effect at the time the

demand for arbitration is filed. Once Contractor has chosen arbitration and so

advised Subcontractor in writing, should either party refuse or neglect to

appear or participate in arbitration proceedings, the arbitrators are empowered

to decide the controversy in accordance with whatever evidence is presented.

The arbitrators are authorized to award any party or parties such sums as such

arbitrators shall deem proper for the time, expense and trouble of arbitration,

including attorneys’ fees and other litigation expenses. In the event of a

dispute over the arbitrability of a dispute, the arbitrator has exclusive

jurisdiction to decide the arbitrability of the dispute.

In the event of litigation or arbitration to enforce any of the terms and

provisions of this Agreement, the prevailing party shall be entitled to receive

all reasonable litigation expenses, including attorneys’ fees, incurred therein

(including fees and expenses for appeals) together with the costs and

disbursements. In no event shall said attorneys’ fees be based on a

contingency fee bases. Attorneys’ fees shall be computed on an hourly basis.

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A dispute arose regarding the sufficiency of work performed by Outdoors Unlimited,

LLC and payment for that work. On January 12, 2009,Jonathan Burke Skelton, individually,

filed a “Verified Complaint to Enforce Mechanics’ and Materialmen’s Lien” (“Complaint”)

against Freese, among others. The Complaint identified Mr. Skelton as “the owner of

Outdoors Unlimited . . . , which is a sole proprietorship[.]” In the Complaint, Mr. Skelton

asserted numerous claims against Freese, and he sought, among other things, a judgment of

$144,916.98.

Before any of the defendants filed an answer, Mr. Skelton filed an Amended

Complaint, on February 20, 2009, to add a defendant and to replace his “mechanics’ and

materialmen’s lien” claim with a “claim against payment bond.”

On June 2, 2009, Freese filed a “Motion to Dismiss Jonathan Burke Skelton’s

Complaint or, in the Alternative, for Judgment on the Pleadings[.]” Freese argued that Mr.

Skelton, who was not a party to the Subcontract Agreement, lacked standing to assert claims

against Freese. Freese’s motion was scheduled to be heard on August 12, 2009. However,

according to the affidavit testimony of Freese’s attorney, J. Timothy Crenshaw, when the

case was called at the August 12, 2009 hearing, Mr. Skelton’s counsel requested that he be

allowed to amend his complaint a second time. Freese did not oppose the motion, and the

trial court granted Mr. Skelton ten days in which to file an amended complaint and it stated

that Freese could then re-set its motion to dismiss.

Mr. Skelton, however, did not file an amended complaint within ten days of the

hearing. Counsel for the various defendants lodged a proposed order with the trial court in

October 2009, which the trial court entered on November 5, 2009. The Order directed Mr.

Skelton to file an amended complaint within ten days, and it stated that Freese, thereafter,

could re-set its motion to dismiss for hearing. Mr. Skelton, however, again failed to file an

amended complaint.

On January 29, 2010, Mr. Skelton’s counsel filed a Motion to Withdraw, which was

scheduled to be heard on March 4, 2010. It appears that no action was taken, and Mr.

Skelton’s counsel filed a second Motion to Withdraw on September 2, 2010. The second

motion was heard on September 17, 2010, after which the trial court entered an Order to

Withdraw, directing Mr. Skelton to secure replacement counsel within thirty days.

It appears that no further action was taken in the case until March 29, 2011, when

Freese filed a Notice of Hearing scheduling its previously-filed Motion to Dismiss for a

hearing on April 7, 2011. Along with its Notice of Hearing, Freese also filed a

“Supplemental Memorandum in Support of Motion to Dismiss” raising Mr. Skelton’s failure

to comply with the November 5, 2009 order directing the filing of an amended complaint and

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his failure to prosecute the suit as additional grounds for dismissal.

On April 6, 2011, one day before Freese’s Motion to Dismiss was scheduled to be

heard, Timothy H. Nichols filed a Notice of Appearance as Mr. Skelton’s counsel. That

same day, Mr. Skelton filed a Response in opposition to Freese’s Motion to Dismiss as well

as a Second Amended Complaint naming “Jonathan Burke Skelton d/b/a Outdoors

Unlimited, LLC and d/b/a Outdoors Unlimited” as the plaintiff. Attached to his Second

Amended Complaint was the Affidavit of Jonathan Burke Skelton, which stated in part:

Prior to January 15, 2008, I filed papers with the Tennessee Secretary

of State to form a single member Tennessee limited liability company called

“Outdoors Unlimited, LLC,” with myself as a sole member of that entity. As

of January 15, 2008, I believed that Outdoors Unlimited, LLC had, in fact,

been successfully formed. However, unbeknownst to me, issues with the

paperwork submitted by me to form Outdoors Unlimited, LLC caused the

Secretary of State to reject the papers submitted to form Outdoors Unlimited,

LLC.

Operating under the belief that I had successfully formed “Outdoors

Unlimited, LLC”, on January 15, 2008, I signed a subcontract . . . with Freese

Construction to furnish labor and materials to construct the landscaping and

irrigation improvements on a construction project known as the Murfreesboro

Medical Clinic . . . on which Freese was the general contractor.

Following execution of the Subcontract and performance of work on the

Project, I learned that I had not, in fact, successfully formed “Outdoors

Unlimited, LLC”. Thereafter, I did ultimately succeed in forming an entity

named “Outdoors Unlimited, LLC”.

In his affidavit, Mr. Skelton expressed dissatisfaction with his former attorney and he

indicated that he was unaware that the former attorney had failed to comply with the

November 5, 2009 order.

Following a hearing on April 7, 2011, the trial court denied Freese’s Motion to

Dismiss. However, it found that Mr. Skelton’s Second Amended Complaint, filed on April

6, 2011, was “of no effect” because it failed to comply with Rule 15 of the Tennessee Rules

of Civil Procedure. On May 10, 2011, an “Agreed Order Allowing Second Amended

Complaint” was entered, and on May 19, 2011, Mr. Skelton filed a second “Second Amended

Complaint,” again naming “Jonathan Burke Skelton d/b/a Outdoors Unlimited, LLC and

d/b/a Outdoors Unlimited” (“Mr. Skelton”) as the plaintiff.

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On July 15, 2011, Mr. Skelton filed a Motion for Default Judgment against Freese

based upon its failure to respond to his May 2011 Second Amended Complaint. On July 17,

2011, Freese answered the Second Amended Complaint generally denying the allegations

against it and setting forth seventeen affirmative defenses. The fifteenth affirmative defense

stated:

Freese asserts that the Subcontract provides that disputes between

Subcontractor and Freese may be submitted to arbitration at the sole option of

Freese and Freese expressly reserves the right to require arbitration of this

dispute pursuant to the terms of the Subcontract.

On July 28, 2011, Mr. Skelton struck his Motion for Default Judgment. According

to the Affidavit testimony of Freese’s counsel, during the months after Freese filed its July

2011 answer to Mr. Skelton’s May 2011 Second Amended Complaint, the parties’ counsel

“had several phone conversations . . . regarding the arbitration provision and the possibility

of the parties agreeing to arbitrate without the necessity of . . . filing a motion to compel

arbitration[.]” However, Mr. Skelton would not agree to submit the claim to arbitration, and

in November 2011, he filed a “Motion to Set and for Scheduling Order” to be heard on

December 12, 2011. By agreement of the parties, the hearing was rescheduled for December

22, 2011; however, the hearing did not occur and Mr. Skelton struck his Motion to Set and

for Scheduling Order on December 28 noting that it would be “re-filed if it [could not] be

resolved by agreement.” According to the Affidavit testimony of Freese’s counsel, after Mr.

Skelton filed his November 2011 Motion to Set and for Scheduling Order, Freese’s counsel

informed Mr. Skelton’s counsel of his intent to file a motion to compel arbitration and the

parties’ counsel “communicated on several occasions[between November 2011 and February

2012] in regard to the filing and scheduling of the hearing on that motion.”

1

On February 15, 2012, Freese filed a “Motion to Compel Arbitration and to Stay Case

Pending Arbitration” citing the Subcontract Agreement. Mr. Skelton responded in opposition

to the motion arguing that Freese had waived its right to arbitrate by participating in the

litigation. Alternatively, Mr. Skelton contended that the arbitration clause was

unconscionable because it was contained within an adhesion contract and that enforcement

of the clause would, likewise, be unconscionable because of the delay in seeking arbitration

and the possibility of requiring Mr. Skelton to fund both litigation and arbitration expenses.

Along with his response, Mr. Skelton filed his Affidavit which provided in part:

The Affidavit of Mr. Skelton’s attorney confirms that these discussions took place; however, Mr. 1

Skelton’s counsel emphasizes that “[a]t no time did the parties agree to arbitrate the dispute[.]”

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During the course of and as a result of this litigation, my financial condition has

worsened. I have incurred substantial legal fees and other litigation expenses during the past

24 months that this lawsuit has been pending. I am now working two jobs to support myself

and my family.

. . . .

The practical effect of having to pay the fees and costs of arbitration

could be to preclude me from obtaining a decision on the merits of my case.

I am currently unable to pay any fees or costs associated with an arbitration

that might be ordered in this case.

Following a hearing on March 5, 2012, the trial court entered an order on March 27,

2012, denying Freese’s Motion to Compel Arbitration. The trial court found that the

arbitration clause was not unconscionable, but that Freese had waived its right to enforce

such based upon its participation in the litigation process, namely its filing of an Answer to

Mr. Skelton’s Second Amended Complaint and its responses to Mr. Skelton’s discovery

requests. Freese filed a Motion to Alter or Amend, which, after a hearing on June 13, 2012,

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the trial court denied. Freese timely appealed to this Court.

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II. ISSUES PRESENTED

On appeal, Freese challenges the trial court’s refusal to order arbitration of the

dispute. In contrast, Mr. Skelton argues that the trial court correctly refused to order

4

arbitration because Freese waived its right to arbitration, or alternatively, because the

arbitration clause is unconscionable. For the following reasons, we reverse the decision of

the chancery court and we remand for entry of an order compelling arbitration.

A transcript of the trial court’s June 13, 2012 ruling on Freese’s Motion to Alter or Amend is 2

included in the record before us. 

The trial court inadvertently entered conflicting orders with respect to the denial of Freese’s Motion 3

to Alter or Amend. However, the trial court set aside the conflicting orders and it entered a new order

denying the motion to alter or amend on August 3, 2012. 

In his appellate brief, Mr. Skelton lists as an issue for review, “whether Freese’s delay in filing its

4

motion to compel arbitration violates its implied duty of good faith and fair dealing.” We decline to address

this issue, however, because it appears that it is raised for the first time on appeal. Barnes v. Barnes, 193

S.W.3d 495, 501 (Tenn. 2006). 

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III. DISCUSSION

A. Waiver

As stated above, the trial court found that Freese had waived its right to enforce the

arbitration clause based upon its participation in the litigation process, namely its filing of

an Answer to Mr. Skelton’s Second Amended Complaint and its responses to Mr. Skelton’s

discovery requests.

“‘[A]n agreement to arbitrate may be waived by the actions of a party which are

completely inconsistent with any reliance thereon.’” Wilson v. Battle Creek Milling &

Supply, Inc., No. M2007-02830-COA-R3-CV, 2008 WL 5330498, at *3 (Tenn. Ct. App.

Dec. 19, 2008) (quoting J. C. Bradford & Co., L.L.C. v. Kitchen, No. M2002-00576-COAR3-CV, 2003 WL 21077643, at *3 (Tenn. Ct. App. May 14, 2003)). As recently explained

by this Court,

Waiver “may be proved by express declaration; or by acts and declarations

manifesting an intent and purpose not to claim the supposed advantage; or by

a course of acts and conduct.” Chattem, [Inc. v. Provident Life & Acc. Ins.

Co.,] 676 S.W.2d [953,] 955 [Tenn. 1984]. Stated another way, “waiver is

proven by a clear, unequivocal and decisive act of the party, showing a

purpose to forgo the right or benefit which is waived.” E & A Ne. Ltd. P’ship

[v. Music City Record Dist., Inc., No. M2005-01207-COA-R3-CV,] 2007 WL

858779, at *7 [Tenn. Ct. App. Mar. 21, 2007]. “The law will not presume a

waiver, and the party claiming the waiver has the burden of proving it by a

preponderance of the evidence.” Jenkins Subway, Inc. v. Jones, 990 S.W.2d

713, 722 (Tenn. Ct. App. 1998). Generally, whether a waiver of a contractual

provision has occurred in a given factual setting is a question of fact[.] Gaston

v. Tenn. Farmers Mut. Ins. Co., 120 S.W.3d 815, 819 (Tenn. 2003).

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GuestHouse Intern., 330 S.W.3d at 202. “To the extent that the issue of waiver involves

questions of fact, our review is de novo with a presumption that the judgment is correct.”

J.C. Bradford & Co., LLC v. Kitchen, No. M2002-00576-COA-R3-CV, 2003 WL

21077643, at *2 (Tenn. Ct. App. May 14, 2003) perm. app. denied (Tenn. Dec. 15, 2003)

(citing Tenn. R. Civ. P. 13(d)).

In Guesthouse, this Court cited with approval JOSEPH M. PERILLO & HELEN 5

HADJIYANNAKIS BENDER, CORBIN ON CONTRACTS § 11:29(c), which explained that “contractual

rights are not waivable, conditions are.” 330 S.W.3d at 201.

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In finding waiver by Freese through its course of conduct, the trial court noted that

Freese “has participated in the litigation for a substantial period” and “has filed a small

number of pleadings and has pursued hearings, and has sought the decision of the Court with

regard to preliminary issues on more than one occasion.” Specifically, the court cited

Freese’s filing an answer to the Second Amended Complaint and its responses to Mr.

Skelton’s requests for production of documents and interrogatories. In addition to Freese’s

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answer and discovery responses, Mr. Skelton points out that Freese filed a Motion to

Dismiss, and it argues that Freese waived its right to arbitrate the dispute by “wait[ing]

approximately [three] years after the commencement of litigation before filing its Motion to

Compel Arbitration.”

Mr. Skelton is correct that the lawsuit was commenced in January 2009 and Freese

did not file its Motion to Compel Arbitration for over three years–until February 2012.

However, given the unique procedural history of this case, the time lapse is not dispositive

of the waiver issue. Mr. Skelton’s 2009 Complaint was brought in his own name, and Freese

moved to dismiss the case alleging that Mr. Skelton lacked standing because he was not a

party to the Subcontract Agreement. Freese’s motion was scheduled for a hearing in August

2009, but when the case was called at that hearing, Mr. Skelton’s counsel requested that he

be allowed to amend his complaint. Freese consented, and Mr. Skelton was given ten days

in which to file an amended complaint. When Mr. Skelton failed to do so, Freese obtained

an order requiring Mr. Skelton to amend his complaint within ten days of the November 2009

order. Mr. Skelton, again, failed to file an amended complaint.

Nothing happened in the case until January 2010 when Mr. Skelton’s counsel filed a

Motion to Withdraw. It appears that no action was taken on the motion, however, and his

counsel filed a second Motion to Withdraw nine months later, in September 2010. In

September 2010, Mr. Skelton’s counsel was allowed to withdraw, and Mr. Skelton was

directed to secure replacement counsel within thirty days; Mr. Skelton failed to do so.

Freese, then, in March 2011, took the initiative to resolve the stalled matter by rescheduling its Motion to Dismiss for hearing, raising as additional grounds for dismissal, Mr.

Skelton’s failure to amend his complaint as ordered and his failure to prosecute the suit. One

day before Freese’s Motion to Dismiss was scheduled to be heard, Mr. Skelton’s current

counsel appeared in the case. That same day, Mr. Skelton filed a response to the Motion to

Dismiss and a Second Amended Complaint naming “Jonathan Burke Skelton d/b/a Outdoors

Freese’s responses to Mr. Skelton’s requests for production of documents and interrogatories are 6

not included in the record on appeal. However, the trial court’s March 8, 2012 Memorandum Opinion states,

“The file reflects that [Mr. Skelton] submitted written interrogatories to [Freese], which [Freese] answered

and served on [Mr. Skelton] on or about August 30, 2011.” 

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Unlimited, LLC and d/b/a Outdoors Unlimited” as the plaintiff.

It appears that no further action was taken in the case until March 29, 2011, when

Freese filed a Notice of Hearing scheduling its previously-filed Motion to Dismiss for a

hearing on April 7, 2011. Along with its Notice of Hearing, Freese also filed a

“Supplemental Memorandum in Support of Motion to Dismiss” raising Mr. Skelton’s failure

to comply with the November 5, 2009 order directing the filing of an amended complaint and

his failure to prosecute the suit as additional grounds for dismissal.

On April 6, 2011, one day before Freese’s Motion to Dismiss was scheduled to be

heard, Timothy H. Nichols filed a Notice of Appearance as Mr. Skelton’s counsel. That

same day, Mr. Skelton filed a Response in opposition to Freese’s Motion to Dismiss as well

as a Second Amended Complaint naming “Jonathan Burke Skelton d/b/a Outdoors

Unlimited, LLC and d/b/a Outdoors Unlimited” as the plaintiff. Along with these

documents, Mr. Skelton filed an affidavit explaining, for the first time, why the Complaint

had not been filed by Outdoors Unlimited, LLC. Mr. Skelton’s April 2011 Second Amended

Complaint, however, wasfound to be ineffective, and Mr. Skelton ultimately filed his Second

Amended Complaint naming “Jonathan Burke Skelton d/b/a Outdoors Unlimited, LLC and

d/b/a Outdoors Unlimited” as the plaintiff in May 2011.

Only two months later, Freese answered the Second Amended Complaint, in which

it “expressly reserve[d]” the right to arbitrate the dispute pursuant to the Subcontract

Agreement. In the ensuing months, the parties’ counsel engaged in discussions regarding the

possibility of amicably submitting the dispute to arbitration. When it became apparent that

an agreement could not be reached, Freese’s counsel notified Mr. Skelton’s counsel of his

intent to file a motion to compel, which was filed in February 2012.

The evidence in this case belies Mr. Skelton’s assertion that Freese wrongfully

delayed the filing of its Motion to Compel Arbitration. Rather, the evidence supports the trial

court’s finding that “the delay in proceeding within the case has been occasioned in

substantial part by [Mr. Skelton.]” Mr. Skelton did not amend his Complaint to name

“Jonathan Burke Skelton d/b/a Outdoors Unlimited, LLC and d/b/a Outdoors Unlimited” as

the party plaintiff until April 2011–over two years after the initial Complaint was filed. In

contrast, two months after the Second Amended Complaint was filed, Freese reserved its

right to arbitrate the dispute, and shortly after it discovered that Mr. Skelton was not

amenable to arbitration, it filed its Motion to Compel.

In finding that Freese’s participation in the litigation constituted waiver, the trial court

relied upon the case of Carolyn B. Beasley Cotton Co. v. Ralph, 59 S.W.3d 110 (Tenn. Ct.

App. 2000). In Beasley, this Court found that the defendant farmer had waived his right to

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arbitrate disputes between himself and the plaintiff broker, as provided for in written

contracts between the parties. Id. at 113. In making this determination, we “note[d] several

actions by [the defendant] that suggest[ed] he [had] waived his right to arbitration[:]” the

defendant answered both the plaintiff’s complaint and his request for production of

documents; the defendant took pretrial depositions, he filed pretrial motions and he attended

pretrialsettlement conferences; and the defendant “made no mention of the arbitration clause

until the original trial court date when he filed a motion to refer the matter to arbitration.”

Id.

We find Beasley distinguishable from the instant case, and therefore, we disagree that

Beasley compels a finding of waiver in this case. In Beasley, the party seeking to enforce the

arbitration provision conducted pre-trial discovery and, importantly, it “made no mention of

the arbitration clause” until the day of trial. Id. at 113. In contrast, Freese has conducted no

discovery in this case and it expressly reserved its right to arbitrate shortly after Mr. Skelton

filed his Second Amended Complaint naming the parties to the Subcontract Agreement–and

its arbitration clause–as the parties to the lawsuit. Additionally, after learning that Mr.

Skelton would not agree to arbitration, Freese promptly notified Mr. Skelton’s counsel of his

intent to file a motion to compel, and such motion was timely filed, apparently before a trial

date was even set. Although Freese filed a Motion to Dismiss in this case, it did so before

the limited liability company party to the Subcontract Agreement was identified as a party

to the lawsuit–thus, ostensibly before arbitration could have been compelled. In sum, we find

the evidence before us preponderates against the trial court’s finding of waiver as it fails to

demonstrate that Freese “clear[ly], unequivocal[ly] and decisive[ly]” acted to forego its right

to arbitrate. See GuestHouse Intern., 330 S.W.3d at 202 (citation omitted).

B. Unconscionable Contract of Adhesion

Having determined that Freese did not waive its right to arbitration, we now

consider whether the arbitration clause should, nonetheless, be held unenforceable as an

unconscionable contract of adhesion. The determination of whether a contract provision,

including an arbitration clause, is unconscionable is a question of law, which we review de

novo without a presumption of correctness. See Taylor v. Butler, 142 S.W.3d 277, 284-85

(Tenn. 2004)).

An adhesion contract has been defined as “a standardized contract form

offered to consumers of goods and services on essentially a ‘take it or leave it’

basis, without affording the consumer a realistic opportunity to bargain and

under such conditions that the consumer cannot obtain the desired product or

service except by acquiescing to the form of the contract.” Professor

Henderson has observed that “the essence of an adhesion contract is that the

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bargaining position and leverage enable one party to select and control risks

assumed under the contract.” Courts generally agree that “[t]he distinctive

feature of a contract of adhesion is that the weaker party has no realistic choice

as to its terms.”

Webb v. First Tenn. Brokerage, Inc., 2013 WL 3941782, at *17 (Tenn. Ct. App. June 18,

2013) (quoting Buraczynski v. Eyring, 919 S.W.2d 314, 320 (Tenn. 1996)).

“If a contract is one of adhesion, the next question is whether it contains such

unconscionable or oppressive terms as to render it unenforceable.” Id. (citing Bradczynski,

919 S.W.2d at 320). An adhesion contract is not enforceable if its terms are “‘beyond the

reasonable expectations of an ordinary person,’” “‘oppressive,’” or “‘unconscionable.’” Id.

(quoting Buraczyski, 919 S.W.2d at 320). As our Supreme Court has stated, “‘[a]

determination of unconscionability must focus on the relative positions of the parties, the

adequacy of the bargaining position, the meaningful alternatives available to the plaintiff, and

the existence of unfair terms in the contract.’” Id. (quoting Taylor, 142 S.W.3d at 285).

“Enforcement of a contract is generally refused on grounds of unconscionability where the

‘inequality of the bargain is so manifest as to shock the judgment of a person of common

sense, and where the terms are so oppressive that no reasonable person would make them on

the one hand, and no honest and fair person would accept them on the other.’” Taylor, 142

S.W.3d at 285 (quoting Haun v. King, 690 S.W.2d 869, 872 (Tenn. Ct. App. 1984)). “‘In

determining whether a contract is unconscionable, a court must consider all the facts and

circumstances of a particular case. If the provisions are then viewed as so one-sided that the

contracting party is denied an opportunity for a meaningful choice, the contract should be

found unconscionable.’” Webb, 2013 WL 3941782, at *17 (quoting Haun, 690 S.W.2d at

872).

On appeal, Mr. Skelton argues that the arbitration clause should be deemed

unenforceable because it is an unconscionable provision within an adhesion contract. He

terms the contract one of “adhesion” citing his Affidavit in which he testified that the

contract, aside from the price of his work, was “presented to him on a ‘take it or leave it’

basis[,]” and he contendsthat the arbitration clause is unconscionable because it allowed only

Freese–and not him–to compel arbitration. In response, Freese contends that the contract is

not one of adhesion because Mr. Skelton is a commercial party–not a “consumer[] of goods

and services”–and that its terms are not unconscionable because it “is overwhelmingly

characterized by mutuality of rights and remedy.”

We hesitate to conclude that an adhesion contract can never been found between

commercial parties, as Freese suggests. See, e.g., Ross Prods. Div. Abbott Labs. v. State,

No. M2006-01113-COA-R3-CV, 2007 WL 4322016, at *4 (Tenn. Ct. App. Dec. 5, 2007)

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perm. app. denied (Tenn. Apr. 28, 2008) (finding it unnecessary to determine whether

“sophisticated business persons” should be considered “consumers of goods and services”

for purposes of inclusion within the “adhesion contract” definition); Vickery Transp., Inc.

v. HEPACO,Inc., No. W2003-01512-COA-R3-CV, 2004 WL 2280421 (Tenn. Ct. App. Oct.

4, 2004) perm. app. denied (Tenn. Mar. 21, 2005) (determining that an agreement between

commercial parties was not a contract of adhesion because there was insufficient evidence

that the party challenging the agreement had no alternative to its execution). However, we

find it unnecessary to decide whether Mr. Skelton is a “consumer[] of goods and services”

because, under the circumstances of this case, we find that the Subcontract

Agreement–particularly its arbitration clause–cannot be considered an adhesion contract.

While it is true that Mr. Skelton testified in his Affidavit that the contract, aside from the

price of his work, was “presented to him on a ‘take it or leave it’ basis[,]” that testimony,

alone, is insufficient to create an adhesion contract. See Wilson Pharmacy, Inc. v. General

Computer Corp., No. E2000-00733-COA-R3-CV, 2000 WL 1421561, at *4 (Tenn. Ct. App.

Sept. 21, 2000) (holding that affidavit testimony by plaintiff that he did not know of any

other computer corporation which would provide a comparable service or that he was offered

a standardized contract “on a take-it-or-leave-it basis” was insufficient to show a contract of

adhesion). Importantly, there is nothing in the record to suggest that the parties lacked equal

commercial sophistication, that Mr. Skelton is a “weaker” party, or that Freese possessed

superior knowledge of the subject matter. See Desgro v. Pack, No. E2012-00918-COA-R3-

CV, 2013 WL 84899, at *3 (Tenn. Ct. App. Jan. 8, 2013) (citing Buraczynski, 919 S.W.2d

at 320). Moreover, there is no evidence that Mr. Skelton questioned the terms of the

Subcontract Agreement, aside from the price of the work, and although execution of the

Subcontract Agreement, according to Mr. Skelton, was required to secure a subcontractor

position, Mr. Skelton has made no argument as to why he could not have simply walked

away from a contract which contained terms he considered unfavorable. See id at *2 (finding

a contract was not one of adhesion where the plaintiff failed to prove that defendant would

not have performed the service without execution of the contract, where the plaintiff did not

question the terms of the agreement, and where the plaintiff could have sought the service

from another provider if he did not agree to the terms of the agreement). Compare

Buraczynski, 919 S.W.2d at 320 (concluding that the arbitration agreements between

physicians and patients were contracts of adhesion, noting that although the patients could

have refused to sign the arbitration agreements, such action would have terminated the

physician-patient trust relationship and interrupted the course of treatment); Raiteri ex rel

Cox v. NHC Healthcare/Knoxville, Inc., 2003 WL 23094413, at * (Tenn. Ct. App. Dec. 30,

2003) (concluding that a nursing home admissions contract, which included an arbitration

clause, was a contract of adhesion where it was offered on a take-it-or-leave it basis, the

weaker party had no opportunity to bargain over its terms, and where refusing to sign the

agreement was not a viable option due to “very trying circumstances” necessitating

admission to the facility). In sum, we find Mr. Skelton’s conclusory statement that he was

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offered the contract on a “‘take it or leave it’ basis” insufficient to show a contract of

adhesion. See Wilson Pharmacy, Inc., 2000 WL 1421561, at *4. Therefore, we find it

unnecessary to examine the arbitration clause to determine its reasonableness. We reverse

the decision of the chancery court and we remand for entry of an order compelling

arbitration. All remaining issues are deemed pretermitted.

IV. CONCLUSION

For the aforementioned reasons, we reverse the decision of the chancery court and we

remand for entry of an order compelling arbitration. All remaining issues are deemed

pretermitted. Costs of this appeal are taxed to Appellee, Jonathan Burke Skelton, for which

execution may issue if necessary.

ALAN E. HIGHERS, P.J., W.S.

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