Opinion ID: 1779273
Heading Depth: 1
Heading Rank: 4

Heading: Absence of meaningful choice

Text: ¶ 31. Almost thirty years ago, this Court's view of an unconscionable contract was that it was one such as no man in his senses and not under a delusion would make on the one hand, and as no honest and fair man would accept on the other. In re Will of Johnson, 351 So.2d 1339, 1341 (Miss.1977). ¶ 32. Then, approximately seven years ago, this Court cited with approval a federal district court case which required for unconscionability only that contract terms be unreasonably favorable to one party to show unconscionability, but carefully limited its holding by requiring an absence of meaningful choice on the part of one of the parties. Entergy Miss., Inc. v. Burdette Gin Co., 726 So.2d 1202, 1207 (Miss.1998), citing Bank of Ind. Nat'l Ass'n v. Holyfield, 476 F.Supp. 104, 109 (S.D.Miss.1979). ¶ 33. The majority completely misreads the absence of meaningful choice requirement imposed by Entergy Miss., Inc. Instead of inquiring whether the Pittses had a meaningful choice in entering into the contract in the first instance, the majority inquires whether the Pittses had a meaningful choice of remedies in the event of breach. The majority states: Unconscionability has been defined as an absence of meaningful choice on the part of one of the parties, together with contract terms which are unreasonably favorable to the other party. A breach by the Pittses of nonpayment would result in Watkins's ability to pursue an action within the courts. However, a breach by Watkins would limit the Pittses to a recovery of $265, the arbitration of which would require fees in excess of their possible recovery. ¶ 19 (citation omitted). This newly discovered application of meaningful choice is novel and without precedent. ¶ 34. Clearly, the absence of meaningful choice requirement of Entergy Miss., Inc. refers to whether the party had a meaningful choice in agreeing to the contract. This point is easily understood by simple review of the facts and holding in that case. ¶ 35. Entergy's contract with its customer required the customer to indemnify and hold harmless the power company for certain injuries related to the power lines. When workers sued the power company to recover damages for injuries they sustained while working on the lines, the power company brought a third-party claim against its customer to enforce the indemnity provision. To find the indemnity provision unconscionable, this Court required a showing of absence of meaningful choice. In finding the requirement was met, this Court observed that the customer  was unable to contract with another party since Entergy was the sole supplier of electricity in the area. 726 So.2d at 1208 (emphasis added). The Court essentially required that the contract be one of adhesion. Id. ¶ 36. Today, the majority quietly and artfully abandons the absence of meaningful choice requirement and merely says that the terms unreasonably favor Watkins. Although the majority correctly cites Entergy Miss., Inc., and recognizes that an absence of meaningful choice was required in that case, we are provided not a single fact which demonstrates that the Pittses signed the contract with Watkins because they had no meaningful choice. In fact, the record clearly demonstrates that the Pittses were free to reject the contract and Watkins's services if they desired, and employ another inspection service. The Pittses purchased the home on May 31, 2000, more than two months after the inspection. It is not even suggested that Watkins was the only home inspection service available. There is simply no credible evidence or argument that the Pittses were without a meaningful choice in contracting for a home inspection. ¶ 37. The majority, in finding the contract unfair, relies heavily on its view of the cost of arbitration. Specifically, the majority concludes at ¶ 16: The Pittses filed affidavits that the inspection failed to discern $30,000 to $40,000 in damages. The limitation of liability clause which limits the Pittses' recovery to $265, in conjunction with an undisclosed arbitration provision of the AAA which would require an initial filing fee of at least $500, would effectively deny the plaintiffs any redress. The deprivation of an adequate remedy resulting from the interaction of these two clauses renders both clauses substantively unconscionable. ¶ 38. The majority's claim of an undisclosed $500 filing fee to arbitrate is not supported by the record or pleadings. There is no indication whatsoever in this case that either party would be required to pay a $500 filing fee to arbitrate. The Pittses do not even mention it in their briefing to this Court. It seems to me that grounding a decision of this Court on evidence not found in the record would be, well, unfair. It also seems to me that opinions are particularly questionable which require for their justification facts not in the record. ¶ 39. The primary authority cited by the majority is East Ford. But in that case there was no finding of substantive unconscionability. The East Ford Court found the subject contract procedurally unconscionable, and then stated, we find it unnecessary to address Taylor's ... arguments regarding substantive unconscionability. East Ford, 826 So.2d at 717. ¶ 40. In any case, today's decision leaves the clear impression that the terms of contracts in Mississippi may not be enforceable if they are found (subjectively) to unreasonably favor one party or the other. In other words, this Court now seems to be in the business of (i) deciding what is an adequate remedy for each of the parties under a contract; (ii) making sure each party has what this Court considers an adequate remedy; (iii) evaluating and deciding whether each contract term unreasonably favors one of the parties; and (iv) making sure each party has a meaningful incentive to act diligently in the performance of a contract. ¶ 41. Thus, our courts must now evaluate consideration and assure that each party to a contract gets what this Court considers a fair deal. I fear that now, citing this case as authority, persons who are perceived to have paid too much for a cap or a chicken may be able to avoid their agreement based on nothing more. [3]