Opinion ID: 1907167
Heading Depth: 2
Heading Rank: 3

Heading: whether the arbitration clause contained within the admissions agreement was substantively unconscionable.

Text: ¶ 35. When reviewing a contract for substantive unconscionability, we look within the four corners of an agreement in order to discover any abuses relating to the specific terms which violate the expectations of, or cause gross disparity between, contracting parties. Substantive unconscionability may be proven by showing the terms of the arbitration agreement [clause] to be oppressive. East Ford, 826 So.2d at 714 (citing York, 585 F.Supp. at 1278). Substantive unconscionability is present when there is a one-sided agreement whereby one party is deprived of all the benefits of the agreement or left without a remedy for another party's nonperformance or breach. Bank of Indiana v. Holyfield, 476 F.Supp. 104, 110 (S.D.Miss.1979) (citing United States Leasing Corp. v. Franklin Plaza Apartments, Inc., 65 Misc.2d 1082, 319 N.Y.S.2d 531 (1971)). ¶ 36. In Buraczynski, the Tennessee Supreme Court recognized substantive unconscionability in the context of a contract of adhesion and noted that [c]ourts will not enforce adhesion contracts which are oppressive to the weaker party or which serve to limit the obligations and liability of the stronger party. 919 S.W.2d at 320 (citing Broemmer v. Abortion Servs. of Phoenix, Ltd., 173 Ariz. 148, 840 P.2d 1013, 1016 (1992)). The Tennessee Supreme Court cited examples in support of its assertion: [I]n Beynon v. Garden Grove Medical Group, 100 Cal.App.3d 698, 161 Cal.Rptr. 146, 150 (1980), the court refused to enforce a provision in a group health insurance plan which gave the health care provider the unilateral right to reject an arbitrator's decision without cause and to require another arbitration before a panel of three physicians. The Beynon court noted that the insured was unaware of the provision and the provision was unduly oppressive because the insured was required to pay one-half the costs of both arbitrations. Finally, in Broemmer, the court refused to enforce an arbitration agreement which was contained in a clinic admission form and which required the arbitrators to be physicians specializing in obstetrics and gynecology. Id. at 1016. 919 S.W.2d at 320-21. ¶ 37. The arbitration clause in today's case is not oppressive. It provides Stephens with a fair process in which to pursue her claims. Moreover, it is typical of arbitration clauses endorsed by the FAA and is conscionable because it bears some reasonable relationship to the risks and needs of the business. Burdette Gin, 726 So.2d at 1207 (quoting Bank of Indiana, Nat'l Ass'n v. Holyfield, 476 F.Supp. 104, 109 (S.D.Miss.1979)). [5] ¶ 38. To invalidate the arbitration clause at bar in today's case would be to endorse a blanket policy of striking any arbitration clause contained within the body of a contract of adhesion. While unconscionably oppressive terms can be facially invalid, a per se finding of substantive unconscionability is strictly applicable only to a provision that by its very language significantly alters the legal rights of the parties involved and severely abridges the damages which they may obtain. In East Ford, we made a clear distinction between terms contained within contracts of adhesion which are invalid on their face and those which are not: While Burdette concluded that an indemnity clause within a contract of adhesion is presumptively unconscionable, the same is not true for arbitration clauses. Burdette involved an agreement to indemnify, which essentially allows a party to contract away or escape liability. Arbitration agreements merely submit the question of liability to another forum-generally speaking, they do not waive liability. Furthermore, Congress has expressed no federal interest in enforcing indemnification agreements as it has in guaranteeing the enforcement of valid arbitration agreements. See Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. 826 So.2d at 716. ¶ 39. Without doubt, the arbitration provision contained in the body of the parties' admissions agreement is enforceable. It merely provides for a mutually agreed-upon forum for the parties to litigate their claims and is benign in its effect on the parties' ability to pursue potential actions.