Opinion ID: 1856868
Heading Depth: 2
Heading Rank: 1

Heading: Whether the trial court erred in finding the arbitration agreement to be unenforceable.

Text: ¶ 9. The Federal Arbitration Act provides a two-pronged inquiry for determining the validity of a motion to compel arbitration. East Ford, Inc. v. Taylor, 826 So.2d 709, 713 (Miss.2002). The first prong requires a threshold finding that the agreement to be arbitrated has a nexus to interstate commerce, followed by a finding that the terms of the arbitration agreement require the parties to arbitrate the kind of dispute involved in the litigation. Id. The second prong addresses whether legal constraints external to the agreement, such as fraud, duress, or unconscionability, foreclose arbitration of the claims. Id. (citing Doctor's Assocs. v. Casarotto, 517 U.S. 681, 686, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996)). Interstate Commerce ¶ 10. In considering these two prongs, we turn to our decision in Vicksburg Partners, wherein this Court held, [a] threshold determination which must be considered is whether the parties' . . . agreement falls within the provisions of § 2 of the Federal Arbitration Act. 911 So.2d at 514. Section 2 of the Federal Arbitration Act states: A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. 9 U.S.C. § 2. ¶ 11. The trial court stated the enforceability of an arbitration agreement between a medical provider and a patient was one of first impression for the court. Plaintiffs assert this agreement regarding a medical procedure cannot be construed as affecting interstate commerce. [2] However, Dr. Cleveland and CSA argue the medical treatment provided to Mann affects interstate commerce under Vicksburg Partners, where this Court held, singular agreements between care facilities and care patients, when taken in the aggregate, affect interstate commerce. 911 So.2d at 515. While the Vicksburg Partners opinion was handed down subsequent to the trial court's ruling in this case, we have held that all judicial decisions apply retroactively unless the Court has specifically stated the ruling is prospective. See Miss. Transp. Comm'n v. Ronald Adams Contractor, Inc., 753 So.2d 1077, 1093 (Miss.2000); Morgan v. State, 703 So.2d 832, 839 (Miss.1997). Therefore, following our opinion in Vicksburg Partners, we conclude the economic activities of Dr. Cleveland and CSA affect interstate commerce, and the Federal Arbitration Act is applicable. Arbitrability of Dispute ¶ 12. Plaintiffs further argue this dispute is not within the scope of the agreement because it was executed subsequent to Mann's 2002 gastrectomy, and the 2003 hernia repairthe procedure for which the agreement was signedwas necessitated by the gastrectomy. Plaintiffs assert there was no agreement executed prior to the gastrectomy, so any injury arising therefrom is not subject to arbitration. Plaintiffs contend that if the agreement is found to be valid, this Court would be setting a dangerous precedent, as it would allow the appellant to get a signature nine months after the first surgery to remove the stomach and use it to defend against puncturing the intestines in the second operation. ¶ 13. However, the agreement at issue states, [p]atient agrees that in the event of any dispute, claim, or controversy arising out of or relating to the performance of medical services . . . such dispute or controversy shall be submitted to JAMS[ [3] ]. . . . (Emphasis added). The theory of the plaintiffs' case is that the initial procedure led to the need for the hernia repair, and the hernia repair was negligently performed, leading to this lawsuit. Thus, the procedures are related by plaintiffs' own theory of the case, and they are covered by the arbitration agreement. External Legal ConstraintsUnconscionability ¶ 14. The FAA's second prong of analysis requires us to consider whether legal constraints external to the parties' agreement foreclose arbitration of the claims. Plaintiffs assert this agreement was not signed by Mann knowingly, voluntarily and intelligently, and it is procedurally and substantively unconscionable. The trial court held the agreement falls well within the realm of adhesion and unconscionability. ¶ 15. This Court has defined unconscionability 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.' Taylor, 826 So.2d at 715 (quoting Bank of Ind., Nat'l Ass'n v. Holyfield, 476 F.Supp. 104, 109 (S.D.Miss. 1979)). We recognize two types of unconscionability procedural and substantive: Procedural unconscionability may be proved by showing a lack of knowledge, lack of voluntariness, inconspicuous print, the use of complex legalistic language, disparity in sophistication or bargaining power of the parties and/or a lack of opportunity to study the contract and inquire about the contract terms. Substantive unconscionability may be proven by showing the terms of the arbitration agreement to be oppressive. Taylor, 826 So.2d at 714 (citations omitted). Procedural unconscionability looks beyond the substantive terms which specifically define a contract and focuses on the circumstances surrounding a contract's formation. Vicksburg Partners, 911 So.2d at 517. In Entergy Mississippi, Inc. v. Burdette Gin Co., 726 So.2d 1202, 1207 (Miss.1998), this Court divided procedural unconscionability into two general categories: lack of knowledge and lack of voluntariness.
¶ 16. A lack of knowledge is demonstrated by a lack of understanding of the contract terms arising from inconspicuous print or the use of complex, legalistic language, disparity in sophistication of parties, and lack of opportunity to study the contract and inquire about contract terms. Vicksburg Partners, 911 So.2d at 517 (citations omitted). ¶ 17. First, plaintiffs argue this agreement was procedurally unconscionable because of a disparity in the sophistication of the parties due to Mann's lack of education and inability to read or understand the agreement. However, this Court has held the inability to read does not render a person incapable of possessing adequate knowledge of the arbitration agreement he or she signed. See EquiFirst Corp. v. Jackson, 920 So.2d 458, 464 (Miss.2006). ¶ 18. Plaintiffs also assert the agreement was not properly explained to Mann, as the terms would have been difficult for him to understand. The agreement is a two-page document. In a bold, capitalized font larger than that of the rest of the document, the first page of the document states: NOTICE: BY SIGNING THIS CONTRACT YOU ARE AGREEING TO HAVE ANY CLAIM OF NEGLIGENCE OR MEDICAL MALPRACTICE DECIDED BY NEUTRAL BINDING ARBITRATION AND YOU ARE GIVING UP YOUR STATUTORY AND CONSTITUTIONAL RIGHT TO A JURY OR COURT TRIAL. This first page is signed and dated by J. Loftin, as an authorized representative of CSA, signed by Mann, and initialed by Dr. Cleveland. ¶ 19. The second page of the agreement contains an explanation of each term found on the first page of the agreement. The top of this page states the patient is to initial next to each term after a member of the medical staff has explained that term to the patient. Mann's initials appear next to each term. The bottom of the second page states, I hereby confirm that I have explained the arbitration agreement to the Patient and the Patient has affirmed his or her understanding of that agreement by initialing or signing beside each of the foregoing provisions. This statement is signed by Jennifer Loftin, an authorized representative for CSA, and is initialed by Dr. Cleveland. ¶ 20. In her affidavit, Barbara Templeton, Mann's sister-in-law, stated she accompanied Mann to his appointment on June 18, 2003. She said Mann was handed a document and told by the receptionist to sign it and to ask Dr. Cleveland any questions he may have. She stated she went to the restroom for three to five minutes, and when she returned, Mann was ready to leave. Templeton testified that on the way home, Mann told her he asked Dr. Cleveland what the agreement meant, and Dr. Cleveland replied, It's so you won't sue me. ¶ 21. In his affidavit, Dr. Cleveland disputes these claims and maintains that Mann signed the agreement and initialed his understanding on the second page of the agreement before meeting with him. Dr. Cleveland stated that when he met with Mann, he asked Mann if he signed the agreement and understood it, and then he answered Mann's questions regarding the agreement. Dr. Cleveland asserted in his affidavit that Mann's signature and his initials signified that he had read the contract, had its terms explained to him, fully understood its terms, and consented to the surgery. Dr. Cleveland explained that his initials at the bottom of both pages of the agreement confirmed that all of [Mann's] questions regarding the arbitration agreement had been answered. ¶ 22. This Court has not been furnished with an affidavit or any testimony from Jennifer Loftin, the authorized representative from CSA who signed the agreement stating she explained its terms to Mann. Plaintiffs argue that it appears these may not be Mann's initials on the second page, and that J. Loftin who signed on the first page is not the same as Jennifer Loftin who signed on the second page. This contention was not asserted at the trial level. Additionally, plaintiffs offer no evidence to support this contention and cite no legal authority for this argument in their brief. Therefore, this argument merits no consideration by this Court. See Ferrell v. River City Roofing, Inc., 912 So.2d 448, 456 (Miss.2005) (failure to cite relevant authority obviates Court's obligation to review issue); Tate v. State, 912 So.2d 919, 928 (Miss.2005) (appellate court will not review issues raised for the first time on appeal). ¶ 23. The language in this agreement is neither complex nor convoluted. The language stating Mann was giving up his right to a trial is boldly printed in all capital letters in a font larger than the font in the rest of the agreement. The second page of the agreement fully states and explains the individual terms of the agreement. Plaintiffs' claim that Mann could not have understood the agreement is without merit, as this Court has held, [a] person cannot avoid a written contract which he has entered into on the ground that he did not read it or have it read to him. . . . Cont'l Jewelry Co. v. Joseph, 140 Miss. 582, 585, 105 So. 639 (1925). Further, Mann signed the first page of the agreement and initialed beside each term on the second page, denoting his understanding of the terms. Mann's initials on the second page of the agreement also indicate he was provided an opportunity to inquire about the agreement's terms. Plaintiffs may not escape the agreement by simply stating Mann did not read the agreement or have it read to him or understand its terms. ¶ 24. Plaintiffs further claim the agreement was procedurally unconscionable because Mann did not have the opportunity to study the contract. They assert Mann was not provided with a copy of the contract to take home, and the original agreement was not furnished to the trial court. However, plaintiffs did not present these arguments to the trial court, and they have not provided any evidence or legal authority for support. Therefore, this Court is not obligated to consider the issue of whether Mann was furnished with a copy of the agreement. See Ferrell, 912 So.2d at 456; Tate, 912 So.2d at 928.
¶ 25. A contract of adhesion is an agreement drafted unilaterally by the dominant party and then presented on a `take-it-or-leave-it' basis to the weaker party who has no real opportunity to bargain about its terms. Taylor, 826 So.2d at 716 (citations omitted). Such contracts are usually pre-printed and contain provisions in extremely small print. Id. A lack of voluntariness is demonstrated in contracts of adhesion when there is a great imbalance in the parties' relative bargaining power, the stronger party's terms are unnegotiable, and the weaker party is prevented by market factors, timing or other pressures from being able to contract with another party on more favorable terms or to refrain from contracting at all. Id. at 716 (citations omitted). ¶ 26. This agreement was prepared for Dr. Cleveland and CSA by the Phelps Dunbar, LLP, law firm. The agreement appears on a printed form but does not contain any small print. However, the parties dispute whether the agreement was presented on a take it or leave it basis. Plaintiffs assert Mann was in a great deal of pain during the June 18 visit to Dr. Cleveland's office. Templeton also stated in her affidavit that during the visit, Mann was in pain and under stress because of the hernia. On the other hand, Dr. Cleveland stated Mann was not under a heavy burden of pain or stress at the time of signing. ¶ 27. The claim of a lack of voluntariness fails for several reasons. First, Mann initialed on the second page of the agreement next to the term stating, [p]atient is not in need of emergency care or under immediate stress. Second, the agreement provides for rescission within fifteen days of signing the agreement, and Mann had nineteen days before his surgery. Additionally, the agreement states, [b]efore signing the Agreement the Patient may make written changes in the Arbitration Agreement if they so desire and present these to the Clinic for approval. While the trial court held it did not seem reasonable or practical for Mann to have secured legal advice in light of his pressing medical condition, Mann's surgery was not scheduled until nineteen days after he executed the agreement, so Mann did not have to choose between forever waiving available remedies in a judicial forum, or forgoing necessary medical treatment. . . . Vicksburg Partners, 911 So.2d at 525. For all of these reasons, we conclude the agreement was not procedurally unconscionable.
¶ 28. Plaintiffs argue the agreement was substantively unconscionable due to Dr. Cleveland's and CSA's right to choose the arbitration association and the patient's right to appeal only in limited circumstances. At the trial level, plaintiffs did not assert as substantively unconscionable the patient's limited right to appeal. They also failed to provide any argument or legal authority to support this assertion in their brief to this Court. Therefore, this Court is under no duty to consider this argument. See Ferrell, 912 So.2d at 456; Tate, 912 So.2d at 928. ¶ 29. Notwithstanding the procedural bar, this claim further fails on its merits. Substantive unconscionability may be found when the terms of the contract are of such an oppressive character as to be unconscionable. Russell, 826 So.2d at 725. This Court has held, [s]ubstantive 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. Vicksburg Partners, 911 So.2d at 521. ¶ 30. The portion of the agreement regarding CSA's choice of an arbitration association states, [a]rbitration will be performed by JAMS. This is a national association of neutral arbitrators. They don't work for Physician or for the Patient. The Clinic will pay the costs, except for the first $125.00, and each side will pay for their own attorneys and other costs. Mann initialed next to the explanation of this term of the agreement. However, plaintiffs argue Mann could not have known what JAMS was, and it was unconscionable that Dr. Cleveland and CSA chose the arbitration association who would hear the dispute. ¶ 31. In Vicksburg Partners, this Court looked to examples cited by the Tennessee Supreme Court of oppressive arbitration agreements. In Buraczynski v. Eyring, 919 S.W.2d 314, 320-21 (Tenn.1996), the Tennessee Supreme Court cited Beynon v. Garden Grove Medical Group, 100 Cal. App.3d 698, 161 Cal.Rptr. 146, 150 (1980), in which the court found an agreement oppressive where a health care provider required arbitration take place before a panel of three physicians. Vicksburg Partners, 911 So.2d at 521. The Tennessee Court further cited Broemmer v. Abortion Services of Phoenix, Ltd., 173 Ariz. 148, 840 P.2d 1013, 1016 (1992), in which the Arizona Supreme Court held unconscionable an agreement drafted by an abortion services clinic in which arbitration had to take place in front of physicians specializing in obstetrics and gynecology. Vicksburg Partners, 911 So.2d at 521. ¶ 32. This Court has held, [w]hile 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. Id. The agreement at issue provides Mann with a fair opportunity and a proper forum in which to dispute his claims. It does not limit Mann's damages, Mann's legal rights, or Dr. Cleveland's and CSA's liability. The agreement further provides for arbitration by a neutral association in the business of providing neutral arbitrators. For these reasons, we conclude the agreement at issue is not substantively unconscionable. ¶ 33. We find the agreement is neither procedurally nor substantively unconscionable. Therefore, the trial court erred in denying the Motion to Compel Arbitration.