Court Opinion

ID: 9733956
Source: CourtListenerOpinion
Date Created: 2023-08-26 17:21:22.900287+00
Date Added: 2024-06-11T18:26:44.696798
License: Public Domain

CONCURRING OPINION
GLENN A. NORTON, Special Judge.
I concur in the result of the majority opinion, but write separately to address concerns over the enforceability of certain provisions found in an arbitration agreement that is executed in connection with a resident’s admission to a nursing home. I would hold that provisions requiring a resident and nursing home to arbitrate any personal injury claims,1 and requiring them to waive their right to have any such claims decided in a court of law, are unenforceable because they are procedurally and substantively unconscionable.2
A. Background
The underlying case involves provisions in a form arbitration agreement between Beverly Manor (“the Nursing Home”) and Dorothy Lawrence (“Resident”) executed by Resident’s daughter, who was acting as Resident’s attorney-in-fact. The first two sentences in the arbitration agreement indicate that its execution was connected to Resident’s admission to the Nursing Home. The first sentence states the agreement was executed by the parties “in conjunction with an agreement for admission and for the provision of nursing facility services” (emphasis added). The second sentence states that, upon execution, the arbitration agreement “becomes part of the Admission Agreement” (emphasis added).
The arbitration agreement between the Nursing Home and Resident provides that “any and all claims, disputes, and controversies ... arising out of, or in connection with, or relating in any way to the Admission Agreement or any service or health care provided by the [Nursing Home] to the Resident shall be resolved exclusively by binding arbitration” and “not by a lawsuit or resort to court process.” The agreement further states:
This agreement to arbitrate includes, but is not limited to, any claim for payment, nonpayment, or refund for services rendered to the Resident by the [Nursing Home], violations of any right granted to the Resident by law or by the Admission Agreement, breach of contract, fraud or misrepresentation, negligence, gross negligence, malpractice, or claims based on any departure from accepted medical or health care or safety standards, as well as any and all claims for equitable relief or claims based on contract, tort, statute, warranty, or any alleged breach, default, negligence, wantonness, fraud, misrepresentation, suppression of fact, or inducement.
The arbitration agreement also contains a provision stating that, by entering into the *531agreement, “the parties are giving up and waiving their constitutional light to have any claim decided in a court of law before a judge and a jury, as well as any appeal from a decision or award of damages.”
Resident died shortly after her admittance to the Nursing Home. Thereafter, Resident’s son filed a two-count wrongful death petition against the Nursing Home, alleging that his mother suffered fatal injuries to her head when the Nursing Home’s employees negligently dropped her. The Nursing Home filed a motion to compel arbitration of Resident’s son’s wrongful death claim, which the trial court denied.
B. Standard of Review
Whether a motion to compel arbitration should have been granted is a question of law that the Court reviews de novo. Arrowhead Contracting, Inc. v. M.H. Washington, LLC, 243 S.W.3d 532, 535 (Mo.App.2008). In reviewing the motion to compel, a court must determine whether a valid arbitration agreement exists and, if so, whether a specific dispute falls within the scope of the arbitration agreement. Id.
C. Relevant Law
There is no dispute by the parties that the arbitration agreement in this case is governed by the Federal Arbitration Act (“the FAA”). The FAA provides that an arbitration agreement is “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. section 2 (2008). Accordingly, if a court determines by ordinary rules of contract interpretation that a valid arbitration agreement exists and that the dispute falls within the scope of that agreement, then arbitration must be compelled. Swain v. Auto Services, Inc., 128 S.W.3d 103, 107 (Mo.App.2003). “Nevertheless, generally applicable state law contract defenses, such as fraud, duress and unconscionability, may be used to invalidate arbitration agreements without contravening the FAA.” Id. (citing Doctor’s Associates, Inc. v. Casarotto, 517 U.S. 681, 687, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996)). The purpose of allowing applicable state law contract defenses to invalidate an arbitration agreement is to protect consumers against unfair pressure to agree to unwanted arbitration. See Whitney v. Alltel Communications, Inc., 173 S.W.3d 300, 310 (Mo. App.2005) (noting that section 9 U.S.C. section 2 “gives States a method of protecting consumers against unfair pressure to agree to a contract with an unwanted arbitration provision”) (quoting Allied-Bruce Terminix Companies, Inc. v. Dobson, 513 U.S. 265, 281, 115 S.Ct. 834, 130 L.Ed.2d 753(1995)).
An unconscionable arbitration provision in a contract will not be enforced. See State ex rel. Vincent v. Schneider, 194 S.W.3d 853, 856-61 (Mo. banc 2006) (invalidating as unconscionable arbitration clauses requiring the consumer to pay for all arbitration fees and allowing an entity related to one of the parties to select the arbitrator); Whitney, 173 S.W.3d at 308-14 (invalidating as unconscionable an arbitration provision barring consumer claims from being raised as class actions); Swain, 128 S.W.3d at 105-09 (invalidating as unconscionable an arbitration provision requiring a Missouri consumer to arbitrate in Arkansas).
In general, both procedural and substantive aspects of unconscionability must exist for an arbitration provision to be unenforceable. Whitney, 173 S.W.3d at 308. Procedural unconscionability, which relates to the formalities of the making, of an agreement, involves, inter alia, the high pressure exerted on the parties and unequal bargaining position. Id. On the *532other hand, substantive unconscionability has been described as “undue harshness in the contract terms themselves.” Id. (internal quotation omitted).
Procedural and substantive unconsciona-bility both may be found in an adhesion contract. See id. at 308-14. An adhesion contract, as opposed to a negotiated contract, has been described as a form contract created and imposed by a stronger party on a weaker party on a “take it or leave it basis,” the terms of which unexpectedly or unconscionably limit the obligations of the drafting party. Swain, 128 S.W.3d at 107. Adhesion contracts usually involve unequal bargaining power of a large company versus an individual, and are often form contracts. Id. “Standing alone, an agreement choosing arbitration over litigation, even between parties of unequal bargaining power, is not unconscionably unfair.” Whitney, 173 S.W.3d at 310-11 (internal quotation omitted). An agreement requiring arbitration is only unconscionable when an average reasonable person would not reasonably expect, in light of the totality of the circumstances surrounding the transaction, that the dispute might be resolved through arbitration rather than litigation. Id. at 311; Midwest Division-OPRMC, LLC v. Department of Social Services, Division of Medical Services, 241 S.W.3d 371, 379 (Mo.App.2007).
D. The Provisions Requiring the Parties to Arbitrate any Personal Injury Claims, and Requiring them to Waive their Right to Have Any Such Claims Decided in a Court of Law, are Procedurally and Substantively Unconscionable
In this case, the provisions of the arbitration agreement that require the Nursing Home and Resident to arbitrate any personal injury claims, and require the parties to waive their right to have any such claims decided in a court of law, are both procedurally and substantively unconscionable.
The parties’ arbitration agreement is a contract of adhesion. Resident is an individual, and the Nursing Home is a large company — the bargaining power was unequal. The arbitration agreement was presented as a form contract. For the reasons stated below, an average individual seeking nursing home care would not reasonably expect that any personal injury claims arising out of the Nursing Home’s care might have to be resolved through arbitration rather than litigation.
The decision whether to place an individual under a nursing home’s care is difficult and emotional for all parties involved. In some cases, the individual may be incapacitated or disabled so that he is not able to make the decision for himself and loved ones must decide what is best for their friend or family member. In other cases, the individual and his loved ones must decide together whether it is best for him to enter a less independent lifestyle. But in all cases where the decision to place an individual under a nursing home’s care is finally made, those involved in the decision reasonably seek and expect that the individual will receive adequate care from the nursing home.
Similarly, upon a person’s admission to the nursing home, an individual and/or his loved ones are focused on and concerned with the ability of the nursing home to begin adequately caring for the resident. And during the admission process and beyond, the reasonable expectation is that the nursing home will provide adequate care for the resident. Thus, a person in the process of becoming a nursing home resident is not in a position to be thinking about how, if adequate care is not provided and personal injury results, the resident *533and/or his successors and assigns are going to pursue any future personal injury claims against the nursing home. In particular, the resident is not thinking about whether, by signing a form in conjunction with an admission agreement, he and/or his successors and assigns are waiving their right to have any personal injury claims decided in a court of law. As previously stated, an average individual seeking nursing home care would not reasonably expect that any personal injury claims arising out of the nursing home’s care might have to be resolved through arbitration rather than litigation.
While I agree with the majority’s ultimate finding that the trial court properly denied the Nursing Home’s motion to compel arbitration, I would find that the trial court’s decision was proper for a different reason. I would hold that the provisions requiring Resident and the Nursing Home to arbitrate any personal injury claims, and requiring them to waive their right to have any such claims decided in a court of law, are unenforceable because they are procedurally and substantively unconscionable.3

. For purposes of this opinion, "any personal injury claims” include claims brought by the parties' successors and assigns.

. The issue of whether provisions in the arbitration agreement are unconscionable was disputed in briefs filed in this Court and was addressed in oral argument before this Court. Specifically, the issue was raised in an amicus brief, addressed in Appellant Beverly Manor's reply brief, and addressed at oral argument.

. Under Missouri law and the terms of the parties’ arbitration agreement, the remaining provisions of the arbitration agreement would remain enforceable, including, but not limited to, provisions requiring the parties to arbitrate claims relating to payment. See Swain, 128 S.W.3d at 108 (stating that the unenforce-ability of one provision of an arbitration agreement does not render the entire arbitration agreement invalid).