Court Opinion

ID: 9379045
Source: CourtListenerOpinion
Date Created: 2023-03-14 15:06:35.432337+00
Date Added: 2024-06-11T17:16:36.123542
License: Public Domain

[Cite as Cook v. Richard T. Kiko Agency, Inc., 2023-Ohio-552.]

             IN THE COURT OF APPEALS OF OHIO
                             SEVENTH APPELLATE DISTRICT
                                 MAHONING COUNTY

                                          THOMAS COOK,

                                         Plaintiff-Appellant,

                                                     v.

                         RICHARD T. KIKO AGENCY, INC. et al.,

                                      Defendants-Appellees.

                        OPINION AND JUDGMENT ENTRY
                                        Case No. 22 MA 0024

                                     Civil Appeal from the
                       Court of Common Pleas of Mahoning County, Ohio
                                   Case No. 2022 CV 00002

                                        BEFORE:
                Carol Ann Robb, Cheryl L. Waite, David A. D’Apolito, Judges.

                                              JUDGMENT:
                                                Affirmed.

Atty. Michael B. Pasternak, The Law Office of Michael Pasternak, 3681 South Green
Road, Suite 411, Beachwood, Ohio 44122 and Atty. Jeffrey Saks, The Saks Law Office,
LLC, 3681 South Green Road, Suite 411, Beachwood, Ohio 44122 for Plaintiff-Appellant
and
                                                                                      –2–

Atty. Michael S. Gruber, Atty. Jason N. Bing, Gruber, Haren, Thomas & Co., 6370 Mt.
Pleasant Street, N.W., North Canton, Ohio 44720, for Defendants-Appellees Richard T.
Kiko Agency, Inc. and

Atty. Elizabeth H. Farbman, Roth, Blair, Roberts, Strasfeld & Lodge, 100 East Federal
Street, Suite 600, Youngstown, Ohio 44503 for Defendants-Appellees DM Bieber
Development, Ltd et al.

                               Dated: February 21, 2023

Robb, J.

       {¶1}   Plaintiff-Appellant Thomas Cook appeals the decision of the Mahoning
County Common Pleas Court granting a stay pending arbitration as requested by
Defendants-Appellees Richard T. Kiko Agency, Inc. (“Appellee Kiko”).             Appellant
contends the case falls under the statutory exception to arbitration in R.C. 2711.01(B)(1),
which applies to “controversies involving title to or possession of real estate.”
Alternatively, Appellant alleges the arbitration clause is unconscionable and thus
unenforceable. For the following reasons, the trial court’s judgment is affirmed.
                                 STATEMENT OF THE CASE
       {¶2}   On December 30, 2021, Appellant filed a complaint with the following four
counts: declaratory judgment, rescission of contract, fraud, and conversion. In addition
to naming Appellee Kiko as a defendant, Appellant also sued DM Bieber Development,
Ltd., Estate of Mary Ann Bieber, Mary Ann Bieber Family Trust, and William A. Bieber
(collectively called “the Bieber Appellees”).         Appellant claims material false
representations induced him to sign two purchase agreements on November 2, 2021 after
an auction.
       {¶3}   Under the first agreement, Appellant agreed to purchase 1750 and 1770 W.
Western Reserve Road in Mahoning County for $973,500. Under the second agreement,
Appellant agreed to purchase nearly 13 acres on Kauffman Road in Columbiana County
for $522,500. Appellant put down a 10% deposit, which totaled $149,600. The purchase
agreement provided for forfeiture of the deposit if the buyer failed to perform. Appellee
Kiko was to hold it in escrow (pending delivery of the deed, agreement, or court order).

Case No. 22 MA 0024
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       {¶4}     According to the complaint, Appellant asked Appellees about the zoning
applicable to the Western Reserve Road properties because he intended to operate a
commercial business and the neighboring lots appeared residential.               He alleged
Appellees informed him the properties were zoned commercial while acknowledging they
also said the properties would be “grandfathered” for continued commercial use.
       {¶5}     Appellant’s complaint said he subsequently learned the properties “would
not continue to be zoned commercial after they were sold by [Appellees].” He asserted
he would not have entered into either agreement if he knew the parcels in the first
agreement could not be used for commercial purposes, as he intended to operate a
business at that location, with the property in the second agreement to be used in
conjunction with this intended commercial enterprise. Appellant refused to proceed with
the purchase and sued after Appellees failed to return his down payment.
       {¶6}     Appellee Kiko filed a motion to stay pending arbitration, pointing to the
arbitration clause in the purchase agreement, which required binding arbitration for any
disputes concerning the contract or the performance of the owners or the realtor related
to or arising out of the contract. The Bieber Appellees also filed a motion to stay pending
arbitration. Appellant filed a memorandum in opposition to each motion. He claimed the
statutory real estate exception to arbitration applied and the arbitration clause was
unconscionable. Replies and sur-replies were filed.
       {¶7}     On March 4, 2022, the trial court granted a stay pending arbitration, which
is a final appealable order.     See R.C. 2711.02(C) (grant or denial of stay pending
arbitration is a final appealable order). Appellant filed a timely notice of appeal.
                                    ASSIGNMENT OF ERROR
       {¶8}     Appellant’s general assignment of error contends:
       “The trial court erred in granting defendants’ motions to stay the case pending
arbitration.”
       {¶9}     An arbitration clause is considered “a contract within a contract, subject to
revocation on its own merits” so that “an alleged failure of the contract in which it is
contained does not affect the provision itself.” Taylor Bldg. Corp. of Am. v. Benfield, 117
Ohio St.3d 352, 2008-Ohio-938, 884 N.E.2d 12, ¶ 41, quoting ABM Farms, Inc. v. Woods,
81 Ohio St.3d 498, 501-501, 692 N.E.2d 574 (1998). In general, there is a presumption

Case No. 22 MA 0024
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in favor of arbitration when a claim is within the scope of the arbitration provision. Williams
v. Aetna Fin. Co., 83 Ohio St.3d 464, 471, 700 N.E.2d 859 (1998). “[W]ith limited
exceptions, an arbitration clause is to be upheld just as any other provision in a contract
should be respected.” Id.
       {¶10} In the motions before the trial court, the parties did not dispute an issue in
the action was referable to arbitration under the written arbitration agreement and the
applicant for a stay was not in default in proceeding to arbitration for purposes of the
following mandatory provision:
       If any action is brought upon any issue referable to arbitration under an
       agreement in writing for arbitration, the court in which the action is pending,
       upon being satisfied that the issue involved in the action is referable to
       arbitration under an agreement in writing for arbitration, shall on application
       of one of the parties stay the trial of the action until the arbitration of the
       issue has been had in accordance with the agreement, provided the
       applicant for the stay is not in default in proceeding with arbitration.
R.C. 2711.02(B).
       {¶11} In the issues presented for review section, Appellant’s brief separately
alleges two specific errors corresponding to the two arguments presented to the trial
court: (1) failure to apply the real estate exception to mandatory arbitration and (2) failure
to find the arbitration clause unconscionable. The following statutory provision underlies
both arguments:
       A provision in any written contract, except as provided in division (B) of this
       section, to settle by arbitration a controversy that subsequently arises out
       of the contract, or out of the refusal to perform the whole or any part of the
       contract, * * * shall be valid, irrevocable, and enforceable, except upon
       grounds that exist at law or in equity for the revocation of any contract.
R.C. 2711.01(A).
       {¶12} The first “except” phrase in this provision points to division (B), which states:
“Sections 2711.01 to 2711.16 of the Revised Code do not apply to controversies involving
the title to or the possession of real estate * * *.” R.C. 2711.01(B)(1) (with the exceptions
to this exception involving leases or boundaries). The concluding “except” phrase in R.C.

Case No. 22 MA 0024
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2711.01(A), referring to the general grounds for revocation, is the underlying premise
behind the argument about an unconscionable arbitration clause. See Taylor Bldg. Corp.,
117 Ohio St.3d 352 at ¶ 33.
       {¶13} As the parties point out, the Supreme Court applied a de novo standard of
review when applying the arbitration statute’s real estate exception, finding the statute
unambiguous and its application a question of law. See French v. Ascent Resources-
Utica, L.L.C., 167 Ohio St.3d 398, 2022-Ohio-869, 193 N.E.3d 543, ¶ 11 (a controversy
asking whether an expired oil and gas lease fell under the exception). Likewise, the Court
applied a de novo standard of review to a decision on whether an arbitration clause was
unconscionable. Taylor Bldg. Corp., 117 Ohio St.3d 352 at ¶ 2. Still, “any factual findings
of the trial court must be accorded appropriate deference.” Id.
                               REAL ESTATE EXCEPTION
       {¶14} Appellant’s first issue presented for review states:
       “The trial court erred in granting defendants’ motions to stay the case pending
arbitration because the case involves a controversy involving the title to or possession of
real estate and thus was exempt from arbitration pursuant to [R.C.] 2711.01(B)(1).”
       {¶15} Appellant emphasizes the purchase agreement he sought to rescind was a
contract to buy real estate, which was entered with intent to transfer “the title to or the
possession of” real estate. He points out the real estate exception to arbitration applies
to a claim for specific performance, citing cases where the buyer sought to compel the
seller to transfer title. Pointing to his complaint’s request for the purchase agreement to
be rescinded and the transaction to be cancelled, he theorizes he set forth the “mirror
image” of a specific performance claim. He claims title is involved because his complaint
shows he wishes the property to remain with the sellers. He also speculates that if his
case had proceeded past the motion for stay, then a counterclaim for specific
performance would have been asserted against him to force him to pay for the property
and accept title.
       {¶16} In urging his claims are “controversies involving the title to or the possession
of real estate” and thus exempted from arbitration by the real estate exception in R.C.
2711.01(B)(1), Appellant claims the recent French decision is a case on point. In an
action for lease termination, the Supreme Court defined the following three words in the

Case No. 22 MA 0024
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real estate exception: “involving” means relating closely or connecting to; “title” means a
union of elements (ownership, possession, custody), which provides the legal right to
control and dispose of property; and “possession” means the exercise of dominion over
property. French, 167 Ohio St.3d 398 ¶ 14. It was pointed out an oil and gas lease is a
real property interest affecting title and possession, which can terminate by operation of
law under its terms, in which event the lease would no longer encumber the land or affect
title and possession. Id. at ¶ 15-18.
       {¶17} The Court found the claim in the action was a controversy involving the title
to or the possession of real property because:
       If the action is successful, it will quiet title to the property, remove the leases
       as encumbrances to the property, and restore the possession of the land to
       the lessors. If the action is unsuccessful, however, title to the land will
       remain subject to the leases, affecting the transferability of the property.
       Also, [the lessee] would have the continued right to possess and occupy the
       land, as permitted by the leases, denying [the lessor] the right to use the
       property without restriction.
(Citations omitted.) Id. at ¶ 20. Therefore, the Court concluded, “An action seeking a
determination that an oil and gas lease has expired by its own terms is a controversy
involving the title to or the possession of real estate and, under R.C. 2711.01(B)(1), the
action is not subject to arbitration.” Id. at ¶ 21.
       {¶18} A quiet title claim invoking a decision on whether to eliminate or maintain a
title encumbrance is distinguishable from the claims sets forth in the case at bar. Unlike
the title in French, which was encumbered by a lease alleged to have expired under its
own terms, the title of the real estate here was not encumbered by the purchase
agreement. There was no delivery of an executed deed here.
       {¶19} Where a complaint containing alleged false representations induced a party
to enter a purchase agreement, this court previously concluded fraud claims seeking
rescission and damages were not exempt from arbitration by the real estate exception.
See Villas Di Tuscany Condo. Assn., Inc. v. Villas Di Tuscany, 7th Dist. Mahoning No. 12
MA 165, 2014-Ohio-776, ¶ 15-17. See also Riggs v. Patriot Energy Partners, L.L.C., 7th

Case No. 22 MA 0024
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Dist. Carroll No. 11 CA 877, 2014-Ohio-558, ¶ 8, 22. Appellees cite our Riggs case for
various principles.
       {¶20} In that case, we found the quiet title claim was exempt from arbitration due
to the real estate exception but then found the claims for fraud and rescission of oil and
gas leases were subject to arbitration. Riggs, 7th Dist. No. 11 CA 877 at ¶ 22. Notably,
a trial court properly stays the entire action pending arbitration even if the action contains
non-arbitrable controversies. Id. at ¶ 26; Villas Di Tuscany, 7th Dist. No. 12 MA 165 at ¶
20; Morris v. Morris, 189 Ohio App.3d 608, 2012-Ohio-4750, 939 N.E.2d 928, ¶ 14 (10th
Dist.); R.C. 2711.02(B) (“stay the trial of the action until the arbitration of the issue has
been had in accordance with the agreement”).
       {¶21} Appellant suggests French negatively affected Riggs.             However, the
particular holding in French (the alleged automatic expiration of an oil and gas lease
involves title to and possession of real estate) and its effect on one particular holding in
Riggs (about rescission of a recorded oil and gas lease) is not before this court. Again,
as Appellant never completed the contract by paying the purchase price, an executed
deed was not delivered to him. Our situation is distinct from cases where a buyer sought
rescission of an agreement after title had been transferred or encumbered.
       {¶22} In other cases relied on by Appellant, the court found the real estate
exception to arbitration in R.C. 2711.01(B)(1) applied to a buyer’s claim for specific
performance to compel a seller to provide title under the purchase agreement. See Kent
Partners v. Crossings at Golden Pond-Portage Cty., L.L.C., 11th Dist. Portage No. 2010-
P-0028, 2011-Ohio-2842, ¶ 34; Kedzior v. CDC Dev. Corp., 123 Ohio App.3d 301, 303,
704 N.E.2d 54 (1997) (8th Dist.). Appellant acknowledges his complaint did not seek
specific performance to compel the transfer of title to him as the buyer. He did not tender
any money after the 10% deposit, was not entitled to a deed, and did not want the
property.
       {¶23} Instead, he sought rescission of an uncompleted contract in order to recover
his down payment and damages, alleging false representations. Appellant’s request does
not involve title to or possession of real estate, as he does not request the recognition of
his rights in the realty or seek to encumber the seller’s rights in the realty. In such
situations, a party who backs out of a purchase agreement after paying only the down

Case No. 22 MA 0024
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payment cannot turn their fraud and rescission claims into “controversies involving title to
or possession of real estate” by merely noting a completed contract would have
transferred title and/or possession. In short, title remained with the sellers, and Appellant
was not seeking to change that situation.
        {¶24} Moreover, Appellant cannot force the exception to apply by speculating on
counterclaims. There was no counterclaim for specific performance set forth; the motion
for stay was filed before Appellees’ answer date.1 Appellant speculates they may ask the
arbitrator to force him to pay the remainder of the purchase price and accept title.
Appellees could submit to arbitration any counterclaim for breach and seek forfeiture of
the down payment or damages for a loss after a future sale of the property. 2 However,
specific performance would not be available to Appellees at arbitration due to the statutory
real estate exception. See Villas Di Tuscany, 7th Dist. No. 12 MA 165 at ¶ 20 (observing
the arbitrator would not rule on non-arbitrable issues such as any request to transfer title
to property but would refer the matter back to the trial court if an issue was raised as to a
remedy involving title); Kent Partners, 11th Dist. No. 2010-P-0028 at ¶ 34; Kedzior, 123
Ohio App.3d at 303. It is not as if the trial court ordered the issue of specific performance
to be arbitrated.3
        {¶25} In sum, the real estate exception in the statute specifically requires the
controversy to “involv[e] the title to or the possession of real estate” in order to be
exempted from arbitration. R.C. 2711.01(B)(1). It does not generally say it applies to
controversies involving real estate. A controversy does not involve title to or possession

1 “[A] defendant is not required to engage in further litigation by filing a responsive pleading before the court
may entertain a R.C. 2711.02 motion and stay the action.” Albrechta & Coble v. Baumgartner, 6th Dist.
Sandusky No. S-02-015, 2002-Ohio-6351, ¶ 8, citing McGuffey v. LensCrafters, Inc., 141 Ohio App.3d 44,
51, 749 N.E.2d 825 (12th Dist.) (a movant “should not be penalized for promptly and appropriately asserting
its right to arbitration”).

2  Appellees say the property has since been sold to a third party, making moot any speculation they may
file a counterclaim for specific performance after the case is submitted to arbitration. “An event that causes
a case to become moot may be proved by extrinsic evidence outside the record.” State ex rel. Cincinnati
Enquirer, Div. of Gannett Satellite Info. Network, Inc. v. Dupuis, 98 Ohio St.3d 126, 2002-Ohio-7041, 781
N.E.2d 163, ¶ 8. Still, the doctrine is not satisfied where an appellee “offer[s] no proof [of the subsequent
event] aside from the bare unverified assertions in their appellate brief” and there is no acknowledgement
of the post-judgment facts by an appellant. Id. at ¶ 9.
3 Appellee Kiko states the Appellant’s argument is even weaker when applied to a realtor, who did not have
title to keep or transfer.

Case No. 22 MA 0024
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of real estate merely because it involves a real estate purchase agreement. See Riggs,
7th Dist. No. 11 CA 877 at ¶ 20. See also Blanchard Valley Health Sys. v. Canterbury
Holdings, Inc., 3d Dist. Hancock No. 5-12-08, 2012-Ohio-5134, ¶ 20 (pointing out that
every controversy concerning real property does not necessarily involve “title to or
possession of real estate” in a case of restrictive covenants); Mears Harding L.L.C. v.
Ferri, 5th Dist. Stark No. 2011CA00253, 2012-Ohio-2878, ¶ 25 (an alternative holding,
after stating appellant should have appealed from the stay rather than the confirmation).
Where money damages are sought without title changes, title to the property is not in
dispute. See id.
       {¶26} Appellant’s claims requesting return of the down payment, damages, and
rescission of a purchase agreement due to allegations of fraud in the inducement of the
agreement are not exempt from arbitration under R.C. 2711.01(B)(1), as they do not set
forth a controversy involving title to or possession of real estate. This assignment of error
is overruled.
                                    UNCONSCIONABILITY
       {¶27} Appellant’s second issue presented for review states:
       “The trial court erred in granting defendants’ motions to stay the case pending
arbitration because the arbitration provision is unconscionable and therefore
unenforceable.”
       {¶28} As outlined supra, an arbitration agreement may be unenforceable based
“upon grounds that exist at law or in equity for the revocation of any contract.” R.C.
2711.01(A). One of these equitable grounds is unconscionability. Taylor Bldg. Corp.,
117 Ohio St.3d 352 at ¶ 33. “[T]he party must show that the arbitration clause itself is
unconscionable. If the court determines that the arbitration clause is enforceable, claims
of unconscionability that relate to the contract generally, rather than the arbitration clause
specifically, are properly left to the arbitrator in the first instance.” Id. at ¶ 42.
       {¶29} The arbitration clause is not unconscionable unless (1) there is a lack of
meaningful choice (procedural unconscionability) and (2) the terms unreasonably favor
the other party (substantive unconscionability). Hayes v. Oakridge Home, 122 Ohio St.3d
63, 2009-Ohio-2054, 908 N.E.2d 408, ¶ 20.             The burden to prove both aspects of
unconscionability is on the challenger of the arbitration clause. Id. at ¶ 30.

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        {¶30} In evaluating the argument on procedural unconscionability, we consider
facts such as: age, education, intelligence, business acumen, experience, and general
ability to understand terms; the identity of the contract drafter; the ability to negotiate
changes; the pre-printed nature of a form; alternative sources for the challenger’s
purchase; and whether the stronger party believed there was no reasonable probability
the weaker party could fully perform or knew the weaker party would not benefit from the
contract. Id. at ¶ 23-24. “All of the factors must be examined and weighed in their totality
in determining whether an arbitration agreement is procedurally unconscionable.” Id. at
¶ 30.
        {¶31} Here, Appellant, through counsel, filed an opposition to the motions to stay
pending arbitration and a sur-reply to Appellees’ replies in support of their motions.
Appellant argued the contract was “forced” upon him because the purchase agreement
shows on its face it was a pre-printed standard form provided by Appellee Kiko (with
blanks for specific items such as the purchase price) and thus there would not have been
an opportunity to negotiate the pre-printed terms. In addition to claiming a disparity in
bargaining power, Appellant’s opposition to the stay claimed there was “an enormous
disparity in knowledge” and surmised Appellees held greater knowledge about the zoning
issue. No affidavits were attached.
        {¶32} The evidence does not show an absence of meaningful choice as required
for procedural unconscionability. The arbitration clause in the purchase agreement was
not in small print compared to the remainder of the agreement or buried among other
terms. The purchase agreement was a one-page contract, and the arbitration clause was
clearly labeled with “ARBITRATION” as the heading. Appellant did not mention his age,
education, experience, or understanding. There was no evidence placed on the record
regarding a lack of legal representation or knowledge about arbitration or negotiation.
        {¶33} Appellant agreed to a purchase price of $1.496 million for three properties
(in two counties) and put $149,600 down. Appellant acknowledged entering the purchase
agreement for his business endeavor. As Appellees point out, this suggests Appellant
possessed some business acumen, an ability to go elsewhere for his purchase, and the
power to attempt to negotiate the arbitration clause. There was no evidence on the
circumstances existing before the execution of the agreement. We also note the mineral

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rights, which were part of the typed contract, were eliminated by handwritten notation and
initialed. Although this change favored the seller, it indicated the terms of the realtor’s
pre-printed contract were not entirely set in stone.
       {¶34} Without evidence of the inability to negotiate and status as the weaker party,
Appellant has not supported the characterization of the agreement as a contract of
adhesion, which is described as “a standardized form contract prepared by one party,
and offered to the weaker party, usually a consumer, who has no realistic choice as to
the contract terms.” Taylor Bldg. Corp., 117 Ohio St.3d 352 at ¶ 49. Moreover, “even a
contract of adhesion is not in all instances unconscionable per se.” Id. at ¶ 50 (noting the
benefits of form contracts to consumers in reducing costs).
       {¶35} Appellant points out he would not have entered the purchase agreement if
he had known about an alleged zoning issue, suggesting Appellees knew he would not
benefit from an agreement for property zoned as residential. Appellees note Appellant’s
complaint specifically acknowledged Appellees used the term “grandfathered” for
commercial use, indicating the zoning was not actually commercial. The details of the
zoning, the grandfathering, the parties’ zoning knowledge or ability to gain such
knowledge, and any inability to petition to extend the grandfathering upon a sale were not
provided to the trial court. The factual claims relied on by Appellant are unsupported by
affidavit for purposes of the unconscionability argument.
       {¶36} In Hayes, the Supreme Court reversed an unconscionability decision after
concluding the appellate court erroneously relied upon facts that were not placed in
evidence. Hayes, 122 Ohio St.3d 63 at ¶ 25-27, 44 (“The only facts in evidence in this
case pertaining to procedural unconscionability are [the buyer’s] age and the terms
contained in the agreement she signed.”). The party challenging the arbitration clause’s
enforceability has the “burden to come forward with evidence supporting her challenge.”
Id. at ¶ 27 (and alternatively finding age, which was the only factor in evidence, did not
alone satisfy the test). See also Harbour Portfolio VII, LP v. Pulley, 1st Dist. Hamilton No.
C-150080, 2015-Ohio-4399, ¶ 10 (reversing a trial court’s stay denial where the opponent
of the stay did not meet the burden by presenting an affidavit or other evidence on her
age, education level, intelligence, business acumen and experience). Compare Williams,
83 Ohio St.3d at 472 (“Williams filed an affidavit in the trial court regarding the arbitration

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clause's inclusion in the loan agreement, to support her challenge to the specific validity
of the arbitration clause.”).
        {¶37} Appellant     submitted   no   affidavit   in   support   of   his   procedural
unconscionability claims (and did not request a hearing in which to present testimony on
the matter). Although counsel’s statements in a memorandum can concede points in
favor of the opposing party, counsel’s arguments are not evidence and cannot be
presented as facts to support the represented party. We cannot say there was an
absence of meaningful choice in entering the agreement, and thus, there was no showing
of procedural unconscionability. In any event and as discussed next, the arbitration
clause is not substantively unconscionable.
        {¶38} When evaluating an argument on substantive unconscionability, the court
considers whether the agreement’s terms are commercially reasonable. Hayes, 122 Ohio
St.3d 63 at ¶ 33. Depending on the content of a particular agreement, some relevant
considerations may include the ability to predict the cost of future liability, industry
standards, the fairness of the terms, and the charge for the product or service. Id. Here,
the arbitration clause required binding arbitration for any disputes concerning the contract
or the performance of the owners or the realtor related to or arising out of the contract.
The applicable rules were disclosed to be those of the American Arbitration Association
or similar organization.    The first party to file had the right to select the arbitration
association. The clause specifically informed the parties they were waiving the right to a
court or jury trial.
        {¶39} First, Appellant argues this limitation of the forum to arbitration is
substantively unconscionable. As this is the very essence of an agreement to arbitrate,
Appellant’s argument is wholly without merit. “[W]aiver of the right to trial by jury is a
necessary consequence of agreeing to have an arbitrator decide a dispute, and this
aspect of an arbitration clause is not substantively unconscionable.” Id. at ¶ 34, citing
Taylor Bldg. Corp., 117 Ohio St.3d 352 at ¶ 55.
        {¶40} Next, Appellant complains the arbitration clause is substantively
unconscionable as it weakens certain claims (such as his fraud claim) by improperly
limiting his damage recovery. The parties’ arbitration clause limits certain aspects of
recovery by containing a waiver of the right to recover incidental, consequential, or

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punitive damages and by requiring the parties to pay their own attorney’s fees and split
the costs of arbitration.4
        {¶41} The Supreme Court has observed an arbitration provision “is not
commercially unreasonable” where it required the parties to each bear their own attorney
fees and costs, which requirement “is equitable to both parties” and “is not one-sided or
oppressive.” Hayes, 122 Ohio St.3d 63 at ¶ 35-36. On the subject of eliminating the
ability to recover punitive damages, the Hayes Court also concluded the arbitration
clause’s waiver of the right to seek punitive damages was commercially reasonable. Id.
at ¶ 35-36 (even where the limitation only applied to the residents of the nursing home).
Here, the waiver of punitive damages applied to both sides with both parties responsible
for their own attorney’s fees and with arbitrator costs split evenly among all parties. This
was commercially reasonable under Hayes.
        {¶42} As for the other damage limitations, it was not merely Appellant who waived
the ability to seek consequential or incidental damages. Applying the analysis from
Hayes, this waiver was commercially reasonable as it was “equitable to both parties” and
“not one-sided or oppressive.” See id. at ¶ 35. Similarly, the Eighth District rejected an
unconscionability argument regarding limitation of damages where the arbitration clause
said the arbitrator had no authority to award consequential or indirect damages (or
punitive damages). McCaskey v. Sanford-Brown College, 8th Dist. Cuyahoga No. 97261,
2012-Ohio-1543, ¶ 35-37.             Because the elimination of consequential or incidental
damages did not unreasonably favor one side, it was not substantively unconscionable.
See Taylor Bldg. Corp., 117 Ohio St.3d 352 at ¶ 32.
        {¶43} Appellant also complains the arbitration clause says, “issues of arbitrability
shall be determined solely by the arbitrator.” Appellant cites no law in support of an
unfairness argument. In general, the parties can agree to submit arbitrability questions
to the arbitrator. Belmont Cty. Sheriff v. Fraternal Order of Police, Ohio Labor Council,
Inc., 104 Ohio St.3d 568, 2004-Ohio-7106, 820 N.E.2d 918, ¶ 13 (“Unless the parties

4 Consequential damages are those “[l]osses that do not flow directly and immediately from an injurious act
but that result indirectly from the act” (which may include business profits). Incidental damages are those
“[l]osses reasonably associated with or related to actual damages” which can include a seller's expenses
reasonably incurred in caring for the subject of the sale after a buyer's breach or a buyer's similar expenses
in caring for the subject after a seller's breach. Black's Law Dictionary (11th Ed. 2019).

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clearly and unmistakably provide otherwise, the question of whether the parties agreed
to arbitrate is to be decided by the court, not the arbitrator.”). In any event, as Appellees
point out, Appellant did not challenge arbitrability of the issues under the terms of the
agreement. The real estate exception was a statutory issue of exemption that was
presented to the trial court (and is now before this court), regardless of the cited portion
of the arbitration clause. And, unconscionability was an issue dealing with enforceability
not arbitrability (and was presented to the court as well).
       {¶44} Finally, while generally stating the agreement was substantively
unconscionable, Appellant’s brief presented a case citation with a parenthetical showing
the cited court held an arbitration provision was unconscionable because it increased the
financial burden on the buyer when pursuing a claim and did not disclose the costs of
arbitration or mention they would be substantially higher than litigation. See Porpora v.
Gatliff Bldg. Co., 160 Ohio App.3d 843, 2005-Ohio-2410, 828 N.E.2d 1081, ¶ 18 (9th
Dist.). Appellant’s reply brief disclosed his intent to utilize this holding as an argument.
Appellant’s memorandum in opposition to a stay presented this topic to the trial court in
the same manner (only disclosing his intent to set forth this specific argument in his sur-
reply after merely citing the case earlier).
       {¶45} A citation’s parenthetical is not a proper method for a party to raise a specific
argument, nor is a reply brief on appeal or a sur-reply brief in the trial court. Regardless,
the Porpora decision initially supported the substantive unconscionability decision by
pointing to the prohibition on the consumer proceeding to arbitration until after the
residential builder provided a certificate of substantial completion (and then added the
observations about the costs of arbitration). Id. at ¶ 15. This is not similar to the situation
in the case at bar. Additionally, the Ninth District subsequently concluded the arbitration
costs listed in the American Arbitration Association’s rules “could easily be exceeded by
litigation expenses, both at the trial court and appellate level” while pointing out the
appellants failed to produce evidence of the expected cost differential.           English v.
Cornwell Quality Tools Co., 9th Dist. Summit No. 22578, 2005-Ohio-6983, ¶ 17 (and
distinguishing Porpora as involving a condition precedent to arbitration).
       {¶46} In any event, Appellant failed to prove this unconscionability claim. As the
Supreme Court pointed out, “arbitration is favored because it provides the parties thereto

Case No. 22 MA 0024
                                                                                        – 15 –

with a relatively expeditious and economical means of resolving a dispute.” Hayes, 122
Ohio St.3d 63 at ¶ 15. “[T]he United States Supreme Court held that an arbitration
agreement that does not mention costs and fees is not per se unenforceable on the theory
that it fails to protect a party from potentially high arbitration costs, because the mere risk
that a plaintiff would be forced to pay exorbitant costs is too speculative to justify
invalidation of the arbitration agreement.” Taylor Bldg., 117 Ohio St.3d 352 at ¶ 57, citing
Green Tree Fin. Corp. v. Randolph, 531 U.S. 79, 90-92, 121 S.Ct. 513, 148 L.Ed.2d 373
(2000). “The lack of evidence before the trial court of excessively high arbitration costs
undercuts the [buyer’s] claim that arbitration costs would be prohibitively expensive.” Id.
Likewise, there is no indication the cost of arbitration would be higher than the
expenditures required for court litigation.
       {¶47} Appellant had the burden to prove the arbitration provision was both
procedurally and substantively unconscionable but failed to do either. Accordingly, this
assignment of error is overruled.
       {¶48} For the foregoing reasons, the trial court’s decision granting a stay pending
arbitration is affirmed.

Waite, J., concurs.

D’Apolito, P. J., concurs.

Case No. 22 MA 0024
[Cite as Cook v. Richard T. Kiko Agency, Inc., 2023-Ohio-552.]

        For the reasons stated in the Opinion rendered herein, the assignments of error
are overruled and it is the final judgment and order of this Court that the judgment of the
Court of Common Pleas of Mahoning County, Ohio, is affirmed. Costs to be taxed against
the Appellant.
        A certified copy of this opinion and judgment entry shall constitute the mandate in
this case pursuant to Rule 27 of the Rules of Appellate Procedure. It is ordered that a
certified copy be sent by the clerk to the trial court to carry this judgment into execution.

                                        NOTICE TO COUNSEL

        This document constitutes a final judgment entry.