Court Opinion

ID: 9761381
Source: CourtListenerOpinion
Date Created: 2023-08-29 01:41:11.012042+00
Date Added: 2024-06-11T07:29:23.265343
License: Public Domain

Pickering, J.,
concurring in part and dissenting in part:
I agree that D.R. Horton, Inc. v. Green, 120 Nev. 549, 553, 96 P.3d 1159, 1162 (2004), requires reversal of the order summarily compelling arbitration. However, I write separately to emphasize that the limited warranty’s arbitration provision contains a delegation clause that appears to commit the decision of “whether an issue should be submitted to binding arbitration’ ’ to the arbitrator, in addition to specifying application of the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-16.
The Supreme Court decided Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010), after the briefing in this case concluded. Rent-A-Center rejects a Nevada-law-based unconscionability challenge to the enforceability under the FAA of an arbitration agreement containing a delegation clause, holding that unless the party contesting arbitration “challenged the delegation provision specifically, we must treat it as valid . . . and must enforce it ... , leaving any challenge to the validity of the [Arbitration] Agreement as a whole for the arbitrator.” Id. at 72. Using arbitration to decide whether arbitration is appropriate seems counter-intuitive, but the Supreme Court has held that such clauses are enforceable if the parties clearly agreed to it. Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83-85 (2002).
The majority denies that the delegation clause is before this court and concludes that, even if it is, the evidence does not clearly and unmistakably show that the parties agreed to arbitrate the enforceability of the arbitration provisions. But the issue is before this court because the Gonskis are challenging the arbitration agreement as a whole, which includes the delegation clause. Although as-yet factually undeveloped, the written agreement shows that the parties appear clearly to have agreed to arbitrate enforceability of the arbitration provisions. Thus, the limited warranty states:
This Dispute Settlement provision sets forth the exclusive remedy of all disputes or controversies under this Limited Warranty.
If the Plan Administrator is unable to successfully mediate the dispute, the Plan Administrator will inform The Homeowner *566and The Builder that the dispute is unresolved and that Binding Arbitration is provided as a remedy for resolving the dispute.* These disputes may include, but are not limited to:
.... 5. Whether an issue should be submitted to binding arbitration.
The Gonskis agreed to this provision by signing the purchase agreement incorporating the limited warranty.
The majority finds substantive unconscionability in that the arbitration agreement limits the application of NRS Chapter 40, citing to Armendariz v. Foundation Health Psychcare, 6 P.3d 669 (Cal. 2000), a California case, to support their contention. What the majority fails to acknowledge is that California has statutes that explicitly prohibit contracts that inhibit unwaivable statutory rights. Armendariz, 6 P.3d at 680 (citing Cal. Civ. Code §§ 1668, 3513). Nevada does not have such statutes and thus we lack the legislative backing to judicially invalidate as unconscionable an agreement that commits such disputes to arbitration. Kindred v. District Court, 116 Nev. 405, 996 P.2d 903 (2000), also cited by the majority, does not support the majority’s conclusion because it only states that statutory rights remain when the parties agree to arbitrate a statutory issue. It says nothing about a court declaring an agreement as a whole unconscionable in the face of an otherwise valid arbitration clause. Kindred, 116 Nev. at 414, 996 P.2d at 909.
The Gonskis never explicitly challenged the delegation clause, only the agreement to arbitrate. Although Rent-A-Center did not permit Jackson to refocus his argument on the delegation clause specifically, that aspect of the decision appears tied to prudential concerns unique to certiorari practice before the Supreme Court, not the FAA itself. And, while the Gonskis did not focus on the delegation clause, neither did Pulte. On this record, I would not reverse outright. Instead, I would reverse and remand for further briefing and argument on whether the agreements contain an enforceable delegation clause under Rent-A-Center. Judicial findings on other matters should abide resolution of the threshold Rent-A-Center issue as to forum.