Gullet v. Kindred Nursing Centers (CA2 2/15/17)

The court discusses whether an arbitration agreement is unconscionable and allows discovery on the issue.

Plaintiff’s father died in a nursing home. Plaintiff sued for, among other things, violation of the Adult Protective Services Act. Defendant moved to compel arbitration, the father having signed an arbitration agreement upon admission. Plaintiff argued that the agreement was substantively unconscionable and that discovery should be allowed on whether it was procedurally unconscionable. The trial court granted the motion; Plaintiff appealed.

On substantive unconscionability the Court of Appeals affirms.

Plaintiff argue that the agreement unreasonably restricted discovery. It allowed standard paper discovery but with limits different from the rules of procedure, allowed depositions of six fact witnesses and two experts, and such other discovery as the parties or arbitrator thought “necessary and proper.” “The amount of discovery is not so low and the burden to obtain more so high that the Agreement denies litigants the opportunity to conduct discovery sufficient to adequately arbitrate [sic]  . . .”

Plaintiff also argued that the agreement was unfair because the arbitration agency used by Defendant – and thus arguably financially biased toward it – supplied the list of arbitrators. But the parties could agree to use other arbitrators and, if they didn’t agree, could use the each-pick-your-own-and-they-pick-a-third process. This was not “fundamentally unfair.”

On procedural unconscionability the court reverses. Plaintiff had no evidence of it but said that was because his father was dead so he needed to do discovery to find out if there was any. The court agrees. When he signed the agreement Plaintiff’s father was “a man requiring in-patient care because of serious health problems . . . who died approximately one month later.” That’s enough for the court to decide, analogizing to summary-judgment cases, that Plaintiff should have a chance to explore the issue.

“On the issue of procedural unconscionability, we vacate and remand . . .” Well, no. “Vacate” is something the Supreme Court occasionally does to opinions from the middle courts but not something they can do to this trial court’s ruling. Its reversed but its still on the record. Odd – telling, perhaps? – that such a mistake got through.

(Opinion: Gullet v. Kindred Nursing Centers)

Orosco v. Maricopa County Special Health Care Dist. (CA1 1/2/17)

A simple but interesting point about offers of judgment.

In this med-mal case Plaintiff had made two offers, almost one year apart. The verdict exceeded both. The question was whether the interest sanction should run from the time of the first or of the second. The trial court used the first; Defendant appealed.

The Court of Appeals affirms. Defendant relied on a Nevada case to the effect that the second offer wipes out the first. “The weight of the authorities construing similar state court rules, however, is to the contrary, when, as here, the judgment finally obtained is less favorable to the offeree than both offers.” The court feels that a contrary rule could inhibit the making of offers and thus reduce chances of settlement.

In this and a separate memo the court also deals with other issues but the part about OJs is the take-away.

(Opinion: Orosco v. MCSHCD)

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Spring v. Bradford (CA1 1/12/17)

On how to apply the rule of exclusion of witnesses

At trial of this medical malpractice case the parties invoked the rule but the defense prepared its experts (one standard-of-care, the other causation) by showing them transcripts of the plaintiff’s experts’ testimony. Plaintiff found out about this on cross and moved to exclude the defense experts. The trial court concluded that Defendant had violated the rule but found no prejudice because the defense experts hadn’t changed their pre-trial opinions. It refused to exclude the experts but did instruct the jury about what had happened. The jury gave a defense verdict; Plaintiff’s motion for new trial was denied; Plaintiff appealed.

“[W]e hold that, by its terms, Rule 615 does not automatically exempt expert witnesses from exclusion [but] the superior court may nevertheless exercise its discretion under the “essential” witness exemption of Rule 615(c) to allow an expert to listen to other testimony (or to review transcribed testimony).” An expert isn’t automatically “essential” but the trial court “may properly consider that the anti-fabrication purpose of Rule 615 applies principally to fact witnesses, that an expert may review other experts’ opinion reports and pretrial depositions, and that an expert’s opinion may properly be based on other witnesses’ trial testimony.” But Defendant hadn’t asked permission so he violated the rule.

Plaintiff argued that prejudice must be presumed from this, citing a Supreme Court criminal case dealing with fact witnesses. But the court feels that “[n]o presumption of prejudice is generally necessary in the context of purely expert witnesses because disclosure of their expert reports and pretrial depositions establish a basis for assessing actual prejudice in the form of altered opinions.” Plaintiff could show no such alteration.

The trial court’s remedy – an instruction rather than striking or excluding testimony — was within its discretion. The opinion mentions that the trial court found Defendant’s violation a mistake about the rule’s application, not an act of bad faith, but does not clarify what a lawyer’s motivation has to do with the question of whether experts changed their opinions.

For similar reasons the opinion affirms the new-trial ruling.

(Opinion: Spring v. Bradford)