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)