3 N.M. 183
N.M. Ct. App.2012Background
- Bargman was admitted to Canyon for inpatient rehabilitative care and later sued for negligence and related claims arising from that care.
- An admission agreement including a three-page arbitration agreement was provided about a month into her treatment.
- The arbitration agreement stated mutual promises to arbitrate disputes and described an expedited ADR process.
- Exclusions included disputes pertaining to resident discharge and collections, with explicit language about giving up rights to court adjudication for most disputes.
- Bargman signed the admission and arbitration agreements after review and acknowledgment, and suit was filed after discharge.
- The district court denied Canyon’s motion to compel arbitration, finding the arbitration agreement substantively unconscionable; this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitration clause is substantively unconscionable. | Bargman argues the provisions are unfairly one-sided. | Canyon contends the clause is fair and aligns with case law allowing some claims to be arbitrated. | Remanded for evidence-based determination; not finally decided here. |
| Whether remand is appropriate to allow development of a record on the collections exclusion. | No remand needed since evidence was not presented. | Remand is appropriate to develop record showing the exclusion is reasonable. | Remand granted to allow Canyon to present evidence on the collections exclusion. |
| Whether the two exclusions (discharge and collections) render the agreement substantively unconscionable. | Exclusions skew rights against residents; discharge is handled administratively, so focus on collections. | Bilateral exclusions are not inherently one-sided and can be reasonable. | Court previously held exclusions can be substantively unconscionable; remand to evaluate collections exclusion specifically. |
Key Cases Cited
- Rivera v. Am. Gen. Fin. Servs., Inc., 259 P.3d 803 (2011-NMSC-033) (unreasonably one-sided arbitration where lender seeks court relief for most claims)
- Cordova v. World Fin. Corp. of N.M., 208 P.3d 901 (2009-NMSC-021) (unconscionable where lender reserves most remedies to courts)
- Ruppelt v. Laurel Healthcare Providers, LLC, 293 P.3d 902 (2013-NMCA-014) (healthcare arbitration with collections/discharge exclusions deemed substantively unconscionable)