Dalon v. Ruleville Nursing & Rehabilitation Center
161 F. Supp. 3d 406
N.D. Miss.2016Background
- Plaintiff Edward Dalon (surviving spouse/administrator) sued Ruleville Nursing & Rehabilitation Center for wrongful death, alleging negligence in the care of his wife, Judy Dalon.
- Judy was admitted to the facility on March 19, 2013; she completed an arbitration agreement that day without family present. The agreement required arbitration of disputes and extended benefits to the resident’s personal representative and spouse.
- Admission records note intermittent confusion, forgetfulness, a diagnosis including Huntington’s disease, and that Judy required assistance with all activities of daily living; some records indicate mild/moderate cognitive impairment and use of antipsychotic medication.
- Plaintiff filed an affidavit asserting Judy lacked capacity when she signed the arbitration agreement and that few alternative facilities were available, making the agreement effectively non‑negotiable.
- Defendant moved to compel arbitration; the Court found the “making” of the agreement to be in issue (capacity and procedural unconscionability) and held the record undeveloped, so a live hearing is required.
- The Court denied the motion to compel arbitration without prejudice and ordered a hearing on the enforceability of the arbitration agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Judy had capacity to enter the arbitration agreement | Judy was confused, forgetful, cognitively impaired, on antipsychotics, and lacked ability to understand/waive rights | Agreement facially signed; medical records (physician notes) do not show incapacity; plaintiff’s affidavit is insufficient | Making of the agreement is in issue; plaintiff’s allegations and records are sufficient to raise a genuine factual dispute requiring a hearing |
| Whether the arbitration agreement is procedurally unconscionable (adhesion/voluntariness) | Agreement was a take‑it‑or‑leave‑it condition of receiving care; few alternatives and urgent need created imbalance and lack of voluntariness | Agreement is standard and not procedurally infirm on its face | Court finds sufficient allegations/evidence of procedural unconscionability (adhesion and limited alternatives) to place making of the agreement in issue |
| Whether the court may resolve arbitrability on the paper record without a hearing | Plaintiff contends a hearing is needed given disputed facts on capacity and market alternatives | Defendant argues court can decide on the papers | Because genuine disputes of material fact exist and the record is undeveloped, a hearing is required under 9 U.S.C. § 4 |
| Whether the court will compel arbitration now | N/A | N/A (seeking immediate enforcement) | Motion to compel arbitration denied without prejudice; defendant may renew after the § 4 hearing on enforceability |
Key Cases Cited
- Am. Bankers Ins. Co. of Fla. v. Inman, 436 F.3d 490 (5th Cir.) (party may move to compel arbitration under the FAA)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S.) (apply ordinary state‑law contract principles to decide whether parties agreed to arbitrate)
- Am. Heritage Life Ins. Co. v. Orr, 294 F.3d 702 (5th Cir.) (party contesting making of arbitration agreement must make some showing and produce some corroborating evidence)
- Sherer v. Green Tree Servicing LLC, 548 F.3d 379 (5th Cir.) (two‑step inquiry: whether parties agreed to arbitrate and whether claims fall within scope)
- Entergy Miss., Inc. v. Burdette Gin Co., 726 So.2d 1202 (Miss.) (procedural unconscionability and adhesion contracts; voluntariness can render agreement unenforceable)
- Caplin Enters., Inc. v. Arrington, 145 So.3d 608 (Miss.) (factors for procedural unconscionability include lack of knowledge, voluntariness, disparity in bargaining power, and lack of opportunity to study terms)