4 N.M. 378
N.M.2012Background
- THI of New Mexico at Casa Arena Blanca operates a nursing home in Alamogordo, NM.
- Marlene Urbina sought admission for Dolores Figueroa; Urbina acted under a general power of attorney.
- As a condition of admission, Urbina signed an admission agreement including an arbitration clause.
- The arbitration clause states preconditions for medical treatment and broad disputes to arbitration, with some exceptions under $2,500, guardianship, collection, and eviction actions.
- Ms. Figueroa resided four months (Sept 2, 2008 – Jan 18, 2009); she died and the son sued for wrongful death and related claims.
- District court found the arbitration clause substantively unconscionable and unenforceable under Cordova.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does FAA preempt NM unconscionability rule for arbitration terms? | Urbina argues NM unconscionability is valid and not preempted. | THICAB argues FAA preempts state unconscionability analysis. | FAA does not preempt unconscionability; NM analysis applied |
| Is the arbitration agreement substantively unconscionable due to one‑sided terms? | Agreement is unfairly one‑sided favoring nursing home. | Exemptions show bilaterality and are not unconscionable. | Agreement is substantively unconscionable |
| Can the unconscionable clause be severed from the arbitration agreement? | Savings clause could preserve bilateral arbitral obligations. | Severance should preserve the remainder; exemptions are severable. | Severance not allowed; entire agreement unenforceable |
Key Cases Cited
- Cordova v. World Finance Corp. of New Mexico, 2009-NMSC-021 (N.M. 2009) (unconscionability applies to one‑sided arbitration terms)
- Rivera v. American Gen. Fin. Servs., Inc., 2011-NMSC-033 (N.M. 2011) (unconscionability not limited to fully bilateral terms)
- Fiser v. Dell Computer Corp., 2008-NMSC-046 (N.M. 2008) (statutory class-action waiver issue; unconscionability doctrine applies)
- Concepcion v. Nvidia Mobility LLC, 563 U.S. 333 (U.S. Supreme Court, 2011) (FAA preemption of Discover Bank rule; class action waiver rule invalidated in some contexts)
- Rivera, 2011-NMSC-033, 150 N.M. 398, 259 P.3d 803 (N.M. 2011) (reaffirmed Cordova approach to unconscionability in arbitration)