Mary T. Kleine v. Emeritus at Emerson, 139 A.3d 148

Background

Plaintiff Mary T. Kleine (through her brother with power of attorney) sued nursing-home defendants for personal injuries; Care One at Valley moved to compel arbitration under an admission agreement.
Admission occurred when an 85‑year‑old plaintiff was placed; her brother signed a stack of documents in the admissions office after being told to "sign and initial," without explanation or opportunity to consult counsel.
The admission agreement contained a bold, upper‑case arbitration clause requiring claims "brought by the resident, his/her personal representatives, heirs, attorneys or the responsible party" to be resolved by binding arbitration administered pursuant to the American Arbitration Association (AAA) rules; it waived jury trial and appeal rights and allocated half the arbitration costs to the resident.
Plaintiff submitted sworn facts alleging lack of understanding, economic inability to pay arbitration fees, and coercive admission circumstances; the trial court granted defendant's summary motion to compel arbitration.
On appeal the Appellate Division assumed plaintiff's factual allegations were true, analyzed contract‑formation and unconscionability principles, and concluded arbitration could not be compelled because the AAA no longer administered individual patient disputes at the time of contracting, so there was no meeting of the minds as to an available arbitral forum.
The court reversed the trial court's order compelling arbitration and remanded (noting the judge also should have stayed claims rather than dismissing them if arbitration were appropriate).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does the FAA preempt N.J. statute barring pre‑dispute nursing‑home waivers?	Marmet and federal policy require enforcement of arbitration provisions.	FAA controls; statute cannot bar arbitration.	FAA governs; state statute yields, but FAA does not dispense with contract defenses.
Was the arbitration clause a valid, mutual waiver of judicial remedies?	Kleine argued lack of clear, mutual waiver and that clause was one‑sided (binds resident only).	Care One argued clause clearly waived resident's rights and references AAA rules; implied mutuality via application of AAA rules.	Court found clause ambiguous/unilateral enough to raise unconscionability concerns and required careful scrutiny.
Were contract formation and unconscionability resolved properly on summary motion?	Kleine contended admissions facts (coercion, age, lack of explanation, inability to pay) required an evidentiary hearing on procedural/substantive unconscionability.	Care One maintained the clause was enforceable as written and Atalese requires clear language.	Court held the trial judge erred by not conducting an evidentiary hearing given plaintiff's sworn statements; unconscionability inquiry was warranted.
Was arbitration available as contemplated (AAA administration) when the parties contracted?	Kleine showed AAA had ceased administering individual patient healthcare disputes as of Jan 1, 2003, so the designated forum was unavailable and no meeting of the minds occurred.	Care One argued the clause only required arbitration pursuant to AAA rules (not AAA administration) or could be administered by another forum applying AAA rules.	Court held AAA was unavailable at contracting, so there was no agreement as to an arbitral forum and arbitration could not be compelled.

Key Cases Cited

Marmet Health Care Ctr., Inc. v. Brown, 565 U.S. 530 (2012) (FAA preempts state statutes that categorically bar nursing‑home arbitration)
Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430 (2014) (arbitration waivers must be clear and unambiguous under state contract law)
Rent‑A‑Center, W., Inc. v. Jackson, 561 U.S. 63 (2010) (arbitration is a matter of contract; state law governs contract formation and defenses)
Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520 (1995) (on summary disposition, court must assume truth of nonmoving party's factual submissions)
AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA preempts state doctrines that interfere with fundamental attributes of arbitration)
Muhammad v. Cnty. Bank of Rehoboth Beach, 189 N.J. 1 (2006) (procedural and substantive unconscionability principles govern enforcement of adhesion contracts)