Moran v. Riverfront Diversified, Inc.
968 N.E.2d 1
Ohio Ct. App.2011Background
- Everdry appeals denial of its motion to stay proceedings and compel arbitration under the contract’s arbitration clause.
- Moran initiated suit in May 2010 alleging foundation repair failures and various damages.
- Contract requires arbitration under AAA Construction Industry Rules with court-entry of award enforceable.
- Trial court held the arbitration clause procedurally and substantively unconscionable based on evidence of adhesion, Moran’s age, and lack of understanding.
- Court found the record insufficient to support unconscionability and remanded for an evidentiary hearing on remand.
- On remand, the court should consider whether AAA Home Construction Rules apply and proceed with a hearing as requested by Moran.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a hearing was required before ruling on arbitration. | Everdry argues R.C. 2711.03 requires a hearing. | Moran contends no hearing was necessary as evidence existed in affidavits. | No reversible error; hearing not required for this motion. |
| Whether the arbitration clause is procedurally unconscionable. | Moran claims adhesion, age, and lack of comprehension show procedural unconscionability. | Everdry contends record shows Moran understood terms; clause not procedurally unconscionable. | Record insufficient to establish procedural unconscionability. |
| Whether the arbitration clause is substantively unconscionable. | Arbitration costs and process were not explained, making it substantively unconscionable. | Costs alone do not establish unconscionability; Moran should have shown undue burden. | Record insufficient to prove substantive unconscionability. |
| Whether the case should be remanded for evidentiary proceedings on unconscionability. | A hearing is needed to resolve factual disputes. | Evidence submitted via affidavits should suffice on de novo legal review. | Remand for evidentiary hearing on remand. |
| What standards govern review of arbitration unconscionability and what outcomes follow. | Ohio policy favors arbitration; Williams considerations apply given record. | Costs and remedies must be evaluated with applicable rules; no automatic invalidation. | Affidavit record insufficient; vacate ruling and remand for hearing. |
Key Cases Cited
- Williams v. Aetna Fin. Co., 83 Ohio St.3d 464 (Ohio 1998) (arbitration clause unconscionability requires more than high costs unless demonstrated by record)
- Taylor Bldg. Corp. of Am. v. Benfield, 117 Ohio St.3d 352 (Ohio 2008) (strong policy favoring arbitration; distinguishes Williams facts)
- Hayes v. Oakridge Home, 122 Ohio St.3d 63 (Ohio 2009) (factors for substantive unconscionability; no bright-line rule)