642 S.W.3d 253
Ark. Ct. App.2022Background
- Lucy Chancey was admitted to Paris Health & Rehab on Sept. 24, 2018; her son Thomas signed the admission agreement as Responsible Party under a durable power of attorney.
- The admission contract contained a broad arbitration clause requiring arbitration of disputes except: any solely monetary claim under $25,000 was excluded from the Program.
- Thomas (as guardian) sued Northport on Oct. 28, 2019 for negligence, medical negligence, and violations of long-term‑care residents’ rights.
- Northport moved to compel arbitration; Thomas opposed, arguing the $25,000 carve‑out destroyed mutuality by shielding Northport’s likely claims while sending residents’ tort claims to arbitration.
- The circuit court denied the motion, finding the arbitration agreement lacked mutuality under Arkansas precedent. Northport appealed.
- The Court of Appeals affirmed, holding the agreement invalid and unenforceable for lack of mutuality of obligations under controlling Arkansas decisions.
Issues
| Issue | Plaintiff's Argument (Chancey) | Defendant's Argument (Northport) | Held |
|---|---|---|---|
| Whether the arbitration agreement is a valid, enforceable contract (mutuality of obligations) | Carve‑out for solely monetary claims < $25,000 makes the clause one‑sided: residents’ tort claims go to arbitration while likely nursing‑home claims (collections, small monetary claims) remain in court, so no mutuality | The clause binds both sides for disputes > $25,000; FAA governs and preempts stricter state scrutiny; Jorja Trading prohibits invalidating arbitration by speculating about benefit imbalance | Agreement lacks mutuality and is unenforceable; denial to compel arbitration affirmed |
| Whether Jorja Trading altered the mutuality analysis or preempts prior Arkansas nursing‑home decisions | N/A (Chancey relies on Arkansas mutuality precedent) | Jorja Trading (Arkansas Supreme Court) shows some intra‑contract provisions need not be bilateral; Northport says that undermines prior rulings like Phillips/Adams/Alexander | Court follows Phillips/Adams/Alexander precedent rather than expanding Jorja Trading; Jorja did not overrule Phillips, so Northport’s argument rejected |
Key Cases Cited
- Jorja Trading, Inc. v. Willis, 598 S.W.3d 1 (2020) (Ark. Supreme Court held certain non‑bilateral arbitration provisions did not destroy mutuality in an installment‑sales contract)
- Robinson Nursing & Rehab. Ctr., LLC v. Phillips, 586 S.W.3d 624 (2019) (Ark. Supreme Court held nursing‑home arbitration clauses with a monetary threshold lacked mutuality)
- Country Club Gardens, LLC v. Alexander, 599 S.W.3d 363 (2020) (Ark. Ct. App. affirmed denial to compel arbitration where clause had a monetary threshold)
- Hickory Heights Health & Rehab, LLC v. Adams, 566 S.W.3d 134 (2018) (Ark. Ct. App. held arbitration clause shielding the facility from court litigation lacked mutuality)
- Reg’l Care of Jacksonville, LLLC v. Henry, 444 S.W.3d 356 (2014) (Ark. Supreme Court precedent recognizing lack of mutuality where arbitration provisions favor one party)
- E‑Z Cash Advance Inc. v. Harris, 60 S.W.3d 436 (2001) (Ark. Supreme Court case cited for mutuality doctrine in arbitration context)
