2023 Ark. App. 172
Ark. Ct. App.2023Background
- In March 2019 Arthur H. Wiegand was admitted to The Waters of White Hall; his son William, who held his power of attorney, signed the facility’s admissions paperwork including an arbitration agreement.
- Arthur died in April 2019; William was later appointed personal representative of the estate and sued the facility in September 2020 for negligence, medical negligence, and violations of residents’ rights.
- The facility moved to compel arbitration in March 2021 based on the admissions arbitration clause.
- The arbitration clause required arbitration for most claims but allowed either party to opt for court when the amount in controversy did not exceed $25,000.
- William argued the $25,000 carve-out created a lack of mutuality because it allowed the facility to avoid court for likely high-value claims while permitting low-value claims to proceed in court; the circuit court agreed and denied the motion to compel.
- On appeal the facility urged application of Jorja Trading (supreme-court decision loosening mutuality rules); the court of appeals declined to overrule Arkansas precedent (e.g., Robinson, Northport) and affirmed the denial.
Issues
| Issue | Plaintiff's Argument (Wiegand) | Defendant's Argument (Facility) | Held |
|---|---|---|---|
| Enforceability — mutuality of obligation | Clause lacks mutuality because the $25,000 carve-out lets facility evade court for major claims while residents are forced to arbitrate; thus no real reciprocal obligation | The parties both agreed to be bound; mutuality does not require identical reciprocal rights — Jorja permits enforcement | Court held clause lacked mutuality and denied the motion to compel arbitration |
| Precedent — whether Jorja overrules Robinson/Northport | Robinson and Northport correctly require mutual obligations for arbitration clauses; those precedents control | Jorja clarified mutuality and should govern, implicitly overruling Robinson-style cases | Court declined to follow Jorja to overrule state supreme-court precedent and adhered to Robinson/Northport |
| Federal policy (FAA) vs. state contract law | State contract-law mutuality principles govern enforceability of arbitration clauses | FAA and Jorja favor arbitration and counsel enforcing the clause | Court acknowledged FAA policy but applied state contract-law mutuality rules and found no error in the circuit court’s decision |
Key Cases Cited
- Jorja Trading, Inc. v. Willis, 598 S.W.3d 1 (Ark. 2020) (supreme-court decision holding mutuality need not require identical reciprocal contractual rights and emphasizing FAA policy)
- Robinson Nursing & Rehabilitation Ctr., LLC v. Phillips, 586 S.W.3d 624 (Ark. 2019) (supreme-court decision finding lack of mutuality where arbitration clause favored nursing facility)
- Northport Health Servs. of Ark., LLC v. Chancey, 642 S.W.3d 253 (Ark. Ct. App. 2022) (court of appeals applying Arkansas mutuality requirement to nursing-facility arbitration agreements)
- E-Z Cash Advance, Inc. v. Harris, 60 S.W.3d 436 (Ark. 2001) (Arkansas precedent stating no mutuality where one party can litigate while the other is compelled to arbitrate)
- Regional Care of Jacksonville v. Henry, 444 S.W.3d 356 (Ark. 2014) (case addressing enforceability of arbitration clauses in long-term-care settings)