Westmoreland v. High Point Healthcare Inc.
218 N.C. App. 76
| N.C. Ct. App. | 2012Background
- Westmoreland, as Chapman’s power of attorney, signed an arbitration agreement for Chapman's nursing facility admission (July 18, 2006).
- Agreement stated signing was not a condition to admission or remaining in the facility and was a separate document.
- Chapman remained in the facility until his death (Sept. 12, 2007).
- Executor filed wrongful death suit (Sept. 15, 2009); facility moved to compel arbitration (Oct. 16, 2009).
- Trial court denied motion to compel arbitration, finding the agreement procedurally and substantively unconscionable (Apr. 14, 2010).
- Appellate court reverses and remands to compel arbitration under the agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Procedural unconscionability of the Arbitration Agreement | Westmoreland argues procedural unconscionability based on bargaining naughtiness | High Point contends no procedural unconscionability | Procedural unconscionability not shown |
| Substantive unconscionability of the Arbitration Agreement | Westmoreland contends terms are one‑sided and oppressive | High Point contends terms are not substantively unconscionable | Substantive unconscienability not proven |
| Effect of AAA policy on enforceability | AAA policy precludes arbitration in health-care disputes | Policy does not make performance impossible; NC public policy favors arbitration | AAA policy did not render performance impossible; not a basis to find unconscionability |
Key Cases Cited
- Tillman v. Commercial Credit Loans, Inc., 362 N.C. 93, 655 S.E.2d 362 (N.C. 2008) (plurality on unconscionability; two-part test; cost/benefit and mutuality factors)
- Brenner v. Little Red School House Ltd., 302 N.C. 207, 274 S.E.2d 206 (N.C. 1981) (defines unconscionability as shock to the sense of justice; totality of circumstances test in some rulings)
- Raper v. Oliver House, LLC, 180 N.C. App. 414, 637 S.E.2d 551 (N.C. App. 2006) (cites strong NC policy favoring arbitration; contextual factors matter)
- Weaver v. St. Joseph of the Pines, Inc., 187 N.C. App. 198, 652 S.E.2d 701 (N.C. App. 2007) (reading of contracts; reading obligation; effect of clear terms when highlighted)
- Blue Cross Blue Shield of Ala. v. Rigas, 923 So. 2d 1077 (Ala. 2005) (AAA health-care policy not to bar arbitration; state public policy favors arbitration)