PAUL CALUSINSKI, аs Independent Administrator of the Estate of Margaret Hostetler, Deceased, Plaintiff-Appellee, v. ALDEN-POPLAR CREEK REHABILITATION AND HEALTH CARE CENTER, INC., an Illinois Corporation d/b/a Alden Poplar Creek, and ALDEN MANAGEMENT SERVICES, INC., Defendants-Appellants.
No. 1-22-0508
APPELLATE COURT OF ILLINOIS FIRST DISTRICT
September 30, 2022
2022 IL App (1st) 220508
PRESIDING JUSTICE LAVIN
First Division; Appeal from the Circuit Court of Coоk County, No. 2019 L 9303; The Honorable Patricia O‘Brien Sheahan, Judge Presiding.
OPINION
¶ 1 Plaintiff, Paul Calusinski, as independent administrator of his mother‘s estate, brought a wrongful death and survival action against defendants, Alden-Poplar Creek Rehabilitation and Health Care Center, Inc., an Illinois Corporation d/b/a Alden Poplar Creek, and Alden Management Services, Inc. Plaintiff alleged that his mother, Margaret Hostetler, suffered and died due to defendants’ negligent care and treatment of her at a nursing home. Defendants
¶ 2 On appeal, defendants argue that the enforceability of the arbitration agreement had to be determined by an arbitrator, not by a court of law, and that the agreement was an enforceable contract in any event. We disagree, and for the reasons that follow, we affirm the circuit court‘s judgment.
¶ 3 BACKGROUND
¶ 4 Plaintiff‘s mother, Margaret Hostetler, now deceased, resided at Alden-Poplar Creek, a long-term care facility operated by Alden-Poplar Creek Rehabilitation and Health Care Center, Inc., between August 2017, and February 2018. Plaintiff, acting under a power of attorney for his mother, entered into an arbitration agreement with Alden-Poplar Creek when his mother was first admitted to the nursing home. At the same time, plaintiff, again acting under a power of attorney for his mother, entered into a separate residential agreement with Alden-Poplar Creek, concerning, among other things, costs and payment related to his mother‘s care at the home. As will be discussed in more detail below, the arbitration agreement required any claims or disputes brought by plaintiff arising out of his mother‘s care at the nursing home to be resolved thrоugh mediation and/or arbitration. Yet, the agreement permitted the nursing home to litigate claims against plaintiff for nonpayment of nursing home costs in a court of law.
¶ 5 Plaintiff‘s mother eventually developed an unstageable prеssure sore at the nursing home that required debridement. She died shortly thereafter on February 20, 2018.
¶ 6 Plaintiff, as independent administrator of his mother‘s estate, filed the instant wrongful death and survival action against defendants, alleging that defendants’ negligence was the direct and proximate cause of his mother‘s suffering and death. Defendants thereafter moved to compel arbitration of plaintiff‘s survival claims, pursuant to the arbitration agreement between the partiеs. In response, plaintiff argued that the agreement was not enforceable because it was so one-sided in defendants’ favor that it was both procedurally and substantively unconscionable. Specifically, plaintiff assеrted that the agreement waived his statutory right to attorney fees, as well as his right to a jury trial and a class action suit, among other things.
¶ 7 The circuit court initially granted defendants’ motion, concluding that plaintiff‘s claims fell within the agreement аnd thus had to be resolved by an arbitrator. The court, however, then allowed additional discovery and ultimately granted plaintiff‘s motion to reconsider its judgment compelling arbitration in which plaintiff expanded upon his unconscionаbility arguments. Specifically, plaintiff pointed to his own testimony that, when he signed the arbitration agreement upon his mother‘s admittance to the nursing home, no explanation was given as to what he was signing or what rights he was waiving and that he was never specifically told that an arbitration agreement was among the documents he had to sign. Furthermore, the nursing home‘s office manager, Justine Johnson, admitted, among other things, that she did not provide plaintiff with a detailed desсription of what he was signing, that she did not know what was meant by binding arbitration, that she did not know the difference between arbitration and a jury trial or what statutory damages were available to plaintiff, and that plaintiff was not allowed to mаke changes to the agreement, which was presented to him on a tablet.
¶ 8 In granting plaintiff‘s motion to reconsider, the circuit court concluded that the arbitration agreement was substantively unconscionable becausе it was so one-sided in favor of defendants
¶ 9 ANALYSIS
¶ 10 In this case, the circuit court concluded that the parties’ arbitration agreement was substantively unconscionable, and therefore unenforceable, because it wаived plaintiff‘s right to statutory attorney fees without adequate consideration. We agree and proceed in our de novo review. See Bain v. Airoom, LLC, 2022 IL App (1st) 211001, ¶ 21 (whether an arbitration agreement is enforceable is a question of law, which we review de novo).
¶ 11 Like other cоntracts, an arbitration agreement may be invalidated by state law contract defenses such as fraud, duress, or unconscionability. Carter v. SSC Odin Operating Co., 2012 IL 113204, ¶ 18. An arbitration agreement is “substantively unconscionability” where, as here, the contract terms are so one-sided that they oppress or unfairly surprise an innocent party and there is an overall imbalance in the obligations and rights imposed by the bargain, as well as significant cost-price disparity. Kinkel v. Cingular Wireless, LLC, 223 Ill. 2d 1, 28 (2006). And if an arbitration agreement is unconscionable, it is unenforceable. Hubbert v. Dell Corp., 359 Ill. App. 3d 976, 986 (2005).1
¶ 12 “Consideration,” on the other hand, is the ” ‘bargained-for exchange of promises or performances, and may consist of a promise, an act or a forbearance.’ ” Carter, 2012 IL 113204,
¶ 13 Here, plaintiff‘s survival claims against defendants were premised on violations of the
¶ 14 While this violation is not a generally applicablе contract defense that negates federal arbitration law, defendants did not give sufficient consideration for plaintiff to waive his right to attorney fees under state law. The arbitration agreement here permitted defendants to litigate claims against plaintiff for nonpayment in a court of law, but it did not allow plaintiff to litigate any claims against defendants in court, and it included a total ban on class action suits. Furthermore, the agreement vested only dеfendants with the right to choose a substitute mediator and/or arbitrator in the event that the primary mediator was unavailable or rejected the parties’ mediation. Finally, the agreement stated that defendants would pay “up tо a maximum of $2,000” for the “mediator and/or arbitrator‘s fees and other reasonable costs associated with
¶ 15 Defendants nonetheless argue that the issue of whether plaintiff can waive his right to attorney fees must be decided by an arbitrator, not by a court of law. This puts the cart before the horse as it would be futile to arbitrate an issue if the arbitration agreement itself is not enforceable.2 See, e.g., Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 70-71 (2010) (where a party challenges specifically the validity of an agrеement to arbitrate, “the federal court must consider the challenge before ordering compliance with that agreement“). Regardless, defendants have not cited any relevant authority to support their claim that only an arbitrator can decide whether plaintiff lawfully waived his right to statutory attorney fees.
¶ 16 Based on the foregoing, we conclude that the parties’ arbitration agreement was not enforceable because it waived plaintiff‘s right to attorney fees under the Act without adequate consideration by defendants. Since we affirm on that basis, we need not address the parties’ alternative arguments concerning the enforceability of the arbitration agreement.
¶ 17 Finally, defendants have not shown, or even argued, that the circuit court abused its discretion when it refused to sever the anti-fee provision from the rest of the arbitration agreement, thereby forfeiting the issue. See
¶ 18 CONCLUSION
¶ 19 For the reasons set forth above, we affirm the cirсuit court‘s judgment.
¶ 20 Affirmed.
Attorneys for Appellant: Johanna L. Tracy and Michael Shacter, of Carden & Tracy, of Chicago, for appellants.
Attorneys for Appellee: Michael W. Rathsack, of Park Ridge, and Steven M. Levin and Nicholas J. Emerson, of Levin & Perconti, of Chicago, for appellee.