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Hayes v. Oakridge Home
908 N.E.2d 408
Ohio
2009
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*1 rationality to the General attribute majority attempted The than if worse Assembly emerges thus act. The General unintentional Assembly’s merely mistaken. it been had Traska, Gold, and D. Co., Peter Ltd., Delahunty, S. John W. Elk Martin

Elk & appellee. for L.P.A., Smith, E. Smith, Co., Kane and Michael

Britton, Kalail David Peters & Stinn, appellant. Oakridge Appellant, Home, Musser, Exr., Appellee,

Hayes; et al. v. Home, v. as [Cite 63, 2009-Ohio-2054.] St.3d 2009.) (No. February May 2009 Decided 2008-0784 Submitted *2 J. O’Connor, enforceability agreement This case concerns the of an arbitration entered nursing

into a and Hayes1 between home its resident. Florence asserts Appellee that the procedurally substantively unconscionable, arbitration clause was and and she would have us fashion a rule that disfavors arbitration a between home its nursing Conversely, appellant and resident. The Oakridge Home, home,2 an agreement contends that arbitration cannot set procedurally aside only as unconscionable based on the age. Oakridge resident’s argues further that the of in an inclusion terms arbitration agreement waiving the trial the right right to and to seek punitive damages attorney and fees is not a finding basis for substantive unconscionability. reasons, For the following we hold that an arbitration agreement

voluntarily by nursing-home executed resident her admission not and as a precondition to admission is rendered solely by unconscionable virtue of the resident’s We age. further hold that an arbitration agreement voluntarily executed a nursing-home resident and not a precondition as to admission that waives the right right trial and the seek damages and is not fees substantively unconscionable. We therefore reverse the judgment of the court and reinstate appeals judgment of the trial court. Background

I. Relevant 31, 2005, May On Hayes was to Oakridge. admitted years {¶ She old 3} at admission, the time her admission. Upon her Hayes signed arbitration agreement whereby she agreed any submit future malpractice against claims arbitration and to right waive her to trial and right her to recover punitive damages and attorney fees. The arbitration agreement top states capital boldface letters

that a voluntary it is agreement. capital just letters the heading, below it instructs the to “please carefully.” resident read Section I of the agreement explains and benefits process drawbacks reempha- February 2007, Musser, Stephen estate, 1. died replaced executor her as appellee in appeal. this “Nursing being place 2. facility” home” is used in “long-term the more formal term care nursing facility.” “skilled III agreement optional. Section that the arbitration sizes voluntary” Agreement that of this Arbitration “execution again specifies at or medical treatment receiving precondition “is not states execution is again consent parties’ The voluntariness of Facility.” to the for admission above immediately agreement, at the end of the capital letters stated boldface lines. signature executing states that The arbitration provides trial. II jury to a Section their constitutional parties giving up award any and that their own fees parties pay that the exemplary punitive damages. amount for shall not include “acknowledgments”: following also contains the acknowledges informed and 1. The resident has been when the resident’s approval cannot be submitted to the resident *3 on whether or not to making a rational decision prevents condition from agree; an right that has a to consult with 2. The resident understands she

{¶ 8} agreement; her choice before and attorney signing understands, to, of, copy and has received a agrees 3. The resident that have been to her agreement, acknowledges explained the terms arbitration opportunity that had the to ask agent facility, acknowledges an and she by agreement. about the arbitration questions the arbitration Hayes representative Oakridge signed and a both home.

agreement day on the she was admitted to the Pleas Hayes Cuyahoga County filed this action Court of Common injuries that she had suffered from a fall while she was resident alleging negligence that fall the direct and result of the Oakridge proximate and was stay moved to Oakridge agents. Oakridge recklessness of its and/or and/or that grounds Hayes’s allegations to R.C. 2711.02 on the proceedings pursuant agreement parties. were covered the arbitration entered into between the ordered that all claims granted Oakridge’s stay The trial court motion and parties’ voluntary agreement. resolved to the pursuant were Hayes Eighth Appeals. argued to the District Court of She appealed agreement the arbitration judgment that the trial court’s was erroneous because substantively Oakridge was and unconscionable. countered procedurally evidentiary finding was no basis for a substantive there unconscionability. agreement A held that was both appeals divided court of 13}

{¶ Home, Oakridge v. substantively Hayes and unconscionable. procedurally ¶ 928, 334, 2008-Ohio-787, 6. The court found appellate 886 N.E.2d App.3d it substantively was unconscionable because took fees, trial. Id. at away Hayes’s rights punitive damages, jury ¶ appeals 15 and 18. The court of also ruled that the arbitration was procedurally 95-year-old unconscionable because woman with no business or contract all experience, bargaining power. had Id. ¶at 19. The court further held that no one had explained Hayes, the terms to and there were no alternatives for her because finding quality nursing home is difficult. Id. court, to this Oakridge appealed accepted jurisdiction and we to address (1)

two issues: a nursing-home age whether resident’s can render an arbitration (2) executed resident unconscionable and whether that waives a nursing-home resident’s to trial and to recover damages fees is Home, v. Hayes Oakridge 2008-Ohio-3880, 119 Ohio St.3d 891 N.E.2d 768. We answer questions negative. both Analysis

II. Both the Ohio General Assembly and Ohio courts have expressed a strong public policy favoring 2711; arbitration. Chapter Taylor R.C. Bldg. Corp. Am. v. Benfield, 352, 2008-Ohio-938, 12, 27; Ohio St.3d 884 N.E.2d (1998), Williams v. Aetna Fin. Co. 83 Ohio St.3d 700 N.E.2d 859. As “ stated, this court has it ‘[Arbitration favored because provides parties thereto with a relatively expeditious and economical means of resolving a ” dispute.’ (1992), v. 708, 712, Allstate Ins. Co. 63 Ohio St.3d Schaefer 1242, quoting Mahoning Cty. Bd. Mental Retardation & Dev. Disabilities v. *4 Mahoning Cty. (1986), 80, 83, OBR Edn. Assn. 22 95, Ohio St.3d 22 OBR 488 N.E.2d 872. Arbitration also has the additional of benefit unburdening crowded court Mahoning Cty. Retardation, dockets. Bd. 83, Mental 22 Ohio St.3d at of 95, 22 OBR 488 N.E.2d 872. In light strong presumption favoring arbitration, all doubts should be in Ignazio resolved its favor. v. Clear Channel ¶ Inc., 276, Broadcasting, 2007-Ohio-1947, 113 Ohio 18, St.3d 865 N.E.2d 18. The General Assembly has endorsed the in strong policy favor of {¶ 16} arbitration of in disputes 2711.01(A), R.C. which that an provides arbitration agreement valid, irrevocable, enforceable, “shall be except upon grounds that exist at law or in equity for the revocation of contract.” provides R.C. 2711.02 for the enforcement of an agreement. arbitration

{¶ 17} A party agreement such an may stay obtain a in litigation favor of 2711.02(B), arbitration under which provides: R.C. “If any action is brought upon any issue referable to arbitration under

an in agreement arbitration, for writing the court in which the action is pending,

67 to arbitra- in action is referable involved that the issue being satisfied one of arbitration, application shall on for agreement writing an tion under has been of the issue action until the arbitration the trial of the parties stay stay for the is applicant provided the agreement, in accordance with had with arbitration.” proceeding in default unless above, grounds is enforceable agreement an As noted 2711.01(A). Uncon- agreement. R.C. equity revoking or in for

exist at law Bldg., Taylor agreement. of an arbitration scionability ground is a revocation ¶ 2008-Ohio-938, 12, Taylor, recently In we 352, N.E.2d 33. 117 884 Ohio St.3d as follows: unconscionability this context explained ! choice on meaningful both “an absence “Unconscionability includes which are unreason with contract terms parties together part one ’ (1993), 66 Ridge Academy Carney v. party.” to the other Lake ably favorable 183, v. 376, 383, Williams Walker-Thomas quoting Ohio St.3d 449; (C.A.D.C.1965), 445, also v. Click F.2d see Collins 350 Furniture Co. 826, 834, Video, (1993), 621 N.E.2d 1294. The App.3d & Inc. 86 Ohio Camera proving the burden of unconscionability of contract bears party asserting substantively unconscionable. See procedurally is both Servs., Inc., 622, 2006-Ohio- App.3d Home 168 Ohio Ball v. Ohio State generally ¶ Camera, 834, 6; 621 4464, 553, App.3d 86 Ohio N.E.2d see also Click 861 (1988) 219, Summers, 1294, & Uniform Commercial Code citing N.E.2d White (‘One in order to prongs of both allege prove “quantum” 4-7 Section unconscionable’).” 117 Taylor Bldg., Ohio that a contract is particular establish 2008-Ohio-938, N.E.2d 34. St.3d of a determination of whether Upon appeal unconscionability, reviewing employs a claim court light

enforceable 2008-Ohio-938, Id., N.E.2d St.3d de novo standard of review. ¶12, 37. Unconscionability

A. Procedural age, resident’s nursing-home address the issue of whether We first alone, the resident an arbitration executed standing renders that it not. unconscionable. We find does procedurally uncon- whether an determining scionable, contracting parties’ surrounding consider “the circumstances courts ‘ education, business acumen parties’ “age, intelligence, such as the bargaining, *5 * * * * * * contract, alterations in the whether who drafted the experience, alternative sources of whether there were possible, terms were printed [and] ’ ” sic.) 117 Taylor Bldg., Ohio St.3d question.” (Ellipses in supply goods for the ¶ Camera, 12, 44, v. 86 Ohio 352, 2008-Ohio-938, quoting N.E.2d Collins Click 884 834, (E.D.Mich. 1294, App.3d at 621 N.E.2d Johnson v. quoting Corp. Mobil Oil 1976), 264, 415 F.Supp. 268. Additional factors that may contribute to a finding “

unconscionability include following: ‘belief stronger party there nois reasonable that the probability party fully contract; weaker will perform the knowledge stronger party that the party weaker will be unable to receive contract; substantial benefits from knowledge of the stronger party that the weaker party reasonably unable to protect his interests reason physical infirmities, or mental ignorance, illiteracy inability to language understand the ” of the agreement, 352, or similar factors.’ Taylor Bldg., 117 Ohio St.3d 2008- Ohio-938, 12, 44, 2d, N.E.2d quoting Eestatement of the Law Contracts (1981), Section Comment d. finding unconscionable,

court of appeals erroneously record, relied facts not in the a practice that the dissent has as adopted (1) well. These purported facts include the following: (2) any lacked business or contract experience, explained no one the terms Hayes, including fact that she agreement, could alter the (3) the rescission clause was among terms, buried a myriad of and she was fill required (4) out time, numerous other forms at the same there were no alternative supply sources of finding because a quality nursing home is difficult. Home, Hayes v. Oakridge App.3d 2008-Ohio-787, ¶ 19. The in only facts evidence in this case pertaining to procedural uncon-

scionability are Hayes’s age and the terms contained the agreement she signed. Contrary the court of appeals’ assertions, and Hayes’s there is no evidence the record regarding Hayes’s educational background, business acumen, or experience. As the party challenging the enforceability

it was Hayes’s burden to come forward with evidence supporting her challenge. She satisfy Indeed, did not that burden. paucity any evidence in support of her claims is notable. The clearly delineated several places that it was voluntary

and not a condition of her Further, admission to Oakridge. by signing the agreement, Hayes acknowledged terms, she understood its that an agent of Oakridge explained her, those terms to and that she had opportunity ask questions and consult with an Moreover, before signing. the a free-standing document and was not simply clause obscured within a lengthy contract. Hayes’s itself, age, and of is not a sufficient basis for finding

agreement procedurally unconscionable. presence absence of single

69 Thus, not consider generally finding. factor is insufficient for such a we need solely an unconscionable on finding agreement procedurally whether arbitration infringe right the basis of a would on the to contract violation party’s age duty court’s to United States and Ohio Constitutions and would violate this 10, 1, I, to contract. Article United right private defend the See Section Clause 28, Constitution; Constitution; II, States Section Article Farmers Natl. (this (1911), 309, 330, Bank v. Delaware Ins. 83 Ohio 94 N.E. 834 court Co. St. must guard right private “zealously”). the constitutional contract Our citizens rights simply they age. do not lose their constitutional and liberties because All of factors must weighed totality be examined and in their an determining agreement whether arbitration is procedurally findings analysis These must be considered tandem with the on substantive A an unconscionability. party challenging agreement prove of both quantum unconscionability. Taylor Bldg., and substantive ¶ 352, 2008-Ohio-938, Ohio St.3d 884 N.E.2d 34. that a voluntary agreement We therefore find aby executed

nursing-home resident her admission is not rendered uncon- solely by scionable virtue of the age. resident’s

B. Unconscionability Substantive The second issue for our consideration is whether an arbitration agreement that waives a nursing-home right resident’s to trial and the right to seek punitive damages fees substantively is unconscionable. The appeals court of held because the arbitration agreement required Hayes to forgo trial, legal rights jury fees, punitive damages, is substantively unconscionable. disagree. We An assessment of whether a contract is substantively unconscionable involves consideration the terms of the agreement they and whether are commercially R. reasonable. John Davis Trust v. Beggs, 10th Dist. No. 8/12/05 ¶ 08AP-432, 2008-Ohio-6311, 5104808, 13; 2008 WL Dorsey v. Contemporary (1996), Gynecology, 75, 80, Obstetrics & Inc. 113 Ohio App.3d N.E.2d 240. Factors courts have in evaluating considered whether a contract is substantively terms, unconscionable include the fairness of the charge for the service rendered, the standard in industry, ability accurately and the predict the ¶ 13; Camera, liability. extent of future John R. Davis at Trust Collins v. Click App.3d 86 Ohio 621 N.E.2d 1294. bright-line No set of factors for determining unconscionability substantive has been adopted by this court. The vary factors to be with considered the content of the at issue. terms between and Oakridge commercially reasonable. With to the regard parties’ agreement forgo trial, an already commercially this court has ruled that such right fact, waiver of the Taylor Bldg, reasonable. as this court noted necessary agreeing to have an arbitrator decide by jury consequence trial clause is not unconscion- dispute, aspect and this 352, 2008-Ohio-938, Id., able. 117 Ohio St.3d 55. We follow *7 holding today. by parties right in the which the waive their provisions The

{¶ 35} damages attorney commercially to seek and fees are also reasonable. their own fees and costs under the parties attorney Both must bear which is to This is not equitable parties. provision oppressive. both one-sided provision We therefore find that the of the arbitration eliminating parties’ ability attorney commercially both to recover fees is not unreasonable. Although relinquishment right punitive damages to seek {¶ 36} only Hayes, to that fact alone does not applies provision commercially render the that a provision unreasonable. The fact contractual is one-sided does not render it unconscionable se. into per By entering agree- ment, statutory also waived that Oakridge legal rights apply only Oakridge. to For waived example, Oakridge legal right its under R.C. 2323.42 to seek

{¶ 37} 2323.42, court costs and attorney fees. Under R.C. defendants a medical claim can recover all court attorney costs and reasonable fees if the court determines that, that there was no reasonable good-faith plaintiffs basis claim or point some during litigation, plaintiff lacked a good-faith basis for continuing to assert that claim. addition, Oakridge also waived its legal right pursue to an action for

{¶ 38} filing a groundless complaint which, under R.C. 2323.51 and if Civ.R. successful, could entitle Oakridge expenses attorney to recover and fees. Finally, Oakridge right waived its to seek a Hayes’s dismissal of action 10(D)(2). for failure to with comply Civ.R. See Fletcher v. Hosps. Univ. Cleveland, 167, 2008-Ohio-5379, 120 Ohio St.3d 897 N.E.2d paragraph one of syllabus claim, that in a (holding medical a motion to dismiss is the appropriate response plaintiffs to to an failure file affidavit of merit under 10(D)(2)). At court, Civ.R. the time this action stayed by the trial Oakridge Hayes’s had filed motion to dismiss complaint grounds on the that she failed to 10(D)(2). comply with Civ.R. The trial court ruled that motion Oakridge’s to dismiss was stay. rendered moot virtue of the above, As outlined both parties relinquished legal rights by to agreeing Hayes gave up

arbitration. to right punitive damages, seek Oakridge costs, fees, turn gave up right its to seek legal outright dismissal Hayes the case. The critical factor herein is that voluntarily agreed to these terms and was not agree. opportunity reject forced She had the waiver of punitive damages of the other terms. reasons, all For we find that terms in an foregoing between home and its resident that eliminate the right right

trial and the to seek punitive damages fees are not substan- tively unconscionable.

C. Contractual Consideration Although the issue of contractual consideration was not raised law, Oakridge’s propositions of we feel compelled briefly address this issue light of the court of The appeals’ holding. appellate court held was invalid for lack of grounds consideration on the Hayes gave up her to trial right nothing and received return. v. Home, 334, 2008-Ohio-787, App.3d 20. We disagree. jury waiver of the to a trial is a necessary consequence of

agreeing arbitration and is not Taylor Bldg., 117 Ohio St.3d *8 352, 2008-Ohio-938, N.E.2d 55. Under the court of appeals’ opinion, every arbitration agreement would lack consideration and be rendered invalid. Such result defies the strong policy favoring arbitration of disputes and the long-standing recognition of arbitration agreements as valid instruments. Both trial, parties gave up their right to as well as all correlating rights judicial the process Moreover, as discussed above. was not required sign agreement, and it unequivocally was not a condition of her admission to the nursing home. Sufficient consideration exists for the arbitration agreement, notwithstanding the lower opinion court’s to the contrary.

III. Conclusion reasons, For the foregoing we hold that an agreement arbitration voluntarily by executed a nursing-home resident her admission and not aas precondition to admission is not procedurally rendered solely by unconscionable virtue of the resident’s age. We further hold that an agreement voluntarily executed a nursing-home resident and not as a precondition to admission that eliminates the to trial punitive damages seek attorney fees is not substantively unconscionable. Accordingly, we reverse the judgment of the court appeals and reinstate the order of the trial court.

Judgment reversed. Moyer, C.J., Cupp, JJ., and O’Donnell and concur.

Lundberg Lanzinger, JJ., Stratton and concur in judgment only. J.,

Pfeifer, dissents. only. judgment J., concurring in

Lanzinger, an arbitration to disavow who wishes party Because unconscionable, I substantively procedurally is both show that only. judgment concur in that the to establish not met her burden Hayes, has Florence Appellee, no record other We have unconscionable. signed she and the signed the documents among two-page

than two woman on the date she entered 95-year-old they signed by were fact that affidavit, documentary testimony, or The record does show nursing home. mentally incompe- agreements, signed when she appellee, evidence that write, in the language confused over or was tent, ability lacked the to read record emotionally stressed. The savvy, or was or lacked business refused nursing-home representative that any evidence does not show attorney, request to obtain or denied appellee’s questions, answer short, no there is evidence agreement. the terms of the through or rushed her giving up important into manipulated appellee at the home anyone that surrounding signing circumstances Speculation about the statutory rights. I concur unconscionability. procedural is not sufficient to show to an arbitration parties fact that one of holding single unconscionability. age is of advanced does not establish however, majority’s from the conclusion this depart, I I with the dissent that the agree agreement is not nursing-home residents away statutory protections granted agreement strips cases in majority cites commercial legislature. the will of the and defeats But the General rights. that favors arbitration emphasizing public policy nursing-home residents clearly protect also its intent Assembly expressed *9 is first time we have Chapter of 3721. This through enactment R.C. and we look to nursing-home setting, in the considered an arbitration substantively it is itself to determine whether content of the appellee’s rights clause here waives unconscionable. The arbitration in the patient rights only by implication fees but refers damages Because the subject to be to arbitration. “any dispute” words encompassing those in special rights appellee’s and remedies to Assembly granted General has circumstances, rights specifically explains unless an arbitration clause uncon- substantively it is by to be affected the arbitration remedies scionable. applying over expressed court has unease appellate At least one money time and clauses, designed were to save initially which to situations where disputes, in contract people business involved

sophisticated v. HCF court trials in actions. Small give up negligence residents nursing-home

73 Al- 2004-Ohio-5757, 19. Inc., 66, Perrysburg, App.3d 159 of agreements of arbitration Assembly prohibited has not use though the General Two at level so. is the federal to do there movement nursing-home settings, predispute would invalidate recently Congressional introduced bills 1237, Cong, H.R. 111th their nursing homes and residents. between agreements 2009). (introduced 3, (introduced 2009); 512, 111th Mar. Cong, S. Feb. of This has held a matter court as every dispute Not arbitrable. Kelm v. subject are not to arbitration. custody that child policy disputes public that the (2001), may It well be syllabus. N.E.2d Kelm Ohio St.3d ban certain arbitration point expressly will act some Assembly General so, yet like it has not done appellee situations this. Since agreements unconscionability. appellee Because both and substantive prove both, judgment I concur reluctantly fulfilled the to show burden court. J., foregoing opinion. concurs in the

Lundberg Stratton, J., dissenting. Pfeifer, First, I I that any nursing-home dissent for several reasons. would hold as a public is unconscionable matter

preadmission arbitration specific I in this case were Alternatively, agreements would hold that policy. I narrowly, hold that public policy. unconscionable as a matter More would both this case were I matter, majority In its of this analysis particular details all big This is an This court should declare

ignores picture. important case. preadmission as a matter nursing-home unenforceable limit policy. elderly special-needs patients’ clauses that public Arbitration simply to the for claims of in their should negligence access courts abuse care Assembly honored not be or enforced the courts this state. General policy special nursing-home in favor of public protection has enunciated through Rights, Bill of passage Nursing residents its the Ohio Home Patients’ strong against particular 3721.10 et seq. public policy “[W]here R.C. there is clause to that will policy likely contract or inimical be declared practice, some policy clearly outweighed by unconscionable and unenforceable unless the in favor of individual legitimate provision.” interest benefited (4th Ed.1998) 43, on Contracts Section 18:7. Williston *10 imprimatur agreements This has its to arbitration today provided court 52} {¶ rights to the and protections that enable homes avoid the enforcement of nursing Assembly. the The mantra that nursing-home to residents General provided mindlessly In some always is to be favored must muttered. areas, appropriate; protection nursing-home arbitration is not the of residents certainly one such area. A against agreements is reflected public policy preadmission 53}

{¶ Further, Rights. Ohio Home Bill of this court Nursing the Patients’ should a public policy against preadmission recognize based nursing-home of such practical inappropriateness residents.

A Bill (¶ By Nursing the Ohio Home of R.C. enacting Rights, Patients’ 54} particular et seq., Assembly 3721.10 the General demonstrated interest ensuring the rights nursing-home patients provided and has reme- statutory 3721.13(A) patients dies for those whose are violated. rights specifically R.C. rights, including enumerates 32 safe important right living “to and clean (R.C. 3721.13(A)(1)), verbal, “to from right physical, environment” be free mental, and at respect, emotional abuse and to be treated all with courtesy, times (R.C. recognition dignity 3721.13(A)(2)), full individuality” right and and “the medical adequate appropriate treatment and care and to other ancillary comprise necessary services that and appropriate care consistent with (R.C. 3721.13(A)(3)), for which the program resident contracted” “to right (R.C. all requests inquiries have reasonable responded promptly” 3721.13(A)(4)),the “to have clothes and right changed bed sheets as need arises, (R.C. 3721.13(A)(5)), to ensure the resident’s comfort or sanitation” “to grievances policies voice and recommend changes and services to staff, health, the home’s employees department of the or to other persons home, not associated with operation choice, of the from resident’s free restraint, (R.C. interference, coercion, discrimination, 3721.13(A)(31)). or reprisal” R.C. 3721.17 provision contains the enforcement Nursing 55}

{¶ 3721.17(I)(l)(a), Home Patients’ Bill Rights. Pursuant to R.C. “[a]ny resident rights whose under sections 3721.10 to 3721.17 of the Revised Code are violated has a cause of against any action or home person committing the violation.” The injunctive use of relief achieve a level of proper clearly care is contemplated Assembly. the General Assembly General calls for the award of fees to injunctive when residents resort relief. “in which only injunctive cases granted, may relief award to the prevailing party [the court] reasonable attorney’s 3721.17(I)(2)(c). fees to the reasonably performed.” limited work R.C. R.C. 3721.17 also allows residents to employ other methods to ensure rights. their include reporting Those violations of Ohio Nursing Home Bill Patients’ to the Rights grievance committee home established 3721.12(A)(2). pursuant requires R.C. The statute combination *11 two staff nursing-home outnumber residents, representatives outside or sponsors, pursue is to residents statutory option Another committees. to one on such Health. R.C. 3721.031. Department through claim and a rights residents nursing-home Assembly given The General all to arbitrate An agreement rights. those preserve to ways multitude of residents nursing-home statutory protections in the face of flies disputes policy. of public as a matter unconscionable be found and should B to admis- signed prior agreements make arbitration Practical realities 58}

{¶ unconscion- Proving substantive public policy. to contrary homes nursing to sion context, fact is and that nursing-home in the unduly burdensome ability elderly To an arbitration escape case. particular in this illustrated the execution of or after years clarity recall with must persons —months to explained was or was what signing, at happened agreement —what stay that a fact is at the time. The sad them, understood they and what in this case. That happened deterioration. signals home most often hip. She fractured Florence entering Oakridge, a month Within Now her her death. to before to return enough never well was Florence her, when happened without what prove, attempt in this case types problems agreements. her arbitration Hayes executed residents. among nursing-home likely to be universal are nursing-home Further, prevents deterioration and mental physical An agreement. to rescind advantage option taking from residents clause, it is worthless fair but very opt-out have a may it.of mentally advantage to take unable physically someone time or the into either put play, clause is time an arbitration By the ability to recall without the can leave the resident negligence own nursing home’s circumstances special into. The entered validly whether the pread- this court that from require judgment care nursing-home attendant contrary public policy. are agreements mission arbitration

II all unwilling preadmission to find if this court Even it should policy, setting contrary public to be nursing-home in the and unenforce- unconscionable this case were specific agreements that the find policy. of public able as matter 3721.17(I)(2)(b), damages compensatory “[i]f Pursuant to R.C. of the Revised section 2315.21 rights, of the resident’s for a violation

awarded for the violation.” damages exemplary to an award of apply Code shall Assembly damages that punitive The General has determined fees statutory in order to their nursing-home patients protect should available to this of a possibility The arbitration case remove rights. acquiring pertinent provision appears midway through resident either. The not in agreements, introductory “Explanation” portion bolded, nor in the all It agreements, capitalized “Acknowledgement” section. reads: *12 “Each all party may represented by be counsel in connection with 63}

{¶ agrees and each their own proceedings party attorney bear fees awards, costs. of Payment any and other fees and costs associated with these arbitrators, shall be proceedings by panel determined the of provided in that award arbitration shall not include for exemplary amount punitive damages.” In regard punitive truth damages, elderly nursing- cold is that for 64}

{¶ patients, home alone compensatory damages practical are limited as matter. short, expectancy nonexistent, Life lost in wages cases, is are many elderly victim be unable to may communicate the true extent of his or injuries. of punitive damages The threat operates as another for incentive respect dignity homes to of their residents. availability The of attorney nursing-home fees ensures that residents are hindered from exerting rights by specter their of cost. Under the Nursing Rights, Home Patients’ Bill of residents can seek to enforce the many rights through injunctive set forth the statutes relief and can recover attorney necessary fees to obtain that relief. An that removes the of a possibility recovery attorney of key fees takes teeth out of a of provision enforcement that legislation. only agreements Not do the in this deny fees, case recovery attorney they defy but further the Ohio Nursing Home Patients’ Bill Rights by requiring pay residents to their share of the of the cost arbitration. that any Residents know attempt enforce their rights will be is costly. exactly That opposite Assembly’s General intent. Although agreements prohibit this case 66}

{¶ damages and fees for both parties, practical reality recognized the statute that only is resident ever hope could to recover them.

giving up nothing. Assembly The General has identified nursing-home being residents as particularly protections vulnerable has instituted for them. The arbitration agreements are strip this case one-sided and away statutory protections Assembly the General has determined necessary the welfare residents. The Assembly spoken General clearly public as to the policy the will of the clearly as flout state, just in this case agreements and the this policy. of public as a matter and unenforceable They are unconscionable people. Ill uneonscionability perspective from the not address majority The does and substantive the case on the basis deciding instead

public policy, decid- wrongly decision is today’s uneonscionability. approach, Even under at issue are both agreements The arbitration ed.

A at issue uneonscionability agreements of the arbitration The substantive II, strip away statutory agreements in Part above. The this case discussed in the Assembly residents the General nursing-home protections granted forbid an award of Rights. Bill of The Nursing Home Patients’ rights that those any explanation fees without punitive damages in their results and are one-sided statutorily guaranteed. both substantively unconscionable. They are thus legislature. defeat the will *13 B prove a contract as unconscionable party challenging The uneonscionability. Taylor Bldg. of both and substantive

quantum procedural 352, 2008-Ohio-938, 12, 34. Benfield, Am. v. 117 Ohio St.3d Corp. of However, uneonscionability present need not be procedural substantive and question: measure equal “ disregards regularity invoked which ‘Essentially sliding scale is formation, terms, in that creates the process of the contract procedural of the substantive terms greater to the harshness or unreasonableness

proportion * * *.) (3d 1972) (15 1763A, 226-227 pp. themselves.’ Williston on Contracts ed. term, words, contract the less substantively oppressive In other the more to come to the conclusion procedural uneonscionability required evidence of unenforceable, and vice versa.” Armendariz v. Found. Health that the term is Servs., (2000), 83, 114, 745, Cal.Rptr.2d 99 6 P.3d 669. Psychcare Inc. Cal.4th “ words, analysis is more of a substantive/procedural other ‘[T]he clause, dichotomy. “bargaining scale than a true The harsher the the less sliding ” uneonscionability.’ Tillman v. Com naughtiness” required that is establish Loans, (2008), quoting mercial Inc. 362 N.C. 655 S.E.2d Credit (W.D.Wash.1980), U.C.C.Rep. Boatbuilding Fishing Tacoma Co. v. Delta Co. (CBC) 26, 37, uneonscionability fn. The of the substantive 20. seriousness Serv. only procedural minor requires proof in this case agreements of the arbitration uneonscionability. majority does not opinion seriously address the uncon-

scionability in this case. The first syllabus paragraph responds nothing but man. It straw reads: “An arbitration agreement voluntarily executed aby nursing-home resident precondition admission and not as a to admission is not rendered procedurally solely unconscionable virtue the resident’s added.) age.” (Emphasis No argued one has that the arbitration agreements in this case are procedurally solely by unconscionable virtue of Hayes’s Florence fact that age. The Florence Hayes years was 95 old is merely one relevant fact. age Her is not enough to make a contract she entered into procedurally unconscionable; nonagenarians capable forming valid contracts. day On the signed she the two for malprac- —one tice claims and one for other beyond claims—factors age working against were Hayes. Florence Oakridge, part of a company owning facilities, 200 elder-care presented Hayes Florence with a preprinted form. Oakridge does not dispute Hayes Florence a 95-year-old woman who was enough debilitated require transport in an ambulance from a hospital Still, to nursing-home care. those facts may not be enough render a contract procedurally unconscionable. But additionally, the arbitration contracts in this case were presented to her on the very day she was entering home, the nursing if emotional not traumatic any person. occasion for on Additionally, day that this 95-year-old was being admitted, Oakridge gave her at pages least 29 of documents to review. Addition- ally, among documents, those 29 pages signature Florence’s or initials were required in 11 different places. Additionally, every except the arbi- document— tration to the care Florence would receive in the Oakridge —related Home. Oakridge claims that signing the arbitration agreements required was not then, admission to facility. Why, were they included with the admission Why documents? would documents having absolutely nothing to do with Flor- ence’s care plan presented to her amidst the documents that were related to her care plan? Florence did not go to bargain over an arbitration agreement; she went to Oakridge to be taken care of. The arbitra- *14 agreements tion were of a completely different character from the other docu- ments she was signing. Additionally, the arbitration agreements on

{¶ 75} their face an present unbalanced characterization of the benefits of arbitration versus litigation. The introductory “Explanation” part of the arbitration agreements provides: “Arbi- tration is a method of resolving disputes without the substantial expense time and using judicial of the system. An arbitration hearing only takes weeks or months schedule, to litigation while civil generally years takes complete.” That apples- to-oranges comparison speaks only of the time in involved an scheduling arbitra- tion, while it talks of the time it complete Further, takes to litigation. it does not account for the likelihood of completion the of litigation through settlement. The judicial many costs are “By avoiding system, the provides, further “Explanation” arbitrations, however, in statement, not mention that does eliminated.” The concludes, signing “By the Finally, “Explanation” [this limited. discovery can be a court and trial jury will constitutional agreement], you give up your subject you facility and the will any that between you agree dispute that the forbids Explanation The does not mention arbitration.” or an award of fees. punitive damages exemplary “Acknowledgements” in section the the line the signature Above {¶ 76} bold, makes no capital again is a letters that agreements, there statement damages a and fees: prohibition mention of THAT EACH OF THEM “THE ACKNOWLEDGE UNDERSIGNED THIS ARBITRATION AND UNDERSTANDS HAS READ AGREEMENT EACH THAT ARBITRATION AGREEMENT HAS BY SIGNING THIS TRIAL, JURY, A BEFORE A OR WAIVED RIGHT TO JUDGE HIS/HER ALL AND OF THEM VOLUNTARILY TO OF THAT EACH CONSENTS THE OF THE ARBITRATION AGREEMENT.” TERMS any are with acknowl- agreements stingy The arbitration this case case its of arbitration. this used edgement drawbacks position to create documents de- expertise superior bargaining boilerplate and presented in its and them a time when residents signed to draw residents the the was for agreements necessary would execution of arbitration believe admission. Thus, 95-year-old present question this whether case does Instead, to enter contract. we called look at

should be free into are surrounding specific the execution unique circumstances Here, woman in 95-year-old involved in this case. we have agreements home, state, entering inundated fragile burdened with emotions of signature, with for her who would have reason believe paperwork requests executing necessary she admission the documents was were into facility, rosy picture of the benefits of presented overly and who been All of these nonnegotiated arbitration in a contract that she never facts sought. That she infirm and 95 old is least of years the record briefs. that make agreements factors positions parties, relative the circumstances bargaining misleading and the characterization surrounding the execution of in the themselves are all evidence of the benefits of the arbitration procedural unconscionability agreements.

C procedural- are both Since unconscionable, they

ly are invalid.

IY employed by Oakridge The tactics and countenanced majority today this case appalling. provides roadmap This court for nursing-home responsibilities facilities to avoid Home Nursing Ohio Patients’ Bill Rights. Is it really acceptable to shove arbitration agreement under the nose woman, 95-year-old

of a newly home, arrived at the as she nursing goes through signing frenzy of admission Does process? majority really believe Hayes knowingly voluntarily that Florence gave up statutory rights through a negotiation process? majority suggests that the Constitution today’s demands result and

that it is duty right this court’s to private defend the contract. The majority writes: “Our do not citizens lose their constitutional rights liberties simply Yes, they age.” because in the penumbra penumbra somewhere contract, you right squint just so, you if can what majority make out right identifies today: the to be “taken in” elderly by nursing This homes. corollary court’s right homes is the ‘You say, signed it. Live it! Nursing with Bill Home Patients’ of Rights? You waived it! Your fundamental rights? constitutional You waived them too! And don’t forget your $5,500 remind son that we need next month’s check for the first.” L.L.C., Dickson & Campbell, Dickson, A. and Blake for appellee. Buckingham, L.L.P., Doolittle & Burroughs, Riemenscheider, Dirk E. Beth A. Nagel, Thomas R. Himmelspach, A. Timothy Spirko, for appellant. Servicing

HomEq Corporation, Appellee, v. Schwamberger Appellants. al., et HomEq Servicing Corp. Schwamberger, v. [Cite as

122 Ohio St.3d 2009-Ohio-2607.]

Case Details

Case Name: Hayes v. Oakridge Home
Court Name: Ohio Supreme Court
Date Published: May 7, 2009
Citation: 908 N.E.2d 408
Docket Number: 2008-0784
Court Abbreviation: Ohio
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