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Keywords

contractdamagesarbitrationattorneynegligenceappealtrialmotionmalpracticepunitive damages
damagesarbitrationattorneyequitytrialmalpracticepunitive damages

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Hayes v. Oakridge Home, 122 Ohio St.3d 63, 908 N.E.2d 408, 2009-Ohio-2054

Facts

Florence Hayes, a 95-year-old nursing home resident, signed an arbitration agreement upon her admission to Oakridge Home, agreeing to submit any future malpractice claims to arbitration and waiving her right to trial, punitive damages, and attorney fees. After sustaining injuries from a fall, Hayes filed a negligence action against the nursing home, which moved to stay the proceedings in favor of arbitration. The trial court granted the motion, leading Hayes to appeal, arguing that the arbitration agreement was unconscionable.

On May 31, 2005, Hayes was admitted to Oakridge. She was 95 years old at the time of her admission. Upon her admission, Hayes signed an arbitration agreement whereby she agreed to submit any future malpractice claims against Oakridge to arbitration and to waive her right to trial and her right to recover punitive damages and attorney fees.

Issue

Whether the arbitration agreement signed by a nursing home resident is procedurally unconscionable solely due to the resident's age, and whether the agreement is substantively unconscionable for waiving the right to trial and punitive damages.

Whether a nursing-home resident's age can render an arbitration agreement executed by the resident procedurally unconscionable and whether an arbitration agreement that waives a nursing-home resident's right to trial and to recover punitive damages and attorney fees is substantively unconscionable.

Rule

An arbitration agreement is enforceable unless it is proven to be both procedurally and substantively unconscionable. Procedural unconscionability involves the circumstances surrounding the agreement's execution, while substantive unconscionability pertains to the fairness of the contract terms.

An arbitration agreement is enforceable unless grounds exist at law or in equity for revoking the agreement.

Analysis

The court found that Hayes's age alone did not render the arbitration agreement procedurally unconscionable, as the agreement was clearly labeled as voluntary and not a condition of her admission. The court also determined that the terms of the arbitration agreement, including the waiver of the right to trial and punitive damages, were commercially reasonable and did not constitute substantive unconscionability.

The only facts in evidence in this case pertaining to procedural unconscionability are Hayes's age and the terms contained in the agreement she signed.

Conclusion

The Supreme Court of Ohio reversed the Court of Appeals' judgment and reinstated the trial court's order, affirming the enforceability of the arbitration agreement.

We therefore find that a voluntary arbitration agreement executed by a nursing-home resident upon her admission is not rendered procedurally unconscionable solely by virtue of the resident's age.

Who won?

The Oakridge Home prevailed in the case because the Supreme Court found that the arbitration agreement was enforceable and not unconscionable, thus allowing the nursing home to compel arbitration.

The Supreme Court, O'Connor, J., held that: 1 voluntary arbitration agreement between nursing home and nursing home resident was not procedurally unconscionable solely due to fact that resident was 95 years old, and 2 agreement was not substantively unconscionable.

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