Arbitration & Mediation

In Dispute Over Enforcement of Arbitration, A Claim of Unconscionability Requires An Evidentiary Hearing -- And a Lawsuit Should Be Stayed, Not Dismissed, if Sent to Arbitrators

By Christopher B. Hopkins, Esq.

We often knock the Fourth District, in a good natured way, for their track record of ruling against nursing homes in arbitration enforcement appeals. They did it again, but with good reason, at least from what we can see from the 2-page opinion.

In Adrienne Curcio as Personal Representative of the Estate of Angelina Lanzetta v. Sovereign Health Care of Boynton Beach LLC d/b/a Boynton Beach Nursing and Rehab Center, the Fourth DCA (Taylor, Stevenson and May) was faced with a trial court's order dismissing a suit and ordering the parties to arbitration after a non-evidentiary hearing on the nursing home defendant's motion to compel arbitration and to dismiss.

Below, the plaintiff had argued to the trial court that they were disputing the validity of the agreement to arbitrate premised upon the deceased nursing home resident's ability to comprehend the agreement and/or the fact that the arbitration agreement was mandatory for admission to the facility. This, in short, was an unconscionability challenge.

Under Florida Statute 682.03(1), a trial court need not hold an evidentiary hearing if the court is satisfied that no substantial issue exists as to the making of the agreement.

Here, the trial court reportedly dismissed the case but retained jurisdiction pending something arising in the course of arbitration discovery which would bolster the plaintiff's arbitration enforcement defense.

The Panel held that the non-evidentiary hearing was not sufficient and that pleading a defense of unconscionability in the face of a motion to compel arbitration warranted an evidentiary hearing. Thus, the trial court's order was reversed.

Next, the Panel held that, upon granting a motion to compel arbitration, the trial court should stay the case, not dismiss it. Presumably, and we would agree, this would simplify the process if/when the parties sought to file a motion to confirm, vacate or modify the arbitration award.

Full post as published by Florida Arbitration Law on April 16, 2009 (boomark / email).