Hwang v. Pathway LaGrange Property Owner, LLC , 2024 IL App (1st) 240534 ( 2024 )

2024 IL App (1st) 240534SIXTH DIVISION
October 11, 2024
No. 1-24-0534
IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
JOAN HWANG, )
)
Plaintiff-Appellee, ) Appeal from the
) Circuit Court of
v. ) Cook County
)
PATHWAY LaGRANGE PROPERTY OWNER, LLC, ) No. 2023-L-007800
d/b/a Aspired Living of LaGrange, and JOHN DOE, )
) The Honorable
Defendants ) Nichole C. Patton,
) Judge Presiding.
(Pathway LaGrange Property Owner, LLC, d/b/a Aspired )
Living of LaGrange, Defendant-Appellant). )
)
JUSTICE TAILOR delivered the judgment of the court, with opinion.
Justices Hyman and C.A. Walker concurred in the judgment and opinion.
OPINION
¶1 Arbitration clauses in adhesion contracts are commonplace in today’s consumer
marketplace. Yet sometimes “mutually binding” arbitration clauses are in reality so one-sided as
to be illusory. For example, the arbitration agreement at issue here purports to impose mutually
binding obligations to arbitrate on both the consumer and business, yet it exempts from arbitration
the claims that the business will most likely have against the consumer, so that its practical effect
is that the consumer must arbitrate all of her claims against the business while the business may
No. 1-24-0534
seek relief in court on all of its likely claims against the consumer. This, along with other
substantively unconscionable terms, renders the arbitration agreement as a whole substantively
unconscionable. Therefore, we affirm the circuit court’s decision to deny the defendant’s motion
to compel arbitration.
¶2 I. BACKGROUND
¶3 In 2023, plaintiff Joan Hwang was a resident of Aspired Living, an assisted living facility
located in La Grange, Illinois, that is owned by defendant Pathway La Grange Property Owner,
LLC (Aspired). On February 2, 2023, as Hwang was walking down a hallway, an unnamed Aspired
employee (John Doe) opened a door, striking Hwang and knocking her to the ground. Hwang, who
was 90 years old at the time, sustained injuries as a result, including a fractured pelvis.
¶4 On August 4, 2023, Hwang filed a five-count complaint against Aspired and John Doe in
the circuit court, alleging violations of the Nursing Home Care Act (Act) (210 ILCS 45/1-101
et seq. (West 2022)), negligence, and premises liability.
¶5 On November 6, 2023, Aspired filed its motion to dismiss complaint and compel
arbitration, pursuant to section 2-619(a) of the Code of Civil Procedure (735 ILCS 5/2-619(a)
(West 2022)). Aspired asserted that on July 18, 2022, Hwang entered into a residency and services
agreement with Aspired, which had a number of attachments, including an arbitration agreement.
The arbitration agreement, which was separately signed by both parties, states in relevant part:
“The Parties agree that any and all disputes (except rent disputes or an action for
involuntary transfer or discharge or eviction) between: a) the Resident or his/her spouse,
Responsible Party, heirs or assigns; and b) the Community Parties [Aspired] or their
affiliates, officers, directors, agents, license holders, managers, or employees shall be
decided by arbitration in accordance with this Agreement. Therefore, all other claims or
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controversies, except where otherwise prohibited by law, arising out of or in any way
relating to the residency and services agreement, the Resident’s stays at the Community,
the services rendered for any condition, and any dispute arising out of the diagnosis,
treatment, or care of the Resident, including disputes regarding interpretation of this
Agreement, whether arising out of State or Federal law, whether existing or arising in the
future, whether for statutory, compensatory or punitive damages and whether sounding in
breach of contract, tort or breach of statutory duties, irrespective of the basis for the duty
or the legal theories upon which the claim is asserted, shall be submitted to binding
arbitration, as provided below, and shall not be filed in a court of law. THE PARTIES TO
THIS AGREEMENT FURTHER UNDERSTAND THAT CLAIMS, INCLUDING
MALPRACTICE CLAIMS, CANNOT BE BROUGHT IN A LAWSUIT IN COURT
BEFORE A JUDGE OR JURY AND THAT A JURY WILL NOT DECIDE THEIR
CASE.
***
The Arbitrator is the sole decision maker and is empowered and shall resolve all disputes
including without limitation any disputes as to the making, validity, enforceability, scope,
interpretation, voidability, unconscionability, preemption, and/or waiver of this Agreement
or underlying residency and services agreement because the parties intend to resolve all
disputes other than payment disputes without involving the court system.
***
The arbitrator’s fee and costs associated with the arbitration shall be divided equally among
the parties. The parties shall bear their own attorneys’ fees and costs and hereby expressly
waive any right to recover attorney fees or costs, actual or statutory.
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The arbitration proceeding shall remain confidential in all respects, including the Demand
for Arbitration, all arbitration filings, deposition transcripts, documents produced or
obtained in discovery, or other material provided by and exchanged between the parties
and the arbitrator’s findings of fact and conclusions of law. **** Further, the parties to the
arbitration also agree not to discuss the amount of the arbitration award or any settlement,
the names of the parties, or the name/location of the Residence except as required by law.
***
The parties acknowledge and agree that with regard to any claim brought by a party to this
Agreement against the other party, [sic] shall be limited to actual out-of-pocket costs
actually incurred PLUS an amount not to exceed $250,000 for any and all damages.
Punitive damages shall not be awarded. Such claims include but are not limited to a claim
by Community Parties for unpaid fees or charges, or a claim by, or on behalf of, a Resident
*** arising out of the care or treatment received by the Resident or the Resident’s
occupancy or presence at the Community, including, without limitation, claims for medical
negligence.
***
In the event a court having jurisdiction finds any term or portion of this Agreement
unenforceable, that portion shall not be effective and the remainder of this Agreement shall
remain effective.
***
You acknowledge that you have been encouraged to discuss this Agreement with an
attorney. By signing below you acknowledge that you have reviewed this Agreement and
understand it.” (Emphasis added in italics.)
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Aspired argued that because Hwang had entered into a “valid and enforceable agreement to
arbitrate,” her “claims must be dismissed and compelled to arbitration.”
¶6 Hwang responded that the arbitration agreement was unenforceable because it was both
procedurally and substantively unconscionable. She argued that the arbitration agreement was
procedurally unconscionable because it constituted several pages of the “extremely voluminous”
75-page residency and services agreement and because she entered into the agreement when she
was 89 years old without the benefit of attorney review on the day before she was scheduled to be
admitted to the facility. She argued that the arbitration agreement was substantively
unconscionable because it limited her ability to recover attorneys’ fees and capped the damages
she could recover and because its confidentiality clause allowed Aspired “to have access to far
more information, including previous discovery and precedents, than [Hwang] and impermissibly
allow[ed] for [Hwang] to be placed at a disadvantage.” Taken together, these provisions made the
agreement as a whole substantially beneficial to Aspired and, therefore, one-sided in its favor.
Hwang also argued that the arbitration agreement was unenforceable as a matter of law because
she did not receive any additional consideration for waiving her statutory right to attorneys’ fees
under the Act.
¶7 On December 20, 2023, Aspired filed a reply, arguing that Hwang delegated her claims of
unconscionability, so they must be decided by an arbitrator. Alternatively, it argued that the
arbitration agreement was not procedurally or substantively unconscionable. In addition, it argued
for the first time that because “Aspired Living is an Assisted Living Facility under 210 ILCS 9/5
et seq. and 77 Ill. Admin Code 295.200” and “not a skilled nursing home,” the Act does not apply
and therefore Hwang could not rely on the punitive damages and attorney fees she could be entitled
to thereunder to establish substantive unconscionability. Finally, Aspired argued that if the court
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found a provision of the arbitration agreement unenforceable, then it should sever that provision
and uphold the rest.
¶8 The circuit court denied Aspired’s motion to dismiss and to compel arbitration. It found
that because “[t]here is no arbitration without a valid contract to arbitrate,” it needed to determine
whether a valid contract to arbitrate existed before referring the matter to arbitration.
¶9 First, the court found that the arbitration agreement lacked the consideration necessary to
form a valid contract because Hwang received no benefit and Aspired suffered no detriment by
signing the arbitration agreement. For the sake of “completeness,” the court then went on to
address the issue of unconscionability and found the arbitration agreement procedurally
unconscionable. It stated that the “the residence and services agreement [Hwang] signed is
seventy-five pages long, including sixteen attachments,” and that the arbitration agreement
consisted of “seventeen paragraphs separated into three sections of mostly dense and confusing
language,” including “sentences stretching over several lines.” The court found that the arbitration
agreement “highlight[ed] the lack of bargaining power on the side of [Hwang] since it was apparent
at the time of signing that unless [Hwang] signed the Arbitration Agreement she would not have
been admitted.” The court said that Hwang was “in need of admission to [Aspired’s] facility and
was presented with the voluminous adhesion contract *** without any realistic opportunity to
consult an attorney.”
¶ 10 The court also found the arbitration agreement substantively unconscionable. It stated that
the agreement (1) contained a waiver of any right to recover attorney fees, (2) divided arbitration
fees and costs equally among the parties, (3) required the arbitration proceeding to remain
confidential, (4) limited the damages award to $250,000, and (5) excluded punitive damages. The
court stated that while many of the provisions were “seemingly applicable to both parties, ***
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upon closer look, it is clear that they strongly benefit [Aspired] at the expense of the resident.” The
court found that disputes regarding payment, where Aspired would be the likely plaintiff, were
exempt from arbitration. In addition, the court found the requirement that the arbitration
proceedings remain confidential in all respects “contributes to the substantive unconscionability
of the contract by ensuring that none of [Aspired’s] potential opponents will have access to
precedent while, at the same time, [Aspired] accumulates a wealth of knowledge.” Finally, the
court found that the exclusion of punitive damages, “an important deterrent and tool of public
policy[,]” represented Aspired’s “attempt to avoid responsibility for injuries caused to residents
by [Aspired’s] willful and wanton conduct.” It found this provision “contravene[d] the public
policy aimed at protecting vulnerable residents of long-term facilities from abuse” and “create[d]
a one-sided benefit for [Aspired].” Ultimately, the trial court refused to sever the offending
provisions from the arbitration agreement, concluding that doing so would be “tantamount to
drafting a new contract.”
¶ 11 While the court acknowledged Aspired’s argument that it was not a nursing home, and thus
not subject to the requirements of the Act, it said that Aspired “did not seek dismissal on these
grounds” and in fact “extensively relied on the case law allowing arbitration of the [Illinois]
Nursing Home Care Act claims.” In any event, the court found that “resolution of the issue of
whether [Aspired] is subject to the Nursing Home Care Act” was not “outcome determinative”
and reasoned that if Aspired “wish[ed] to pursue this argument, it could do so via a properly filed
motion to dismiss at a later stage.”
II. JURISDICTION
¶ 12 We have jurisdiction to hear this appeal under Illinois Supreme Court Rule 307(a)(1) (Nov.
1, 2017) (allowing an appeal to be taken from an interlocutory order of court “granting, modifying,
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No. 1-24-0534
refusing, dissolving, or refusing to dissolve or modify an injunction”). Menard County Housing
Authority v. Johnco Construction, Inc., 341 Ill. App. 3d 460, 463 (2003) (“A motion to compel
arbitration is treated as a complaint for injunctive relief, and a denial of that motion is reviewed
pursuant to Supreme Court Rule 307(a)(1) [citation].”).
¶ 13 III. ANALYSIS
¶ 14 A. Unconscionability
¶ 15 Among other grounds for appeal, Aspired argues that the arbitration agreement is not
substantively unconscionable. We disagree and, therefore, limit our discussion to this dispositive
issue.
¶ 16 Whether an agreement is unenforceable because it is unconscionable is a question of law,
which we review de novo. Bain v. Airoom, LLC, 2022 IL App (1st) 211001, ¶ 21. “A finding of
unconscionability may be based on either procedural or substantive unconscionability, or a
combination of both.” Kinkel v. Cingular Wireless, LLC, 223 Ill. 2d 1, 21 (2006). “ ‘Substantive
unconscionability concerns the actual terms of the contract and examines the relative fairness of
the obligations assumed.’ ” Bain, 2022 IL App (1st) 211001, ¶ 25 (quoting Kinkel, 223 Ill. 2d at
28). A contract will be found substantively unconscionable where its “terms are so one-sided that
they oppress or unfairly surprise an innocent party,” when there is “an overall imbalance in the
obligations and rights imposed by the bargain,” or when a “significant cost-price disparity” exists.
Turner v. Concord Nursing & Rehabilitation Center, LLC, 2023 IL App (1st) 221721, ¶ 20.
Unequal bargaining power and other “circumstances surrounding the transaction” are to be
considered when deciding whether an agreement is enforceable. Kinkel, 223 Ill. 2d at 24. When
examining the substantive provisions of an arbitration agreement, courts are more likely to find
unconscionability when a consumer is involved and has “no hand in [the] drafting” of the
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agreement, when there is a disparity in bargaining power, and when the agreement is on a pre-
printed form. Razor v. Hyundai Motor America, 222 Ill. 2d 75, 100 (2006); Bain, 2022 IL App
(1st) 211001, ¶ 28.
¶ 17 As a threshold matter, although Aspired argued before the circuit court that any claims of
unconscionability must be decided by an arbitrator based on the arbitration agreement’s delegation
clause, it does not raise this issue on appeal. Therefore, we do not consider it. People v. Hampton,
165 Ill. 2d 472, 478 (1995); Ill. S. Ct. R. 341(h)(7) (eff. Oct. 1, 2020) (“Points not argued [in an
appellant’s brief] are forfeited and shall not be raised in the reply brief, in oral argument, or on
petition for rehearing.”). Instead, we turn to Aspired’s other threshold argument that because it is
an assisted living facility, not a nursing home facility, the ability to recover attorney’s fees and
punitive damages under the Act does not apply here and should play no part in our substantive
unconscionability analysis. However, even without considering the right to attorney’s fees and
punitive damages under the Act, we find the arbitration agreement substantively unconscionable
for the reasons that follow.
¶ 18 First, the obligation to arbitrate is entirely one-sided, greatly favoring Aspired to Hwang’s
detriment. Aspired’s argument that the arbitration agreement is mutually binding is disingenuous
because it excludes from arbitration any “rent disputes” and “action[s] for involuntary transfer or
discharge or eviction,” the very claims Aspired is most likely to bring against its residents. On the
other hand, it requires residents to arbitrate almost all of their claims against Aspired, including
personal injury claims that often arise in the assisted living context. Nevertheless, Aspired argues
that because the arbitration agreement does not exclude every possible payment dispute that could
arise, the arbitration requirement provision is not substantively unconscionable. When determining
whether an arbitration agreement is unduly one-sided, however, we consider its real-world
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application, giving less weight to the kinds of unlikely claims that may arise and be subject to
arbitration under the fringes of the contract, such as Aspired’s contention that it would be required
to arbitrate “claims for unpaid fees and charges owed to the facility *** [stemming] from a
resident’s failure to pay for additional services or other non-recurring charges not encompassed by
the amount paid each month in rent.” We find that Aspired’s decision to exempt from arbitration
all of its likeliest claims while at the same time forcing its residents to arbitrate almost all of their
claims, including the kind of negligence claims that residents often bring in the assisted living
context, supports a finding of substantive unconscionability.
¶ 19 Our conclusion aligns with our precedent, as well as numerous precedents of other states.
See, e.g., Vassilkovska v. Woodfield Nissan, Inc., 358 Ill. App. 3d 20, 28-29 (2005) (finding
defendant’s promise to arbitrate was an “empty one” even though defendant “ ‘waive[d] *** all
rights to pursue any legal action in a court of law,’ ” because it “retain[ed] the right to sue the
plaintiff [in court] for a laundry list of reasons”); Peavy v. Skilled Healthcare Group, Inc., 2020-
NMSC-010, ¶¶ 19, 26, 470 P.3d 218 (finding an arbitration agreement substantively
unconscionable when the drafting party excluded its likeliest claims from arbitration but forced
the non-drafting party to arbitrate its likeliest claims); Flores v. Transamerica HomeFirst, Inc.,
113 Cal. Rptr. 2d 376, 383 (Ct. App. 2001) (finding that a contract provision requiring the
borrower to arbitrate all claims but allowing the lender to avoid arbitration and obtain
foreclosure, “the only remedy [the lender was] likely to need,” was “so one-sided as to be
substantively unconscionable”); Armendariz v. Foundation Health Psychcare Services, Inc., 6
P.3d 669, 692 (Cal. 2000) (finding a “unilateral obligation to arbitrate” substantively
unconscionable, reasoning that it is “unfairly one-sided for an employer with superior bargaining
power to impose arbitration on the employee as plaintiff but not to accept such limitations when
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it seeks to prosecute a claim against the employee” and that such a practice makes
arbitration appear “less as a forum for neutral dispute resolution and more as a means of
maximizing employer advantage,” a purpose for which “[a]rbitration was not intended” (internal
quotation marks omitted)); Wisconsin Auto Title Loans, Inc. v. Jones, 2006 WI 53, ¶¶ 59-69, 290
Wis. 2d 514, 714 N.W.2d 155 (finding the “one-sidedness of the arbitration provision ***
sufficient to hold the arbitration provision substantively unconscionable” because it granted the
creditor a choice of forum for its claims but required the borrower to raise claims before an
arbitrator and “impose[d] arbitration on the weaker party without accepting the arbitration forum
for itself”); Dan Ryan Builders, Inc., v. Nelson, 737 S.E.2d 550, 560 (W. Va. 2012) (“under the
doctrine of unconscionability, a trial court may decline to enforce a contract clause—such as an
arbitration provision—if the obligations or rights created by the clause unfairly lack mutuality”
because it requires the weaker party to arbitrate but permits the stronger party to seek relief in
court); Brewer v. Missouri Title Loans, 364 S.W.3d 486, 493 (Mo. 2012) (en banc) (finding the
evidence supported a determination that an agreement’s arbitration clause was unconscionable
when, among other things, the terms of the agreement were entirely one-sided because the
consumer was required to arbitrate, while the title company had a choice of simply repossessing
the collateral by force or through suit in court, stating “[t]he fact that no consumer ever has
arbitrated a claim against the title company *** makes it clear that the agreement stands as a
substantial obstacle not just to arbitration but also to the resolution of any consumer disputes
against the title company”).
¶ 20 Aspired nevertheless argues that the arbitration agreement is not substantively
unconscionable because it is supported by consideration. But cases that turn on the issue of
consideration are not based on an assessment of fairness or adequacy. See Gallagher v. Lenart,
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226 Ill. 2d 208, 243 (2007) (“In reality, plaintiffs are merely asking us to conduct a generalized
inquiry into the fairness of Gallagher’s bargain with Rail Terminal, which we decline to
do. Courts generally will not inquire into the adequacy of consideration for a contract.”). Instead,
they ask only whether a contract was supported by mutual promises, regardless of whether the
obligations imposed on both parties were identical ones. See, e.g., Bishop v. We Care Hair
Development Corp., 316 Ill. App. 3d 1182, 1198 (2000); Tortoriello v. Gerald Nissan of North
Aurora, Inc., 379 Ill. App. 3d 214, 238 (2008). Because the substantive unconscionability
analysis turns upon the “relative fairness of the obligations assumed” (Zuniga v. Major League
Baseball, 2021 IL App (1st) 201264, ¶ 38), we find that the heavily one-sided nature of the
obligation to arbitrate here supports our conclusion that the arbitration agreement is substantively
unconscionable. To be sure, Illinois courts have consistently treated consideration and
substantive unconscionability as separate and distinct legal concepts. See, e.g., Hartz v. Brehm
Preparatory School, Inc., 2021 IL App (5th) 190327, ¶¶ 45, 58-61 (finding the contract at issue
was supported by consideration but remanding the case for the trial court to consider the merits
of plaintiffs’ unconscionability claims). Thus, an agreement may be supported by consideration
yet be substantively unconscionable. See, e.g., Keefe v. Allied Home Mortgage Corp., 393 Ill.
App. 3d 226, 230-31, 236 (2009) (holding that an arbitration rider was supported by
consideration but that its class action prohibition clause—“a scheme to deliberately cheat large
numbers of consumers out of individually small sums of money”—was substantively
unconscionable). Therefore, we conclude that the fact that the arbitration agreement may be
supported by consideration does not immunize it from a substantive unconscionability attack.
¶ 21 Second, the confidentiality clause contained in the arbitration agreement, which requires
the proceedings to “remain confidential in all respects” and requires the parties “not to discuss the
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amount of the arbitration award or any settlement, the names of the parties, or the name/location
of the Residence except as required by law,” is another factor that unfairly favors Aspired, to
Hwang’s detriment. As this court explained in Bain when addressing a similar confidentiality
clause, “[a]s a repeat player in arbitrations under its own contract, *** [defendant] will of course
have access to information about past proceedings that the individual [consumers] it arbitrates with
will lack,” which “ ‘burden[s] an individual customer’s ability to vindicate [his or her] claim[s]’ ”
and “ ‘contributes to the substantive unconscionability’ of the contract ‘ “by ensuring that none of
[the defendant’s] potential opponents will have access to precedent while, at the same time, [the
defendant] accumulates a wealth of knowledge.” ’ ” Bain, 2022 IL App (1st) 211001, ¶ 39 (quoting
Kinkel, 223 Ill. 2d at 42, quoting Ting v. AT&T, 319 F.3d 1126, 1152 (9th Cir. 2003)). The same
is true here. Thus, the confidentiality clause contributes to the substantive unconscionability of the
arbitration agreement.
¶ 22 Third, the arbitration agreement’s damages cap of $250,000 supports an unconscionability
finding because it is intended to limit Aspired’s liability. See Razor, 222 Ill. 2d at 100 (finding a
consequential damages exclusion clause supported a finding of unconscionability because the
clause was “intended to limit the drafter’s liability”). The arbitration agreement’s damages cap
applies to both Aspired and Hwang. However, personal injury and malpractice claims brought by
Hwang and residents like her could expose Aspired to damage awards far in excess of $250,000,
whereas Aspired is unlikely to have a claim for damages against a resident that would ever
approach $250,000. Accordingly, the only real purpose of the damages cap is to limit Aspired’s
liability, another factor contributing to our finding that the arbitration agreement is substantively
unconscionable.
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¶ 23 Fourth, the arbitration agreement’s prohibition of punitive damages is another indicator of
Aspired’s intent to limit its liability. If Hwang were allowed to litigate her claims in court, the facts
alleged in the negligence counts (as opposed to the count for violation of the Act) of her
complaint—that Aspired and its agents “acted willfully, wantonly, and maliciously, and/or with a
conscious disregard for [her] overall health, rights, and well-being”—could support an award of
punitive damages. See Doe v. Catholic Bishop of Chicago, 2017 IL App (1st) 162388, ¶ 14 (“the
trial court may allow a claim for punitive damages if the evidence would reasonably support a
finding that defendant acted ‘willfully, or with such gross negligence as to indicate a wanton
disregard of the rights of others’ ” (quoting Kelsay v. Motorola, Inc., 74 Ill. 2d 172, 186 (1978),
and citing Loitz v. Remington Arms Co., 138 Ill. 2d 404, 415 (1990))). Conversely, it is highly
unlikely that Aspired would ever have a claim against its residents that would warrant punitive
damages. Therefore, because the arbitration agreement’s prohibition on recovery of punitive
damages is intended to limit Aspired’s liability, it too supports a finding of substantive
unconscionability.
¶ 24 Finally, the fact that the arbitration agreement is on a pre-printed form, and that nothing in
the record reflects that Hwang had any opportunity to negotiate its terms, also supports an
unconscionability finding. See Razor, 222 Ill. 2d at 100 (“facts which tend to support a finding of
unconscionability” include that the warranty was preprinted and that the plaintiff “had no hand in
its drafting, and no bargaining power at all with respect to its terms”); cf. Fuqua v. SVOX AG, 2014
IL App (1st) 131429, ¶ 40 (finding the contract was not substantively unconscionable in part
because plaintiff “negotiated and requested” some of the terms of the contract and had ample
opportunity to object to and request changes (emphasis in original)). Although nonnegotiable
“adhesion” contracts “are a fact of modern life” (Kinkel, 223 Ill. 2d at 26), the circumstances
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surrounding the transaction here indicate that Hwang, who was not represented by counsel when
she signed the arbitration agreement, had no real opportunity to consult with an attorney before
doing so, as she signed the agreement on July 18, 2022, and was scheduled to be admitted to
Aspired the next day. These circumstances weigh in favor of an unconscionability finding. Razor,
222 Ill. 2d at 100.
¶ 25 Taken together, the one-sided nature of the arbitration obligation, the confidentiality
clause, the provision prohibiting punitive damages, the provision capping damages at $250,000,
and Hwang’s lack of bargaining power when signing the agreement make the arbitration agreement
substantively unconscionable and, therefore, unenforceable.
¶ 26 B. Severability
¶ 27 Aspired alternatively argues that the trial court should have severed any offending
provisions and enforced the rest of the arbitration agreement, based on the severability clause in
the arbitration agreement. In its discretion, a court may sever unenforceable provisions from a
contract. Abbott-Interfast Corp. v. Harkabus, 250 Ill. App. 3d 13, 21 (1993). However, a court
should not sever provisions from a contract if “doing so would be ‘tantamount to drafting a new
contract.’ ” Bain, 2022 IL App (1st) 211001, ¶ 53 (quoting Lee/O’Keefe Insurance Agency, Inc. v.
Ferega, 163 Ill. App. 3d 997, 1007 (1987)). Indeed, courts should be “cautioned *** against
engaging in this practice, as it ‘discourag[es] the narrow and precise draftsmanship which should
be reflected in written agreements.’ ” Turner, 2023 IL App (1st) 221721, ¶ 47 (quoting
Lee/O’Keefe Insurance Agency, Inc., 163 Ill. App. 3d at 1007). Here, because a significant number
of provisions of the arbitration agreement operate collectively to make it substantively
unconscionable, it would be impossible to sever these provisions without essentially writing a new
agreement. See Bain, 2022 IL App (1st) 211001, ¶ 54 (“Where, as here, the drafting party has
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structured an arbitration agreement that is designed to make a claim expensive to bring, to bar any
full recovery, and to ensure that the public does not learn of adverse findings against the company,
the modifications necessary to render the agreement enforceable cannot be considered
minor.”). For this reason, we conclude that the arbitration agreement as a whole is unenforceable.
¶ 28 Because we find that the arbitration agreement as a whole is substantively unconscionable,
and therefore unenforceable, we need not address Aspired’s alternate arguments regarding
procedural unconscionability and consideration.
¶ 29 IV. CONCLUSION
¶ 30 For the foregoing reasons, the judgment of the trial court is affirmed.
¶ 31 Affirmed.
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Hwang v. Pathway LaGrange Property Owner, LLC, 2024 IL App (1st) 240534Decision Under Review: Appeal from the Circuit Court of Cook County, No. 2023-L-
007800; the Hon. Nichole C. Patton, Judge, presiding.
Attorneys Scott L. Howie, Michael J. Borree, and Laura Coffey Ieremia,
for of Donohue Brown Mathewson & Smyth LLC, of Chicago, for
Appellant: appellant.
Attorneys David R. Centracchio and Jacob B. Gordon, of Gordon Gordon
for & Centracchio, of Chicago, for appellee.
Appellee:
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