Lopez Rivera v. Stetson ( 2023 )

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22-P-904 Appeals Court
CARLOS E. LOPEZ RIVERA vs. STEVEN W. STETSON.
No. 22-P-904.
Worcester. March 3, 2023. – August 31, 2023.
Present: Wolohojian, Shin, & Hodgens, JJ.
Arbitration. Contract, Arbitration, Misrepresentation, Duress.
Fraud.
Civil action commenced in the Superior Court Department on
September 25, 2020.
A motion to compel arbitration was heard by Valerie A.
Yarashus, J.
Andrew D. Black (Barbara H. Buell also present) for the
defendant.
Robert A. Scott for the plaintiff.
HODGENS, J. Wanting vision correction, the plaintiff,
Carlos E. Lopez Rivera (Lopez), engaged the services of the
defendant eye surgeon, Steven W. Stetson. Prior to surgery,
Lopez signed a form agreeing to submit any disputes regarding
the surgery to arbitration. Dissatisfied with the surgery,
2
Lopez filed a medical malpractice complaint in the Superior
Court, and Stetson moved to dismiss and to compel arbitration
pursuant to the signed agreement. A Superior Court judge denied
the motion concluding that Stetson's "failure to translate" the
arbitration agreement into Spanish amounted to "fraud in the
inducement" and rendered the agreement invalid and
unenforceable. We reverse.
Background. On the morning scheduled for his elective
surgery, Lopez signed and initialed four forms, printed in
English, and provided by Stetson: (1) a patient arbitration
agreement; (2) a patient consent for surgery and receipt of
medical information; (3) a patient consent for laser vision
correction; and (4) a lifetime assurance plan. According to the
arbitration agreement, the "[p]atient agree[d] that . . . any
and all actions for medical malpractice . . . shall be resolved
by mandatory and binding arbitration."
Following the surgery, Lopez filed a complaint against
Stetson and the Lasik Vision Institute, LLC (LVI), in the
Superior Court alleging medical malpractice.1 Pursuant to G. L.
c. 251, § 2 (a), Stetson moved to dismiss and to compel
arbitration according to the terms of the arbitration agreement.
In opposition, Lopez claimed that "no such [arbitration]
1 LVI did not file an answer and is not a party to this
appeal.
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agreement exists because the patient was incapable of
understanding the document." Lopez argued that the arbitration
agreement was the product of fraud, mistake, and
unconscionability.
After an expedited evidentiary hearing that included
testimony from Lopez, Stetson, and a technician in Stetson's
office, the judge made findings of fact and rulings of law. She
found that no one explained the arbitration agreement to Lopez
in his primary language (Spanish), but an interpreter was
available had Lopez requested one. The judge also found that
Lopez lacked a sufficient understanding of English to know what
he was signing, and "that in signing a stack of multiple forms
without translating into Spanish that one of these forms was for
binding arbitration, [Lopez] was led to believe that he was
signing medical forms." Generally citing fraud, duress, and
unconscionability, the judge denied Stetson's motion to dismiss
and to compel arbitration. Stetson appeals from this
interlocutory order pursuant to G. L. c. 251, § 18 (a) (1). See
Joulé, Inc. v. Simmons, 459 Mass. 88, 92 (2011).
Discussion. Arbitration agreements regarding activities
involving interstate commerce are governed by Federal and State
law. See Miller v. Cotter, 448 Mass. 671, 678 (2007). See
generally 9 U.S.C. §§ 1 et seq.; G. L. c. 251, §§ 1 et seq.
"Healthcare is such an activity." Miller, supra. Under
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identical language in the governing statutes, arbitration
agreements "shall be valid, enforceable and irrevocable, save
upon such grounds as exist at law or in equity for the
revocation of any contract." G. L. c. 251, § 1. Compare 9
U.S.C. § 2 (same language but switching order of words
"enforceable" and "irrevocable"). These grounds include
"generally applicable contract defenses," Doctor's Assocs., Inc.
v. Casarotto, 517 U.S. 681, 687 (1996), including "fraud,
duress, or unconscionability." Miller, supra at 679. "State
contract law supplies the principles for determining validity,
revocability, and enforceability." Bekele v. Lyft, Inc., 918
F.3d 181, 185 (1st Cir. 2019). "What States may not do is
decide that a contract is fair enough to enforce all its basic
terms (price, service, credit), but not fair enough to enforce
its arbitration clause." Allied-Bruce Terminix Cos. v. Dobson,
513 U.S. 265, 281 (1995). "Congress precluded States from
singling out arbitration provisions for suspect status,
requiring instead that such provisions be placed 'upon the same
footing as other contracts.'" Doctor's Assocs., Inc., supra,
quoting Scherk v. Alberto-Culver Co., 417 U.S. 506, 511 (1974).
On appeal from the denial of a motion to dismiss and to compel
arbitration, we apply "de novo" review to the motion judge's
legal conclusions, Archer v. Grubhub, Inc., 490 Mass. 352, 355
(2022), and we "defer to the motion judge's findings of fact
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unless clearly erroneous." Licata v. GGNSC Malden Dexter LLC,
466 Mass. 793, 796 (2014).
Based upon the "totality of the circumstances" presented by
undisputed facts in the record, we conclude that the parties
formed a valid arbitration agreement (citation omitted).
Archer, 490 Mass. at 361. "[F]or there to be an enforceable
contract, there must be both reasonable notice of the terms and
a reasonable manifestation of assent to those terms." Kauders
v. Uber Techs., Inc., 486 Mass. 557, 572 (2021). The record
shows that Lopez had reasonable notice of the arbitration
agreement, and that he manifested his assent to the agreement.
Stetson's office staff presented to Lopez four forms, including
the arbitration agreement. Text at the top of the arbitration
form clearly identified the document as "PATIENT ARBITRATION
AGREEMENT." The first paragraph, titled "ARBITRATION," stated
that any claim, including "medical malpractice," must be
resolved by "mandatory and binding arbitration" as the "sole and
exclusive means for . . . resolving any claim." The second
paragraph, titled "PROCEDURE FOR ARBITRATION," stated that the
American Arbitration Association decision would be "final and
binding for both parties." The third and last paragraph, titled
"CONSIDERATION," stated that Lopez "has read, understands, and
had an opportunity to refuse to execute this arbitration
agreement and agrees to be legally bound by its terms." Lopez
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signed and dated the arbitration agreement on the lines
indicated. These facts amply demonstrate a valid arbitration
agreement because Lopez had reasonable notice of the terms of
the agreement and manifested his assent. See Archer, supra
(arbitration agreement valid "even if the party did not actually
view the agreement, so long as the party had an adequate
opportunity to do so").
Lopez's lack of facility with the English language does not
require a different result. Lopez testified that he had lived
in Massachusetts for twelve years at the time of his surgery and
had learned a "little bit" of English "on the streets." Lopez
further testified that if the arbitration agreement had been
read to him in Spanish, he would not have signed it. The judge
found, "Mr. Lopez's primary language is Spanish, but he
understood some limited English from living and working in the
United States for more than twelve years by the time of these
events in 2017." The judge also found, "Mr. Lopez did not have
a sufficient understanding of English to allow him to read the
Arbitration Agreement." "The general rule is that, in the
absence of fraud, one who signs a written agreement is bound by
its terms whether he reads and understands it or not. This rule
applies to a person who cannot read." Wilkisius v. Sheehan, 258
Mass. 240, 243 (1927). The rule also applies to those who lack
an "understanding" of the terms of the agreement or "the English
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language." Paulink v. American Express Co., 265 Mass. 182, 185
(1928). "Written contracts are intended to preserve the exact
terms of the obligations assumed, so that they may not be
subject to the chances of a want of recollection or an
intentional misstatement." Grace v. Adams, 100 Mass. 505, 507
(1868). This longstanding rule "rests upon the fundamental need
for security in business transactions." 1 R.A. Lord, Williston
on Contracts § 4:19 (4th ed. 2022). These legal principles
underscore that there is a "solemnity [to] physically signing a
written contract" that renders a signature more than just a
fancy ornament on a document. Kauders, 486 Mass. at 574.
We disagree with Lopez's contention that the arbitration
agreement presented a "different species of document" that
required something more than just reasonable notice of the terms
and a manifestation of assent. Lopez notes the judge's finding
that "he was never informed that by signing the form he would be
giving up his right to a jury trial." States, however, are
precluded from "singling out arbitration provisions for suspect
status," Doctor's Assocs., Inc., 517 U.S. at 687, and must view
such provisions "upon the same footing as other contracts," id.,
quoting Scherk, 417 U.S. at 511. Courts may not "invalidate
arbitration agreements under state laws applicable only to
arbitration provisions." Doctor's Assocs., Inc., supra. Under
ordinary contract principles, "a party's failure to read or
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understand a contract provision does not free him from its
obligations." Miller, 448 Mass. at 680. Therefore, we apply
that rule to the arbitration contract here and conclude that
Lopez is bound by the arbitration agreement.
We also discern no evidence of fraud by Stetson or anyone
in his office. Fraud requires proof that one party made a
materially false statement to induce action by the other party,
and that the other party relied on the false statement to its
detriment. Zimmerman v. Kent, 31 Mass. App. Ct. 72, 77 (1991).
According to the record, and the judge's findings, Lopez signed
these documents on the day of surgery in a small group setting
where a technician explained the risks and benefits of surgery
to multiple patients, and Stetson invited patients to ask
general questions.2 Stetson would address patient-specific
questions in private. During both the group session and the
2 There was also testimony about the general practice of
providing forms to patients. Patients received a "packet" of
forms to "take home and read over" when scheduling surgery at
the initial consultation. This packet included medical consent
forms and an arbitration agreement. During the initial
consultation, patients who had booked surgeries "would sit down
with a technician and/or the optometrist [the] same day, [and]
go over the risks associated" with the surgery. Patients would
bring the forms with them on the day scheduled for surgery and
would be provided another "packet" if they forgot to bring the
forms. On the day of surgery, office staff "would again go over
all the risks and have them initial the paperwork." The parties
did not offer any argument, and the judge did not make any
findings, relative to the general practice of patients taking
forms home to review. Our decision does not turn on this
testimony.
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private session, a Spanish-speaking staff member was available
to discuss any of the documents if necessary. Lopez testified,
"They gave me papers and told me, sign here, sign here. It was
a gentleman [not Stetson]." No evidence, including Lopez's own
testimony, indicated that anyone misrepresented the nature of
the arbitration agreement. In the absence of a material
misrepresentation, there is no basis to conclude that fraud
occurred.
For similar reasons, we conclude that the arbitration
agreement was not invalid on the ground of unconscionability.
Presenting a patient with a "stack of multiple forms" to review
and sign before a medical procedure does not alone render a
contract contained therein unconscionable. See Miller, 448
Mass. at 673, 680 (concluding separate arbitration agreement
signed along with various other "necessary forms" by plaintiff
on date of his father's admission to nursing home not
unconscionable). The inquiry is more nuanced. "Historically, a
contract was considered unconscionable if it was 'such as no man
in his senses and not under delusion would make on the one hand,
and as no honest and fair man would accept on the other.'" Id.
at 679, quoting Hume v. United States, 132 U.S. 406, 411 (1889).
Unconscionability, both procedural and substantive, is evaluated
"on a case by case basis," giving particular attention to
"unfair surprise" and "oppressive" terms. Zapatha v. Dairy
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Mart, Inc., 381 Mass. 284, 293 (1980). Here, we discern neither
unfair surprise nor oppressive terms. In addition to the ample
notice provided by the terms of the arbitration agreement
previously discussed, the process used by Stetson minimized any
risk of unfair surprise. On the day of the surgery, Lopez had
the opportunity to raise any questions about the packet, discuss
questions with Stetson, and avail himself of the services of a
Spanish-speaking interpreter if needed. On appeal Lopez did not
identify any dubious provision. The arbitration agreement is
brief and to the point –- establishing mandatory arbitration as
the sole and exclusive means of settling all claims for medical
malpractice. The purpose and effect of the agreement are not
unconscionable and are entirely consistent with State and
Federal policies that "heavily" favor submitting disputes to
binding arbitration. Miller, supra at 680.
Finally, the record lacks any evidence of duress showing
that Stetson caused Lopez to enter into the arbitration
agreement "under the influence of such fear" that precluded the
exercise of "free will and judgment" (citation omitted).
Avallone v. Elizabeth Arden Sales Corp., 344 Mass. 556, 561
(1962). Rather than duress, the record shows an exercise of
free will: Lopez had time to review all documentation; he had
access to a Spanish-speaking interpreter at Stetson's office; he
had the opportunity to speak with Stetson in a group setting or
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in private; he knew he could decline to sign; and he signed the
arbitration agreement. Thus, the arbitration agreement here was
ultimately the product of "consent, not coercion," Volt Info.
Sciences, Inc. v. Trustees of Leland Stanford Jr. Univ., 489
U.S. 468, 479 (1989), and must be rigorously enforced as agreed,
see Archer, 490 Mass. at 355.
Conclusion. The Superior Court judge's order denying
Stetson's motion to compel arbitration is reversed, and the case
is remanded for the entry of an order compelling arbitration and
dismissing the complaint as to Stetson.
So ordered.