Zellner v. Prestige Gardens Rehab. & Nursing Ctr. , 2019 Ohio 595 ( 2019 )

[Cite as Zellner v. Prestige Gardens Rehab. & Nursing Ctr., 2019-Ohio-595.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
UNION COUNTY
BETHANY ZELLNER, AS PERSONAL
REPRESENTATIVE OF THE ESTATE
OF GLENNA A. ZELLNER, CASE NO. 14-18-14
PLAINTIFF-APPELLANT,
v.
PRESTIGE GARDENS REHABILITATION
AND NURSING CENTER, ET AL., OPINION
DEFENDANTS-APPELLEES.
Appeal from Union County Common Pleas Court
Trial Court No. 2018-CV-0062
Judgment Affirmed
Date of Decision: February 19, 2019
APPEARANCES:
Blake A. Dickson for Appellant
Keona Padgett for Appellees
Case No. 14-18-14
PRESTON, J.
{¶1} Plaintiff-appellant, Bethany Zellner (“Zellner”), as the personal
representative of the estate of Glenna Zellner (“Glenna”), appeals the July 3, 2018
judgment of the Union County Court of Common Pleas granting the motion to stay
pending arbitration of defendants-appellees, Prestige Gardens Rehabilitation and
Nursing Center, Marysville Gardens Rehabilitation and Health Care LLC,
Chickiestrong Marysville Gardens LLC, Garden Healthcare Group LLC, Joshua
Farkovitz, David Gamzeh, Akiva Glatzer, and various John Does (collectively the
“defendants”). For the reasons that follow, we affirm.
{¶2} This case arises from Glenna’s death following her admission to
Prestige Gardens Rehabilitation and Nursing Center (“Prestige Gardens”). Glenna
was admitted to Prestige Gardens on April 18, 2017.1 (See Doc. No. 26). (See also
Doc. No. 23, Defendants’ Ex. A). Glenna suffered from dementia and Parkinson’s
disease, and as a result, she needed assistance performing basic daily tasks,
including bathing and dressing. (See Doc. No. 26). She also required “extensive
assistance to walk and transfer herself.” (Id.). According to Zellner, although
Glenna was identified “as a high fall risk” by Prestige Gardens’s staff, “no
individualized interventions were put in place to prevent [Glenna] from suffering
1
Glenna’s date of admission to Prestige Gardens is supported by the record. (See Doc. No. 23, Defendants’
Ex. A). However, the remaining events described in this paragraph, although alleged by Zellner in the trial
court, are largely unsupported by evidence in the record.
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falls * * *.” (Id.). On April 21, 2017, a nurse found Glenna on her back on the floor
of her room complaining of pain in her right hip. (See id.). Glenna was then
transferred to an area hospital where she was diagnosed with a hip fracture. (See
id.). After undergoing surgery to repair her fractured hip, Glenna was discharged
from the hospital and placed under hospice care. (See id.). Glenna died soon
thereafter on May 8, 2017. (See id.).
{¶3} On April 9, 2018, Zellner filed a complaint asserting various claims for
personal injury, wrongful death, medical negligence, ordinary negligence, and
violations of Ohio’s Nursing Home Residents’ Bill of Rights. (Doc. No. 2). The
defendants filed their answer on May 9, 2018. (Doc. No. 21). On May 16, 2018,
Zellner filed an affidavit of merit. (Doc. No. 22). On May 31, 2018, the defendants
filed a motion to stay the proceedings pending arbitration pursuant to an arbitration
agreement signed by Glenna’s power of attorney, her husband, Jack Zellner
(“Jack”), in the course of admitting Glenna to Prestige Gardens on April 18, 2017.
(Doc. No. 23). (See Doc. No. 23, Defendants’ Ex. A).
{¶4} On June 11, 2018, the defendants filed a motion for a protective order.
(Doc. No. 25). On June 13, 2018, Zellner filed a combined motion for extension of
time to respond to the defendants’ motion to stay proceedings pending arbitration,
motion to compel, and brief in opposition to the defendants’ motion for a protective
order. (Doc. No. 26). On June 26, 2018, the defendants filed a combined
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memorandum in opposition to Zellner’s motion for extension of time and motion to
compel. (Doc. No. 27).
{¶5} On July 3, 2018, the trial court granted the defendants’ motion to stay
the proceedings pending arbitration and stayed Zellner’s action pending arbitration.
(Doc. No. 28).
{¶6} On August 1, 2018, Zellner filed a notice of appeal. (Doc. No. 33). She
raises three assignments of error.
Assignment of Error No. I
The Trial Court erred in permanently staying this case in favor
of binding arbitration because the arbitration clause2 is void,
invalid, and unenforceable.
{¶7} In her first assignment of error, Zellner argues that the trial court erred
by staying the entire proceedings pending arbitration. Zellner advances five distinct
arguments in support of this assignment of error. First, Zellner argues that the trial
court erred by staying the action because the arbitration agreement is void, invalid,
and unenforceable as it is procedurally and substantively unconscionable and
because it fails to comply with R.C. 2711.23. In addition, Zellner argues that the
trial court erred by staying the action because the defendants waived their rights to
enforce the arbitration agreement. Finally, Zellner contends that the trial court
2
Throughout her appellate brief, Zellner refers to the document setting forth the agreement to arbitrate as an
“arbitration clause.” However, the “arbitration clause” is a three-page document with eight subparts and a
signature block that spans two pages. (See Doc. No. 23, Defendants’ Ex. A). Accordingly, except when
directly quoting Zellner’s appellate brief, we will refer to the document as the “arbitration agreement.”
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erroneously stayed the proceedings as to all claims and all the defendants because
(1) Zellner’s wrongful-death claim is not arbitrable and (2) some of the defendants
were neither party to the arbitration agreement nor in privity with a party to the
arbitration agreement.
{¶8} “Typically, a decision to grant or deny a stay of proceedings pending
arbitration is reviewed under an abuse-of-discretion standard.” Kellogg v. Griffiths
Health Care Group, 3d Dist. Marion No. 9-10-59, 2011-Ohio-1733, ¶ 9, citing
Morris v. Morris, 189 Ohio App. 3d 608, 2010-Ohio-4750, ¶ 15 (10th Dist.). An
abuse of discretion suggests the trial court’s decision is unreasonable, arbitrary, or
unconscionable. Blakemore v. Blakemore, 5 Ohio St. 3d 217, 219 (1983).
“‘Furthermore, when a trial court makes factual findings, such as any findings
regarding the circumstances surrounding the making of the contract, those factual
findings should be reviewed with great deference.’” Loyer v. Signature Healthcare
of Galion, 3d Dist. Crawford No. 3-16-09, 2016-Ohio-7736, ¶ 7, quoting Kellogg at
¶ 9, citing Taylor Bldg. Corp. of Am. v. Benfield, 117 Ohio St. 3d 352, 2008-Ohio-
938, ¶ 38 and Nationwide Mut. Fire Ins. Co. v. Guman Bros. Farm, 73 Ohio St. 3d
107, 108 (1995) (contract interpretation, a question of law, is reviewed de novo,
“[u]nlike determinations of fact which are given great deference”). “‘“However, a
de novo standard of review is appropriate when the appeal presents a question of
law.”’” Id., quoting Spearman v. Am. Elec. Power Co., Inc., 3d Dist. Hardin No. 6-
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14-13, 2015-Ohio-928, ¶ 13, quoting Kellogg at ¶ 9, citing Morris at ¶ 15 and
Barhorst, Inc. v. Hanson Pipe & Prods. Ohio, Inc., 169 Ohio App. 3d 778, 2006-
Ohio-6858, ¶ 10 (3d Dist.).
{¶9} “‘Both the Ohio General Assembly and Ohio courts have expressed a
strong public policy favoring arbitration.’” U.S. Bank Natl. Assn. v. Allen, 3d Dist.
Paulding No. 11-15-09, 2016-Ohio-2766, ¶ 24, quoting Hayes v. Oakridge Home,
122 Ohio St. 3d 63, 2009-Ohio-2054, ¶ 15, citing R.C. Chapter 2711, Taylor Bldg.
at ¶ 27, and Williams v. Aetna Fin. Co., 83 Ohio St. 3d 464, 471 (1998).
“‘“Arbitration is favored because it provides the parties thereto with a relatively
expeditious and economical means of resolving a dispute.”’” Id., quoting Kelm v.
Kelm, 68 Ohio St. 3d 26, 29 (1993), quoting Schaefer v. Allstate Ins. Co., 63 Ohio
St.3d 708, 712 (1992). “‘Arbitration also has the additional benefit of unburdening
crowded court dockets.’” Id., quoting Hayes at ¶ 15, citing Mahoning Cty. Bd. of
Mental Retardation & Dev. Disabilities v. Mahoning Cty. TMR Edn. Assn., 22 Ohio
St.3d 80, 83 (1986). “‘In light of the strong presumption favoring arbitration, all
doubts should be resolved in its favor.’” Id., quoting Hayes at ¶ 15, citing Ignazio
v. Clear Channel Broadcasting, Inc., 113 Ohio St. 3d 276, 2007-Ohio-1947, ¶ 18.
{¶10} “The General Assembly has endorsed the strong policy in favor of
arbitration of disputes in R.C. 2711.01(A), which provides that an arbitration
agreement ‘shall be valid, irrevocable, and enforceable, except upon grounds that
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exist at law or in equity for the revocation of any contract.’” Hayes at ¶ 16. R.C.
2711.02 provides for the indirect enforcement of arbitration agreements by allowing
a party to an arbitration agreement to obtain a stay of litigation in favor of
arbitration. Villas Di Tuscany Condominium Assn., Inc. v. Villas Di Tuscany, 7th
Dist. Mahoning No. 12 MA 165, 2014-Ohio-776, ¶ 12, citing Maestle v. Best Buy
Co., 100 Ohio St. 3d 330, 2003-Ohio-6465, ¶ 14, quoting Brumm v. McDonald &
Co. Secs., Inc., 78 Ohio App. 3d 96, 100 (4th Dist.1992). R.C. 2711.02(B) provides:
If any action is brought upon any issue referable to arbitration under
an agreement in writing for arbitration, the court in which the action
is pending, upon being satisfied that the issue involved in the action
is referable to arbitration under an agreement in writing for arbitration,
shall on application of one of the parties stay the trial of the action
until the arbitration of the issue has been had in accordance with the
agreement, provided the applicant for the stay is not in default in
proceeding with arbitration.
“[A]n order under R.C. 2711.02(B) that grants or denies a stay of a trial pending
arbitration ‘is a final order and may be reviewed, affirmed, modified, or reversed
on appeal pursuant to the Rules of Appellate Procedure and, to the extent not in
conflict with those rules, Chapter 2505 of the Revised Code.’” U.S. Bank Natl.
Assn. at ¶ 26, quoting R.C. 2711.02(C).
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{¶11} We turn first to Zellner’s argument that the trial court erred by staying
the proceedings because the arbitration agreement is both procedurally and
substantively unconscionable and thus unenforceable. Regarding procedural
unconscionability, Zellner argues that the “process by which the arbitration clause
was signed in this case was procedurally unconscionable” because the defendants
“had all of the relevant experience and business acumen” and “drafted and had total
control over the arbitration clause and the admissions paperwork.” (Appellant’s
Brief at 15). Moreover, Zellner contends that the defendants, “the much stronger
parties in this case, knew that Glenna Zellner and Jack Zellner were unable to
reasonably protect their interests by reason of their inability to understand the
concept of arbitration.” (Id.). As to substantive unconscionability, Zellner argues
that the “arbitration clause at issue * * * is a classic contract of adhesion,” that it
lacks “any specific rules that will be applied to the arbitration of claims,” and that it
“requires [Zellner] to front all arbitration costs, and states that she could ultimately
be responsible for those costs.” (Id. at 16-17). Zellner also notes that the fact that
the arbitration agreement is titled “Attachment D,” indicating that the agreement is
part of a much larger document, is evidence of substantive unconscionability. (Id.
at 16).
{¶12} “Unconscionability is a ground for revocation of an arbitration
agreement.” Hayes, 122 Ohio St. 3d 63, 2009-Ohio-2054, at ¶ 19, citing Taylor
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Bldg., 117 Ohio St. 3d 352, 2008-Ohio-938, at ¶ 33. “A contract is unconscionable
when it is created through ‘an absence of meaningful choice on the part of one of
the parties to a contract, combined with contract terms that are unreasonably
favorable to the other party.’” Yellow Book Sales v. Beamer, 3d Dist. Union No.
14-11-18, 2012-Ohio-654, ¶ 24, quoting Collins v. Click Camera & Video, Inc., 86
Ohio App. 3d 826, 834 (2d Dist.1993). “‘The party asserting unconscionability of a
contract bears the burden of proving that the agreement is both procedurally and
substantively unconscionable.’” (Emphasis added.) Hayes at ¶ 20, quoting Taylor
Bldg. at ¶ 34, citing Ball v. Ohio State Home Servs., Inc., 168 Ohio App. 3d 622,
2006-Ohio-4464, ¶ 6 (9th Dist.) and Collins at 834, citing White & Summers,
Uniform Commercial Code, Section 4-7, 219 (3d Ed.1988). See Hayes at ¶ 30 (“A
party challenging an arbitration agreement must prove a quantum of both procedural
and substantive unconscionability.”), citing Taylor Bldg. at ¶ 34. This court reviews
de novo whether an arbitration agreement is unconscionable. Hayes at ¶ 21.
{¶13} “In determining whether an arbitration agreement is procedurally
unconscionable, courts consider ‘the circumstances surrounding the contracting
parties’ bargaining, such as the parties’ “‘age, education, intelligence, business
acumen and experience, * * * who drafted the contract, * * * whether alterations in
the printed terms were possible, [and] whether there were alternative sources of
supply for the goods in question.’”’” Id. at ¶ 23, quoting Taylor Bldg. at ¶
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44, quoting Collins at 834, quoting Johnson v. Mobil Oil Corp., 415 F. Supp. 264,
268 (E.D.Mich. 1976). Additional factors that may contribute to a finding of
procedural unconscionability include:
“‘belief by the stronger party that there is no reasonable probability
that the weaker party will fully perform the contract; knowledge of
the stronger party that the weaker party will be unable to receive
substantial benefits from the contract; knowledge of the stronger party
that the weaker party is unable reasonably to protect his interests by
reason of physical or mental infirmities, ignorance, illiteracy or
inability to understand the language of the agreement, or similar
factors.’”
Id. at ¶ 24, quoting Taylor Bldg. at ¶ 44, quoting 2 Restatement of the Law 2d,
Contracts, Section 208, Comment d (1981). “All of the factors must be examined
and weighed in their totality in determining whether an arbitration agreement is
procedurally unconscionable.” Id. at ¶ 30.
{¶14} On the other hand, “[a]n assessment of whether a contract is
substantively unconscionable involves consideration of the terms of the agreement
and whether they are commercially reasonable.” Id. at ¶ 33, citing John R. Davis
Trust 8/12/05 v. Beggs, 10th Dist. Franklin No. 08AP-432, 2008-Ohio-6311, ¶ 13
and Dorsey v. Contemporary Obstetrics & Gynecology, Inc., 113 Ohio App. 3d 75,
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80 (2d Dist.1996). “Factors courts have considered in evaluating whether a contract
is substantively unconscionable include the fairness of the terms, the charge for the
service rendered, the standard in the industry, and the ability to accurately predict
the extent of future liability.” Id., citing John R. Davis Trust at ¶ 13 and Collins at
834. However, the Supreme Court of Ohio has not adopted a “bright-line set” of
factors for determining whether an arbitration agreement is substantively
unconscionable. Id. Instead, “[t]he factors to be considered vary with the content
of the agreement at issue.” Id.
{¶15} The arbitration agreement in this case provides, in relevant part, as
follows:
ATTACHMENT D:
VOLUNTARY ARBITRATION AGREEMENT
***
1. General Provisions. By signing this Agreement, the Parties agree
that, except as otherwise set forth herein, any action, claim, dispute or
controversy of any kind, whether in contract, tort, statutory, common
law, legal, equitable, or otherwise, during the term of the Admissions
Agreement or hereafter arising between the parties in any way arising
out of, pertaining to, or in connection with, the provision of health
care services or any agreement between the Parties including, but not
limited to, the scope of this Agreement with, and the arbitrability of,
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any claim or dispute, against whomever made (including, to the full
extent permitted by applicable laws, third parties who are not
signatories to this Agreement) shall be resolved by binding arbitration
administered by the American Arbitrators Association (“AAA”),
under the AAA Rules and Procedures then in effect. * * *
***
4. Arbitration Award and Fees. The award of costs of the
arbitration shall be determined by the arbitrator in accordance with all
applicable laws. The administrative fee and arbitrator’s compensation
shall be initially advanced by the party requesting arbitration, but shall
be allocated on the ratio of final award to each party over the total
award in the final arbitration order.
***
8. Right to Cancel Agreement. I understand that I do not have to
sign this Agreement to receive health care services and that I may
cancel by providing written notice of cancellation to the facility within
thirty (30) days after signing this agreement. Following such thirty
day revocation period, revocation or cancellation of this agreement
may only be made by mutual agreement of the parties in writing.
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THE RESIDENT UNDERSTANDS AND ACKNOWLEDGES
THAT BY THE RESULT OF ENTERING INTO THIS
AGREEMENT IS THAT ALL DISPUTES OR CLAIMS
WHICH HE OR SHE MAY HAVE AGAINST THE FACILITY,
CANNOT BE BROUGHT AS A LAWSUIT IN COURT OF LAW
BEFORE A JUDGE OR JURY, AND INSTEAD AGREES
THAT ALL SUCH DISPUTES OR CLAIMS WILL BE
RESOLVED BY BINDING ARBITRATION.
THE UNDERSIGNED HAS READ, UNDERSTANDS AND
AGREES TO BE LEGALLY BOUND BY THE TERMS AND
CONDITIONS AS SET FORTH HEREIN.
(Underlining, capitalization, and boldface sic.) (Doc. No. 23, Defendants’ Ex. A).
{¶16} Under the facts presented here, we conclude that the arbitration
agreement is not unconscionable. Specifically, because the arbitration agreement is
comparable to arbitration agreements that various Ohio courts have sustained
against claims of substantive unconscionability, we conclude that Zellner has failed
to carry her burden of showing that the arbitration agreement is substantively
unconscionable.
{¶17} First, rather than being a short clause buried in a larger contract, the
arbitration agreement in this case is a separate, stand-alone document consisting of
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eight subparts across three pages. See Harrison v. Winchester Place Nursing &
Rehab. Ctr., 10th Dist. Franklin No. 12AP-327, 2013-Ohio-3163, ¶ 54; Manley v.
Personacare, 11th Dist. Lake No. 2005-L-174, 2007-Ohio-343, ¶ 36. See also
Fortune v. Castle Nursing Homes, Inc., 164 Ohio App. 3d 689, 2005-Ohio-6195, ¶
33-34 (5th Dist.) (offering an example of an arbitration agreement in a medical
setting that would likely not be found to be unconscionable), citing Buraczynski v.
Eyring, 919 S.W.2d 314 (Tenn. 1996). That the agreement is apparently
“Attachment D” to a presumably much longer admissions agreement does not weigh
strongly in favor of concluding that the arbitration agreement is substantively
unconscionable. What is important is that the “inclusion of a binding-arbitration
clause must be done in such a manner that the person signing the agreement is made
aware of the existence of the provision and the importance of the right that he or she
is waiving.” Fortune at ¶ 32. Here, despite being an attachment to a larger contract,
the arbitration agreement is clearly set off from any accompanying documents and
is itself a separate contract. See Harrison at ¶ 54 (noting that an arbitration
agreement was not substantively unconscionable in part because “[t]he ADR
agreement is a separate, four-page document that is an attachment to the admission
agreement. It is not a ‘clause’ buried amid the admission agreement.”). Thus, the
format of the document was sufficient to put Jack on notice of the existence of the
agreement to arbitrate.
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{¶18} In addition, the arbitration agreement clearly states that it is a
voluntary agreement and that signing the agreement is not a precondition to
receiving health care services. See Hayes, 122 Ohio St. 3d 63, 2009-Ohio-2054, at
¶ 43-44; Harrison at ¶ 36, 40, 54; Manley at ¶ 37. Although not determinative of
substantive conscionability, the fact that the agreement is both characterized as
voluntary in boldface, underlined, all-capitals lettering in the heading of the
agreement and that it includes a clause that explicitly states that admission is not
contingent on signing the arbitration agreement weighs against a finding of
substantive unconscionability. See Hayes at ¶ 44; Harrison at ¶ 54; Manley at ¶ 37.
Furthermore, the arbitration agreement provides that it may be cancelled within 30
days. As a result, Jack “was given an opportunity to think about [his] decision and,
if unhappy with the agreement, the opportunity to reject the agreement. This 30-
day period also provided [Jack] with an opportunity to discuss the matter with a
family member or an attorney.” Manley at ¶ 39. See Harrison at ¶ 54; Fortune at ¶
33. Moreover, the arbitration agreement states in boldface, all-capitals lettering just
above the signature block that, by executing the arbitration agreement, the right to
bring a lawsuit in court before a judge or jury is being waived. “[W]aiver of the
right to trial by jury is a necessary consequence of agreeing to have an arbitrator
decide a dispute, and this aspect of an arbitration clause is not substantively
unconscionable.” Hayes at ¶ 34, citing Taylor Bldg., 117 Ohio St. 3d 352, 2008-
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Ohio-938, at ¶ 55. The fact that the agreement includes a clear and prominent
explanation that the parties were waiving access to judicial remedies by executing
the arbitration agreement is an additional factor that weighs against a conclusion
that the agreement is substantively unconscionable. See id. at ¶ 44; Harrison at ¶
54; Manley at ¶ 38.
{¶19} Finally, Zellner argues that the arbitration agreement is substantively
unconscionable because she would be required to advance the costs of arbitration
up front and could ultimately be responsible for paying all of those costs. This
argument is unavailing. Although she does not phrase her argument as such, Zellner
appears to suggest that the arbitration agreement’s provision for the payment of
costs and fees is effectively a “loser pays” provision.
{¶20} Ohio courts of appeals have consistently concluded that “loser pays”
provisions in arbitration agreements are unenforceable as being against public
policy or that they are a factor weighing in favor of finding substantive
unconscionability. See, e.g., Gaither v. Wall & Associates, Inc., 2d Dist.
Montgomery No. 26959, 2017-Ohio-765, ¶ 50-51, 65, citing DeVito v. Autos Direct
Online, Inc., 8th Dist. Cuyahoga No. 100831, 2015-Ohio-3336, ¶ 36-46; Fortune,
164 Ohio App. 3d 689, 2005-Ohio-6195, at ¶ 27-30, 34; Small v. HCF of Perrysburg,
Inc., 159 Ohio App. 3d 66, 2004-Ohio-5757, ¶ 24-26 (6th Dist.). However, we
conclude that the disputed provision is not a “loser pays” provision that renders the
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arbitration agreement substantively unconscionable or otherwise unenforceable.
First, while the clause explicitly provides that “[t]he administrative fee and
arbitrator’s compensation shall be initially advanced by the party requesting
arbitration,” it also provides that ultimate responsibility for these costs are to be
borne by the parties in proportion to their award. Thus, although it is conceivable
that one party could pay the entire administrative fee and arbitrators’ compensation
if the other party, and only the other party, prevails, the provision does not operate
as a “loser pays” provision, per se.
{¶21} More importantly, the agreement provides that only “[t]he
administrative fee and arbitrator’s compensation” shall be allocated in this fashion.
The award of other, potentially exorbitant costs of arbitration, which may include
attorneys’ fees, discovery expenses, and costs associated with motion practice,
“shall be determined by the arbitrator in accordance with all applicable laws.” Such
“applicable laws” could include, for example, the general rule that “a prevailing
party in a civil action may not recover attorney fees as a part of the costs of
litigation.” Wilborn v. Bank One Corp., 121 Ohio St. 3d 546, 2009-Ohio-306, ¶ 7,
citing Nottingdale Homeowners’ Assn., Inc. v. Darby, 33 Ohio St. 3d 32, 33-34
(1987) and State ex rel. Beebe v. Cowley, 116 Ohio St. 377, 382 (1927). Thus, this
clause does not necessarily require the losing party to pay all of the prevailing
party’s expenses and is distinguishable from the “loser pays” provisions that have
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contributed to findings of substantive unconscionability or rendered arbitration
agreements, or portions of arbitration agreements, unenforceable. See Gaither at ¶
6 (“[T]he substantially prevailing party in the arbitration will be entitled to recover
from the other all costs, fees, and expenses pertaining or attributable to
such arbitration, including reasonable attorneys’ fees for those claims on which the
substantially prevailing party prevailed.”); Fortune at ¶ 14 (“‘The prevailing party
in the arbitration shall be entitled to have the other party pay its costs for the
arbitration, including reasonable attorney’s fees and prejudgment interest.’”); Small
at ¶ 17 (same).
{¶22} In addition, Zellner contends that this clause renders the arbitration
agreement substantively unconscionable because, by making arbitration
prohibitively expensive, it “deter[s] a potential plaintiff who has been the victim of
negligence from moving forward with arbitration * * *.” (See Appellant’s Brief at
10-11, 17). “There is a point at which the costs of arbitration could render a clause
unconscionable as a matter of law.” Neel v. A. Perrino Constr., Inc., 8th Dist.
Cuyahoga No. 105366, 2018-Ohio-1826, ¶ 18, citing Arnold v. Burger King, 8th
Dist. Cuyahoga No. 101465, 2015-Ohio-4485, ¶ 89, citing Taylor Bldg., 117 Ohio
St.3d 352, 2008-Ohio-938, at ¶ 60. However, “an arbitration clause will not be held
unenforceable based on unsupported allegations of prohibitive costs.” Taylor Bldg.
at ¶ 59, citing Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79, 121 S.Ct.
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513 (2000). The party seeking to avoid arbitration because of prohibitive cost “must
provide more than unsupported allegations of prohibitive costs, because ‘the mere
risk that a plaintiff would be forced to pay exorbitant costs is too speculative to
justify invalidation of the arbitration agreement.’” Neel at ¶ 19, quoting Taylor
Bldg. at ¶ 57.
{¶23} Here, Zellner did not present any evidence whatsoever demonstrating
that the costs of arbitration would be prohibitive, unreasonable, or unfair as applied
to her. See Rinderle v. Whispering Pines Health Care Ctr., 12th Dist. Fayette No.
CA2007-12-041, 2008-Ohio-4168, ¶ 19, citing Taylor Bldg. at ¶ 56-57. See also
Harrison, 2013-Ohio-3163, at ¶ 42-44. The arbitration agreement clearly identifies
both the organization that would be responsible for administering arbitration and the
rules and procedures under which such arbitration would be conducted.3 Yet,
Zellner did not present a fee schedule from the organization, offer an explanation as
to why such a schedule could not be obtained, or attempt to provide a calculation of
the total expected costs of arbitration beyond initial administrative and filing fees.
Additionally, Zellner provided no evidence of the estate’s financial position or of
her individual financial position. Thus, even if Zellner had put on evidence of the
expected costs of arbitration, the trial court would not have been capable of
3
This provision also dispenses with Zellner’s contention that the arbitration agreement is substantively
unconscionable because it fails to provide any specific rules that will be applied to the arbitration of claims.
See Riggs v. Patriot Energy Partners, L.L.C., 7th Dist. Carroll No. 11 CA 877, 2014-Ohio-558, ¶ 51, citing
Peltz v. Moyer, 7th Dist. Belmont No. 06 BE 11, 2007-Ohio-4998, ¶ 48.
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determining whether those costs were prohibitive, unfair, or unreasonable as
applied to her. See Rinderle at ¶ 20, citing Taylor Bldg. at ¶ 58; Harrison at ¶ 44.
{¶24} In light of the foregoing, we conclude that Zellner has not carried her
burden of demonstrating that the arbitration agreement is substantively
unconscionable. Because the party alleging unconscionability must demonstrate
both substantive and procedural unconscionability, we need not address whether the
arbitration agreement is procedurally unconscionable. See Shearer v. VCA Antech,
Inc., 10th Dist. Franklin No. 11AP-44, 2011-Ohio-5171, ¶ 29 (“The failure to
demonstrate either type of unconscionability alleviates the need to address the
other.”), citing John R. Davis Trust, 2008-Ohio-6311, at ¶ 21, Reno v. Bethel Village
Condominium Assn., Inc., 10th Dist. Franklin No. 08AP-10, 2008-Ohio-4462, ¶ 13,
and Corl v. Thomas & King, 10th Dist. Franklin No. 05AP-1128, 2006-Ohio-2956,
¶ 37. Therefore, the trial court did not abuse its discretion by staying the
proceedings despite Zellner’s claims of unconscionability.
{¶25} We also consider Zellner’s argument that the arbitration agreement is
unenforceable for failure to comply with R.C. 2711.23. Zellner argues that because
“the arbitration clause in this case completely fails to meet several requirements of
[R.C. 2711.23], it is invalid and unenforceable as a matter of law.” (Appellant’s
Brief at 9). In particular, Zellner argues that the arbitration agreement fails to
comply with R.C. 2711.23(C), (E), and (G). (Id. at 10-11).
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R.C. 2711.22 provides:
[A] written contract between a patient and a hospital or healthcare
provider to settle by binding arbitration any dispute or controversy
arising out of the diagnosis, treatment, or care of the patient rendered
by a hospital or healthcare provider, that is entered into prior to the
diagnosis, treatment, or care of the patient is valid, irrevocable, and
enforceable once the contract is signed by all parties. The contract
remains valid, irrevocable, and enforceable until or unless the patient
or the patient’s legal representative rescinds the contract by written
notice within thirty days of the signing of the contract.
R.C. 2711.22(A). In turn, R.C. 2711.23 provides, in relevant part:
To be valid and enforceable any arbitration agreements pursuant to
sections 2711.01 and 2711.22 of the Revised Code for controversies
involving a medical, dental, chiropractic, or optometric claim that is
entered into prior to a patient receiving any care, diagnosis, or
treatment shall include or be subject to the following conditions:
***
(C) The agreement shall provide that the decision whether or not to
sign the agreement is solely a matter for the patient’s determination
without any influence;
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***
(E) The agreement shall provide that the arbitration expenses shall be
divided equally between the parties to the agreement;
***
(G) The arbitration agreement shall be separate from any other
agreement, consent, or document[.]
R.C. 2711.23(C), (E), (G).
{¶26} We conclude that the trial court did not abuse its discretion by staying
the entire proceedings because, even assuming that the arbitration agreement does
not comply with R.C. 2711.23, staying the proceedings pending arbitration is
appropriate because Zellner’s action includes at least one non-medical claim subject
to the arbitration agreement. By its terms, R.C. 2711.23 applies only to arbitration
agreements between patients and hospitals or healthcare providers for controversies
“involving * * * medical, dental, chiropractic, or optometric claim[s] that [are]
entered into prior to a patient receiving any care, diagnosis, or treatment.” See
Donnell v. Parkcliffe Alzheimer’s Community, 6th Dist. Wood No. WD-17-001,
2017-Ohio-7982, ¶ 26-27; R.C. 2711.22(A). Therefore, an agreement to arbitrate
non-medical, non-dental, non-chiropractic, or non-optometric claims does not need
to comply with R.C. 2711.23 to be valid and enforceable. Instead, whether an
agreement to arbitrate non-medical, non-dental, non-chiropractic, or non-optometric
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claims is enforceable is a question of general principles of contract law, not
compliance with R.C. 2711.23. See R.C. 2711.01(A) (“[A]ny agreement in writing
between two or more persons to submit to arbitration any controversy existing
between them at the time of the agreement to submit, or arising after the agreement
to submit, from a relationship then existing between them or that they
simultaneously create, shall be valid, irrevocable, and enforceable, except upon
grounds that exist at law or in equity for the revocation of any contract.”). If a party
brings claims against another party—some of which are medical, dental,
chiropractic, or optometric claims and some of which are not—an arbitration
agreement between the parties must comply with R.C. 2711.23 in order to arbitrate
the medical, dental, chiropractic, or optometric claims.4 See Donnell at ¶ 26.
However, to arbitrate the non-medical, non-dental, non-chiropractic, or non-
optometric claims, that same agreement need not comply with R.C. 2711.23.
{¶27} Here, in addition to bringing various medical claims against the
defendants, Zellner’s complaint also includes a claim for ordinary negligence.
Zellner’s complaint provides as follows:
56. The claims against the Defendants in this case include claims for
ordinary negligence that do not involve a decision, act, or omission
4
This assumes that the arbitration agreement was (1) entered into between a patient and a hospital or
healthcare provider (2) before the patient received any care, diagnosis, or treatment—two additional
conditions necessary to subject an arbitration agreement to the requirements of R.C. 2711.23.
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requiring knowledge of medical science or specialized training or
skill.
57. Some of the acts or omissions complained of herein regarding
the Defendants may be assessed by the trier of fact on the basis of
common, everyday experiences and the common knowledge of a lay
person.
58. In other words, some of the acts or omissions complained of do
not implicate questions of medical competence nor involve matters of
medical science nor art requiring specialized knowledge, training, or
skills not ordinarily possessed by lay persons.
59. Moreover, the acts or omissions complained of herein involve
custodial neglect perpetuated [sic] by persons who were not medical
professionals and/or the acts and omissions complained of herein
resulted from the dangerous administrative policies, systems,
directives, and/or practices engaged in by the Defendants which
affected not only Glenna A. Zellner, who is now deceased, but an
entire group of residents in the facility.
60. Accordingly, some of the claims set forth herein sound in
ordinary negligence, not medical negligence.
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(Doc. No. 2). Hence, at least one of Zellner’s claims against the defendants is a
non-medical claim embraced within the scope of the broad arbitration agreement.
{¶28} As will be discussed in detail below, because at least one claim in
Zellner’s action against the defendants is subject to the arbitration agreement,
Zellner’s entire action against the defendants must be stayed pending arbitration.
U.S. Bank Natl. Assn., 2016-Ohio-2766, at ¶ 42 (“[W]hen a trial court determines
that certain claims are subject to arbitration, it must stay the entire proceeding until
those claims have been arbitrated, even though the action may involve both
arbitrable and non-arbitrable claims.”). Thus, assuming without deciding that the
arbitration agreement does not comply with R.C. 2711.23 and that it is thus
unenforceable as to Zellner’s medical claims, staying the entire action was
nevertheless appropriate because Zellner’s action consists of at least one arbitrable
claim. Accordingly, the trial court did not abuse its discretion by staying the entire
proceedings.
{¶29} Next, we address Zellner’s argument that the trial court erred by
staying the proceedings pending arbitration because the defendants waived their
rights to enforce the arbitration agreement. Specifically, Zellner argues that
although the defendants “clearly knew of their alleged right to arbitration,” they “did
not move to stay the case in response to [Zellner’s] Complaint,” “demanded a jury
trial in their Answer,” and “propounded written discovery requests” to which
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Zellner responded. (Appellant’s Brief at 18-19). According to Zellner, the
defendants’ actions are “inconsistent with any right to arbitrate and, as a result, [the
defendants] * * * thereby waived any such right.” (Id. at 19).
{¶30} “‘Like any other contractual right, * * * the right to arbitrate may be
implicitly waived.’” Donnell, 2017-Ohio-7982, at ¶ 20, quoting Travelers Cas. &
Sur. Co. v. Aeroquip-Vickers, Inc., 6th Dist. Lucas No. L-06-1201, 2007-Ohio-5305,
¶ 34. “‘“Whether the contractual right to arbitration has been waived is a mixed
question of both factual issues and the weight to be given those facts under the
applicable legal standard.”’” Alford v. Arbors at Gallipolis, 4th Dist. Gallia No.
17CA11, 2018-Ohio-4653, ¶ 52, quoting Donnell at ¶ 20, quoting Buyer v. Long,
6th Dist. Fulton No. F-05-012, 2006-Ohio-472, ¶ 7. “‘“[A]lthough questions of law
may be reviewed de novo, the trial court’s ultimate determination of whether the
right to demand arbitration has been waived will be reviewed under an abuse of
discretion standard.”’” Id., quoting Donnell at ¶ 20, quoting Buyer at ¶ 7.
{¶31} “‘Waiver may attach where there is active participation in a lawsuit
demonstrating an acquiescence to proceeding in a judicial forum.’” Donnell at ¶ 21,
quoting Buyer at ¶ 13. “‘A party asserting waiver must establish that (1) the waiving
party knew of the existing right to arbitrate; and (2) the totality of the circumstances
demonstrate the party acted inconsistently with the known right.’” Id., quoting
Buyer at ¶ 11, citing Atkinson v. Dick Masheter Leasing II, Inc., 10th Dist. Franklin
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No. 01AP-1016, 2002-Ohio-4299, ¶ 20. In determining whether the totality of the
circumstances supports a finding of waiver, courts may consider such factors as:
(1) any delay in the requesting party’s demand to arbitrate via a
motion to stay judicial proceedings and an order compelling
arbitration; (2) the extent of the requesting party’s participation in the
litigation prior to its filing a motion to stay the judicial proceeding,
including a determination of the status of discovery, dispositive
motions, and the trial date; (3) whether the requesting party invoked
the jurisdiction of the court by filing a counterclaim or third-party
complaint without asking for a stay of the proceedings; and (4)
whether the non-requesting party has been prejudiced by the
requesting party’s inconsistent acts.
U.S. Bank Natl. Assn., 2016-Ohio-2766, at ¶ 14, citing Harsco Corp. v. Crane
Carrier Co., 122 Ohio App. 3d 406, 414 (3d Dist.1997). “‘Because of the strong
public policy in favor of arbitration, the heavy burden of proving waiver of the
right to arbitration is on the party asserting waiver.’” Id., quoting Griffith v.
Linton, 130 Ohio App. 3d 746, 751 (10th Dist.1998). “Therefore, a court will not
lightly infer waiver of a right to arbitrate.” Id., citing Harsco Corp. at 415.
{¶32} Based on the totality of the circumstances, we conclude that the
defendants did not waive their rights to arbitrate. Zellner argues that the defendants’
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demand for a jury trial in their answer and submission of discovery requests
evidence that the defendants waived their rights to arbitrate. (See Doc. No. 21); (See
also Doc. No. 27, Defendants’ Ex. A). We disagree. Rather than evincing an
intention to relinquish the right to arbitrate, the defendants’ demand for a jury trial
is better understood as an effort to protect their rights to a jury trial in the event that
their attempts to stay the proceedings pending arbitration ultimately proved
unsuccessful. Alford at ¶ 58. See Donnell at ¶ 22-24.
{¶33} Likewise, Zellner’s argument that the defendants waived their rights
to arbitrate because they “propounded written discovery requests” fails to account
for the limited extent of the defendants’ participation in the discovery process. On
May 8, 2018, a day before their answer was filed, the defendants propounded to
Zellner their “First Set of Interrogatories and Request for Production of Documents
and Things.” (See Doc. No. 27, Defendants’ Ex. A). However, the defendants
withdrew this initial request for discovery less than a week later on the morning of
May 14, 2018. (Id.). Nevertheless, despite the defendants’ notice of withdrawal of
their requests for discovery, Zellner responded to the defendants’ withdrawn
requests on the evening of May 14, 2018 by sending the defendants copies of
Glenna’s medical records and bills. (See Doc. No. 27, Defendants’ Ex. B). Aside
from this sequence of events, the defendants did not participate in discovery with
Zellner. (See Doc. No. 26) (“Defendants have absolutely refused to participate in
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any discovery whatsoever.”). Ohio courts have found discovery more extensive
than that present in this case insufficient to establish waiver of the right to arbitrate.
See, e.g., Fries v. Greg G. Wright & Sons, L.L.C., 1st Dist. Hamilton No. C-160818,
2018-Ohio-3785, ¶ 30 (holding that the party seeking to enforce arbitration did not
waive the right by asking for additional time from the trial court to respond to
discovery and by taking one deposition); Donnell, 2017-Ohio-7982, at ¶ 4, 22-24
(the party seeking to enforce arbitration did not waive the right despite propounding
interrogatories, requests for production, and requests for admissions and responding
to their opponent’s interrogatories, requests for production, and requests for
admissions); Harsco Corp. at 416 (holding that the right to arbitrate had not been
waived where “a limited number of depositions were conducted” by the party
seeking arbitration). Consequently, the defendants’ quickly-abandoned discovery
requests do not support a finding of waiver. See Fries at ¶ 30 (“Discovery must be
extensive to constitute a waiver.”), citing Gavlik Constr. Co. v. H.F. Campbell Co.,
526 F.2d 777, 783 (3d Cir.1975).
{¶34} Moreover, Zellner’s argument that the defendants waived their rights
to arbitrate because they did not move to stay the proceedings in response to
Zellner’s complaint is unpersuasive. The defendants filed their motion to stay on
May 31, 2018—less than two months after Zellner filed her complaint on April 9,
2018 and less than one month after filing their answer on May 9, 2018. (Doc. Nos.
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2, 21, 23). A delay of less than two months is insufficient to establish waiver of the
right to arbitrate. See Fries at ¶ 29 (holding that a 94-day delay between the filing
of the complaint and the filing of the motion to stay was insufficient to demonstrate
waiver of the right to arbitrate); Donnell at ¶ 23-24 (a four-month delay in filing a
motion to stay was insufficient to establish waiver); Milling Away, L.L.C. v. Infinity
Retail Environments, Inc., 9th Dist. Summit No. 24168, 2008-Ohio-4691, ¶ 14 (a
six-month delay before seeking arbitration was insufficient to establish waiver);
Harsco Corp., 122 Ohio App. 3d at 416 (a three-month delay did not result in
waiver).
{¶35} Additional factors weigh against a finding of waiver. First, the
defendants affirmatively pleaded the right to arbitrate in their answer. (See Doc.
No. 21). Although a party is not required to affirmatively plead the right to arbitrate
in order to preserve the right, doing so is a factor that weighs against a finding of
waiver. Alford, 2018-Ohio-4653, at ¶ 56-58; Donnell at ¶ 22-24; Harsco Corp. at
415-416. See U.S. Bank Natl. Assn., 2016-Ohio-2766, at ¶ 18, citing Hudson v.
Ernst & Young, L.L.P., 189 Ohio App. 3d 60, 2010-Ohio-2731, ¶ 37 (10th Dist.).
Furthermore, the defendants’ answer did not set forth a counterclaim against Zellner
or a third-party complaint. (Doc. No. 21). See Harsco Corp. at 416 (noting that the
filing of a complaint, counterclaim, or summary judgment motion by the party
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seeking to enforce the right to arbitrate would demonstrate that party’s “recognition
of the trial court’s authority to determine the suit pending before it”).
{¶36} Lastly, Zellner has not demonstrated that she was prejudiced by any
of the defendants’ actions that she claims are inconsistent with the right to arbitrate.
A trial date had not been set and the parties had not met for a status conference or
conducted a pretrial hearing. See Alford at ¶ 57. Furthermore, any prejudice Zellner
may have suffered because she responded to the defendants’ written discovery
requests was at least partially self-inflicted as the defendants clearly retracted their
requests before Zellner submitted a response. Thus, the totality of the circumstances
does not support a finding of waiver. Accordingly, the trial court did not abuse its
discretion by staying the proceedings despite Zellner’s claims of waiver.
{¶37} Finally, we address whether the trial court erred by staying litigation
on all of Zellner’s claims, and as to all the defendants, pending arbitration. Zellner
argues that the trial court erred by staying litigation on her wrongful-death claim
because “[t]he arbitration clause in this case cannot subject [her] wrongful death
claims to binding arbitration.” (Appellant’s Brief at 11). As a result, Zellner
contends, “the Trial Court erred when it required Glenna Zellner’s next-of-kin to
arbitrate their wrongful death claims.” (Id. at 12). In addition, Zellner argues that
she “cannot be required to arbitrate her claims against” six of the defendants because
those six defendants “were not parties to the Arbitration Clause.” (Id. at 6). She
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further argues that “[w]ithout a valid contract obligating [her] to arbitrate her dispute
with [the six defendants], * * * [the] Motion to Stay should have been denied.” (Id.
at 9). At the very least, Zellner maintains, “the Trial Court’s order should have
clearly stated that [her] claims against [the six defendants] were not subject to
arbitration because no agreement to arbitrate exists.” (Id.).
{¶38} At the outset, we note that Zellner mischaracterizes the trial court’s
judgment in this case. The defendants sought a stay of the proceedings under R.C.
2711.02, rather than an order under R.C. 2711.03 directing specified parties to
arbitrate specified claims pursuant to the arbitration agreement. (See Doc. No. 23).
Instead of ordering certain claims into arbitration or ordering certain parties to
engage in arbitration, the trial court merely stayed the litigation pending arbitration
under R.C. 2711.02. Thus, Zellner’s contention that the trial court erroneously
forced her wrongful-death claim and claims against the six defendants into
arbitration is incorrect. Nevertheless, Zellner still raises the question of whether the
stay is appropriate even if some of her claims are non-arbitrable and some of the
defendants against whom she brought suit are not subject to the arbitration
agreement.
{¶39} First, Zellner argues that the trial court erred by granting the stay
because her wrongful-death claim against the defendants is not arbitrable. Under
the facts of this case, Zellner is probably correct that her wrongful-death claim is
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not subject to the arbitration agreement. In Peters v. Columbus Steel Castings Co.,
the Supreme Court of Ohio considered “whether the personal representative of a
decedent’s estate is required to arbitrate a wrongful-death claim when the decedent
had agreed to arbitrate all claims against the alleged tortfeasor.” 115 Ohio St. 3d
134, 2007-Ohio-4787, ¶ 1. In answering that question in the negative, the court
noted that, under Ohio law, “survival claims and wrongful-death claims are distinct
claims that belong to separate individuals, even though they are generally brought
by the same nominal party (the personal representative of the estate).” Id. at ¶ 17.
As a result, although a person could agree to arbitrate his own claims, whether
brought during his life or after his death, that person “could not restrict his
beneficiaries to arbitration of their wrongful-death claims, because he held no right
to those claims; they accrued independently to his beneficiaries for the injuries they
personally suffered as a result of the death.” Id. at ¶ 18-19, citing Thompson v.
Wing, 70 Ohio St. 3d 176, 182-183 (1994). While “[t]he beneficiaries can agree to
arbitrate [their wrongful-death claims] themselves, * * * they are not required to do
so.” Id. at ¶ 19.
{¶40} Here, Glenna’s beneficiaries did not sign the arbitration agreement.
Although the arbitration agreement was signed by Glenna’s husband, Jack, he did
so in his capacity as Glenna’s power of attorney rather than in his individual
capacity. (See Doc. No. 23, Defendants’ Ex. A). Additionally, neither Zellner’s
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signature nor the signature of any other purported beneficiary of Glenna’s estate
appear on the arbitration agreement. (See id.). Thus, from the available record, it
appears that Glenna’s beneficiaries did not bind themselves to arbitrate their
wrongful-death claims against the defendants. Resultantly, Glenna’s beneficiaries
likely cannot be compelled to arbitrate their wrongful-death claims against the
defendants.
{¶41} However, as indicated above, the trial court did not compel Zellner to
arbitrate her wrongful-death claim against any of the defendants; instead, the trial
court merely stayed the proceedings pending arbitration. Although Zellner’s
wrongful-death claim is likely not subject to the arbitration agreement, this does not
mean that the trial court abused its discretion by staying the entire litigation,
including litigation as to the wrongful-death claim. “‘Where any claim in an action
is subject to arbitration under R.C. 2711.02(B), a court must stay the entire
proceeding, although nonarbitrable claims exist.’” Raber v. Emeritus at Marietta,
4th Dist. Washington No. 15CA18, 2016-Ohio-1531, ¶ 24, quoting Jarvis v. Lehr,
1st Dist. Hamilton No. C-130832, 2014-Ohio-3567, ¶ 11 and citing Maclin v.
Greens Nursing & Assisted Living, L.L.C., 8th Dist. Cuyahoga No. 101085, 2014-
Ohio-2538, ¶ 9 and Villas Di Tuscany, 2014-Ohio-776, at ¶ 20; Marquez v. Koch,
4th Dist. Ross No. 11CA3283, 2012-Ohio-5466, ¶ 11 (“[T]he presence of non-
arbitrable claims * * * does not justify the denial of [a] motion to stay.”). Therefore,
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to the extent that Zellner’s other claims are subject to the arbitration agreement, the
trial court did not abuse its discretion by staying litigation on Zellner’s wrongful-
death claim pending resolution of the arbitrable claims. See Alford, 2018-Ohio-
4653, at ¶ 45-48; Donnell, 2017-Ohio-7982, at ¶ 39-40; Raber at ¶ 26-27; Wolcott
v. Summerville at Outlook Manor, L.L.C., 10th Dist. Franklin No. 15AP-550, 2016-
Ohio-1237, ¶ 18-23; Litman v. HCR ManorCare, Inc., 5th Dist. Stark No.
2014CA00224, 2015-Ohio-2637, ¶ 6-17; Maclin at ¶ 9-12.
{¶42} Similarly, we reject Zellner’s argument that the trial court erred by
staying the entire proceedings because some of the defendants were neither a party
to the arbitration agreement nor in privity with a signatory to the agreement. Zellner
does not argue that all of the defendants were nonparties to the arbitration
agreement; rather, Zellner argues that some of the defendants were not a party to the
agreement. (See Appellant’s Brief at 6-9). However, it is well-established that if
“any of the claims are subject to an arbitration agreement, R.C. 2711.02 requires a
stay of the proceeding, regardless of whether the dispute also involves parties who
cannot be compelled to arbitrate.” Murray v. David Moore Builders, Inc., 177 Ohio
App.3d 62, 2008-Ohio-2960, ¶ 11 (9th Dist.), citing BSA Invests., Inc. v.
DePalma, 173 Ohio App. 3d 504, 2007-Ohio-4059, ¶ 16-17, DH-KL Corp. v.
Stampp Corbin Corp., 10th Dist. Franklin No. 97APE02-206, 1997 WL 467319, *3
(Aug. 12, 1997) and Krafcik v. USA Energy Consultants, Inc., 107 Ohio App. 3d 59,
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64 (8th Dist.1995); Jarvis at ¶ 11; Marquez at ¶ 11. Thus, to the extent that Zellner’s
action includes at least one arbitrable claim, because she acknowledges that at least
one of the defendants was a party to the arbitration agreement, it is irrelevant
whether the other six defendants were parties to the arbitration agreement. Under
these circumstances, the presence of a single arbitrable claim against a single
defendant subject to the arbitration agreement required the trial court to stay the
proceedings as to all the defendants. Therefore, the trial court did not abuse its
discretion by staying the entire proceedings as to all the defendants.
{¶43} Zellner’s first assignment of error is overruled.
Assignment of Error No. II
The Trial Court erred in not permitting Appellant to conduct
discovery in relation to Appellees’ Motion to Stay Pending
Arbitration
{¶44} In her second assignment of error, Zellner argues that the trial court
erred by staying the proceedings without allowing her to conduct discovery relevant
to determining whether the arbitration agreement is valid and enforceable. In
particular, Zellner argues that “it is reversible error to grant a motion to stay pending
arbitration without affording the nonmoving party the opportunity to conduct
discovery and to present their findings on whether the arbitration clause is valid and
enforceable.” (Appellant’s Brief at 19-20). Additionally, she argues that because
the trial court did not issue a decision on her motion to compel, the trial court “never
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afforded [her] an opportunity to explore the circumstances surrounding the nature
and execution of the arbitration clause.” (Id. at 22). Zellner concludes that “a trial
court that fails to provide for adequate time to fully develop the record regarding
the circumstances surrounding the nature and execution of an arbitration clause is
abusing its discretion and committing a reversible error.” (Id.).
{¶45} We first address Zellner’s contention that the trial court never decided
her motion to compel discovery. “It has generally been held that ‘a trial court’s
failure to rule gives rise to a presumption that the trial court has denied the motion.’”
Alford, 2018-Ohio-4653, at ¶ 72, quoting GMAC Mtge., L.L.C. v. Jacobs, 196 Ohio
App.3d 167, 2011-Ohio-1780, ¶ 9 (9th Dist.). Here, although the trial court did not
expressly deny Zellner’s motion on the record, it is clear that the trial court granted
the defendants’ motion to stay after duly considering Zellner’s motion, effectively
denying Zellner’s motion. (See Doc. No. 28) (“Plaintiff filed a Motion for
Extension of Time to Respond to Defendants’ Motion to Stay Proceedings * * *
[and] Motion to Compel * * *. Plaintiff argues that additional discovery and time
are required to permit her to * * * attack[] the validity of the arbitration clause.”).
Zellner does not cite to any evidence in the record suggesting otherwise. Thus, we
presume that the trial court denied Zellner’s motion to compel discovery.
{¶46} “A decision to grant or deny a discovery motion rests within the sound
discretion of the trial court.” Alford at ¶ 70, citing Stephens v. Marietta Mem. Hosp.,
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4th Dist. Washington No. 95CA46, 1996 WL 551405, *6 (Sept. 23, 1996), citing
Mauzy v. Kelly Servs., Inc., 75 Ohio St. 3d 578 (1996); Zimpfer v. Roach, 3d Dist.
Shelby No. 17-17-03, 2017-Ohio-8437, ¶ 27, citing State ex rel. Grandview Hosp.
& Med. Ctr. v. Gorman, 51 Ohio St. 3d 94, 96 (1990). “The trial court has discretion
to manage the discovery process.” Alford at ¶ 70, citing State ex rel. Daggett v.
Gessaman, 34 Ohio St. 2d 55 (1973). As previously indicated, an abuse of discretion
suggests the trial court’s decision is unreasonable, arbitrary, or unconscionable.
Blakemore, 5 Ohio St. 3d at 219.
{¶47} As discussed in detail under Zellner’s first assignment of error, she
raises five specific arguments attacking the trial court’s decision to stay the entire
proceedings pending arbitration. These five arguments were also presented in some
form to the trial court alongside Zellner’s motion to compel as reasons to deny the
defendants’ motion to stay. (See Doc. No. 26). Four of these arguments—that the
arbitration agreement fails to comply with R.C. 2711.23, that the defendants waived
their rights to arbitrate, that Zellner’s wrongful-death claim is not arbitrable, and
that the arbitration agreement is not binding as to all of the defendants—could have
been fully developed in the trial court without additional discovery because they are
based on interpreting the terms of the arbitration agreement in light of generally
applicable law, applying well-established precedent, or evaluating the parties’
conduct as reflected in the record. Zellner appears to concede as much. (Appellant’s
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Brief at 25) (“If given appropriate notice, [Zellner] could have challenged the
arbitration clause in a number of ways * * * even without additional discovery.”).
Only one of Zellner’s arguments—that the trial court abused its discretion by
staying the proceedings because the arbitration agreement is unconscionable—
could have potentially been affected by evidence outside of the available record,
i.e., the circumstances surrounding the execution of the arbitration agreement.
Therefore, we limit our analysis to determining whether the trial court abused its
discretion by precluding Zellner from conducting further discovery into the issue of
unconscionability.
{¶48} We conclude that, under the particular facts and circumstances of this
case, the trial court did not abuse its discretion by denying Zellner’s motion to
compel discovery. As previously discussed, a party must demonstrate both
procedural unconscionability and substantive unconscionability. Hayes, 122 Ohio
St.3d 63, 2009-Ohio-2054, at ¶ 20, 30. Substantive unconscionability involves a
consideration of the terms of the agreement and whether those terms are
commercially reasonable. Id. at ¶ 33. Here, the parties provided the trial court with
a copy of the arbitration agreement. The trial court was thus in a position to examine
the terms of the agreement to determine whether they were so unfair or unreasonable
as to render the agreement substantively unconscionable. As we determined above,
the trial court did not err in determining that the agreement was substantively
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conscionable. The discovery requested by Zellner concerned principally the
circumstances and process of executing the arbitration agreement. Accordingly, the
discovery sought by Zellner was addressed to procedural unconscionability, rather
than substantive unconscionability. However, because a person must demonstrate
both substantive and procedural unconscionability to order to establish
unconscionability, the discovery sought by Zellner would not have affected the
viability of her unconscionability argument because she failed to establish
substantive unconscionability. Finally, to the extent that Zellner could have used
additional evidence to demonstrate substantive unconscionability—such as an
estimation of the costs of arbitration or a statement evidencing the estate’s financial
position or her own financial position—such information could have been obtained
without the requested discovery. Thus, the trial court did not abuse its discretion by
denying Zellner’s motion to compel. See Eberhard v. Chicago Title Ins. Co.,
N.D.Ohio No. 1:11 CV 834, 2012 WL 13029534, *6 (Mar. 31, 2012) (applying
Ohio law and denying the plaintiffs’ “request for additional discovery to uncover
facts related to procedural unconscionability” where sufficient information was
before the court to conclude that an arbitration agreement was not substantively
unconscionable).
{¶49} Zellner’s second assignment of error is overruled.
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Assignment of Error No. III
The Trial Court erred in ruling on Appellees’ Motion to Stay
Pending Arbitration without giving Appellant an opportunity to
oppose Appellees’ Motion.
{¶50} In her third assignment of error, Zellner argues that the trial court erred
by staying the proceedings because she “was not given the opportunity to file a Brief
in Opposition to Appellees’ Motion to Stay.” (Appellant’s Brief at 23). Zellner
asserts that the “Trial Court never ruled on [her] Motion for Extension and did not
give [her] notice that it would be ruling on [the defendants’] Motion to Stay.” (Id.).
She argues that “[e]ven if the Trial Court was inclined to deny [her] additional time
to conduct discovery, it should have given [her] formal notice though [sic] the grant
of a limited continuance, that [she was] running out of time and that the court was
about to render judgment in the case.” (Id. at 25). She concludes that, in the absence
of “the opportunity to respond, [the defendants’] Motion to Stay went
unchallenged.” (Id.).
{¶51} We reiterate that “‘a trial court’s failure to rule gives rise to a
presumption that the trial court has denied the motion.’” Alford, 2018-Ohio-4653,
at ¶ 72, quoting GMAC Mtge., L.L.C., 196 Ohio App. 3d 167, 2011-Ohio-1780, at ¶
9. Again, because Zellner has not demonstrated that the trial court failed to render
a decision on her motion for an extension of time to respond to the defendants’
motion to stay, we presume that the trial court denied her motion.
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{¶52} Zellner’s arguments are without merit. Zellner has provided no
authority germane to her argument that the trial court was required to notify her that
a ruling on the defendants’ motion to stay was imminent, and we have been unable
to locate any such authority. See Alford at ¶ 73. The month that elapsed between
the filing of the defendants’ motion to stay and the trial court’s ruling on the motion
afforded Zellner ample time to respond to the motion, and per her own admission,
she could have done so adequately even without the grant of additional time to
conduct discovery as she requested. (See Appellant’s Brief at 25). Finally, Zellner’s
assertions that she was completely denied the opportunity to respond to the
defendants’ motion to stay and that the motion to stay went unopposed are, at best,
disingenuous. Zellner’s combined motion for extension of time to respond to the
defendants’ motion to stay proceedings pending arbitration, motion to compel, and
brief in opposition to the defendants’ motion for a protective order is a 20-page
document that sets forth, to varying degrees of detail, each of the five arguments
advanced in Zellner’s first assignment of error. (See Doc. No. 26). The defendants
responded to Zellner’s combined motion with a memorandum in opposition
responsive to each of Zellner’s five arguments. (See Doc. No. 27). Thus, the trial
court was adequately briefed concerning Zellner’s arguments and the defendants’
responses thereto before granting the defendants’ motion to stay. This is especially
true given that, as discussed above, the additional discovery requested by Zellner
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would have had little, if any, bearing on the trial court’s resolution of each of her
five arguments.
{¶53} Zellner’s third assignment of error is overruled.
{¶54} Having found no error prejudicial to the appellant herein in the
particulars assigned and argued, we affirm the judgment of the trial court.
Judgment Affirmed
ZIMMERMAN, P.J. and WILLAMOWSKI, J., concur.
/jlr
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