FI-POMPANO REHAB, LLC d/b/a POMPANO HEALTH & REHAB, etc. v. MARJORIE IRVING, etc., ESTATE OF MERCEDES NESBETH

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
FI-POMPANO REHAB, LLC d/b/a POMPANO HEALTH AND
REHABILITATION CENTER,
Appellant,
v.
MARJORIE IRVING, Personal Representative
of the Estate of Mercedes Nesbeth,
Appellee.
No. 4D16-3121
[ July 5, 2017 ]
Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Sandra Perlman, Judge; L.T. Case No. CACE-16-000244.
Karen M. Rich and Amy L. Christiansen of Spector Gadon & Rosen,
LLP, St. Petersburg, for appellant.
William A. Dean of Ford, Dean & Rotunto, P.A., Miami, for appellee.
PER CURIAM.
FI-Pompano Rehab, LLC d/b/a Pompano Health and Rehabilitation
Center (“Pompano Rehab”) appeals a non-final order denying its motion to
compel arbitration. We reverse, because the arbitration agreement at
issue was neither substantively or procedurally unconscionable.
Mercedes Nesbeth (“Nesbeth”) was admitted to Pompano Rehab, a
rehabilitation and nursing center. Thirty-four days after Nesbeth was
admitted, Marjorie Irving, (“Irving”), her daughter and power of attorney,
signed on her behalf a Resident Admission Agreement that contained an
arbitration provision in a section referred to as the “voluntary Section of
the Admission Agreement.” The agreement briefly explains arbitration in
general and provides:
Arbitration under this Admission Agreement shall be governed
and interpreted in accordance with the Federal Arbitration
Code and, to the extent its provisions do not conflict with the
Federal Arbitration Code, the applicable Arbitration Code, Act
or Statute of the State where the Facility is physically located.
Both parties have the right to be represented by an attorney
at the arbitration at their own expense. Each party is to bear
their own attorneys’ fees and costs incurred in relation to any
arbitration conducted pursuant to this Section of the
Admission Agreement. All costs and expenses of the
arbitrator shall be borne equally by the parties.
The arbitration section of the admission agreement concludes with:
As explicitly stated below, both the Resident and the signing
staff member at the Facility hereby acknowledge that they
understand that: (1) the Resident has the right to seek legal
counsel concerning this voluntary Section of the Admission
Agreement, (ii) the execution of this voluntary Section of the
Admission Agreement is not a precondition to the furnishing
of services to the Resident by the Facility, and (iii) this
voluntary Section of the Admission Agreement may be revoked
by written notice to the Facility from the Resident within three
(3) days of signature.
Nesbeth died while in the care of Pompano Rehab. Subsequently, Irving
filed a complaint against Pompano Rehab, seeking damages for violations
of Chapter 400, Florida Statutes, which she alleged occurred while
Nesbeth was a resident of the facility. Pompano Rehab filed a motion to
compel arbitration citing the arbitration provision contained in the
admission agreement signed by Irving.
Irving filed a response in which she relied on our decision in Romano v.
Manor Care, Inc., 861 So. 2d 59 (Fla. 4th DCA 2003), to argue that the
arbitration agreement was unconscionable because it was signed after
Nesbeth’s admission to the facility, and therefore unenforceable. Irving
argued:
It is undisputed that the Defendant Nursing Home Facility
had Mercedes Nesbeth sign the arbitration agreement sub
judice 34 days after the Defendant had accepted Mercedes
Nesbeth into their facility and provided care, treatment, and
supervision to her. It is clearly unconscionable for any
nursing home to admit a resident to their facility, then have
that nursing home resident execute an arbitration agreement
after admission.
After a limited hearing, the trial court denied Pompano Rehab’s motion
to compel arbitration, citing Romano, as well as Shotts v. O.P. Winter
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Haven, Inc., 86 So. 3d 456 (Fla. 2011), and Gessa v. Manor Care of Fla.,
Inc., 86 So. 3d 484 (Fla. 2011). This appeal followed.
“In reviewing the denial of a motion to compel arbitration, the trial
court’s factual findings are reviewed under a competent, substantial
evidence standard.” BDO Seidman, LLP v. Bee, 970 So. 2d 869, 873 (Fla.
4th DCA 2007) (citation omitted). “However, the standard of review
applicable to the trial court’s construction of an arbitration provision, and
its application of the law to the facts found, is de novo.” Id. at 874 (quoting
Fonte v. AT&T Wireless Servs., Inc., 903 So. 2d 1019, 1023 (Fla. 4th DCA
2005)).
“In ruling on a motion to compel arbitration, the trial court is limited to
three inquiries: ‘(1) whether a valid written agreement to arbitrate exists;
(2) whether an arbitrable issue exists; and (3) whether the right to
arbitration was waived.’” Romano, 861 So. 2d at 61 (quoting Seifert v. U.S.
Home Corp., 750 So. 2d 633, 636 (Fla. 1999)). The issue in this appeal
focuses on the first inquiry, whether a valid arbitration agreement exists.
More specifically, Irving contends the agreement is unconscionable.
In order to obtain a ruling that a contract provision is unconscionable,
“a party must demonstrate both procedural and substantive
unconscionability.” Zephyr Haven Health & Rehab Ctr., Inc. v. Hardin, 122
So. 3d 916, 920 (Fla. 2d DCA 2013) (citing Orkin Exterminating Co. v.
Petsch, 872 So. 2d 259, 264 (Fla. 2d DCA 2004)). “Procedural
unconscionability concerns the manner in which the contract is entered,
whereas substantive unconscionability looks to whether the contractual
terms are unreasonable and unfair.” Fonte, 903 So. 2d at 1025 (citing
Romano, 861 So. 2d at 62). The burden of proving unconscionability lies
with the party seeking to avoid the arbitration provision. Basulto v.
Hialeah Auto., 141 So. 3d 1145, 1158 (Fla. 2014).
While both procedural and substantive unconscionability must be
present in order for a court to decline to enforce a contract provision, they
need not be present to the same degree. Romano, 861 So. 2d at 62(citations omitted). Courts employ a “sliding scale” or balancing approach
to the unconscionability question:
The prevailing view is that [procedural and substantive
unconscionability] must both be present in order for a court
to exercise its discretion to refuse to enforce a contract or
clause under the doctrine of unconscionability. But they need
not be present in the same degree. Essentially a sliding scale
is invoked which disregards the regularity of the procedural
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process of the contract formation, that creates the terms, in
proportion to the greater harshness or unreasonableness of
the substantive terms themselves. In other words, the more
substantively oppressive the contract term, the less evidence
of procedural unconscionability is required to come to the
conclusion that the term is unenforceable, and vice versa.
Basulto, 141 So. 3d at 1159 (quoting Romano, 861 So. 2d at 62).
In the instant case, based on Irving’s response to the motion to compel
arbitration, and the order denying the motion to compel arbitration, Irving
argued only procedural unconscionability. Thus, to the extent the trial
court determined that the agreement is unenforceable based on only one
prong of unconscionability, it erred. Hardin, 122 So. 3d at 22.
Although Irving argues on appeal that the agreement is substantively
unconscionable because it frustrates the remedial purpose of Chapter 400
by requiring that the parties equally share in the cost of the arbitrator, she
did not make this argument below, and the trial court did not deny the
motion on that basis. This Court will only consider arguments that were
raised in the proceedings below. See Cosid, Inc. v. Bay Steel Prods. Co.,
Inc., 288 So. 2d 277, 277 (Fla. 4th DCA 1974) (citation omitted) (“Except
in the case of fundamental error[,] a point not raised and determined in
the court below cannot be raised for the first time on appeal; an appellate
court must confine itself to a consideration of only those matters in
question that were before the lower court.”).
Nevertheless, regardless of whether the issue was raised below, Irving’s
argument fails because the arbitration agreement at issue is not
substantively unconscionable. The arbitration provision does not deprive
Irving of any statutory cause of action, it does not defeat the remedial
purpose of Chapter 400, and it does not limit damages. Cf. Romano, 861
So. 2d 59 at 62-63 (concluding that arbitration agreement was
substantively unconscionable where it contained a limitation of liability
provision that excluded punitive damages and limited non-economic
damages to a maximum of $250,000); Alterra Healthcare Corp. v. Bryant,
937 So. 2d 263, 266 (Fla. 4th DCA 2006) (same).
Likewise, the arbitration agreement at issue does not violate public
policy. In Shotts, our supreme court held that the arbitration agreement
violated public policy because it limited statutory remedies created by the
Legislature with the intent to protect the rights of nursing home residents.
86 So. 3d at 474. There, the arbitration agreement provided that the
resident waived entitlement to punitive damages. Id. at 471. Likewise, in
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Gessa, the court held that the arbitration agreement violated public policy
by placing a cap on non-economic damages and waived punitive damages.
Gessa, 86 So. 3d at 493. In both cases, the violating provisions were
deemed to erode access to statutory remedies provided in sections 400.022
and 400.023, Florida Statutes (2003). Shotts, 86 So. 3d at 474; Gessa, 86
So. 3d at 493.
In the instant case, the arbitration agreement did not limit any specific
statutory remedies created by the Legislature. Instead, Irving contends
that the arbitration agreement violated public policy (and is substantively
unconscionable) because requiring a party to equally pay for an arbitrator
“can easily frustrate the remedial purpose of chapter 400 by denying
access to arbitration for the indigent plaintiff.” However, Irving did not
provide any evidence to show that the costs of arbitration were so
prohibitive as to prevent any resident of Pompano Rehab from pursuing
statutory remedies. See FI-Tampa, LLC v. Kelly-Hall, 135 So. 3d 563, 568
(Fla. 2d DCA 2014) (holding that arbitration agreement, signed three days
after patient’s admission to facility and that required cost sharing, did not
violate public policy even though the particular litigant could not afford to
arbitrate her claims); Hardin, 122 So. 3d at 22 (holding that arbitration
agreement, signed two days after patient’s admission to nursing facility
and that required cost sharing, was enforceable).
Finally, Romano does not control the outcome of this case as to the
issue of procedural unconscionability. In Romano, we reversed a trial
court order requiring arbitration because after the spouse who was ill had
been admitted, the spouse signing the admission agreement was presented
with six different documents to be signed, one of which was a six-page
arbitration agreement. 861 So. 2d at 61. The signing spouse was directed
that the documents must be signed, but was not told that if the arbitration
agreement was not signed, it would not affect whether the ill spouse could
remain in the facility. Id. Here, the admission agreement itself made it
clear, in simple to understand language, that signing the arbitration
agreement was voluntary, and that the arbitration agreement was not a
precondition to the furnishing of services to Nesbeth.
Based on the foregoing, we conclude that the trial court erred in
denying the motion to compel arbitration. We reverse and remand with
directions to the trial court to enter an order compelling arbitration.
Reversed and remanded.
TAYLOR, MAY and CONNER, JJ., concur.
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* * *
Not final until disposition of timely filed motion for rehearing.
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