Hayes v. Oakridge Home

[Cite as Hayes v. Oakridge Home, 122 Ohio St.3d 63, 2009-Ohio-2054.]

HAYES; MUSSER, EXR., APPELLEE, v. THE OAKRIDGE HOME,
APPELLANT, ET AL.
[Cite as Hayes v. Oakridge Home, 122 Ohio St.3d 63, 2009-Ohio-2054.]
Contracts — Arbitration — Nursing home — Arbitration agreement voluntarily
executed by nursing-home resident upon her admission and not as a
precondition to admission is not rendered procedurally unconscionable
solely due to resident’s age — Arbitration agreement that waives right to
trial and right to recover punitive damages and attorney fees is not
substantively unconscionable.
(No. 2008-0784 — Submitted February 4, 2009 — Decided May 7, 2009.)
APPEAL from the Court of Appeals for Cuyahoga County,
No. 89400, 175 Ohio App.3d 334, 2008-Ohio-787.
__________________
SYLLABUS OF THE COURT
1. An arbitration agreement voluntarily executed by a nursing-home resident
upon her admission and not as a precondition to admission is not rendered
procedurally unconscionable solely by virtue of the resident’s age.
2. An arbitration agreement voluntarily executed by a nursing-home resident and
not as a precondition to admission that waives the right to trial and the
right to seek punitive damages and attorney fees is not substantively
unconscionable.
__________________
O’CONNOR, J.
{¶ 1} This case concerns the enforceability of an arbitration agreement
entered into between a nursing home and its resident. Appellee Florence Hayes1

1. Hayes died in February 2007, and Stephen Musser, executor of her estate, has replaced her as
appellee in this appeal.
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asserts that the arbitration clause was procedurally and substantively
unconscionable, and she would have us fashion a rule that disfavors arbitration
agreements between a nursing home and its resident. Conversely, appellant The
Oakridge Home, a nursing home,2 contends that an arbitration agreement cannot
be set aside as procedurally unconscionable based only on the resident’s age.
Oakridge further argues that the inclusion of terms in an arbitration agreement
waiving the right to trial and the right to seek punitive damages and attorney fees
is not a basis for a finding of substantive unconscionability.
{¶ 2} For the following reasons, we hold that an arbitration agreement
voluntarily executed by a nursing-home resident upon her admission and not as a
precondition to admission is not rendered procedurally unconscionable solely by
virtue of the resident’s age. We further hold that an arbitration agreement
voluntarily executed by a nursing-home resident and not as a precondition to
admission that waives the right to trial and the right to seek punitive damages and
attorney fees is not substantively unconscionable. We therefore reverse the
judgment of the court of appeals and reinstate the judgment of the trial court.
I. Relevant Background
{¶ 3} On May 31, 2005, Hayes was admitted to Oakridge. She was 95
years old at the time of her admission. Upon her admission, Hayes signed an
arbitration agreement whereby she agreed to submit any future malpractice claims
against Oakridge to arbitration and to waive her right to trial and her right to
recover punitive damages and attorney fees.
{¶ 4} The arbitration agreement states at the top in boldface capital
letters that it is a voluntary agreement. In capital letters just below the heading, it
instructs the resident to “please read carefully.” Section I of the agreement
explains the benefits and the drawbacks of the arbitration process and

2. “Nursing home” is being used in place of the more formal term “long-term care facility” or
“skilled nursing facility.”

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reemphasizes that the arbitration agreement is optional. Section III of the
agreement again specifies that “execution of this Arbitration Agreement is
voluntary” and states that execution “is not a precondition to receiving medical
treatment at or for admission to the Facility.” The voluntariness of the parties’
consent is again stated in boldface capital letters at the end of the agreement,
immediately above the signature lines.
{¶ 5} The arbitration agreement states that by executing the agreement,
the parties are giving up their constitutional right to a jury trial. Section II
provides that the parties must pay their own attorney fees and that any arbitration
award shall not include any amount for exemplary or punitive damages.
{¶ 6} The agreement also contains the following “acknowledgments”:
{¶ 7} 1. The resident has been informed and acknowledges that the
arbitration agreement cannot be submitted to the resident for approval when the
resident’s condition prevents her from making a rational decision on whether or
not to agree;
{¶ 8} 2. The resident understands that she has a right to consult with an
attorney of her choice before signing the agreement; and
{¶ 9} 3. The resident understands, agrees to, and has received a copy of
the arbitration agreement, acknowledges that the terms have been explained to her
by an agent of the facility, and acknowledges that she had the opportunity to ask
questions about the arbitration agreement.
{¶ 10} Hayes and a representative of Oakridge both signed the arbitration
agreement on the day she was admitted to the nursing home.
{¶ 11} Hayes filed this action in the Cuyahoga County Court of Common
Pleas alleging that she had suffered injuries from a fall while she was a resident at
Oakridge and that the fall was the direct and proximate result of the negligence
and/or recklessness of Oakridge and/or its agents. Oakridge moved to stay the
proceedings pursuant to R.C. 2711.02 on the grounds that Hayes’s allegations

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were covered by the arbitration agreement entered into between the parties. The
trial court granted Oakridge’s motion to stay and ordered that all claims were to
be resolved pursuant to the parties’ voluntary arbitration agreement.
{¶ 12} Hayes appealed to the Eighth District Court of Appeals. She
argued that the trial court’s judgment was erroneous because the arbitration
agreement was procedurally and substantively unconscionable. Oakridge
countered that there was no evidentiary basis for a finding of procedural or
substantive unconscionability.
{¶ 13} A divided court of appeals held that the arbitration agreement was
both procedurally and substantively unconscionable. Hayes v. Oakridge Home,
175 Ohio App.3d 334, 2008-Ohio-787, 886 N.E.2d 928, ¶ 6. The appellate court
found that the arbitration agreement was substantively unconscionable because it
took away Hayes’s rights to attorney fees, punitive damages, and a jury trial. Id.
at ¶ 15 and 18. The court of appeals also ruled that the arbitration agreement was
procedurally unconscionable because Hayes was a 95-year-old woman with no
business or contract experience, and Oakridge had all the bargaining power. Id. at
¶ 19. The court further held that no one had explained the terms to Hayes, and
there were no alternatives for her because finding a quality nursing home is
difficult. Id.
{¶ 14} Oakridge appealed to this court, and we accepted jurisdiction to
address two issues: (1) whether a nursing-home resident’s age can render an
arbitration agreement executed by the resident procedurally unconscionable and
(2) whether an arbitration agreement that waives a nursing-home resident’s right
to trial and to recover punitive damages and attorney fees is substantively
unconscionable. Hayes v. Oakridge Home, 119 Ohio St.3d 1407, 2008-Ohio-
3880, 891 N.E.2d 768. We answer both questions in the negative.
II. Analysis

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{¶ 15} Both the Ohio General Assembly and Ohio courts have expressed a
strong public policy favoring arbitration. R.C. Chapter 2711; Taylor Bldg. Corp.
of Am. v. Benfield, 117 Ohio St.3d 352, 2008-Ohio-938, 884 N.E.2d 12, ¶ 27;
Williams v. Aetna Fin. Co. (1998), 83 Ohio St.3d 464, 471, 700 N.E.2d 859. As
this court has stated, “ ‘[A]rbitration is favored because it provides the parties
thereto with a relatively expeditious and economical means of resolving a
dispute.’ ” Schaefer v. Allstate Ins. Co. (1992), 63 Ohio St.3d 708, 712, 590
N.E.2d 1242, quoting Mahoning Cty. Bd. of Mental Retardation & Dev.
Disabilities v. Mahoning Cty. TMR Edn. Assn. (1986), 22 Ohio St.3d 80, 83, 22
OBR 95, 488 N.E.2d 872. Arbitration also has the additional benefit of
unburdening crowded court dockets. Mahoning Cty. Bd. of Mental Retardation,
22 Ohio St.3d at 83, 22 OBR 95, 488 N.E.2d 872. In light of the strong
presumption favoring arbitration, all doubts should be resolved in its favor.
Ignazio v. Clear Channel Broadcasting, Inc., 113 Ohio St.3d 276, 2007-Ohio-
1947, 865 N.E.2d 18, ¶ 18.
{¶ 16} 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
exist at law or in equity for the revocation of any contract.”
{¶ 17} R.C. 2711.02 provides for the enforcement of an arbitration
agreement. A party to such an agreement may obtain a stay of litigation in favor
of arbitration under R.C. 2711.02(B), which provides:
{¶ 18} “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

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been had in accordance with the agreement, provided the applicant for the stay is
not in default in proceeding with arbitration.”
{¶ 19} As noted above, an arbitration agreement is enforceable unless
grounds exist at law or in equity for revoking the agreement. R.C. 2711.01(A).
Unconscionability is a ground for revocation of an arbitration agreement. Taylor
Bldg., 117 Ohio St.3d 352, 2008-Ohio-938, 884 N.E.2d 12, ¶ 33. In Taylor, we
recently explained unconscionability in this context as follows:
{¶ 20} “Unconscionability includes both ‘ “an absence of meaningful
choice on the part of one of the parties together with contract terms which are
unreasonably favorable to the other party.” ’ Lake Ridge Academy v. Carney
(1993), 66 Ohio St.3d 376, 383, 613 N.E.2d 183, quoting Williams v. Walker-
Thomas Furniture Co. (C.A.D.C.1965), 350 F.2d 445, 449; see also Collins v.
Click Camera & Video, Inc. (1993), 86 Ohio App.3d 826, 834, 621 N.E.2d 1294.
The party asserting unconscionability of a contract bears the burden of proving
that the agreement is both procedurally and substantively unconscionable. See
generally Ball v. Ohio State Home Servs., Inc., 168 Ohio App.3d 622, 2006-Ohio-
4464, 861 N.E.2d 553, ¶ 6; see also Click Camera, 86 Ohio App.3d at 834, 621
N.E.2d 1294, citing White & Summers, Uniform Commercial Code (1988) 219,
Section 4-7 (‘One must allege and prove a “quantum” of both prongs in order to
establish that a particular contract is unconscionable’).” Taylor Bldg., 117 Ohio
St.3d 352, 2008-Ohio-938, 884 N.E.2d 12, ¶ 34.
{¶ 21} Upon appeal of a determination of whether an arbitration
agreement is enforceable in light of a claim of unconscionability, the reviewing
court employs a de novo standard of review. Id., 117 Ohio St.3d 352, 2008-Ohio-
938, 884 N.E.2d 12, ¶ 37.
A. Procedural Unconscionability

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{¶ 22} We first address the issue of whether a nursing-home resident’s
age, standing alone, renders an arbitration agreement executed by the resident
procedurally unconscionable. We find that it does not.
{¶ 23} 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.” ’ ” (Ellipses sic.) Taylor Bldg., 117 Ohio St.3d
352, 2008-Ohio-938, 884 N.E.2d 12, ¶ 44, quoting Collins v. Click Camera, 86
Ohio App.3d at 834, 621 N.E.2d 1294, quoting Johnson v. Mobil Oil Corp.
(E.D.Mich.1976), 415 F.Supp. 264, 268.
{¶ 24} Additional factors that may contribute to a finding of procedural
unconscionability include the following: “ ‘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.’ ” Taylor Bldg., 117 Ohio St.3d 352, 2008-
Ohio-938, 884 N.E.2d 12, ¶ 44, quoting Restatement of the Law 2d, Contracts
(1981), Section 208, Comment d.
{¶ 25} In finding the arbitration agreement procedurally unconscionable,
the court of appeals erroneously relied upon facts not in the record, a practice that
the dissent has adopted as well. These purported facts include the following: (1)
Hayes lacked any business or contract experience, (2) no one explained the terms
of the agreement to Hayes, including the fact that she could alter the agreement,
(3) the rescission clause was buried among a myriad of terms, and she was

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required to fill out numerous other forms at the same time, and (4) there were no
alternative sources of supply because finding a quality nursing home is difficult.
Hayes v. Oakridge Home, 175 Ohio App.3d 334, 2008-Ohio-787, 886 N.E.2d
928, ¶ 19.
{¶ 26} The only facts in evidence in this case pertaining to procedural
unconscionability are Hayes’s age and the terms contained in the agreement she
signed. Contrary to the court of appeals’ and Hayes’s assertions, there is no
evidence in the record regarding Hayes’s educational background, business
acumen, or experience.
{¶ 27} As the party challenging the enforceability of the arbitration
agreement, it was Hayes’s burden to come forward with evidence supporting her
challenge. She did not satisfy that burden. Indeed, the paucity of any evidence in
support of her claims is notable.
{¶ 28} The agreement clearly delineated in several places that it was
voluntary and not a condition of her admission to Oakridge. Further, by signing
the agreement, Hayes acknowledged that she understood its terms, that an agent
of Oakridge explained those terms to her, and that she had the opportunity to ask
questions and consult with an attorney before signing. Moreover, the arbitration
agreement was a free-standing document and was not simply a clause obscured
within a lengthy contract.
{¶ 29} Hayes’s age, in and of itself, is not a sufficient basis for finding the
agreement procedurally unconscionable. The presence or absence of any single
factor is generally insufficient for such a finding. Thus, we need not consider
whether finding an arbitration agreement procedurally unconscionable solely on
the basis of a party’s age would infringe on the right to contract in violation of the
United States and Ohio Constitutions and would violate this court’s duty to
defend the right to private contract. See Section 10, Clause 1, Article I, United
States Constitution; Section 28, Article II, Ohio Constitution; Farmers Natl. Bank

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v. Delaware Ins. Co. (1911), 83 Ohio St. 309, 330, 94 N.E. 834 (this court must
guard the constitutional right of private contract “zealously”). Our citizens do not
lose their constitutional rights and liberties simply because they age.
{¶ 30} All of the factors must be examined and weighed in their totality in
determining whether an arbitration agreement is procedurally unconscionable.
These findings must be considered in tandem with the analysis on substantive
unconscionability. A party challenging an arbitration agreement must prove a
quantum of both procedural and substantive unconscionability. Taylor Bldg., 117
Ohio St.3d 352, 2008-Ohio-938, 884 N.E.2d 12, ¶ 34.
{¶ 31} We therefore find that a voluntary arbitration agreement executed
by a nursing-home resident upon her admission is not rendered procedurally
unconscionable solely by virtue of the resident’s age.
B. Substantive Unconscionability
{¶ 32} The second issue for our consideration is whether an arbitration
agreement that waives a nursing-home resident’s right to trial and the right to seek
punitive damages and attorney fees is substantively unconscionable. The court of
appeals held that because the arbitration agreement required Hayes to forgo her
legal rights to a jury trial, punitive damages, and attorney fees, the agreement is
substantively unconscionable. We disagree.
{¶ 33} An assessment of whether a contract is substantively
unconscionable involves consideration of the terms of the agreement and whether
they are commercially reasonable. John R. Davis Trust 8/12/05 v. Beggs, 10th
Dist. No. 08AP-432, 2008-Ohio-6311, ¶ 13; Dorsey v. Contemporary Obstetrics
& Gynecology, Inc. (1996), 113 Ohio App.3d 75, 80, 680 N.E.2d 240. 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. John R. Davis Trust at ¶ 13; Collins v. Click Camera, 86

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Ohio App.3d at 834, 621 N.E.2d 1294. No bright-line set of factors for
determining substantive unconscionability has been adopted by this court. The
factors to be considered vary with the content of the agreement at issue.
{¶ 34} The terms of the arbitration agreement between Hayes and
Oakridge are commercially reasonable. With regard to the parties’ agreement to
forgo the right to trial, this court has already ruled that such an agreement is
commercially reasonable. In fact, as this court noted in Taylor Bldg. waiver 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. Id., 117 Ohio St.3d 352, 2008-Ohio-938, 884
N.E.2d 12, ¶ 55. We follow that holding today.
{¶ 35} The provisions in the agreement by which the parties waive their
right to seek punitive damages and attorney fees are also commercially
reasonable. Both parties must bear their own attorney fees and costs under the
agreement, which is equitable to both parties. This provision is not one-sided or
oppressive. We therefore find that the provision of the arbitration agreement
eliminating both parties’ ability to recover attorney fees is not commercially
unreasonable.
{¶ 36} Although the relinquishment of the right to seek punitive damages
applies only to Hayes, that fact alone does not render the provision commercially
unreasonable. The fact that a contractual provision is one-sided does not render it
substantively unconscionable per se. By entering into the arbitration agreement,
Oakridge also waived statutory legal rights that apply only to Oakridge.
{¶ 37} For example, Oakridge waived its legal right under R.C. 2323.42
to seek court costs and attorney fees. Under R.C. 2323.42, defendants in a
medical claim can recover all court costs and reasonable attorney fees if the court
determines that there was no reasonable good-faith basis for the plaintiff’s claim

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or that, at some point during the litigation, the plaintiff lacked a good-faith basis
for continuing to assert that claim.
{¶ 38} In addition, Oakridge also waived its legal right to pursue an action
for filing a groundless complaint under R.C. 2323.51 and Civ.R. 11, which, if
successful, could entitle Oakridge to recover expenses and attorney fees.
{¶ 39} Finally, Oakridge waived its right to seek a dismissal of Hayes’s
action for failure to comply with Civ.R. 10(D)(2). See Fletcher v. Univ. Hosps. of
Cleveland, 120 Ohio St.3d 167, 2008-Ohio-5379, 897 N.E.2d 147, paragraph one
of the syllabus (holding that in a medical claim, a motion to dismiss is the
appropriate response to a plaintiff’s failure to file an affidavit of merit under
Civ.R. 10(D)(2)). At the time this action was stayed by the trial court, Oakridge
had filed a motion to dismiss Hayes’s complaint on the grounds that she failed to
comply with Civ.R. 10(D)(2). The trial court ruled that Oakridge’s motion to
dismiss was rendered moot by virtue of the stay.
{¶ 40} As outlined above, both parties relinquished legal rights by
agreeing to arbitration. Hayes gave up her right to seek punitive damages, and
Oakridge in turn gave up its right to seek legal costs, attorney fees, and an
outright dismissal of the case. The critical factor herein is that Hayes voluntarily
agreed to these terms and was not forced to agree. She had the opportunity to
reject a waiver of punitive damages or any of the other terms.
{¶ 41} For all of the foregoing reasons, we find that terms in an arbitration
agreement between a nursing home and its resident that eliminate the right to trial
and the right to seek punitive damages and attorney fees are not substantively
unconscionable.
C. Contractual Consideration
{¶ 42} Although the issue of contractual consideration was not raised by
Oakridge’s propositions of law, we feel compelled to briefly address this issue in
light of the court of appeals’ holding. The appellate court held that the arbitration

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agreement was invalid for lack of consideration on the grounds that Hayes gave
up her right to trial and received nothing in return. Hayes v. Oakridge Home, 175
Ohio App.3d 334, 2008-Ohio-787, 886 N.E.2d 928, ¶ 20. We disagree.
{¶ 43} The waiver of the right to a jury trial is a necessary consequence of
agreeing to arbitration and is not unconscionable. Taylor Bldg., 117 Ohio St.3d
352, 2008-Ohio-938, 884 N.E.2d 12, ¶ 55. Under the court of appeals’ opinion,
every arbitration agreement would lack consideration and be rendered invalid.
Such a result defies the strong policy favoring arbitration of disputes and the long-
standing recognition of arbitration agreements as valid instruments. Both parties
gave up their right to trial, as well as all correlating rights in the judicial process
as discussed above. Moreover, Hayes was not required to sign the agreement, and
it was unequivocally not a condition of her admission to the nursing home.
Sufficient consideration exists for the arbitration agreement, notwithstanding the
lower court’s opinion to the contrary.
III. Conclusion
{¶ 44} For the foregoing reasons, we hold that an arbitration agreement
voluntarily executed by a nursing-home resident upon her admission and not as a
precondition to admission is not rendered procedurally unconscionable solely by
virtue of the resident’s age. We further hold that an arbitration agreement
voluntarily executed by a nursing-home resident and not as a precondition to
admission that eliminates the right to trial and to seek punitive damages and
attorney fees is not substantively unconscionable. Accordingly, we reverse the
judgment of the court of appeals and reinstate the order of the trial court.
Judgment reversed.
MOYER, C.J., and O’DONNELL and CUPP, JJ., concur.
LUNDBERG STRATTON and LANZINGER, JJ., concur in judgment only.
PFEIFER, J., dissents.
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LANZINGER, J., concurring in judgment only.
{¶ 45} Because a party who wishes to disavow an arbitration agreement
must show that the agreement is both procedurally and substantively
unconscionable, I concur in judgment only.
{¶ 46} Appellee, Florence Hayes, has not met her burden to establish that
the agreement she signed is procedurally unconscionable. We have no record
other than two two-page arbitration agreements among the documents signed and
the fact that they were signed by a 95-year-old woman on the date she entered the
nursing home. The record does not show by testimony, affidavit, or documentary
evidence that appellee, when she signed the agreements, was mentally
incompetent, or lacked the ability to read or write, or was confused over language
in the agreement, or lacked business savvy, or was emotionally stressed. The
record does not show any evidence that the nursing-home representative refused
to answer any of appellee’s questions, or denied her request to obtain an attorney,
or rushed her through the terms of the agreement. In short, there is no evidence
that anyone at the nursing home manipulated appellee into giving up important
statutory rights. Speculation about the circumstances surrounding the signing of
the agreements is not sufficient to show procedural unconscionability. I concur in
holding that the single fact that one of the parties to an arbitration agreement is of
advanced age does not establish procedural unconscionability.
{¶ 47} I depart, however, from the majority’s conclusion that this
arbitration agreement is not substantively unconscionable. I agree with the
dissent that the agreement strips away statutory protections granted to nursing-
home residents and defeats the will of the legislature. The majority cites
commercial cases in emphasizing the public policy that favors arbitration rights.
But the General Assembly has also expressed clearly its intent to protect nursing-
home residents through enactment of R.C. Chapter 3721. This is the first time we
have considered an arbitration agreement in the nursing-home setting, and we

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look to the content of the agreement itself to determine whether it is substantively
unconscionable. The arbitration clause here waives appellee’s rights to punitive
damages and attorney fees but refers to patient rights only by implication in the
encompassing words “any dispute” to be subject to arbitration. Because the
General Assembly has granted special rights and remedies to those in appellee’s
circumstances, unless an arbitration clause specifically explains the rights and
remedies to be affected by the arbitration agreement, it is substantively
unconscionable.
{¶ 48} At least one appellate court has expressed unease over applying
arbitration clauses, which initially were designed to save time and money for
sophisticated business people involved in contract disputes, to situations where
nursing-home residents give up court trials in negligence actions. Small v. HCF of
Perrysburg, Inc., 159 Ohio App.3d 66, 2004-Ohio-5757, 823 N.E.2d 19.
Although the General Assembly has not prohibited use of arbitration agreements
in nursing-home settings, there is movement at the federal level to do so. Two
recently introduced Congressional bills would invalidate predispute arbitration
agreements between nursing homes and their residents. H.R. 1237, 111th Cong.
(introduced Feb. 26, 2009); S. 512, 111th Cong. (introduced Mar. 3, 2009).
{¶ 49} Not every dispute is arbitrable. This court has held as a matter of
public policy that child custody disputes are not subject to arbitration. Kelm v.
Kelm (2001), 92 Ohio St.3d 223, 749 N.E.2d 299, syllabus. It may well be that
the General Assembly will act at some point to expressly ban certain arbitration
agreements in situations like this. Since it has not yet done so, appellee must
prove both procedural and substantive unconscionability. Because appellee has
not fulfilled the burden to show both, I reluctantly concur in the judgment of the
court.
LUNDBERG STRATTON, J., concurs in the foregoing opinion.
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PFEIFER, J., dissenting.
{¶ 50} I dissent for several reasons. First, I would hold that any nursing-
home preadmission arbitration agreement is unconscionable as a matter of public
policy. Alternatively, I would hold that the specific agreements in this case were
unconscionable as a matter of public policy. More narrowly, I would hold that the
arbitration agreements in this case were both substantively and procedurally
unconscionable.
I
{¶ 51} In its analysis of the details of this particular matter, the majority
ignores the big picture. This is an important case. This court should declare all
nursing-home preadmission arbitration agreements unenforceable as a matter of
public policy. Arbitration clauses that limit elderly or special-needs patients’
access to the courts for claims of negligence or abuse in their care should simply
not be honored or enforced by the courts of this state. The General Assembly has
enunciated a public policy in favor of special protection of nursing-home
residents through its passage of the Ohio Nursing Home Patients’ Bill of Rights,
R.C. 3721.10 et seq. “[W]here there is a strong public policy against a particular
practice, a contract or clause inimical to that policy will likely be declared
unconscionable and unenforceable unless the policy is clearly outweighed by
some legitimate interest in favor of the individual benefited by the provision.” 8
Williston on Contracts (4th Ed.1998) 43, Section 18:7.
{¶ 52} This court today has provided its imprimatur to arbitration
agreements that enable nursing homes to avoid the enforcement of the rights and
protections provided to nursing-home residents by the General Assembly. The
mantra that arbitration is always to be favored must not be mindlessly muttered.
In some areas, arbitration is not appropriate; the protection of nursing-home
residents is certainly one such area.

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{¶ 53} A public policy against preadmission arbitration agreements is
reflected in the Ohio Nursing Home Patients’ Bill of Rights. Further, this court
should recognize a public policy against preadmission arbitration agreements
based upon the practical inappropriateness of such agreements for nursing-home
residents.
A
{¶ 54} By enacting the Ohio Nursing Home Patients’ Bill of Rights, R.C.
3721.10 et seq., the General Assembly has demonstrated particular interest in
ensuring the rights of nursing-home patients and has provided statutory remedies
for those patients whose rights are violated. R.C. 3721.13(A) specifically
enumerates 32 important rights, including the right “to a safe and clean living
environment” (R.C. 3721.13(A)(1)), the right “to be free from physical, verbal,
mental, and emotional abuse and to be treated at all times with courtesy, respect,
and full recognition of dignity and individuality” (R.C. 3721.13(A)(2)), “the right
to adequate and appropriate medical treatment and nursing care and to other
ancillary services that comprise necessary and appropriate care consistent with the
program for which the resident contracted” (R.C. 3721.13(A)(3)), the right “to
have all reasonable requests and inquiries responded to promptly” (R.C.
3721.13(A)(4)), the right “to have clothes and bed sheets changed as the need
arises, to ensure the resident's comfort or sanitation” (R.C. 3721.13(A)(5)), and
the right “to voice grievances and recommend changes in policies and services to
the home’s staff, to employees of the department of health, or to other persons not
associated with the operation of the home, of the resident’s choice, free from
restraint, interference, coercion, discrimination, or reprisal” (R.C.
3721.13(A)(31)).
{¶ 55} R.C. 3721.17 contains the enforcement provision of the Ohio
Nursing Home Patients’ Bill of Rights. Pursuant to R.C. 3721.17(I)(1)(a), “[a]ny
resident whose rights under sections 3721.10 to 3721.17 of the Revised Code are

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violated has a cause of action against any person or home committing the
violation.” The use of injunctive relief to achieve a proper level of care is clearly
contemplated by the General Assembly. The General Assembly calls for the
award of attorney fees when residents resort to injunctive relief. In cases “in
which only injunctive relief is granted, [the court] may award to the prevailing
party reasonable attorney's fees limited to the work reasonably performed.” R.C.
3721.17(I)(2)(c).
{¶ 56} R.C. 3721.17 also allows residents to employ other methods to
ensure their rights. Those include reporting violations of the Ohio Nursing Home
Patients’ Bill of Rights to the grievance committee established at the home
pursuant to R.C. 3721.12(A)(2). The statute requires that a combination of
residents, sponsors, or outside representatives outnumber nursing-home staff two
to one on such committees. Another statutory option for residents is to pursue a
claim through the Department of Health. R.C. 3721.031.
{¶ 57} The General Assembly has given nursing-home residents rights
and a multitude of ways to preserve those rights. An agreement to arbitrate all
disputes flies in the face of the statutory protections of nursing-home residents
and should be found unconscionable as a matter of public policy.
B
{¶ 58} Practical realities make arbitration agreements signed prior to
admission to nursing homes contrary to public policy. Proving substantive
unconscionability is unduly burdensome in the nursing-home context, and that
fact is illustrated in this particular case. To escape an arbitration agreement,
elderly persons must recall with clarity — months or years after the execution of
the agreement — what happened at the signing, what was or was not explained to
them, and what they understood at the time. The sad fact is that a stay at a
nursing home most often signals deterioration. That happened in this case.
Within a month of entering Oakridge, Florence Hayes fractured her hip. She was

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never well enough to return to Oakridge before her death. Now her attorney must
attempt to prove, without her, what happened when Florence Hayes executed her
arbitration agreements. The types of problems in this case are likely to be
universal among nursing-home residents.
{¶ 59} Further, physical and mental deterioration prevents nursing-home
residents from taking advantage of the option to rescind an agreement. An
arbitration agreement may have a very fair opt-out clause, but it is worthless to
someone unable physically or mentally to take advantage of it.
{¶ 60} By the time an arbitration clause is put into play, either time or the
nursing home’s own negligence can leave the resident without the ability to recall
whether the agreement was validly entered into. The special circumstances
attendant to nursing-home care require a judgment from this court that
preadmission arbitration agreements are contrary to public policy.
II
{¶ 61} Even if this court is unwilling to find all preadmission arbitration
agreements in the nursing-home setting to be contrary to public policy, it should
find that the specific agreements in this case were unconscionable and
unenforceable as a matter of public policy.
{¶ 62} Pursuant to R.C. 3721.17(I)(2)(b), “[i]f compensatory damages are
awarded for a violation of the resident’s rights, section 2315.21 of the Revised
Code shall apply to an award of punitive or exemplary damages for the violation.”
The General Assembly has determined that punitive damages and attorney fees
should be available to nursing-home patients in order to protect their statutory
rights. The arbitration agreements in this case remove the possibility of a resident
acquiring either. The pertinent provision appears midway through the arbitration
agreements, not in the introductory “Explanation” portion of the agreements, nor
in the bolded, all capitalized “Acknowledgement” section. It reads:

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{¶ 63} “Each party may be represented by counsel in connection with all
arbitration proceedings and each party agrees to bear their own attorney fees and
costs. Payment of any other awards, fees and costs associated with these
arbitration proceedings shall be determined by the panel of arbitrators, provided
that the award in arbitration shall not include any amount for exemplary or
punitive damages.”
{¶ 64} In regard to punitive damages, the cold truth is that for elderly
nursing-home patients, compensatory damages alone are limited as a practical
matter. Life expectancy is short, lost wages are nonexistent, and in many cases,
the elderly victim may be unable to communicate the true extent of his or her
injuries. The threat of punitive damages operates as another incentive for nursing
homes to respect the dignity of their residents.
{¶ 65} The availability of attorney fees ensures that nursing-home
residents are not hindered from exerting their rights by the specter of cost. Under
the Ohio Nursing Home Patients’ Bill of Rights, residents can seek to enforce the
many rights set forth in the statutes through injunctive relief and can recover the
attorney fees necessary to obtain that relief. An arbitration agreement that
removes the possibility of a recovery of attorney fees takes the teeth out of a key
enforcement provision of that legislation. Not only do the agreements in this case
deny recovery of attorney fees, but they further defy the Ohio Nursing Home
Patients’ Bill of Rights by requiring the residents to pay their share of the cost of
the arbitration. Residents know that any attempt to enforce their rights will be
costly. That is exactly the opposite of the General Assembly’s intent.
{¶ 66} Although the arbitration agreements in this case prohibit punitive
damages and attorney fees for both parties, the practical reality recognized by the
statute is that only a resident could ever hope to recover them. Oakridge is giving
up nothing.

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{¶ 67} The General Assembly has identified nursing-home residents as
being particularly vulnerable and has instituted protections for them. The
arbitration agreements in this case are one-sided and strip away statutory
protections that the General Assembly has determined to be necessary for the
welfare of residents. The General Assembly has spoken clearly as to the public
policy of this state, and the agreements in this case just as clearly flout the will of
the people. They are unconscionable and unenforceable as a matter of public
policy.
III
{¶ 68} The majority does not address unconscionability from the
perspective of public policy, instead deciding the case on the basis of procedural
and substantive unconscionability. Even under that approach, today’s decision is
wrongly decided. The arbitration agreements at issue are both procedurally and
substantively unconscionable.
A
{¶ 69} The substantive unconscionability of the arbitration agreements at
issue in this case is discussed in Part II, above. The agreements strip away
statutory protections granted to nursing-home residents by the General Assembly
in the Nursing Home Patients’ Bill of Rights. The agreements forbid an award of
punitive damages or attorney fees without any explanation that those rights are
both statutorily guaranteed. The agreements are one-sided in their results and
defeat the will of the legislature. They are thus substantively unconscionable.
B
{¶ 70} The party challenging a contract as unconscionable must prove a
quantum of both procedural and substantive unconscionability. Taylor Bldg.
Corp. of Am. v. Benfield, 117 Ohio St.3d 352, 2008-Ohio-938, 884 N.E.2d 12, ¶
34. However, substantive and procedural unconscionability need not be present
in equal measure in the agreement in question:

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{¶ 71} “ ‘Essentially a sliding scale is invoked which disregards the
regularity of the procedural process of the contract formation, that creates the
terms, in proportion to the greater harshness or unreasonableness of the
substantive terms themselves.’ (15 Williston on Contracts (3d ed. 1972) 1763A,
pp. 226-227 * * *.) 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.”
Armendariz v. Found. Health Psychcare Servs., Inc. (2000), 24 Cal.4th 83, 114,
99 Cal.Rptr.2d 745, 6 P.3d 669.
{¶ 72} In other words, “ ‘[T]he substantive/procedural analysis is more of
a sliding scale than a true dichotomy. The harsher the clause, the less “bargaining
naughtiness” that is required to establish unconscionability.’ ” Tillman v.
Commercial Credit Loans, Inc. (2008), 362 N.C. 93, 103, 655 S.E.2d 362, quoting
Tacoma Boatbuilding Co. v. Delta Fishing Co. (W.D.Wash.1980), 28
U.C.C.Rep.Serv. (CBC) 26, 37, fn. 20. The seriousness of the substantive
unconscionability of the arbitration agreements in this case requires proof of only
minor procedural unconscionability.
{¶ 73} The majority opinion does not seriously address the procedural
unconscionability in this case. The first syllabus paragraph responds to nothing
but a straw man. It reads: “An arbitration agreement voluntarily executed by a
nursing-home resident upon her admission and not as a precondition to admission
is not rendered procedurally unconscionable solely by virtue of the resident’s
age.” (Emphasis added.) No one has argued that the arbitration agreements in this
case are procedurally unconscionable solely by virtue of Florence Hayes’s age.
The fact that Florence Hayes was 95 years old is merely one relevant fact. Her
age is not enough to make a contract she entered into procedurally
unconscionable; nonagenarians are capable of forming valid contracts.

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{¶ 74} On the day she signed the two arbitration agreements – one for
malpractice claims and one for other claims – factors beyond age were working
against Florence Hayes. Oakridge, part of a company owning 200 elder-care
facilities, presented Florence Hayes with a preprinted form. Oakridge does not
dispute that Florence Hayes was a 95-year-old woman who was debilitated
enough to require transport in an ambulance from a hospital to nursing-home care.
Still, those facts may not be enough to render a contract procedurally
unconscionable. But additionally, the arbitration contracts in this case were
presented to her on the very day she was entering the nursing home, an emotional
if not traumatic occasion for any person. Additionally, on the day that this 95-
year-old was being admitted, Oakridge gave her at least 29 pages of documents to
review. Additionally, among those 29 pages of documents, Florence’s signature
or initials were required in 11 different places. Additionally, every document —
except the arbitration agreements — related to the care Florence would receive in
the Oakridge Home. Oakridge claims that signing the arbitration agreements was
not required for admission to the facility. Why, then, were they included with the
admission documents? Why would documents having absolutely nothing to do
with Florence’s care plan be presented to her amidst the documents that were
related to her care plan? Florence Hayes did not go to Oakridge to bargain over
an arbitration agreement; she went to Oakridge to be taken care of. The
arbitration agreements were of a completely different character from the other
documents she was signing.
{¶ 75} Additionally, the arbitration agreements on their face present an
unbalanced characterization of the benefits of arbitration versus litigation. The
introductory “Explanation” part of the arbitration agreements provides:
“Arbitration is a method of resolving disputes without the substantial time and
expense of using the judicial system. An arbitration hearing takes only weeks or
months to schedule, while civil litigation generally takes years to complete.” That

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apples-to-oranges comparison speaks only of the time involved in scheduling an
arbitration, while it talks of the time it takes to complete litigation. Further, it
does not account for the likelihood of the completion of litigation through
settlement. The “Explanation” further provides, “By avoiding the judicial system,
many costs are eliminated.” The statement, however, does not mention that in
arbitrations, discovery can be limited. Finally, the “Explanation” concludes, “By
signing [this agreement], you will give up your constitutional right to a jury or
court trial and you agree that any dispute between you and the facility will be
subject to arbitration.” The Explanation does not mention that the agreement
forbids exemplary or punitive damages or an award of attorney fees.
{¶ 76} Above the signature line in the “Acknowledgements” section of
the agreements, there is a statement in bold, capital letters that again makes no
mention of a prohibition of punitive damages and attorney fees:
{¶ 77} “THE UNDERSIGNED ACKNOWLEDGE THAT EACH OF
THEM HAS READ THIS ARBITRATION AGREEMENT AND
UNDERSTANDS THAT BY SIGNING THIS ARBITRATION AGREEMENT
EACH HAS WAIVED HIS/HER RIGHT TO A TRIAL, BEFORE A JUDGE OR
JURY, AND THAT EACH OF THEM VOLUNTARILY CONSENTS TO ALL
OF THE TERMS OF THE ARBITRATION AGREEMENT.”
{¶ 78} The arbitration agreements in this case are stingy with any
acknowledgement of the drawbacks of arbitration. Oakridge in this case used its
expertise and superior bargaining position to create boilerplate documents
designed to draw in its residents and presented them at a time when residents
would believe that the execution of the arbitration agreements was necessary for
admission.
{¶ 79} Thus, this case does not present the question of whether a 95-year-
old should be free to enter into any contract. Instead, we are called upon to look
at the unique circumstances surrounding the execution of the specific arbitration

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agreements involved in this case. Here, we have a 95-year-old woman in a fragile
state, burdened with the emotions of entering a nursing home, inundated with
paperwork and requests for her signature, who would have reason to believe that
the documents she was executing were necessary for her admission into the
facility, and who has been presented an overly rosy picture of the benefits of
arbitration in a nonnegotiated contract that she never sought. All of these facts
are in the record and briefs. That she was infirm and 95 years old is the least of
the factors that make the arbitration agreements procedurally unconscionable.
{¶ 80} The relative bargaining positions of the parties, the circumstances
surrounding the execution of the agreement, and the misleading characterization
of the benefits of arbitration in the agreements themselves are all evidence of the
procedural unconscionability of the arbitration agreements.
C
{¶ 81} Since the arbitration agreements are both substantively and
procedurally unconscionable, they are invalid.
IV
{¶ 82} The tactics employed by Oakridge and countenanced by the
majority in this case are appalling. This court today provides a roadmap for
nursing-home facilities to avoid the responsibilities of the Ohio Nursing Home
Patients’ Bill of Rights.
{¶ 83} Is it really acceptable to shove an arbitration agreement under the
nose of a 95-year-woman, newly arrived at the nursing home, as she goes through
the signing frenzy of the admission process? Does the majority really believe that
Florence Hayes knowingly and voluntarily gave up her statutory rights through a
negotiation process?
{¶ 84} The majority suggests that the Constitution demands today’s result
and that it is this court’s duty to defend the right to private contract. The majority
writes: “Our citizens do not lose their constitutional rights and liberties simply

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because they age.” Yes, somewhere in the penumbra of the penumbra of the right
to contract, if you squint just so, you can make out what the majority identifies
today: the right of the elderly to be “taken in” by nursing homes. This court’s
corollary right for nursing homes is the right to say, “You signed it. Live with it!
Ohio Nursing Home Patients' Bill of Rights? You waived it! Your fundamental
constitutional rights? You waived them too! And don't forget to remind your son
that we need next month's check for $5,500 by the first.”
__________________
Dickson & Campbell, L.L.C., and Blake A. Dickson, for appellee.
Buckingham, Doolittle & Burroughs, L.L.P., Dirk E. Riemenscheider,
Beth A. Nagel, Thomas R. Himmelspach, and Timothy A. Spirko, for appellant.
______________________

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