Rude v. NUCO Edn. Corp.

[Cite as Rude v. NUCO Edn. Corp., 2011-Ohio-6789.]

STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )

BARBARA J. RUDE, et al. C.A. No. 25549

Appellees

v. APPEAL FROM JUDGMENT
ENTERED IN THE
NUCO EDUCATION CORPORATION, COURT OF COMMON PLEAS
dba NATIONAL INSTITUTE OF COUNTY OF SUMMIT, OHIO
TECHNOLOGY, et al. CASE No. 2010-01-032

Appellants

DECISION AND JOURNAL ENTRY

Dated: December 30, 2011

DICKINSON, Judge.

INTRODUCTION

{¶1} When a number of nursing students of the RETS School of Nursing at the

National Institute of Technology in Cuyahoga Falls learned that the program they had entered

was not accredited, they sued the school. Their claims included violation of the Ohio Consumer

Sales Practices Act, breach of contract, fraud, unjust enrichment, promissory estoppel, and

negligence. The claims were based on allegations that the school had actively misrepresented its

accreditation in order to induce them to secure thousands of dollars in federal education loans to

enter the program. The school moved to stay the proceedings pending arbitration, and the

students opposed the motion, arguing that the arbitration provision in the enrollment agreement

was unconscionable. Following an evidentiary hearing, the trial court determined the arbitration

agreement is unenforceable and denied the school’s motion to stay. The school has appealed that
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decision. This Court affirms because the arbitration provision is unenforceable as it is both

procedurally and substantively unconscionable.

BACKGROUND

{¶2} Barbara Rude and Jessica Canfield filed suit against NUCO Education

Corporation dba National Institute of Technology, Aimee Dennison, Education Affiliates Inc.,

RETS Tech Center Inc. dba RETS College, and ten John Does. The named defendants included

the two schools that promoted the nursing program, an admissions representative, and her direct

employer. Two months later, Sonja Flynn sued the same defendants, alleging similar claims.

Soon after that, Ms. Rude and Ms. Canfield amended their complaint and added Michelle Stover,

Lacey Stoops, and Melissa Welker as party plaintiffs. They also moved to consolidate their case

with that of Sonja Flynn. The trial court granted that motion.

{¶3} Meanwhile, the school defendants moved to dismiss or stay the proceedings

pending arbitration. The students opposed the motion, arguing the arbitration clause could not be

enforced against them because it was both procedurally and substantively unconscionable. The

trial court held an evidentiary hearing and ruled in favor of the students, precipitating this appeal.

{¶4} According to the students, their future educational and professional options are

severely limited by participation in an unaccredited nursing program. They testified that,

knowing that to be the case, prior to enrolling in the program, they asked the admissions

representative whether the program was accredited. Each student testified that she was told that

it was accredited when, in fact, it was not.

{¶5} The students testified that they each had a single meeting with Ms. Dennison that

ended with them signing a “Retail Installment Contract” and an “Enrollment Agreement.” The

students promised to pay approximately $25,000 each for the course of instruction culminating in
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an occupational associate degree in registered nursing. The enrollment agreement is printed on a

legal size piece of paper with single-spaced small print following the hand-written area

describing the individual applicant. The arbitration provision appears on the back of the pre-

printed form in the same size font as the rest of the page:

“Any disputes or claims arising out of or relating to this Agreement (including
any claims against the Institute, any affiliate of the Institute or any Institute
affiliate’s officers, directors, trustees, employees, or agents) shall be resolved by
individual binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association then in effect, and judgment on
any award by the arbitrator(s) may be entered in any court having jurisdiction.
The parties agree that this transaction involves interstate commerce and therefore
the Federal Arbitration Act and related federal judicial procedure shall govern this
Agreement to the fullest extent possible. The parties agree that any dispute
subject to arbitration shall not be adjudicated as a class action or a consolidated
class arbitration proceeding either in court or under the rules of the American
Arbitration Association. The parties agree that a student’s responsibility to pay
administrative fees, filing fees, processing fees, arbitrator compensation, and
services charges for arbitration proceedings conducted by the American
Arbitration Association under this Agreement shall be limited to no more than
$125.00 for claims under $10,000 and $375.00 for claims between $10,000 but
less than $75,000, or for claims not seeking monetary compensation. The
arbitrator is allowed to ignore this limit, except as prohibited under applicable
arbitration rules, should the arbitrator find that the student filed a frivolous
claim(s) or unnecessarily delayed the arbitration proceedings. Except as may be
required by law, neither a party nor an arbitrator may disclose the existence,
content or results of any arbitration conducted pursuant to this provision without
the prior written consent of both parties.”

{¶6} Each of the students is a licensed practical nurse who comes from modest

financial means and hoped to increase her earning power by becoming a registered nurse

following graduation from the National Institute of Technology, now known as Fortis College.

The National Institute of Technology is a for-profit private career college. The students said

that, during individual meetings with the nursing recruiter, Aimee Dennison, they were pressured

to sign the agreement immediately or risk losing their spot in the next class. The students

testified that, although there are other nursing programs in the area, they take longer to complete
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and have waiting lists. The students testified that they did not read the enrollment agreement

word for word during their meeting with Ms. Dennison, but merely “skimmed” it before signing.

None of them knew what arbitration was or asked any questions about the arbitration provision.

Ms. Dennison testified that, although she interviews hundreds of applicants each year, she has

never been asked a question about the arbitration provision and she has not mentioned it when

meeting with prospective students. In fact, Ms. Dennison testified that she did not understand

the arbitration provision herself. In any event, she said that she had no power to alter any of the

terms of the agreement.

ARBITRATION

{¶7} The school defendants’ sole assignment of error is that the trial court incorrectly

denied their motion to dismiss or compel arbitration because it incorrectly determined that the

arbitration clause is unconscionable and, therefore, unenforceable. The students have accused

the school of fraudulently inducing them to take on thousands of dollars of debt to pursue an

unaccredited degree. In order to defeat a motion to stay pending arbitration, however, “a party

must demonstrate that the arbitration provision itself in the contract at issue, and not merely the

contract in general, was fraudulently induced.” ABM Farms Inc. v. Woods, 81 Ohio St. 3d 498,

syllabus (1998). “Arbitration agreements are ‘valid, irrevocable, and enforceable, except upon

grounds that exist at law or in equity for the revocation of any contract.’” Taylor Bldg. Corp. of

Am. v. Benfield, 117 Ohio St. 3d 352, 2008-Ohio-938, at ¶33 (quoting R.C. 2711.01(A)).

Unconscionability is a valid basis for revoking a contract. Id.

{¶8} “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.’” Taylor Bldg. Corp. of Am. v. Benfield, 117 Ohio St. 3d 352, 2008-Ohio-938, at ¶34
 5

(quoting Lake Ridge Academy v. Carney, 66 Ohio St. 3d 376, 383 (1993)). “The party asserting

unconscionability of a contract bears the burden of proving that the agreement is both

procedurally and substantively unconscionable.” Id. (citing Collins v. Click Camera & Video

Inc., 86 Ohio App. 3d 826, 834 (1993) (“One must allege and prove a ‘quantum’ of both prongs

in order to establish that a particular contract is unconscionable”)).

{¶9} “The issue of unconscionability is a question of law.” Eagle v. Fred Martin

Motor Co., 157 Ohio App. 3d 150, 2004-Ohio-829, at ¶12. Therefore, this Court reviews a trial

court’s unconscionability decision de novo. Taylor Bldg. Corp. of Am. v. Benfield, 117 Ohio St.

3d 352, 2008-Ohio-938, at ¶2. The question, however, necessarily requires a case-by-case

review of the facts and circumstances surrounding the making of the agreement. Eagle, 2004-

Ohio-829, at ¶13. To the extent that conflicts in the evidence must be resolved via an evaluation

of the credibility of witnesses, the trial court is in a better position to perform that evaluation and

this Court is deferential toward such factual findings. Taylor, 2008-Ohio-938, at ¶38.

PROCEDURAL UNCONSCIONABILITY

{¶10} The trial court held that the arbitration provision was procedurally unconscionable

because there is a disparity of bargaining power between the students and the school, the school

used high-pressure sales tactics, the provision was part of a take-it-or-leave-it adhesion contract,

and the students had no understanding of arbitration or the effect of entering into an arbitration

agreement. “Procedural unconscionability concerns the formation of the agreement and occurs

when no voluntary meeting of the minds is possible.” Brunke v. Ohio State Home Servs. Inc.,

9th Dist. No. 08CA009320, 2008-Ohio-5394, at ¶10 (quoting Porpora v. Gatliff Bldg. Co., 160

Ohio App. 3d 843, 2005-Ohio-2410, at ¶7). To evaluate procedural unconscionability, this Court

considers “the relative bargaining positions of the parties . . . and whether the party claiming that
 6

the provision is unconscionable was represented by counsel at the time the contract was

executed.” Porpora, 2005-Ohio-2410, at ¶7 (citing Eagle v. Fred Martin Motor Co., 157 Ohio

App. 3d 150, 2004-Ohio-829, at ¶31). Factors bearing on the relative bargaining positions of the

parties include “age, education, intelligence, business acumen, experience in similar transactions,

whether the terms were explained to the weaker party, and who drafted the contract.” Eagle,

2004-Ohio-829, at ¶31. Generally, no one factor alone determines whether a contract is

procedurally unconscionable. Hayes v. Oakridge Home, 122 Ohio St. 3d 63, 2009-Ohio-2054, at

¶29. A court must consider the totality of the circumstances. Id. at ¶30.

{¶11} An adhesion contract is “a standardized form contract prepared by one party, and

offered to the weaker party, usually a consumer, who has no realistic choice as to the contract

terms.” Taylor Bldg. Corp. of Am. v. Benfield, 117 Ohio St. 3d 352, 2008-Ohio-938, at ¶49

(citing Black’s Law Dictionary 342 (8th Ed. 2004)). Despite Ohio’s public policy in favor of

arbitration, the Ohio Supreme Court has cautioned courts to pay special attention to arbitration

clauses in contracts between businesses and consumers. Id. at ¶50. “To be sure, an arbitration

clause in a consumer contract with some characteristics of an adhesion contract, ‘necessarily

engenders more reservations than an arbitration clause in a different setting,’ such as a

collective-bargaining agreement or a commercial contract between two businesses.” Id. (quoting

Williams v. Aetna Fin. Co., 83 Ohio St. 3d 464, 472 (1998)). In the consumer context, the Ohio

Supreme Court has warned that if “there are strong indications that the contract at issue is an

adhesion contract, and the arbitration clause itself appears to be adhesive in nature,” there is

“considerable doubt that any true agreement ever existed to submit disputes to arbitration.”

Williams, 83 Ohio St. 3d at 473. Under those circumstances, “the presumption in favor of

arbitration should be substantially weaker[.]” Id.
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{¶12} In this case, there is no doubt that the contract evidences a consumer transaction

for the provision of educational services. See R.C. 3332.16. The entire contract, including the

arbitration provision was drafted by the school, preprinted in boilerplate language, and presented

on a take-it-or-leave-it basis. Ms. Dennison testified that the school had more applicants than it

could accommodate and she had no authority to negotiate the terms of the contract even if any of

the applicants had been sophisticated enough to question them. Thus, it was a contract of

adhesion as the trial court determined. Furthermore, the arbitration provision was not a separate

document, but was part of the single-spaced fine print of a double-sided legal size piece of paper.

See Hayes v. Oakridge Home, 122 Ohio St. 3d 63, 2009-Ohio-2054, at ¶28. As this arbitration

provision appears in a consumer contract that is one of adhesion, we consider it in light of the

Ohio Supreme Court’s warning that there is “considerable doubt that any true agreement ever

existed to submit disputes to arbitration.” Williams v. Aetna Fin. Co., 83 Ohio St. 3d 464, 473

(1998).

{¶13} The trial court correctly determined that the school enjoyed a “vastly superior

bargaining position over the [students].” Although the students were all literate adults working

as licensed practical nurses, none of them had any education beyond high school and a brief

practical nursing program. None of them claimed any business education or experience and

none of them knew what the word “arbitration” meant. Ms. Dennison testified that she did not,

and, in fact, could not explain the arbitration provision to students. She testified that she did not

understand it herself. The students had some experience with other consumer contracts, such as

those for purchase of a house or car, but there was no evidence that any of the students had any

experience with or understanding of arbitration provisions.
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{¶14} The trial court determined that Ms. Dennison fulfilled a dual role as both “advisor

[to the students] as they made a major life decision” and “closing agent for the school.” This

contributed to the unequal bargaining power in the relationship. Each of the students testified

that she was experiencing financial difficulty and hoped to increase her earning power to support

her family by obtaining licensure as a registered nurse. They all needed to secure loans in order

to pay the $25,000 in tuition and fees required by the school. Ms. Dennison testified that she or a

co-worker met with each interested applicant and got to know them to help them determine

whether the nursing program would be a good fit. Following the interview, she had the power to

determine whether each applicant would be permitted to take the next step in the admissions

process. The trial court found that “[e]ach [student] testified, entirely consistently, that [Ms.]

Dennison urged her to sign the enrollment agreement during the meeting or risk losing [her] spot

in the program. This representation acted as an impetus for each [student] to sign the enrollment

form.” None of the students was represented by a lawyer when they signed the contract. In fact,

none of them knew any lawyers or had ever hired a lawyer except for help with a divorce.

{¶15} No prospective student has ever asked Ms. Dennison about the arbitration

provision or asked to consult with a lawyer before signing it. Ms. Dennison testified that she

always encouraged the students to read the agreement while she stepped out of the room to make

copies of the forms. Although she did not require the students to sign at the first meeting, she

did pressure them to sign immediately by emphasizing that the classes fill up fast and they may

well have to wait if they do not choose to sign immediately.

{¶16} The school has argued that the students were not without bargaining power

because they could have obtained the same services elsewhere. The evidence revealed that there

were a few other nursing programs in the area, but that those programs have waiting lists and,
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once begun, take longer to complete. There was no evidence of a multitude of registered nursing

programs available in the area. We note that the school has requested that this Court take

judicial notice that “there are no fewer than eleven registered nursing programs in Northeast

Ohio alone.” Under Rule 201 of the Ohio Rules of Evidence, a court may take judicial notice of

an adjudicative fact that is “not subject to reasonable dispute in that it is either (1) generally

known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready

determination by resort to sources whose accuracy cannot reasonably be questioned.” Evid. R.

201(B). A court “shall take judicial notice if requested by a party and supplied with the

necessary information.” Evid. R. 201(D). We cannot take judicial notice of the number of

registered nursing programs in Northeast Ohio because the source of information offered, that is,

a link to a website for the Ohio Board of Nursing, did not supply the information in a manner

that allows for judicial notice of a discrete fact without further inquiry. There is no evidence in

the record indicating that a multitude of schools, located a similar distance from the students’

homes, offered the same program.

{¶17} The school has argued that the arbitration provision is not procedurally

unconscionable because the contract contained a five-day cancellation provision. The trial court

determined that the “five-day cancellation period may mitigate against procedural

unconscionability, [but] the arbitration clause in thi[s] case . . . is so hard to understand that the

[students] had no reasonable opportunity to protect their interest and cancel their enrollment.”

The trial court focused on the language about agreeing that the transaction involved “interstate

commerce” when it did not. In addition to using language confusing even to a reviewing court,

the provision does nothing to explain its meaning to the average consumer. Olah v. Ganley

Chevrolet Inc., 8th Dist. No. 86132, 2006-Ohio-694, at ¶26 (arbitration clause that failed to
 10

explain “any details about the arbitration process” deemed substantively unconscionable because

“its incompleteness is not only confusing, but misleading[.]”). “Accepting the arbitration clause

as written, plaintiffs could not have known what being bound to arbitration really meant.” Id.

The clause in this case is even less informative than the clause in Olah. In that case, the Court

considered an arbitration clause that explained “binding arbitration” with the words, “you give

up your right to go to court.” Id. at ¶19. In this case, the clause did nothing to explain the words

“binding arbitration” and “judgment on any award by the arbitrator(s) may be entered in any

court having jurisdiction.” Furthermore, whether the students read the clause thoroughly before

signing or within the five-day cancellation period is “ultimately inconsequential in this particular

case . . . [because, as discussed below,] nothing on the face of the [arbitration] clause could have

put [them] on notice of excessive, prohibitive costs associated with the arbitration.” Eagle v.

Fred Martin Motor Co., 157 Ohio App. 3d 150, 2004-Ohio-829, at ¶54. The arbitration

provision is procedurally unconscionable as applied to these students. To the extent that the

school’s assignment of error relates to procedural unconscionability, it is overruled.

SUBSTANTIVE UNCONSCIONABILITY

{¶18} The trial court held the arbitration provision is substantively unconscionable

because it prevents the students from proceeding under the Consumer Sales Practices Act,

requires them to arbitrate under commercial rather than consumer arbitration rules, denies them

access to the remedial provisions of the Consumer Sales Practices Act, mandates that they

prosecute all claims individually, and requires confidentiality. The trial court further found the

arbitration provision commercially unreasonable because it is “very difficult to understand” and

determined that “it is pretty clear the [students] could not understand it.” “Substantive

unconscionability encompasses those factors that concern the contract terms themselves[.]”
 11

Brunke v. Ohio State Home Servs. Inc., 9th Dist. No. 08CA009320, 2008-Ohio-5394, at ¶10

(quoting Eagle v. Fred Martin Motor Co., 157 Ohio App. 3d 150, 2004-Ohio-829, at ¶31).

“Contractual terms are substantively unconscionable if they are unfair and commercially

unreasonable.” Id. (citing Ball v. Ohio State Home Servs. Inc., 168 Ohio App. 3d 622, 2006-

Ohio-4464, at ¶7).

{¶19} The school has argued that the provision is not substantively unconscionable

because this Court has repeatedly enforced arbitration agreements in cases involving claims

made under the Consumer Sales Practices Act, Ohio courts have held that class action waivers do

not make arbitration provisions substantively unconscionable, and the confidentiality provision

does not interfere with enforcement of the statutory claims because the provision forbids

disclosure “[e]xcept as may be required by law.” The students have argued that the class action

prohibition, coupled with the confidentiality clause, renders the arbitration provision

substantively unconscionable.

{¶20} In this case, however, the confidentiality restriction is limited so as to avoid

interfering with applicable law. The contract provides that “neither a party nor an arbitrator may

disclose the existence, content or results of any arbitration conducted pursuant to this provision

without the prior written consent of both parties,” but that restriction is limited by the words

“[e]xcept as may be required by law.” Thus, the remedial goals of the Ohio Consumer Sales

Practices Act are not stymied by the confidentiality language in the arbitration provision. On the

contrary, to the extent that the Act requires dissemination of the arbitration award or other

information about the arbitration in order to protect other consumers, the language of the contract

indicates that the law will be followed over the contract’s preference for confidentiality. See

R.C. 1345.05(A)(3).
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{¶21} This Court is “not authorized to reverse a correct judgment merely because

erroneous reasons were assigned as a basis thereof.” State ex rel. Carter v. Schotten, 70 Ohio St.

3d 89, 92 (1994). In this case, we do not agree with each of the reasons the trial court assigned

for holding this arbitration provision substantively unconscionable, nor do we agree with its

decision to give the cost issue “little weight.” Regardless, “an appellate court shall affirm a trial

court’s judgment that is legally correct on other grounds, that is, one that achieves the right result

for the wrong reason, because such an error is not prejudicial.” Cook Family Invests. v. Billings,

9th Dist. Nos. 05CA008689, 05CA008691, 2006-Ohio-764, at ¶19. In this case, we affirm the

judgment of the trial court because it correctly held the arbitration provision is both procedurally

and substantively unconscionable, regardless of the reasons it assigned.

{¶22} An analysis of this arbitration provision reveals that it is substantively

unconscionable because it prevents the students from vindicating their claims due to the

excessive cost of arbitration. Although the trial court found the students “have limited means to

pay an arbitrator,” it gave “little weight” to the cost issue because “nothing in the provision

exposes [the students] to undue or prohibitive costs.” The trial court determined that the students

would be required to pay a filing fee similar to a court of competent jurisdiction and that they

would “be exposed to additional, unspecified costs in either arbitration or civil litigation.”

{¶23} The arbitration provision provides that students asserting a claim for damages

between $10,000 and $75,000 will have their total arbitration fees capped at $375. The arbitrator

is allowed to ignore the limit, however, if he finds that the student “filed a frivolous claim[ ] or

unnecessarily delayed the arbitration proceedings.” The students argued before the trial court

that the unspecified costs, such as witness fees, and the arbitrator’s discretionary power to ignore

the fee cap could expose them to untold costs that place arbitration out of reach. Ms. Rude
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testified that she would not pursue arbitration if it exposed her to more than $1200 in costs. As a

single mother without a consistent source of income, Ms. Canfield testified that $375 is too much

for her to pursue arbitration of her claims against the school.

{¶24} Although silence of an arbitration clause with respect to costs does not, by itself,

make the clause unconscionable, “if the costs associated with the arbitration effectively deny a

claimant the right to a hearing or an adequate remedy in an efficient and cost-effective manner,”

then the clause is invalid. Felix v. Ganley Chevrolet Inc., 8th Dist. No. 86990, 86991, 2006-

Ohio-4500, at ¶21. As the students have argued to this Court, the fee cap is inapplicable in this

case, making arbitration under the provision prohibitively expensive. The students’ claims

exceed $75,000 because they seek to recover monetary damages in excess of $25,000, subject to

trebling under the Ohio Consumer Sales Practices Act. The trial court record contains a copy of

the American Arbitration Association’s Commercial Rules authenticated by a lawyer’s affidavit.

According to the standard fee schedule found in those rules, the students would be responsible

for paying an initial filing fee of $1850 and a case service fee of $750 for a claim that proceeds

to an initial hearing. These initial costs are merely the administrative costs of arbitration. Under

Rule 50, each party is also responsible for her own witnesses’ expenses and half of the cost of

“[a]ll other expenses of the arbitration, including required travel and other expenses of the

arbitrator, AAA representatives, and any witness and the costs of any proof produced at the

direct request of the arbitrator[.]” The arbitrator’s hourly rate of compensation is not specified,

but is described in Rule 51(a) as “a rate consistent with the arbitrator’s stated rate of

compensation.” Additionally, the arbitrator has the power to assess all or any part of the total

arbitration costs to either party.
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{¶25} The cost problem is further exacerbated in this case by the class action waiver

language in the provision. The provision forbids any “class action or a consolidated class

arbitration proceeding either in court or under the rules of the American Arbitration

Association.” When a number of consumers have similar claims against a company, they may

file one complaint in court and share the filing fee and additional costs associated with pursuing

that claim, as the students testified that they have done in this action. When consumers are

prevented from sharing the cost of that endeavor, it can quickly become more expensive than any

one is able to shoulder alone. In this case, the students testified that they are unable to afford

even the initial filing fee to arbitrate this case individually. See Porpora v. Gatfliff Bldg. Co.,

160 Ohio App. 3d 843, 2005-Ohio-2410, at ¶17-19.

{¶26} Ignoring the fact that the arbitration clause exposes the students to potential

liability for the entire cost of arbitration, the evidence shows that the known cost of arbitration

under this clause is unattainable for these students, making them unable to vindicate their

statutory rights. See Green Tree Fin. Corp.-AL v. Randolph, 531 U.S. 79, 90-91 (2000)

(arbitration clause not invalidated by record’s silence on the subject of arbitration costs because

silence allowed only speculation regarding whether costs would be prohibitive). From the

evidence presented to the trial court, we know that each student will be required to pay a

minimum of $1850 to file an arbitration claim and another $750 once the claim proceeds to an

initial hearing. It is not at all speculative to consider that the students will each have to pay half

of the arbitrator’s fee, even if no expenses are billed. There is no evidence in the record

regarding how much each arbitrator will charge for his services, but a fee will certainly be

charged. So, we know that the arbitration costs will exceed the filing fee. The students have

offered a link to the website for the Summit County Clerk of Courts, indicating that the cost to
 15

file a civil complaint is $275.00 plus a $25 fee for each summons the clerk is instructed to issue,

http://www.cpclerk.co.summit.oh.us\civilfees.asp (last visited Dec. 28, 2011). In this case, six

plaintiffs filed two complaints and served four defendants. The cost of that filing was shared

among six plaintiffs rather than being incurred individually, as would be required in arbitration

under the terms of this provision.

{¶27} As the students have testified that they cannot afford to pay even the initial filing

fee for individual arbitration under this clause, the students have met their burden of showing

that the arbitration fees they would be responsible for under the contract make vindication of

their claims through arbitration cost prohibitive. See Taylor Bldg. Corp. of Am. v. Benfield, 117

Ohio St. 3d 352, 2008-Ohio-938, at ¶59. The arbitration provision in this case is substantively

unconscionable because it is prohibitively expensive for consumers to pursue their claims under

the terms of the provision.

SEVERABILITY

{¶28} The school has argued for the first time on appeal that, if this Court deems some

part of the arbitration provision unconscionable, it should not affect the enforceability of the

remainder of that provision because the contract also includes a severability clause. The contract

provides that “[i]f any court of competent jurisdiction or governmental or accrediting agency

determines that any provision of this Agreement is invalid or unenforceable, such judgment shall

not invalidate any other provision of this Agreement.”

{¶29} The school has cited the Ohio state court cases of Ignazio v. Clear Channel

Broadcasting Inc., 113 Ohio St. 3d 276, 2007-Ohio-1947, at ¶12, Bozich v. Kozusko, 9th Dist.

No. 09CA009604, 2009-Ohio-6908, at ¶10, and Broughsville v. OHECC LLC, 9th Dist. No.

05CA008672, 2005-Ohio-6733, at ¶27-33, in support of its argument. The students have
 16

correctly argued that those cases are not similar to the situation in this case. Ignazio, 2007-Ohio-

1947, at ¶17 (sentence in arbitration clause providing expanded judicial review contrary to state

law was unenforceable and severable); Broughsville, 2005-Ohio-6733, at ¶22 (the designated

arbital forum was unavailable, but term could be severed from the arbitration agreement);

Bozich, 2009-Ohio-6908, at ¶10 (limitation of liability to price of home inspection was

unconscionable and severable). In each of those cases, the court severed a discrete term of the

arbitration provision and enforced the remainder of it. In this case, we need not consider how the

cost of arbitration could be severed from this agreement because the school has forfeited its right

to raise this issue by failing to raise it before the trial court. Eisenbrei v. Akron, 9th Dist. No.

25788, 2011-Ohio-5777, at ¶12 (citing Thrower v. Akron Dep’t of Public Hous. Appeals Bd., 9th

Dist. No. 20778, 2002-Ohio-3409, at ¶20). To the extent that the school’s assignment of error

addresses substantive unconscionability, it is overruled.

CONCLUSION

{¶30} The school’s assignment of error is overruled. The trial court correctly held that

the arbitration provision in this consumer contract is both procedurally and substantively

unconscionable and, therefore, unenforceable. The judgment of the Summit County Common

Pleas Court is affirmed.

Judgment affirmed.

There were reasonable grounds for this appeal.

We order that a special mandate issue out of this Court, directing the Court of Common

Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy

of this journal entry shall constitute the mandate, pursuant to App.R. 27.
 17

Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the

period for review shall begin to run. App.R. 22(E). The Clerk of the Court of Appeals is

instructed to mail a notice of entry of this judgment to the parties and to make a notation of the

mailing in the docket, pursuant to App.R. 30.

Costs taxed to Appellants.

CLAIR E. DICKINSON
FOR THE COURT

BELFANCE, P. J.
MOORE, J.
CONCUR

APPEARANCES:

DOUGLAS B. SCHNEE and LUCY K. O’SHAUGHNESSY, Attorneys at Law, for Appellants.

WILLIAM DOWLING and JOSHUA D. NOLAN, Attorneys at Law, for Appellees.