Robinson v. Mayfield Auto Group, L.L.C.

[Cite as Robinson v. Mayfield Auto Group, L.L.C., 2017-Ohio-8739.]

Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION
No. 105844

JOHN P. ROBINSON, ET AL.
PLAINTIFFS-APPELLANTS

vs.

MAYFIELD AUTO GROUP, L.L.C., ET AL.
DEFENDANTS-APPELLEES

JUDGMENT:
AFFIRMED

Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-16-869520

BEFORE: Blackmon, J., McCormack, P.J., and Stewart, J.

RELEASED AND JOURNALIZED: November 30, 2017
ATTORNEYS FOR APPELLANTS

Sheila A. McKeon
Colleen A. Mountcastle
Melanie R. Irvin
Gallagher Sharp L.L.P.
Bulkley Building, Sixth Floor
1501 Euclid Avenue,
Cleveland, Ohio 44115

ATTORNEYS FOR APPELLEES

Ann E. Knuth
Mansour Gavin L.P.A.
North Point Tower
1001 Lakeside Avenue, Suite 1400
Cleveland, Ohio 44114

David M. Neumann
David Neumann L.L.C.
2769 Commercial Road
(East Ninth Extension)
Cleveland, Ohio 44113
PATRICIA ANN BLACKMON, J.:

{¶1} Plaintiff-appellant, John P. Robinson (“Robinson”), appeals from the order

of the trial court granting the motion to stay proceedings pending arbitration filed by

defendant-appellee Mayfield Auto Group, L.L.C., d.b.a. Nick Mayer Ford Lincoln (“Nick

Mayer Ford”). Robinson assigns the following error for our review:

The trial court erred in granting [Nick Mayer Ford’s] motion to stay

proceedings as to the claims of John P. Robinson pending arbitration.

{¶2} Having reviewed the record and pertinent law, we affirm the trial court’s

decision. The apposite facts follow.

{¶3} In September 2016, Robinson, the former controller for Nick Mayer Ford,

and his coworker Eric Walker, filed a complaint against the dealership alleging breach of

contract and unjust enrichment. 1 As is relevant herein, Robinson alleged that he,

Robinson, began his employment with Marshall Ford in 2005. In 2014, Marshall Ford

was purchased by Nick Mayer Ford, and the terms of Robinson’s employment were

adopted by Nick Mayer Ford. Robinson alleged that under the terms of the Controller

pay plan, he was entitled to a monthly base salary plus commissions in the amount of 1%

of the dealership’s net pre-tax profit, and payment for unused vacation. He alleged that

he is entitled to accrued commissions in the amount of $11,459, past vacation payment in

the amount of $5,192, and current vacation payment in the amount of $3,600.

1
Walker is not a party to this appeal.
 {¶4} In its answer, Nick Mayer Ford denied liability and asserted that Robinson’s

claims were subject to a mandatory arbitration agreement that was part of his

employment. Nick Mayer Ford also moved to stay the proceedings pending arbitration

and attached a copy of the arbitration agreement, which states:

any and all claims or controversies between me and the COMPANY
relating to my employment with the COMPANY or termination thereof
including claims for breach of contract, tort, employment discrimination
(including unlawful harassment) and any violation of any state or federal
law shall be resolved by arbitration in accordance with the applicable
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association.
***

If any party prevails on a statutory claim, which affords the prevailing party
attorneys fees, then the arbitrator may award reasonable attorneys fees and
costs to the prevailing party.

I understand and agree that this Arbitration Agreement contains a full and

complete statement of any and all agreements and understandings regarding

resolution of disputes between the COMPANY and me * * *.

{¶5} In opposition to the motion to stay, Robinson acknowledged that he signed

the arbitration agreement but argued that the agreement was unsupported by

consideration, and that it is unenforceable because it lacks mutuality and is

unconscionable.

{¶6} On May 2, 2017, the trial court stayed Robinson’s claims pending

arbitration. Robinson now appeals.

Standard of Review
 {¶7} Generally, questions concerning whether an arbitration agreement is

enforceable or unconscionable are reviewed under a de novo standard of review.

Hedeen v. Autos Direc t Online, Inc., 2014-Ohio-4200, 19 N.E.3d 957, ¶ 9

(8th Dist.), citing McCaskey v. Sanford-Brown College, 8th Dist. Cuyahoga No. 97261,

2012-Ohio-1543, ¶ 7, and Taylor Bldg. Corp. of Am. v. Benfield, 117 Ohio St.3d 352,

353, 2008-Ohio-938, 884 N.E.2d 12. We give no deference to a trial court’s decision

when reviewing an issue de novo. Hedeen at ¶ 9, citing Brownlee v. Cleveland Clinic

Found., 8th Dist. Cuyahoga No. 97707, 2012-Ohio-2212, ¶ 9.

{¶8} There is a presumption in favor of arbitration where the disputed issue falls

within the scope of the arbitration agreement, “except upon grounds that exist at law or in

equity for the revocation of any contract.” DeVito v. Autos Direct Online, Inc.,

2015-Ohio-3336, 37 N.E.3d 194, ¶ 42 (8th Dist.)(en banc); Conte v. Blossom Homes

L.L.C., 8th Dist. Cuyahoga No. 103751, 2016-Ohio-7480, ¶ 13.

{¶9} In DeVito, this court explained that presumption as follows:

It is well settled that the arbitration process is a favored method to
settle disputes. Both the Ohio General Assembly and the courts have
expressed a strong public policy favoring arbitration. Hayes v. Oakridge
Home, 122 Ohio St.3d 63, 2009-Ohio-2054, 908 N.E.2d 408, ¶ 15.
Arbitration is favored because it provides the parties “‘with a relatively
expeditious and economical means of resolving a dispute.’” Id., quoting
Schaefer v. Allstate Ins. Co., 63 Ohio St.3d 708, 712, 590 N.E.2d 1242
(1992).

Id. at ¶ 12. Accord R.C. 2711.01(A) (an arbitration agreement in a written contract

“shall be valid, irrevocable, and enforceable, except upon grounds that exist in law or

equity for the revocation of any contract.”).
 {¶10} Under R.C. 2711.02(B), when a trial court determines that an arbitration

provision is enforceable, the trial court shall on application of a party, stay the trial

pending arbitration, unless arbitration has been waived.

{¶11} In the instant matter, Robinson argues that the arbitration provision is

unenforceable for lack of mutuality of assent and consideration, and because it is

unconscionable.

I. Enforceability

{¶12} Arbitration is a matter of contract. DeVito at ¶ 13, citing United

Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347,

4 L.Ed.2d 1409 (1960). Thus, prior to making any determination regarding the

arbitrability of any issue, a court must first determine whether the arbitration agreement is

enforceable under basic contract precepts. Skerlec v. Ganley Chevrolet, Inc., 8th Dist.

Cuyahoga No. 98247, 2012-Ohio-5748, ¶ 8, citing Council of Smaller Ents. v. Gates,

McDonald & Co., 80 Ohio St.3d 661, 665, 1998-Ohio-172, 687 N.E.2d 1352.

{¶13} The elements of a contract are a voluntary offer, acceptance of the offer, and

consideration. Butcher v. Bally Total Fitness Corp., 8th Dist. Cuyahoga No. 81593,

2003-Ohio-1734, ¶ 28, citing Nilavar v. Osborn, 127 Ohio App.3d 1, 711 N.E.2d 726

(2d Dist.1998); Noroski v. Fallet, 2 Ohio St.3d 77, 79, 442 N.E.2d 1302 (1982). The

“mutuality of obligation” doctrine requires only a quid pro quo or consideration. Frick

v. Univ. Hosps. of Cleveland, 133 Ohio App.3d 224, 228, 727 N.E.2d 600 (8th

Dist.1999). The Ohio Supreme Court has held that giving up a right to trial, in addition
to the corresponding rights of that judicial process, is consideration. Hayes v. Oakridge

Home, 122 Ohio St.3d 63, 2009-Ohio-2054, 908 N.E.2d 408, ¶ 42-43.

{¶14} In support of his contention that the arbitration agreement is

unenforceable, Robinson relies on Harmon v. Philip Morris, 120 Ohio App.3d 187, 697

N.E.2d 270 (8th Dist.1997). In Harmon, the employer’s alternative dispute resolution and

arbitration programs required the employee, but not the employer, to submit claims to

arbitration. The employer gave the employee the option of accepting the program or

working elsewhere, and the employer also reserved the right to terminate the program at

any time. The employee “acknowledged receipt of” pamphlets explaining the

agreement. In concluding that the employee was not required to arbitrate his claim for

wrongful termination, this court found no “acceptance” of the agreement, no mutuality,

and no consideration.

A. Acceptance

{¶15} In undertaking its analysis, the Harmon court explained:

[T]he Restatement of the Law 2d, Contracts (1981), Section 17, which
provides as follows:

“(1) * * * the formation of a contract requires a bargain in which there is a
manifestation of mutual assent to the exchange and a consideration.”

Section 22 provides:

“(1) The manifestation of mutual assent to an exchange ordinarily takes the
form of an offer or proposal by one party followed by an acceptance by the
other party or parties.”

(Emphasis deleted.) Id. at 190.
 {¶16} Therefore, as to the acceptance issue, this court noted that Harmon merely

signed a document verifying that he had “received the information,” but did not agree to

the terms set forth in the program. Harmon, 120 Ohio App.3d at 191.

{¶17} Here, however, Robinson did not merely acknowledge receipt of the

arbitration agreement. Rather, he specifically agreed that he “understand[s] and agree[s]

that this Arbitration Agreement contains a full and complete statement of any and all

agreements and understandings regarding resolution of disputes between the COMPANY

and me[.]” Therefore, we find sufficient acceptance.

B. Mutuality of Assent

{¶18} Robinson argues that the arbitration agreement is unilateral, and the trial

court erred in “summarily determining that there was mutual assent[.]”

{¶19} With regard to the mutuality of the assent and consideration, the Harmon

court also noted that “the terms of this program require employees to arbitrate their claims

against Philip Morris but do not similarly require Philip Morris to arbitrate its claims

against them. 120 Ohio App.3d at 191.

{¶20} However, in Bell v. Hollywood Ent., 8th Dist. Cuyahoga No. 87210,

2006-Ohio-3974, this court distinguished Harmon and found sufficient mutuality of

obligation where the employer was required to submit all claims to arbitration and could

not alter or terminate the arbitration program. Accord Skerlec, 2012-Ohio-5748. In

Skerlec, both the employee and the dealership agreed to submit any unresolved complaint
of “workplace wrongdoing” to arbitration and both parties agreed to give up their right to

a jury trial in exchange for the other’s similar promise. Id. at ¶ 12. This court agreed

with the trial court’s determination that the arbitration provision was enforceable in light

of the mutual promises and consideration, and “[u]nlike Harmon and Post [v. ProCare

Auto. Serv. Solutions, 8th Dist. Cuyahoga No. 87646, 2007-Ohio-2106], there is nothing

in the arbitration agreement that permits the employer to bypass arbitration.” Id. at ¶ 13.

{¶21} In this matter, the arbitration agreement states:

any and all claims or controversies between me and the COMPANY
relating to my employment with the COMPANY or termination thereof
including claims for breach of contract, tort, employment discrimination
(including unlawful harassment) and any violation of any state or federal
law * * * shall be resolved by arbitration.

Therefore, because the agreement pertains to “all” claims and controversies, it governs

both the employee’s and employer’s claims. Unlike Harmon and Post, there is no

provision that allows the employer to use the judicial process. Therefore, the agreement

is not void for lack of mutuality.

C. Consideration

{¶22} Robinson argues that there is insufficient consideration for the agreement

because his employment was not contingent upon signing the arbitration agreement. He

notes that Nick Mayer Ford took no action against his coworker Walker for failing to sign

the agreement.

{¶23} With regard to consideration, the Harmon court noted:

[Restatement (Second) of Contracts,] Section 17 provides:
 “(1) To constitute consideration, a performance or a return promise must be
bargained for.

“(2) A performance or return promise is bargained for if it is sought by the
promisor in exchange for his promise and is given by the promisee in
exchange for that promise.

“(3) The performance may consist of

“(a) an act other than a promise, or

“(b) a forbearance, or

“(c) the creation, modification, or destruction of a legal relation.”

Harmon, 120 Ohio App.3d at 190.

{¶24} In finding insufficient consideration, the Harmon court explained:

[S]ince Philip Morris reserves the right to amend or terminate the program
at any time, it has neither offered a benefit to employees nor incurred a
detriment by modifying the terms of the employment relationship. Thus,
no consideration flowed from the employer to the employees to compensate
them for relinquishing their individual and collective rights to present their
claims to a jury in a court of law because they remained at-will employees
following implementation of the program, subject to termination but
without the right to seek redress from a jury.

Id. at 191.

{¶25} However, in Skerlec, 2012-Ohio-5748, this court found sufficient

consideration. The Skerlec court noted that “[n]o consideration is required above and

beyond the mutual agreement to arbitrate.” Id. at ¶ 13, citing Corl v. Thomas & King,

10th Dist. Franklin No. 05AP-1128, 2006-Ohio-2956, ¶ 20, citing Dantz v. Apple Ohio

LLC, 277 F.Supp.2d 794 (N.D.Ohio 2003). The Skerlec court also noted that giving up
a right to trial, in addition to the corresponding rights of that judicial process, is

consideration. Id. at ¶ 9, citing Hayes, 122 Ohio St.3d 63 at ¶ 42-43.

{¶26} From the foregoing, the parties’ agreement to arbitrate all disputes serves as

consideration; consideration is not dependent upon the promise of continued employment.

Further, in this matter, unlike Harmon, 120 Ohio App.3d at 187, and Post,

2007-Ohio-2106, Nick Mayer Ford did not reserve the right to alter or terminate the plan.

Rather, the parties mutually agreed to arbitrate “any and all claims or controversies.”

Therefore, we find sufficient consideration to support the mandatory arbitration

agreement.

{¶27} In accordance with the foregoing, we conclude that the arbitration

agreement contains the requisite elements of a valid, enforceable contract.

II. Unconscionability

{¶28} Unconscionability is a ground for revocation of a contract. Taylor Bldg.

Corp. of Am., 117 Ohio St.3d 352 at ¶ 32; R.C. 2711.01(A). Whether a particular

contract or contract provision is unconscionable is a question of law subject to de novo

review. Taylor Bldg. Corp. of Am. at ¶ 36; Devito, 2015-Ohio-3336 at ¶ 16; Martin v.

Byke, 8th Dist. Cuyahoga No. 88878, 2007-Ohio-6816, ¶ 25. The party claiming

unconscionability bears the burden of proving that the contract or provision at issue is

unconscionable. Taylor Bldg. Corp. of Am. at ¶ 33.

{¶29} In Martin, this court explained the concept of unconscionability as

follows:
 “Unconscionability is generally recognized to include an absence of
meaningful choice on the part of one of the parties to a contract, combined
with contract terms that are unreasonably favorable to the other party.”
Collins v. Click Camera & Video, Inc. (1993), 86 Ohio App.3d 826, 834,
621 N.E.2d 1294. “Unconscionability thus embodies two separate
concepts: 1) unfair and unreasonable contract terms, i.e., ‘substantive
unconscionability,’ and 2) individualized circumstances surrounding each
of the parties to a contract such that no voluntary meeting of the minds was
possible, i.e., ‘procedural unconscionability * * *. These two concepts
create what is, in essence, a two-prong test of unconscionability. One
must allege and prove a ‘quantum’ of both prongs in order to establish that
a particular contract is unconscionable.” Id., quoting White & Summers,
Uniform Commercial Code (1988) 219, Section 4-7.

Substantive unconscionability concerns the actual terms of the agreement
and whether the terms are unfair and unreasonable. Collins, supra, at 834.
Contract clauses are unconscionable where the “clauses involved are so
one-sided as to oppress or unfairly surprise [a] party.” Neubrander v.
Dean Witter Reynolds, Inc. (1992), 81 Ohio App.3d 308, 311-312, 610
N.E.2d 1089.

Procedural unconscionability involves the circumstances surrounding the

execution of the contract between the two parties and occurs where no

voluntary meeting of the minds was possible. Collins, supra at 834. In

determining procedural unconscionability, a court should consider factors

bearing on the relative bargaining position of the contracting parties —

including age, education, intelligence, business acumen, and experience in

similar transactions — whether the terms were explained to the weaker

party, and who drafted the contract. Id., citing Johnson v. Mobil Oil

Corp., 415 F.Supp 264, 268 (E.D.Mich. 1976).

Id. at ¶ 28-30; see also Devito at ¶ 14-20.

A. Substantive Unconscionability
 {¶30} Robinson argues that the arbitration agreement is substantively

unconscionable in accordance with this court’s decision in Post v. ProCare Auto. Serv.

Solutions, 8th Dist. Cuyahoga No. 87646, 2007-Ohio-2106. He asserts that it required

the employee, but not the employer, to submit his or her disputes to arbitration, did not

disclose the costs, and that he “may end up spending a considerably higher amount of

costs and fees in arbitration.”

1. Lack of Mutuality as Basis of Unconscionability

{¶31} As noted in Post, 2007-Ohio-2106, lack of mutuality can be a basis of

unconscionability. Id. at ¶ 17.

{¶32} Here, however, as this court noted in the discussion of enforceability of the

agreement, the arbitration agreement required arbitration of “any and all claims or

controversies between me and the COMPANY relating to my employment with the

COMPANY or termination thereof[.]” Therefore, we reject Robinson’s claim of lack of

mutuality.

2. Failure to Disclose Costs

{¶33} The arbitration agreement that the Post court found to be substantively

unconscionable did not disclose the costs of arbitration or the fact that they may be

substantially higher than costs associated with a regular court proceeding. Id. at ¶ 18.

However, the plaintiff presented no evidence that the costs of arbitration would deter him
from vindicating his rights in arbitration. Id. at ¶ 20. Similarly, in McCaskey, this

court stated:

[A] failure to disclose the costs of arbitration did not make a provision per
se unconscionable. [Taylor, 117 Ohio St.3d 352] at ¶ 56-58,
citing Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79, 90-91,
121 S.Ct. 513, 148 L.Ed.2d 373 (2000). The Taylor court required specific
and individualized evidence that arbitration costs were unduly burdensome
to the party opposing it.

Here, just as in Taylor, there is no evidence that McCaskey would be
prevented from prosecuting his claim in arbitration even though he did
submit various fee schedules for the American Arbitration Association
(“AAA”) and the National Arbitration Forum (“NAF”).
Id., 2012-Ohio-1543, at ¶ 32-33.

{¶34} Similarly, in this matter, there is no evidence that Robinson would be

prevented from prosecuting his claim in arbitration.

{¶35} In accordance with the foregoing, we likewise reject the claim that the

arbitration agreement is unconscionable for failing to disclose costs.

3. Costs of Arbitration Higher Than Litigation

{¶36} Robinson maintains that the costs of arbitration are higher than in the

judicial forum and he “may end up spending a considerably higher amount of costs and

fees in arbitration.”

{¶37} The party complaining of the costs of arbitration bears the burden of

showing the likelihood of incurring such costs. Felix v. Ganley Chevrolet Inc., 8th

Dist. Cuyahoga Nos. 86990 and 86991, 2006-Ohio-4500, ¶ 21. The mere “risk” that a

party will be saddled with prohibitive cost is too speculative to justify the invalidation of

an arbitration agreement. Taylor Bldg. Corp. of Am., 117 Ohio St.3d 352, at ¶ 57.
 {¶38} Here, Robinson’s assertion that he “may end up spending a considerably

higher amount of costs and fees in arbitration” is too speculative to support the claim of

unconscionability. Id. Further, Robinson’s claim that the costs of arbitration are

higher than in the judicial forum was insufficient to demonstrate that the cost of

arbitration would operate to deter him or other similarly situated individuals from seeking

to vindicate his statutory rights through arbitration.

{¶39} Further, the evidence presented herein concerning arbitration filing

appears to place a greater cost burden upon the employer, and there is no basis upon

which we can conclude that the arbitration costs and fees are prohibitive, unreasonable, or

unfair as applied to Robinson, or that Robinson has been denied the opportunity for a

hearing of his claims due to the costs. Accord Felix, 2006-Ohio-4500, at ¶ 21.

B. Procedural Unconscionability

{¶40} Robinson next asserts that the arbitration agreement is procedurally

unconscionable because it was drafted by Nick Mayer Ford and was not explained to

Robinson. This court rejected similar claims in Pruitt v. Strong Style Fitness, 8th Dist.

Cuyahoga No. 96332, 2011-Ohio-5272, and stated:

immediately preceding Pruitt’s signature is a paragraph in bold type stating
that Pruitt read and understood the terms of the rules and regulations prior
to signing. At that point, Pruitt was free to walk away from the contract if
he did not like the terms proposed by Strong Style. See Wallace v. Ganley
Auto Group, 8th Dist. Cuyahoga No. 95081, 2011-Ohio-2909[.]

Id. at ¶ 18. Accord Taylor Bldg. Corps. of Am. at ¶ 47. Accord Butcher, 8th Dist.

Cuyahoga No. 81593, 2003-Ohio-1734, at ¶ 35.
 {¶41} In accordance with all of the foregoing, the assigned error is without

merit.

{¶42} Judgment is affirmed.

It is ordered that appellee recover of appellant costs herein taxed. The court

finds there were reasonable grounds for this appeal. It is ordered that a special mandate

issue out of this court directing the common pleas court to carry this judgment into

execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of

the Rules of Appellate Procedure

PATRICIA ANN BLACKMON, JUDGE

TIM McCORMACK, P.J., and
MELODY J. STEWART, J., CONCUR