Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Gullett v. Kindred Nursing Centers West, L.L.C.

Court of Appeals of Arizona, Second Division

February 15, 2017

Jeffrey Gullett, Special Administrator of the Estate of Winford Gullett, on behalf of the Estate of Winford Gullett, and Jeffrey Gullett, Special Administrator, for and on behalf of Winford Gullett's statutory beneficiaries pursuant to A.R.S. § 12-612(A), Plaintiff/Appellant,
v.
Kindred Nursing Centers West, L.L.C., a Delaware limited liability company, dba Hacienda Rehabilitation and Care Center nka Kindred Nursing and Rehabilitation-Hacienda; Kindred Healthcare Operating, Inc., a Delaware corporation; Kindred Healthcare, Inc., a Delaware corporation; and Theresa Linnane, Administrator, Defendants/Appellees. and Wilkes & McHugh, P.A., Scottsdale By Melanie L. Bossie, Mary Ellen Spiece, and Ernest J. Calderon II Counsel for Plaintiff/Appellant Quintairos, Prieto, Wood & Boyer, P.A., Phoenix By Anthony J. Fernandez, Vincent J. Montell, and Rita J. Bustos Counsel for Defendants/Appellees

         Appeal from the Superior Court in Cochise County No. CV201500087 The Honorable Karl D. Elledge, Judge

         AFFIRMED IN PART; VACATED IN PART AND REMANDED

         COUNSEL

          Law Office of Scott E. Boehm, P.C., Phoenix By Scott E. Boehm and Wilkes & McHugh, P.A., Scottsdale By Melanie L. Bossie, Mary Ellen Spiece, and Ernest J. Calderon II Counsel for Plaintiff/Appellant

          Quintairos, Prieto, Wood & Boyer, P.A., Phoenix By Anthony J. Fernandez, Vincent J. Montell, and Rita J. Bustos Counsel for Defendants/Appellees

          Judge Staring authored the opinion of the Court, in which Presiding Judge Howard and Judge Espinosa concurred.

          OPINION

          STARING, Judge

         ¶1 Jeffrey Gullett appeals the judgment compelling arbitration of his statutory claim for abuse and neglect of his late father Winford Gullett pursuant to Arizona's Adult Protective Services Act (APSA), A.R.S. §§ 46-451 to 46-459. He argues the arbitration agreement is substantively unconscionable and, alternatively, the trial court erred in failing to allow discovery and grant an evidentiary hearing on his claims of procedural unconscionability. For the reasons that follow, we affirm in part, vacate in part and remand for further proceedings.[1]

         Factual and Procedural Background

         ¶2 In January 2013, Winford Gullett was admitted to Hacienda Care and Rehabilitation Center ("Hacienda"). On January 16, he signed an Alternative Dispute Resolution Agreement ("Agreement") that provides all claims arising out of any stay at Hacienda shall be submitted to arbitration. Winford remained at Hacienda until his death on February 21, 2013.

         ¶3 In February 2015, Jeffrey Gullett brought suit against appellee Kindred Nursing Centers West, L.L.C., doing business as Hacienda ("Kindred"), alleging it had abused and neglected Winford in violation of APSA, resulting in his death. [2] Kindred subsequently moved to compel arbitration pursuant to the Agreement. Gullett opposed the motion, claiming the Agreement was substantively unconscionable and discovery was required on the issue of procedural unconscionability.

         ¶4 Following a hearing in October 2015, the trial court granted Kindred's motion to compel arbitration and denied Gullett's request for an evidentiary hearing on the issue of procedural unconscionability. This appeal followed. We have jurisdiction pursuant to A.R.S. § 12-2101(A)(1). See S. Cal. Edison Co. v. Peabody W. Coal Co., 194 Ariz. 47, ¶¶ 16-20, 977 P.2d 769, 774-75 (1999) (order compelling arbitration appealable if certified pursuant to Rule 54(b), Ariz. R. Civ. P.).

         Discussion

         ¶5 Gullett argues the Agreement is substantively unconscionable because it "severely limits discovery, " requires that arbitration be administered by an administrator who "lacks neutrality, " requires the forfeiture of non-waivable remedies, and does not impose mutual obligations on the parties.[3] He further argues the court erred by denying his request for an evidentiary hearing because he is entitled to conduct discovery to develop his claim of procedural unconscionability.

         ¶6 "The validity and enforceability of a contract and arbitration clause are mixed questions of fact and law, subject to de novo review." Estate of DeCamacho ex rel. Guthrie v. La Solana Care & Rehab, Inc., 234 Ariz. 18, 9, 316 P.3d 607, 609 (App. 2014). Pursuant to A.R.S. § 12-3006(A), "[a]n agreement contained in a record to submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable and irrevocable except on a ground that exists at law or in equity for the revocation of the contract." Accordingly, "[a]n arbitration agreement . . . is subject to the same defenses to enforceability as any other contract." Dueñas v. Life Care Ctrs. of Am., Inc., 236 Ariz. 130, ¶ 6, 336 P.3d 763, 768 (App. 2014). Claims of substantive or procedural unconscionability are independent defenses to enforceability. Id. ¶ 7.

         Substantive Unconscionability

         ¶7 "Substantive unconscionability concerns the actual terms of the contract and examines the relative fairness of the obligations assumed." Maxwell v. Fid. Fin. Servs., Inc., 184 Ariz. 82, 89, 907 P.2d 51, 58 (1995). In determining whether a contract is substantively unconscionable, we look to see whether the "contract terms [are] so one-sided as to oppress or unfairly surprise an innocent party, " whether there is "an overall imbalance in the obligations and rights imposed" by the contract, or whether there is a "significant cost-price disparity." Id. "The rules of contract interpretation apply equally in the context of arbitration clauses." Estate of DeCamacho, 234 Ariz. 18, ¶ 15, 316 P.3d at 611; see also City of Cottonwood v. James L. Fann Contracting, Inc., 179 Ariz. 185, 189, 877 P.2d 284, 288 (App. 1994) ("Because of the public policy favoring arbitration, arbitration clauses are construed liberally and any doubts about whether a matter is subject to arbitration are resolved in favor of arbitration.").

         Discovery

         ¶8 Gullett first argues the Agreement is substantively unconscionable "because it so limits discovery (and therefore witnesses) that [he would] be unable to prepare and present his APSA claims." "[Arbitration is appropriate only '[s]o long as the prospective litigant effectively may vindicate' his or her rights in the arbitral forum." Harrington v. Pulte Home Corp., 211 Ariz. 241, ¶ 42, 119 P.3d 1044, 1055 (App. 2005), quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28 (1991) (alteration in Harrington). But, "by agreeing to arbitrate, a party 'trades the procedures and opportunity for review of the courtroom for the simplicity, informality, and expedition of arbitration.'" Gilmer, 500 U.S. at 31, quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985). And, as our courts have consistently explained, "the primary purpose of arbitration is to provide an inexpensive and speedy final disposition of disputes, as an alternative to litigation." Harrington, 211 Ariz. 241, ¶ 42, 119 P.3d at 1055.

         ¶9 Prospective litigants "are at least entitled to discovery sufficient to adequately arbitrate their statutory claim, " Armendariz v. Found. Health Psychcare Servs., Inc., 6 P.3d 669, 684 (Cal. 2000), criticized on other grounds by AT & T Mobility LLC v. Concepcion, 563 U.S. 333, 340, 352 (2011), as part of being able to effectively vindicate their rights, see Gilmer, 500 U.S. at 28. "'[Adequate' discovery does not mean unfettered discovery, " however. Fitz v. NCR Corp., 13 Cal.Rptr.3d 88, 97 (Ct. App. 2004), quoting Mercuro v. Superior Court, 116 Cal.Rptr.2d 671, 683 (Ct. App. 2002). Further, parties may agree to something less than the amount of discovery provided by the rules of civil procedure. See id.

         ¶10 The Agreement provides:

Discovery may be initiated immediately after the Request is filed. The parties shall have the right to engage in discovery consistent with the Arizona Rules of Civil Procedure, subject to any restrictions contained in the applicable statutes, rules, and regulations . . ., and also subject to Rule 3.02 of the [Kindred Healthcare ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.