Broemmer v. Otto

• Decision Date: 09 May 1991
• Docket Number: CA-CV,No. 1,1
• Citation: 169 Ariz. 543,821 P.2d 204
• Parties: Melinda Kay BROEMMER, Plaintiff-Appellant, v. Steven R. OTTO, M.D., and Jane Doe Otto, individually and as husband and wife; Abortion Services of Phoenix, Ltd., an Arizona corporation, Defendants-Appellees. 89-249.
• Court: Arizona Court of Appeals

Page 204

821 P.2d 204

169 Ariz. 543

Melinda Kay BROEMMER, Plaintiff-Appellant, v. Steven R. OTTO, M.D., and Jane Doe Otto, individually and as husband and wife; Abortion Services of Phoenix, Ltd., an Arizona corporation, Defendants-Appellees.

No. 1 CA-CV 89-249.

Court of Appeals of Arizona Division 1, Department C.

May 9, 1991.

Review Granted Dec. 19, 1991.

[169 Ariz. 544] Fogel and Lamber by Dennis M. Lamber and Kenneth J. Love, Phoenix, for plaintiff-appellant.

Weyl, Guyer, Macban & Olson by A. Craig Blakey, II and J. Jeff Bouma, Phoenix, for Dr. Steven R. Otto.

Snell & Wilmer by Barry D. Halpern, John C. West, Bob J. McCullough and Robert H. Oberbillig, Phoenix, for Abortion Services of Phoenix, Ltd.

OPINION

GERBER, Judge.

This appeal involves an arbitration agreement between Melinda Broemmer and Abortion Services of Phoenix, Ltd. (ASP). The primary issue is whether the latter's standardized contract is an adhesion contract meeting the reasonable expectations of the parties. We find that the arbitration agreement is enforceable and conclude that the trial court properly dismissed the lawsuit.

FACTS

After learning from an Iowa physician that she was pregnant, Broemmer decided to terminate the pregnancy. Her mother located a physician in Phoenix to perform the abortion. ASP indicated it could perform the procedure.

When Broemmer arrived at ASP for her initial appointment, she completed and signed a medical history form, a consent to operation and an agreement to arbitrate. It took her approximately five minutes to complete the three forms, which she now claims she did not recall or understand. After signing the forms, she underwent a cervical dilation and a sonogram. The next morning Steven M. Otto, M.D. performed the abortion.

The arbitration agreement is a single page document which states at the top, "PLEASE READ THIS CONTRACT CAREFULLY AS IT EFFECTS [sic] YOUR LEGAL RIGHTS, AGREEMENT TO ARBITRATE" in large bold letters. The document contains a paragraph identifying the parties to the contract, with blank spaces for the name of the patient and the date. Following this paragraph are four short paragraphs setting out the consideration and mutuality of the obligation and the terms of the agreement providing:

1. In the event any dispute arises between the Parties as a result of the fees and/or services provided by Doctor the Parties hereby mutually agree that any such dispute shall be settled by binding arbitration in the City of Phoenix in accordance with the rules then prevailing of the American Arbitration Association (AAA). The Parties further agree that any arbitrators appointed by the AAA shall be licensed medical doctors who specialize in obstetrics/gynecology.

After the procedure, Broemmer filed a medical malpractice claim against Otto and ASP alleging personal injuries as a result of the abortion. ASP, later joined by Otto, filed a motion to dismiss for lack of subject matter jurisdiction, or alternatively, to compel arbitration. The trial court granted the motion to dismiss.

Broemmer then filed a motion for relief from the judgment under Rule 60(c), Arizona Rules of Civil Procedure. She alleged that the court should have compelled arbitration and stayed the proceedings. The trial court denied her motion. Broemmer appeals from the judgment and the denial of her Rule 60 motion.

ISSUES

Broemmer challenges the trial court's order of dismissal claiming: (1) the arbitration agreement is an adhesion contract falling short of her reasonable expectations; (2) the arbitration agreement is unconscionable; and (3) Otto is not a party to the arbitration agreement. She also contends that the trial court violated A.R.S. § 12-1502 by failing to stay the suit pending arbitration.

ARBITRATION AGREEMENTS

This state has adopted the Uniform Arbitration Act which provides in A.R.S. § 12-1501:

A written agreement to submit any existing controversy to arbitration or a written provision in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract.

Arizona courts have expressed broad support for arbitration. See e.g., U.S. Insulation, Inc. v. Hilro Construction Co., 146 Ariz. 250, 258, 705 P.2d 490, 498 (App.1985). Arbitration is a preferred mode of resolution because it is efficient regarding time and finances. Dusold v. Porta-John Corp. 167 Ariz. 358, 807 P.2d 526 (App.1990). The mere inclusion of an arbitration clause in a contract does not favor either party. U.S. Insulation, Inc. v. Hilro Construction Co., 146 Ariz. at 255-256, 705 P.2d at 495-96. Doubts are resolved in favor of arbitration. Payne v. Pennzoil Corp., 138 Ariz. 52, 55-56, 672 P.2d 1322, 1325-26 (App.1983).

Therefore, we look to contract law to determine if this arbitration agreement is enforceable.

ADHESION CONTRACTS

Broemmer contends that she did not knowingly consent to arbitrate any malpractice claim arising from her treatment. She argues that the public policy favoring arbitration cannot displace the need for her voluntary agreement to arbitrate. See Wheeler v. St. Joseph Hospital, 63 Cal.App.3d 345, 133 Cal.Rptr. 775 (1976); Miner v. Walden, 101 Misc.2d 814, 422 N.Y.S.2d 335 (1979). Although she concedes she signed the written agreement to arbitrate, she argues that it is an unenforceable adhesion contract.

Adhesion contracts may be enforced under rules other than ordinary rules of contract law applicable to the standard bargained-for exchange. Darner Motor Sales, Inc. v. Universal Underwriters Insurance Co., 140 Ariz. 383, 393, 682 P.2d 388, 398 (1984). In Gordinier v. Aetna Casualty & Surety Co., 154 Ariz. 266, 742 P.2d 277 (1987), the Arizona Supreme Court described an adhesion contract as a form contract with terms not negotiated, difficult to understand, seldom read nor expected to be read. 154 Ariz. at 271, 742 P.2d at 282, quoting Zuckerman v. Transamerica Ins. Co., 133 Ariz. 139, 144, 650 P.2d 441, 446 (1982). The court stated that adhesive terms generally seek to insure that the drafting party will prevail. Id.

ASP and Otto argue that this agreement is not an adhesion contract because it lacks the main characteristics of an adhesion contract namely, lack of notice and terms protecting the drafting party. They contend that Broemmer had a choice because she could have gone to another health care provider to obtain an abortion. ¹

In Sanchez v. Sirmons, 121 Misc.2d 249, 467 N.Y.S.2d 757 (1983), relied upon by appellees, the court considered the validity of an agreement to arbitrate contained in a lengthy consent to abortion form. The court refused to enforce the agreement but rejected the contention that it was an adhesion contract:

The essence of an adhesion contract is that it is offered on a take it or leave it basis to a consumer who has no realistic bargaining strength and cannot obtain the desired services or goods elsewhere without consenting to the identical contract terms. (K.D. v. Educational Testing Service, 87 Misc.2d 657, 662, 386 N.Y.S.2d 747). That is not the case here. The petitioner, not confronted with a medical emergency, could have obtained an elective abortion elsewhere at countless other health facilities in the metropolitan area without being compelled to arbitrate any alleged malpractice claim arising from its performance.

121 Misc.2d at 252, 467 N.Y.S.2d at 759.

Not all courts presented with form health care agreements drafted by the caregiver have considered the existence of alternative sources of care a determinative factor. In Obstetrics and Gynecologists v. Pepper, 101 Nev. 105, 693 P.2d 1259 (1985), the Nevada Supreme Court found that an arbitration agreement handed to a patient at a medical clinic as a condition for services was an adhesion contract because the patient was not offered a realistic opportunity to bargain for other terms. The opinion does not discuss the patient's options to go to other clinics.

Similarly, other courts have found that a hospital admission form containing an arbitration clause constitutes an adhesion contract because of the patient's inability to choose other providers. ² Wheeler v. St. Joseph Hospital, 63 Cal.App.3d at 356, 133 Cal.Rptr. at 783.

ASP and Otto correctly point out the absence of two characteristics of the classic adhesion contract. The arbitration agreement is not hidden in small print in boilerplate language in a lengthy document. Further, this arbitration provision is not favorable to the drafting party. See U.S. Insulation, Inc. v. Hilro Constr. Co., 146 Ariz. at 255-56, 705 P.2d at 495-96. However, neither Darner, Gordinier, nor the authorities which they cite imply that all characteristics must be present for a contract to be adhesive.

There is no evidence as to whether ASP would have performed the surgery if Broemmer refused to sign all three papers given her. However, Broemmer's uncontradicted affidavit states that she was given two standardized contracts and a medical history form and told to fill them out prior to meeting with a physician or nurse. She was not told that she was free to reject any of the documents. She merely believed that she had to sign the forms before she could receive medical services.

When an individual believes she needs immediate medical attention, she is unlikely to comparison shop for contract terms that relate to potential medical malpractice claims. If a medical entity uses a standardized form which contains an arbitration clause, and offers it to patients on a take it or leave it basis, the clause constitutes a contract of adhesion. Henderson, Contractual Problems In the Enforcement of Agreements To Arbitrate Medical Malpractice, 58 Va.L.Rev. 947 (1972). ASP's standardized contract thus appears to be an adhesion contract. However, that determination alone does not render it unenforceable.

An adhesion contract is enforceable if...