Figueroa v. Thi of New Mexico At Casa Arena Blanca LLC, No. 30,477.

Docket NºNo. 30,477.
Citation306 P.3d 480
Case DateOctober 03, 2012
CourtCourt of Appeals of New Mexico

306 P.3d 480

Didier L. FIGUEROA, Individually, and as Personal Representative for the Estate of Dolores Figueroa, Deceased, Plaintiff–Appellee,
v.
THI OF NEW MEXICO AT CASA ARENA BLANCA LLC, a Foreign Limited Liability Company d/b/a Casa Arena Blanca Nursing Home, Thi of Baltimore, Inc., a Foreign Corporation, John Doe and Jane Doe, Defendants–Appellants.

No. 30,477.

Court of Appeals of New Mexico.

July 18, 2012.
Certiorari Denied, Oct. 3, 2012, No. 33,762.


[306 P.3d 482]


Yenson, Lynn, Allen & Wosick, P.C., Patrick D. Allen, April D. White, Albuquerque, NM, for Appellee.

Johnson, Trent, West & Taylor, LLP, Lori D. Proctor, Houston, TX, for Appellant.

[306 P.3d 483]


OPINION

VIGIL, Judge.

{1} This case requires us to examine whether an arbitration agreement that a nursing home requires to be signed as a condition of admission is substantively unconscionable. Agreeing with the district court that the agreement is unfairly and unreasonably one-sided in favor of the nursing home, we affirm.

I. BACKGROUND

{2} Defendant, THI of New Mexico at Casa Arena Blanca, LLC (THICAB), operates Casa Arena Blanca, a nursing home in Alamogordo, New Mexico. Marlene Urbina sought to admit her mother, Dolores Figueroa, to Casa Arena Blanca in August 2008. Ms. Urbina had been granted a general power of attorney by Ms. Figueroa, upon which she acted during the admissions process. As a condition of Ms. Figueroa's admission to Casa Arena Blanca, Ms. Urbina was required to sign various admission agreements, including an arbitration agreement. The agreement states: “Resident/Representative understands that signing this Agreement to arbitrate is a precondition for medical treatment or admission to the Health Care Center.” It further provides in pertinent part:

In the event of any controversy or dispute between the parties arising out of or relating to Resident's stay at the Health Care Center, the Health Care Center's Admission Agreement, or breach thereof, or relating to the provision of care or services to Resident, including but not limited to any alleged tort, personal injury, negligence, contract, consumer protection, claims under the New Mexico Unfair Practices Act, or other claim; or any federal or state statutory or regulatory claim of any kind; or whether or not there has been a violation of any right or rights granted under State law (collectively “Disputes”), and the parties are unable to resolve such through negotiation, then the parties agree that such Dispute(s) shall be resolved by arbitration, as provided by the National Arbitration Forum Code of Procedure or other such association.

The parties agree that guardianship proceedings, collection and eviction actions initiated by the Health Care Center, any dispute where the amount in controversy is less than Two Thousand Five Hundred Dollars ($2,500.00) will be excluded from binding arbitration and may be filed and litigated in any court which may have jurisdiction over the dispute.

{3} Ms. Figueroa was a resident at Casa Arena Blanca for four months: from her admission on September 2, 2008, to the date of her death, January 18, 2009. After her death, Ms. Figueroa's son, Didier Figueroa (Plaintiff), individually, and as her personal representative, filed a complaint in the district court against Defendant. The complaint contained allegations of: wrongful death; personal injury; negligent hiring, training, and supervision; negligence per se; misrepresentation; violation of the Unfair Practices Act; and loss of consortium. Plaintiff stated that “[d]espite her advanced age, Ms. Figueroa was relatively active at the time of her admission,” but her health “rapidly declined” following her admission to Casa Arena Blanca due to Defendants' failure to provide proper care. Plaintiff further alleged that while residing at Casa Arena Blanca, Ms. Figueroa suffered unsanitary hygiene conditions, numerous avoidable falls and resulting injuries, skin breakdown, urinary tract infections, dehydration, bruises, pain and suffering, mental anguish, humiliation, and wrongful death.

{4} In response to Plaintiff's complaint, Defendant filed a motion to dismiss the lawsuit from district court for lack of subject matter jurisdiction, to compel arbitration, and to stay litigation. Defendant asserted that the causes of action in the complaint were subject to arbitration under the terms of the agreement that Ms. Urbina had signed on behalf of Ms. Figueroa when she was admitted to Casa Arena Blanca.

{5} The district court ruled that the arbitration agreement was unenforceable under Cordova v. World Finance Corporation of New Mexico, in which our Supreme Court held an arbitration agreement that was unfairly and unreasonably one-sided in favor of the drafter was substantively unconscionable

[306 P.3d 484]

and unenforceable. 2009–NMSC–021, ¶ 25, 146 N.M. 256, 208 P.3d 901. The district court noted that the agreement is unreasonably and unfairly one-sided stating: “really this is not a mutual obligation ... the nursing home has, for all practical purposes, excluded almost every kind of case it would bring against the resident or resident family from arbitration but has bound the resident in almost every instance where the resident and his or her family would be suing the nursing home, so I think the Cordova case would be applied in this context to find that the arbitration clause was unenforceable.” 1

{6} Defendant appeals pursuant to NMSA 1978, Section 44–7A–29(a)(1) (2001) (allowing an appeal to be taken from an order denying a motion to compel arbitration). The district court stayed further proceedings pending our decision on appeal.

II. ANALYSIS

{7} Defendant argues: (1) that the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1–6 (2006), preempts our state law that applies a substantive unconscionability analysis to the terms of arbitration agreements; (2) that the agreement was not unfairly and unreasonably one-sided in favor of Defendant, because the district court misinterpreted the meaning and effect of the exemptions from arbitration; and (3) that even if the exemptions from arbitration are substantively unconscionable, the remainder of the arbitration agreement should be severed and enforced, because the parties have bilateral obligations to arbitrate tort claims. We address each argument in turn.

A. Preemption by the Federal Arbitration Act

{8} We agree with Defendant that the FAA applies to its arbitration agreement. See9 U.S.C. §§ 1–2 (stating that the FAA governs all arbitration agreements that involve commerce). The FAA requires that state courts enforce arbitration agreements unless the agreement is otherwise revocable under existing legal or equitable principles. See9 U.S.C. § 2 (“A written provision ... or a contract [to arbitrate] ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”). Accordingly, arbitration agreements must be placed on “equal footing” with other contracts, and are revocable only by “generally applicable contract defenses, such as fraud, duress, or unconscionability,” but not by defenses that single out arbitration agreements or “that derive their meaning from the fact that an agreement to arbitrate is at issue.” Rivera v. Am. Gen.Fin.Servs. Inc., 2011–NMSC–033, ¶ ¶ 16–17, 150 N.M. 398, 259 P.3d 803 (internal quotation marks and citation omitted). Thus, if a state law or judicial doctrine treats arbitration agreements disparately, it is inconsistent with, and preempted by, the FAA and cannot be used to render the arbitration agreement unenforceable. See id.;A T & T Mobility LLC v. Concepcion, 563 U.S. ––––, 131 S.Ct. 1740, 1747–53, 179 L.Ed.2d 742 (2011); Doctor's Assocs., Inc. v. Casarotto, 517 U.S. 681, 686–88, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996). However, if state law governs issues concerning the validity, revocability, and enforceability of contracts generally, that law's application to arbitration agreements is not preempted by the FAA. See Cordova, 2009–NMSC–021, ¶ 37, 146 N.M. 256, 208 P.3d 901 (“ ‘[S]tate law, whether of legislative or judicial origin, is applicable [and does not contravene the FAA] if that law arose to govern issues concerning the validity, revocability, and enforceability of contracts generally.’ ”) (quoting Perry v. Thomas, 482 U.S. 483, 492 n. 9, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987)).

{9} For example, in Fiser v. Dell Computer Corp., the defendant sought to enforce an

[306 P.3d 485]

arbitration agreement that precluded the consumer from bringing a class action against the defendant. 2008–NMSC–046, ¶ 4, 144 N.M. 464, 188 P.3d 1215. In analyzing the defendant's arguments, the Court considered a New Mexico statute providing that any waiver of a consumer's right to a class action in an arbitration agreement was void and unenforceable. Seeid. ¶ 13 (citing NMSA 1978, § 44–7A–1(b)(4)(f) (2001) and § 44–7A–5 (2001)).2 The New Mexico Supreme Court noted that the statute may have been preempted by the FAA because it specifically singled out arbitration agreements, but nevertheless, the Court reasoned that the statute was evidence of New Mexico's strong public policy to provide a procedure for consumers to have a remedy for small claims. See Fiser, 2008–NMSC–046, ¶ 13, 144 N.M. 464, 188 P.3d 1215. Therefore, the Court concluded that the provision waiving the plaintiff's right to a class action in the arbitration agreement was substantively unconscionable and unenforceable as contrary to our state's public policy. Seeid. ¶¶ 13–22. In considering the dictates of the FAA, the Court reasoned that because unconscionability is a doctrine that applies to all contracts under New Mexico law, its holding was not preempted by the FAA. Seeid. ¶ 23 (“Because our invalidation of the ban on class relief rests on the doctrine of unconscionability, a doctrine that exists for the revocation of any contract, the FAA does not preempt our holding.”).

{10} Additionally, in Cordova, in...

To continue reading

Request your trial
31 practice notes
  • Patterson v. Nine Energy Serv., LLC, No. CIV 17-1116 JB/GBW
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • November 29, 2018
    ...of any savings clause. See Reconsideration Motion at 3 (citing Figueroa v. THI of N.M. at Casa Arena Blanca, LLC, 2013-NMCA-077, ¶ 39, 306 P.3d 480, 494 ). Patterson asserts that the Court correctly determined that the injunctive relief provision at issue is substantively unconscionable by ......
  • Patterson v. Nine Energy Serv., LLC, No. CIV 17-1116 JB\GBW
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • November 29, 2018
    ...any savings clause. See Reconsideration Motion at 3 (citing Figueroa v. THI of N.M. at Casa ArenaPage 14 Blanca, LLC, 2013-NMCA-077, ¶ 39, 306 P.3d 480, 494). Patterson asserts that the Court correctly determined that the injunctive relief provision at issue is substantively unconscionable ......
  • Premier Trust of Nev., Inc. v. City of Albuquerque, No. A-1-CA-34784
    • United States
    • New Mexico Court of Appeals of New Mexico
    • October 1, 2020
    ...States Supreme Court decision seems contra." (citation omitted)); Figueroa v. THI of N.M. at Casa Arena Blanca, LLC , 2013-NMCA-077, ¶ 15, 306 P.3d 480 (same). {22} In short, Premier's contention that the district court erred by not applying Penn Central is without merit, and we consequentl......
  • Evangelical Lutheran Good Samaritan Soc'y v. Moreno, No. CIV 16–1355 JB/KS
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • September 29, 2017
    ...from the agreement to arbitrate.’ " Reply at 11 n.6 (quoting Figueroa v. THI of New Mexico at Casa Arena Blanca, LLC, 2013-NMCA-077, ¶ 39, 306 P.3d 480, 494 ). Fourth, the arbitration provision is not procedurally unconscionable, according to Good Samaritan, because the parties are required......
  • Request a trial to view additional results
31 cases
  • Patterson v. Nine Energy Serv., LLC, No. CIV 17-1116 JB/GBW
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • November 29, 2018
    ...of any savings clause. See Reconsideration Motion at 3 (citing Figueroa v. THI of N.M. at Casa Arena Blanca, LLC, 2013-NMCA-077, ¶ 39, 306 P.3d 480, 494 ). Patterson asserts that the Court correctly determined that the injunctive relief provision at issue is substantively unconscionable by ......
  • Patterson v. Nine Energy Serv., LLC, No. CIV 17-1116 JB\GBW
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • November 29, 2018
    ...any savings clause. See Reconsideration Motion at 3 (citing Figueroa v. THI of N.M. at Casa ArenaPage 14 Blanca, LLC, 2013-NMCA-077, ¶ 39, 306 P.3d 480, 494). Patterson asserts that the Court correctly determined that the injunctive relief provision at issue is substantively unconscionable ......
  • Premier Trust of Nev., Inc. v. City of Albuquerque, No. A-1-CA-34784
    • United States
    • New Mexico Court of Appeals of New Mexico
    • October 1, 2020
    ...States Supreme Court decision seems contra." (citation omitted)); Figueroa v. THI of N.M. at Casa Arena Blanca, LLC , 2013-NMCA-077, ¶ 15, 306 P.3d 480 (same). {22} In short, Premier's contention that the district court erred by not applying Penn Central is without merit, and we consequentl......
  • Evangelical Lutheran Good Samaritan Soc'y v. Moreno, No. CIV 16–1355 JB/KS
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • September 29, 2017
    ...from the agreement to arbitrate.’ " Reply at 11 n.6 (quoting Figueroa v. THI of New Mexico at Casa Arena Blanca, LLC, 2013-NMCA-077, ¶ 39, 306 P.3d 480, 494 ). Fourth, the arbitration provision is not procedurally unconscionable, according to Good Samaritan, because the parties are required......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT