Fl–carrollwood Care Llc v. Gordon

• Decision Date: 28 September 2011
• Docket Number: No. 2D10–5751.,2D10–5751.
• Citation: 72 So.3d 162
• Parties: FL–CARROLLWOOD CARE, LLC, a/k/a FL–Carrollwood Care, LLC; Senior Health Management–Gold Coast, LLC; Dan Davis; Senior Health Management, LLC; Rick L. Knight a/k/a Richard Leon Knight; and Carla H. Russo a/k/a Carla Hughes Russo (as to Carrollwood Care Center), Appellants,v.Patricia Ann GORDON, as Personal Representative of the Estate of Robert Dixon Gordon, Sr., Deceased, Appellee.
• Court: Florida District Court of Appeals

72 So.3d 162

FL–CARROLLWOOD CARE, LLC, a/k/a FL–Carrollwood Care, LLC; Senior Health Management–Gold Coast, LLC; Dan Davis; Senior Health Management, LLC; Rick L. Knight a/k/a Richard Leon Knight; and Carla H. Russo a/k/a Carla Hughes Russo (as to Carrollwood Care Center), Appellants,

v.Patricia Ann GORDON, as Personal Representative of the Estate of Robert Dixon Gordon, Sr., Deceased, Appellee.

No. 2D10–5751.

District Court of Appeal of Florida, Second District.

Aug. 5, 2011.Rehearing Denied Sept. 28, 2011.

George M. Vinci and Amy L. Christiansen of Spector Gadon & Rosen, LLP, St. Petersburg, for Appellants.Isaac R. Ruiz–Carus and A. Lance Reins of Wilkes & McHugh, P.A., Tampa, for Appellee.VILLANTI, Judge.

FL–Carrollwood Care Center, LLC; Senior Health Management–Gold Coast, LLC; Dan Davis; Senior Health Management, LLC; Rick L. Knight; and Carla H. Russo (collectively “Carrollwood Care”) challenge the trial court's denial of their motion to compel arbitration. We reverse the trial court's order and remand the case for arbitration.

This is the second time this case is before this court. The underlying lawsuit stems from Robert Dixon Gordon's stay at a Carrollwood Care facility for short-term rehabilitation following amputation of a toe. Mr. Gordon entered the facility on October 31, 2007. On November 1, 2007, he signed admissions-related paperwork which included an arbitration agreement. Mr. Gordon's Estate subsequently sued Carrollwood Care alleging negligence and violations of chapter 400, Florida Statutes. Carrollwood Care moved to compel arbitration pursuant to the agreement signed by Mr. Gordon. The Estate responded that no valid arbitration agreement existed because Mr. Gordon lacked the necessary mental capacity to enter into a contract when he signed the agreement. Alternatively, the Estate argued that even if Mr. Gordon had the mental capacity to enter into a valid contract, the arbitration provision was unconscionable and, therefore, unenforceable.

In response to the Estate's claims, Carrollwood Care requested an evidentiary hearing to address the issue of Mr. Gordon's mental capacity. The trial court denied the request for an evidentiary hearing, but nonetheless was persuaded by the Estate's incompetence argument, and entered an order denying arbitration on that sole basis. Having ruled on the Estate's first argument, the trial court did not address the unconscionability argument.¹ On appeal, after concluding that an evidentiary hearing was necessary to determine whether Mr. Gordon had the requisite mental capacity to enter into the arbitration agreement, this court reversed the trial court's order and remanded the case for further proceedings. See FL–Carrollwood Care Ctr., LLC v. Estate of Gordon ex rel. Gordon, 34 So.3d 804, 806 (Fla. 2d DCA 2010). Importantly, our prior opinion did not address the Estate's unconscionability argument, which had not specifically been ruled upon below.

At an evidentiary hearing after remand, the Estate made the same two arguments it had made previously. After considering the evidence, the trial court concluded that the Estate had not shown that Mr. Gordon lacked mental capacity at the time he signed the arbitration agreement.² Nevertheless, relying on Woebse v. Health Care & Retirement Corp. of America, 977 So.2d 630 (Fla. 2d DCA 2008), the court concluded that the arbitration agreement was unconscionable and denied arbitration. This appeal followed.

Initially, we reject Carollwood Care's argument that the trial court exceeded this court's mandate when it considered the Estate's unconscionability argument on remand. Carrollwood Care argues that this court's mandate limited the trial court to deciding only whether Mr. Gordon had mental capacity when he signed the arbitration agreement. We agree with the Estate's response that the trial court properly considered the unconscionability argument because that alternative argument was presented to the trial court but never decided before the first appeal.

Although a trial court lacks authority to deviate from the terms of the appellate court's instructions on remand, White Sands, Inc. v. Sea Club V. Condo. Ass'n, 591 So.2d 286, 287 (Fla. 2d DCA 1991), in this case the trial court's first order had not ruled on the Estate's unconscionability argument. Therefore, absent some unequivocal direction to the contrary in the mandate, on remand the trial court still had authority to consider and decide that issue. See Two M Dev. Corp. v. Mikos, 578 So.2d 829, 830–31 (Fla. 2d DCA 1991) (explaining that trial court did not consider a particular issue in the original proceeding when its ruling on a different issue rendered the second issue moot; thus, the appellate court did not consider the issue in the first appeal and the trial court could consider it on remand); see also Harbour Club Condo. No. Three, Inc. v. Sauder, 380 So.2d 449, 450 (Fla. 2d DCA 1979) (holding that mandate did not preclude the trial court from considering unconscionability argument on remand because that issue had not been decided by the trial court nor considered by this court in the first appeal). However, even though the trial court had authority to consider the unconscionability argument on remand, we must nevertheless reverse its conclusion on the merits because the arbitration agreement was not shown to be unconscionable.

On appeal, we accept the trial court's factual findings if they are supported by competent, substantial evidence, but we review de novo the court's construction of the arbitration provision and the application of the law to the facts. Woebse, 977 So.2d at 632. To succeed in an unconscionability argument, the Estate had to show both procedural and substantive unconscionability. Bland ex rel. Coker v. Health Care & Ret. Corp. of Am., 927 So.2d 252, 256 (Fla. 2d DCA 2006). However, this court assesses procedural and substantive unconscionability independently. Id. at 257.

Procedural unconscionability relates to the manner in which the contract was made and involves issues such as the parties' relative bargaining power and their ability to know and understand disputed contract terms. Id. at 256. A court can also find a contract unconscionable if important terms are hidden in fine print or if the contract reflects an absence of meaningful choice on the part of the consumer. See Orkin Exterminating Co. v. Petsch, 872 So.2d 259, 265 (Fla. 2d DCA 2004). On the other hand, substantive unconscionability considers whether the contract terms themselves are so outrageously unfair as to shock the judicial conscience. Bland, 927 So.2d at 256. “A substantively unconscionable contract is one that ‘no man in his senses and not under delusion would make on the one hand, and ... no honest and fair man would accept on the other.’ ” Id. (quoting Belcher v. Kier, 558 So.2d 1039, 1044 Fla. 2d DCA 1990)). In this case, we must conclude that the arbitration agreement was not substantively unconscionable.³

Here, the Estate argues that limitations on punitive damages, noneconomic damages, and discovery ⁴ render the arbitration agreement substantively unconscionable. We disagree. First, we note that the arbitration agreement in this case does not place any limitations on an award of punitive damages. The agreement is silent as to punitive damages but provides that the arbitration award shall be consistent with Florida law “except as otherwise stated in this Agreement.” Nevertheless, the Estate initially argues that the agreement bars punitive damages because in Complete Interiors, Inc. v. Behan, 558 So.2d 48, 51 (Fla. 5th DCA 1990), the Fifth District held that an arbitrator cannot award punitive damages when the parties' agreement does not expressly provide for such an award.

This court has explained that Behan does not apply when the substantive law at issue allows an award of punitive damages. See, e.g., Reeves v. Ace Cash Express, Inc., 937 So.2d 1136, 1138 (Fla. 2d DCA 2006); Morton v. Polivchak, 931 So.2d 935, 940 (Fla. 2d DCA 2006) (“Polivchak's contention that punitive damages may not be awarded in an arbitration proceeding unless expressly authorized by the arbitration agreement ... is lacking in merit.... The rule the court stated in Behan ... was applied in a context where punitive damages ordinarily are not available.”). Here, the arbitration agreement does not expressly prohibit an award of punitive damages, the agreement requires the arbitrator to follow Florida law, and the substantive law of Florida allows punitive damages. See §§ 400.023(1), .0237, .0238; 768.72, Fla. Stat. (2007); Reeves, 937 So.2d at 1138 (noting that agreement required the arbitrator to follow Florida law). Therefore, there is no limitation on punitive damages that could make the arbitration agreement substantively unconscionable on that basis.⁵

The Estate's and the trial court's reliance on Woebse is therefore misplaced because the arbitration agreement in that case expressly barred a punitive damages award. 977 So.2d at 635. The same is true of the Estate's reliance on Romano ex rel. Romano v. Manor Care, Inc., 861 So.2d 59, 61–63 (Fla. 4th DCA 2003).

Other cases relied upon by the Estate are likewise inapplicable because they found a limitation on punitive damages void as contrary to public policy. See, e.g., SA–PG–Ocala, LLC v. Stokes, 935 So.2d 1242, 1242 (Fla. 5th DCA 2006); Lacey v. Healthcare & Ret. Corp. of Am., 918...