Osprey Health Care Ctr., LLC v. Pascazi

• Decision Date: 13 October 2021
• Docket Number: No. 2D19-4787,2D19-4787
• Citation: 329 So.3d 177
• Parties: OSPREY HEALTH CARE CENTER, LLC; a Florida limited liability company; Enrique de la Piedra; and Randy Lee Sloan, Appellants, v. Doris H. PASCAZI, BY AND THROUGH Sharon Ann OUTWATER, Attorney-in-Fact, Appellee.
• Court: Florida District Court of Appeals

329 So.3d 177

OSPREY HEALTH CARE CENTER, LLC; a Florida limited liability company; Enrique de la Piedra; and Randy Lee Sloan, Appellants,

v.Doris H. PASCAZI, BY AND THROUGH Sharon Ann OUTWATER, Attorney-in-Fact, Appellee.

No. 2D19-4787

District Court of Appeal of Florida, Second District.

October 13, 2021

Thomas A. Valdez and Vilma Martinez of Quintairos, Prieto, Wood & Boyer, P.A., Tampa; and Robin N. Khanal and Vanessa A. Braga of Quintairos, Prieto, Wood & Boyer, P.A., Orlando, for Appellants.

Megan M. Hunter, Megan Gisclar Colter, Lisa M. Tanaka, and Donna K. Hanes of Wilkes & Associates, P.A., Tampa, for Appellee.

LABRIT, Judge.

Appellants Osprey Health Care Center, LLC, Enrique de la Piedra, and Randy Lee Sloan (collectively, Osprey) appeal an order denying their motion to compel arbitration of claims that Appellee Doris H. Pascazi, by and through Sharon Outwater as attorney-in-fact, asserted against Osprey.¹ We reverse because the trial court erroneously concluded that the arbitration agreement is unconscionable.

Background

On March 20, 2015, Mrs. Pascazi was admitted to Osprey Health Care Center, a licensed assisted living facility. Sharon Outwater was authorized to act as Mrs. Pascazi's attorney-in-fact and signed several documents for Mrs. Pascazi's admission to Osprey Health Care Center, including a document entitled "Mediation and Arbitration Agreement," which this opinion refers to as the "arbitration agreement" or the "agreement."

Mrs. Pascazi left Osprey Health Care Center in January 2017; a year later, she sued Osprey and alleged claims for negligence, breach of fiduciary duty, and violations of section 415.1111, Florida Statutes (2016). Osprey moved to compel arbitration. Mrs. Pascazi opposed Osprey's motion, maintaining that the arbitration agreement was (1) invalid because it lacked specific terms regarding arbitration rules and procedures; (2) void as against public policy principally because it contained a provision impermissibly shortening the applicable statute of limitations; and (3) procedurally and substantively unconscionable for myriad reasons, including those underlying Mrs. Pascazi's "missing terms" and voidness arguments. In the vernacular, Mrs. Pascazi took a "spaghetti bowl" approach to argue that numerous issues rendered the agreement invalid, unconscionable, and void.

After holding two hearings on Osprey's motion, the trial court orally ruled that the agreement was unconscionable and denied Osprey's motion to compel arbitration in an unelaborated order. Rather than make any specific findings, the court announced that it simply would "adopt" Mrs. Pascazi's "argument on all the points that were argued" as to substantive unconscionability. The court stated that—as part of its substantive unconscionability determination—it "adopted" Mrs. Pascazi's position that the shortened statute of limitations provision rendered the agreement void as against public policy. In response to Osprey's argument that findings of both procedural and substantive unconscionability were required, the court stated:

I don't know to what degree I'm going to find there was procedural unconscionability, but I think that there is enough here for me to do the sliding scale^{[2 ]} and to tack on substantive unconscionability of this contract. So in the totality of the circumstances, I'm going to also rule that there was procedural unconscionability in this case.

This appeal ensued.

Analysis

Courts consider three elements in determining whether to compel arbitration of a dispute: "(1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration was waived." Seifert v. U.S. Home Corp. , 750 So. 2d 633, 636 (Fla. 1999). This case concerns only the first question because the parties agreed that an arbitrable issue exists and the right to arbitration had not been waived.

I. Standard of Review and Applicable Principles of Construction

A trial court's decision on the validity of an arbitration agreement is a matter of contract interpretation that is reviewed de novo. Premier Real Est. Holdings, LLC v. Butch , 24 So. 3d 708, 709–10 (Fla. 4th DCA 2009).

A party seeking to avoid enforcement of an arbitration agreement is burdened to demonstrate its invalidity. Spring Lake NC, LLC v. Figueroa , 104 So. 3d 1211, 1214 (Fla. 2d DCA 2012). Because arbitration is "a favored means of dispute resolution," courts are "required to indulge every reasonable presumption in favor of arbitration." K.P. Meiring Constr., Inc. v. Northbay I & E, Inc. , 761 So. 2d 1221, 1223 (Fla. 2d DCA 2000).

"The intent of the parties ... as manifested in the plain language of the arbitration provision and contract itself, determines whether a dispute is subject to arbitration." Jackson v. Shakespeare Found., Inc. , 108 So. 3d 587, 593 (Fla. 2013). Like any other contract, an arbitration provision should be read "in the context of the entire agreement ... in a way that gives effect to all of the contract's provisions." Retreat at Port of the Islands, LLC v. Port of the Islands Resort Hotel Condo. Ass'n, 181 So. 3d 531, 533 (Fla. 2d DCA 2015) (citation omitted). Ambiguities in arbitration agreements generally should be resolved in favor of arbitration. Jackson , 108 So. 3d at 593.

II. Unconscionability

Osprey argues that the trial court erred reversibly by denying its motion to compel arbitration on the ground that the agreement is unconscionable. We agree.

Unconscionability is a defense to enforcement of an arbitration agreement and is based on the common law concept that a court may refuse to enforce a contract where it would be inequitable to do so. See Basulto v. Hialeah Auto. , 141 So. 3d 1145, 1157 (Fla. 2014). Because Mrs. Pascazi sought to avoid arbitration on unconscionability grounds, she was burdened to "establish that the arbitration agreement is both procedurally and substantively unconscionable." Id. at 1158 ; see Zephyr Haven Health & Rehab Ctr., Inc. v. Hardin ex rel. Hardin , 122 So. 3d 916, 920 (Fla. 2d DCA 2013) ("Where the party alleging unconscionability establishes only one of the two prongs, the claim fails.").

Procedural unconscionability "relates to the manner in which the contract was entered" and is described as "[t]he absence of meaningful choice when entering into the contract." Basulto , 141 So. 3d at 1157 ; accord Fla. Holdings III, LLC v. Duerst , 198 So. 3d 834, 838 (Fla. 2d DCA 2016) ("Procedural unconscionability ... asks ‘whether the complaining party had a meaningful choice at the time the contract was signed.’ " (quoting Brea Sarasota, LLC v. Bickel , 95 So. 3d 1015, 1017 (Fla. 2d DCA 2012) )). Substantive unconscionability "requires assessment of the contract's terms to ‘determine whether they are so outrageously unfair as to shock the judicial conscience.’ " Zephyr Haven , 122 So. 3d at 920 (quoting Gainesville Health Care Ctr., Inc. v. Weston , 857 So. 2d 278, 284–85 (Fla. 1st DCA 2003) ).

The trial court made no specific findings on procedural unconscionability. Although it initially questioned Mrs. Pascazi's procedural unconscionability theories,³ the court ultimately found procedural unconscionability based on the "totality of the circumstances"—which circumstances the court wholly failed to identify.⁴ The court apparently accepted Mrs. Pascazi's suggestion that her substantive unconscionability challenges were within the "totality of the circumstances" and could buttress a finding of procedural unconscionability.

This approach was plainly erroneous. A party seeking to avoid arbitration on unconscionability grounds must demonstrate both procedural and substantive unconscionability, and the two types of unconscionability are distinct.⁵ The "totality of the circumstances" on which the trial court properly could rely to find procedural unconscionability encompassed only matters pertinent to execution of the arbitration agreement, not challenges to its substance. See Duerst , 198 So. 3d at 839–42 (collecting cases and discussing examples of procedural unconscionability); see also Brea Sarasota, LLC , 95 So. 3d at 1017–18 ; Hobby Lobby Stores, Inc. v. Cole , 287 So. 3d 1272, 1275–76 (Fla. 5th DCA 2020).

As Osprey correctly argues, this record doesn't support a finding of procedural unconscionability. Confined to its proper boundaries, Mrs. Pascazi's procedural unconscionability claim is based on the facts that Ms. Outwater felt rushed during the admission meeting with Osprey because she had a "plane to catch," she didn't ask any questions of Osprey Health Care Center's admissions personnel, and she merely skimmed the documents before signing them, so she didn't fully understand the import of the agreement. Ms. Outwater received full copies of all documents, there was no evidence that she was either prevented or discouraged from reading them before she signed them, and there is no evidence that she was coerced or otherwise pressured to sign the documents.

These facts are legally insufficient to establish procedural unconscionability. See Duerst , 198 So. 3d at 839–40 (reversing finding of procedural unconscionability where party opposing arbitration admitted she had not read agreement and contended that (1) she had no legal background, (2) the documents had not been explained to her, (3) she was asked to sign them in a "hurried" process that lasted only ten minutes, and (4) she believed she had to sign the documents in order for her mother to receive treatment); Bickel , 95 So. 3d at 1017 ("A party to a contract is not ‘permitted to avoid the consequences of a contract freely entered into simply because he or she elected not to read and understand its terms before executing it, or because, in retrospect, the bargain turns out to be disadvantageous.’ " (quoting Gainesville Health Care Ctr. , 857 So. 2d at 288 )); Cole , 287 So. 3d at 1276 (finding procedural unconscionability lacking where there was no evidence that proponent of arbitration coerced...