Covenant Health Rehab of Picayune, L.P., et al. v. Brown, et al.
| Docket Number: | 2005-CA-02220-SCT | |
| Supreme Court: | Opinion Link Opinion Date: 02-22-2007 Opinion Author: SMITH, C.J. Holding: AFFIRMED IN PART; REVERSED AND REMANDED IN PART |
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| Additional Case Information: |
Topic: Contract - Arbitration - Procedural unconscionability - Substantive unconscionability Judge(s) Concurring: COBB, P.J., EASLEY, CARLSON AND DICKINSON, JJ. Judge(s) Concurring Separately: WALLER, P.J. Dissenting Author : DIAZ, J. RANDOLPH, J. DISSENTS IN PART JOINED BY WALLER, P.J., AND IN PART BY DIAZ, J. Dissent Joined By : GRAVES, J. Concur in Part, Dissent in Part 1: Randolph, J. Concur in Part, Dissent in Part Joined By 1: Joined by Waller, P.J., and in Part by Diaz, J. Procedural History: Bench Trial Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 10-24-2005 Appealed from: PEARL RIVER COUNTY CIRCUIT COURT Judge: R. I. Prichard, III Disposition: Trial court struck several clauses in the admissions agreement inlcuding the arbitration clause finding it unconscionable Case Number: 2005-0150 |
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| Party Name: | Attorney Name: | |||
| Appellant: | COVENANT HEALTH REHAB OF PICAYUNE,
L.P., ITS SUCCESSOR AND INTEREST OF
PICAYUNE PARTNERS, L.P., d/b/a PICAYUNE
CONVALESCENT CENTER; COVENANT DOVE,
INC.; AND KERI LADNER |
PAUL HOBART KIMBLE
JOHN L. MAXEY, II |
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| Appellee: | BARBARA N. BROWN, MARGARET GRACE AND SHARON GOSS ON BEHALF OF THE WRONGFUL DEATH BENEFICIARIES OF BERNICE BROWN | WOODROW W. PRINGLE, III |
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| Topic: | Contract - Arbitration - Procedural unconscionability - Substantive unconscionability |
| Summary of the Facts: | Barbara Brown, Sharon Goss, and Margaret Grace, as administrators of the estate of their mother Bernice Brown, filed a complaint alleging that the decedent had been grossly neglected while a resident at Picayune Convalescent Center and that the center’s negligence was the direct and proximate cause of Brown’s death. The defendants filed a motion to compel arbitration, pursuant to the arbitration provision in the admissions agreement signed by the decedent. The plaintiffs filed a motion to declare the admissions agreement unconscionable and void. The court granted the plaintiffs’ motion, finding the arbitration provision substantively unconscionable and striking all provisions related to arbitration or the limitation of remedies in the admissions agreement. The defendants appeal. |
| Summary of Opinion Analysis: | Issue 1: Procedural unconscionability The plaintiffs argue that the admissions agreement is procedurally unconscionable because Brown was incompetent and incapable of entering into a contract, and Sharon Goss, signing as a responsible party, had no authority to bind Brown. Seeing that Brown was incapacitated by virtue of admission by her representatives and corroboration by her admitting physician, she was capable legally of having her decisions made by a surrogate. Her adult daughter, Goss, was an appropriate member of the classes under section 41-41-211 from which a surrogate could be drawn, and thus, Goss could contractually bind Brown in matters of health care. Goss argues that she signed the agreement in a manner that was not voluntary and not knowing, since the admissions agreement was one of adhesion, the print was inconspicuous, and she did not understand the legal terms. In Vicksburg Partners, L.P. v. Stephens, 911 So. 2d 507 (Miss. 2005), the court found that there was no procedural unconscionability. The facts in that case, including the location and format of the arbitration provision in the agreement, is identical to the provision in this case. Therefore, the trial court in this case correctly found no procedural unconscionability. Issue 2: Substantive unconscionability For a per se finding of substantive unconscionability, the contract at issue must by its very language significantly alter the legal rights of the parties involved and severely abridge the damages which they may obtain. One of the sections in the agreement at issue enforces the contract entered into by the decedent against her heirs beyond her death. Arbitration agreements are not invalidated by the death of the signatory and may be binding on successors and heirs if provided in the agreement. Therefore, the trial court clearly erred in striking this provision. The trial court also struck the clauses concerning limited liability and punitive damages. The sections creating a limitation on liability and waiving punitive damages are unenforceable and were properly stricken by the trial court from the admissions agreement. The “grievance resolution process” as laid out in the agreement is also unconscionable. The section requiring the resident to pay all costs for enforcement of the agreement if the resident avoids or challenges either the grievance resolution process or an award therefrom was also properly stricken by the court. A section of the contract prohibits legal action by a resident “more than one year following the happening of the event giving rise to [the] complaint, claim, or grievance.” A contractually created time limitation on suits will not be enforced. Modifications to the statute of limitations cannot be accomplished by contract, and any attempt to do so will be void. The section waiving the right of all parties to a jury trial is not one-sided. Because the parties can agree to the means of dispute resolution prior to a dispute, the trial court erred in striking this section. The remainder of the contract without the unconscionable clause is binding. |
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