Florida Appellate Court Inadvertently Exemplifies Farce of Arbitration

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A Florida appellate court recently held that even though a vulnerable, elderly woman “could not possibly have understood” an arbitration clause, that fact had no bearing on the clause’s enforceability. On that basis, the Second District Court of Appeal reversed a trial court’s refusal to enforce an arbitration agreement between a 92-year-old woman with a fourth-grade education and her nursing home. See Spring Lake NC, LLC v. Holloway, No. 2D12-2140 (Fla. Dist. Ct. App. Feb. 1, 2013).

The plaintiff, Jessie V. Holloway (now deceased), had a history of memory problems and was documented to have been “increasingly confused” at the time she moved into Spring Lake Rehabilitation Center. Upon her admission to the nursing home, Ms. Holloway was asked to sign an assortment of forms that included an arbitration clause. See slip op. at 2. The Florida courts thus faced the question as to whether the plaintiff’s signature constituted consent to the at-issue arbitration clause. Despite the U.S. Supreme Court’s demanding standard applied to corporations when their consent to classwide arbitration is being determined, the Florida appellate court took a laissez-faire view of consent in this instance: “We have little doubt that the trial court correctly assessed Ms. Holloway’s ability to understand these documents. For better or worse, her limited abilities are not a basis to prevent the enforceability of this contract.” Slip op at 2.

With a momentary flash of nostalgia, the appellate court noted that “[t]here was a time when most contracts were individually negotiated and handwritten. In that period, perhaps the law could adequately describe a mutual agreement as a ‘meeting of the minds’ between the parties.” Slip op. at 4. However, echoing Justice Scalia’s aside in AT&T Wireless v. Concepcion to the effect that virtually all contracts in the modern, enlightened society are adhesion contracts, the Florida court made a pronouncement: “Our modern economy simply could not function if a ‘meeting of the minds’ required individualized understanding of all aspects of the typical standardized contract that is now signed without any expectation that the terms will actually be negotiated between the parties.” Slip op. at 4.

The opinion’s ultimate conclusion: “[T]he law must address abuses in standardized contracts by rules other than the ‘meeting of the minds.’” Slip op. at 4. No word yet on whether law school contracts casebooks are being revised accordingly.