An astonishing arbitration decision in an age of astonishing arbitration decisions

Why do courts enforce mandatory arbitration clauses? Because the contracting parties agreed to them, the courts tell us.

Not this time. A Florida intermediate appellate court held earlier this month that an arbitration clause was enforceable in a wrongful death suit against a rehabilitation center even though Jessie Holloway, the 92-year-old woman who signed the arbitration agreement, "could not possibly have understood what she was signing." Specifically:

When she entered the facility, she
executed a standard resident admission and financial agreement and a
separate arbitration agreement. At the time, she was 92 years old and
had a fourth-grade education. She could not spell well and often had to
sound out words while reading. She had memory problems and was
increasingly confused.

Even though the court had no trouble accepting the trial court's finding that Ms. Holloway couldn't have understood the agreement, the court nonetheless held that "[f]or better or worse,
her limited abilities are not a basis to prevent the enforceability of
this contract," because "[o]ur modern economy simply could not function if a 'meeting of the minds'
required individualized understanding of all aspects of the typical
standardized contract."

The court is thus abandoning any pretense that arbitration must be based on consent and a knowing waiver of rights. Instead, this rule permits forced arbitration to be imposed unilaterally by the more sophisticated party to any contract. And if "[t]he agreements are sufficiently complex that many able-bodied adults
would not fully understand the agreements," well, so much the better for the company imposing the terms, and so much the worse for the elderly patient who forgot to bring her lawyer when she checked in to the rehab center.

The case is Spring Lake v. Holloway, decided by Florida's Second District Court of Appeals.

0 thoughts on “An astonishing arbitration decision in an age of astonishing arbitration decisions

  1. N. Haney says:

    Judges are making these decisions because they are on board with the guys with the most money-power – banksters and their big corporate clients. Guess who they are getting all that money from – us. Some of it by frauding us with engineered financial bubbles, but most of it we are complicit in our greed. All our retirement funds are invested with the same people that we are fighting with our petitions. We want our cake and eat it too. It’s as hard to give up that measly 5-6% interest on your investments as it is to go through the eye of a needle. But when you do the cash flows in the right direction. Even stakes of millionaires and billionaires are eventually slated to be gobbled up by these guys that deal in trillions. We need to stop cooperating with them. You have to stop feeding a fire in order to put it out.

  2. Janet Lachman says:

    Huh? Our economy “just couldn’t function” if people without bargaining power couldn’t be flim-flammed by those who have it? Does this court actually hear itself? Is our economy utterly dependent on fraud and exploitation in order to function?

  3. Stephen Wyman says:

    This is the age of lawyers executing contracts that are overtly extra long and obtuse; would be hard to understand even if one were to be a lawyer.
    It’s called self-perpetuating employment

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