PETITIONERS BRIEF ON JURISDICTION

Transcription

1 IN THE SUPREME COURT OF FLORIDA SC CASE NO.: L. T. Case No.: 4D AG MANOR CARE, INC.: ) MANOR CARE OF AMERICA, ) INC.; MANORCARE HEALTH ) SERVICES, INC.; NEW ) MANORCARE HEALTH SERVICES, ) INC.; MANORCARE HEALTH ) SERVICES OF BOYNTON BEACH, ) INC.; and MANOR CARE OF BOCA ) RATON, INC. (as to MANORCARE ) HEALTH SERVICES-BOCA RATON) ) ) Defendants/Petitioners. ) ) v. ) ) JOSEPHINE ROMANO, by and ) through LAWRENCE ROMANO ) SR., Plenary Guardian, ) ) Plaintiff/Respondent, ) ) PETITIONERS BRIEF ON JURISDICTION Attorneys for Defendants/Petitioners BETSY E. GALLAGHER FBN: COLE, SCOTT & KISSANE, P.A West Kennedy Blvd., Ste. 750 Tampa, Florida TEL: (813) FAX: (813)

2 TABLE OF CONTENTS PAGE Table of Contents...i Table of Authorities... ii Statement of the Case and Facts... 1 Summary of the Argument... 3 Argument... 5 A. STANDARD OF REVIEW ON DISCRETIONARY JURISDICTION... 5 B. THE PRESENT DECISION EXPRESSLY AND DIRECTLY CONFLICTS WITH: UNICARE HEALTH FACILITIES, INC. V. MORT, 553 So.2d 159 (Fla. 1989)... 5 C. THE PRESENT DECISION EXPRESSLY AND DIRECTLY CONFLICTS WITH: GAINESVILLE HEALTH CARE CENTER, INC. V. WESTON, 857 So.2d 278 (Fla. 1 st DCA 2003); BRASINGTON V. EMC CORP., 855 So.2d 1212 (Fla. 1 st DCA 2003)... 6 D. THE PRESENT DECISION EXPRESSLY AND DIRECTLY CONFLICTS WITH; ALLIED VAN LINES, INC. V. BRATTON 351 So.2d 344 (Fla. 1977); QUBTY V. NAGDA, 817 So.2d 952 (Fla. 5 th DCA 2002); SABIN V. LOWE S OF FLORIDA, INC., 404 So.2d 772 (Fla. 5 th DCA 1981)... 9 CONCLUSION CERTIFICATE OF SERVICE CERTIFICATE OF COMPLIANCE ii

3 TABLE OF AUTHORITIES CASES: PAGE Allied Van Lines, Inv. V. Bratton, 351 So.2d 344 (Fla. 1977).... 4, 9, 10 Brasington v. E.M.C. Corp., 855 So.2d 1212 (Fla. 1 st DCA 2003)....4, 6-8 Complete Interiors, Inc. v. Began, 558 So.2d 48, 52 (Fla. 5 th DCA 1990) Gainesville Health Care Center, Inc. v. Weston, 857 So.2d 278 (Fla. 1 st DCA 2003)... 4, 6, 7 Kohl v. Bay Colony Club Condo., Inc., 398 So.2d 865, 867 (Fla. 4 th DCA 1981)... 3 Nielsen v. City of Sarasota, 117 So.2d 731 (Fla. 1960)... 5 Orkin Exterminating Co., Inc. v. Petsch, 2004 WL (Fla. 2d DCA 2004)... 3 Powertel, Inc. v. Bexley, 743 So.2d 570 (Fla. 1 st DCA 1999)... 3 Qubty B. Nagda, 817 So.2d 952 (Fla. 5 th DCA 2002)... 9, 10 Sabin v. Lowe s, Inc., 404 So.2d 772 (Fla. 5 th DCA 1981)... 4, 5, 9, 10 Steinhardt v. Rudolph, 422 So.2d 884, 889 (Fla. 3d DCA 1982)... 3 ii

4 Unicare Health Facilities, Inc. v. Mort, 553 So.2d 159 (Fla. 1989)... 3, 5, 6 Other Authorities: Section , Florida Statutes (2001)... 1 Section , Florida Statutes (2001) ,5, 6 iii

5 STATEMENT OF THE CASE AND FACTS The underlying appeal arose out of the trial court s order compelling the parties to arbitrate respondent Romano s Chapter 400 nursing home resident rights claims pursuant to a voluntarily executed arbitration agreement. In reversing, the Fourth District held the arbitration agreement entered into between the parties was unconscionable and unenforceable. The Fourth District reiterated established Florida law and held that [t]o decline to enforce a contract as unconscionable, the contract must be both procedurally unconscionable and substantively unconscionable. (emphasis added and cites omitted). The Fourth District expressly found the agreement both procedurally and substantively unconscionable based on the following reported facts. Seventy-nine year old Josephine Romano was hospitalized after falling at her home. Her husband placed her at Manor Care, a nursing rehabilitation home. Both Josephine and her husband, Lawrence, participated in this decision. On the date of admission, Lawrence was told that paperwork needed to be completed. The admission paperwork and documents were provided to Mr. Romano the day after the admission. At that time he was presented with, and signed, a number of separate documents including an optional comprehensive six-page arbitration agreement. As the opinion notes in greater detail, the agreement provided for arbitration of all disputes, including 1

6 those brought under a statute. There were specific provisions for limited discovery, payment of costs, and a limitation of liability provision which excluded punitive damages and limited non-economic damages to a maximum of $250, The agreement also provided that neither party would be entitled to attorney s fees. The Fourth District found the contract substantively unconscionable because it allowed the residents to waive statutory rights available under section , Florida Statutes. On the procedural unconscionability issue, the Fourth District noted in its opinion, it is true that the arbitration agreement was not hidden in the fine print. Also, the opinion notes the resident could cancel the agreement within three days of its signing. Indeed, as the opinion notes, the trial judge specifically found at an evidentiary hearing that the agreement was not cancelled. The Fourth District found procedural unconscionability because: (1) The six page arbitration agreement was presented to Lawrence as simply another document required to be signed as part of the admission process ; (2) plaintiffs are elderly ; (3) although Mr. Romano owned his own business, there was no showing that he had legal training to understand the rights he was signing away for his wife ; and (4) he was being asked to sign these documents after his wife was already admitted to the nursing home without being told that his failure to sign them would not affect her care 2

7 or her ability to stay in the home. On these facts, the Fourth District found the contract substantively unconscionable and that some quantum of procedural unconscionability was shown. Petitioner asserts the Fourth District s opinion, which found the agreement substantively and procedurally unconscionable, conflicts with several decisions from the Supreme Court of Florida and other district courts of appeal. SUMMARY OF THE ARGUMENT In Florida, arbitration agreements are favored and should be enforced unless the agreement is both substantively and procedurally unconscionable. See, e.g., Powertel, Inc. v. Bexley, 743 So.2d 570 (Fla. 1 st DCA 1999) ; Orkin Extremis. Co., Inc. v. Petsch, 2004 WL (Fla. 2d DCA 2004); Steinhardt v. Rudolph, 422 So.2d 884, 889 (Fla. 3d DCA 1982); Kohl v. Bay Colony Club Condo., Inc., 398 So.2d 865, 867 (Fla. 4 th DCA 1981); Complete Interiors, Inc. v. Began, 558 So.2d 48, 52 (Fla. 5 th DCA 1990). The present decision which held the arbitration agreement substantively unconscionable conflicts with this Court s decision in Unicare Health Facilities, Inc. v. Mort, 553 So.2d 159 (Fla. 1989). In Mort, this Court held that a resident can waive statutory rights available under section , while the Fourth District held a contract unenforceable because the residents signed away (or waived) their 3

8 statutory rights under section The present Fourth District decision, which held an arbitration agreement procedurally invalid, also directly and expressly conflicts with two First District cases, which on substantially similar facts, found their respective agreements procedurally conscionable and enforceable. Gainesville Health Care Center, Inc. v. Weston, 857 So.2d 278 (Fla. 1 st DCA 2003); Brasington v. EMC Corp., 855 So.2d 1212 (Fla. 1 st DCA 2003). The present Fourth District decision also expressly and directly conflicts with Florida Supreme Court and Fifth District cases which hold that one is bound by his contract and can not defend himself against the enforcement of the contract on the ground that he did not read the contract unless that person can show facts and circumstances which show he was prevented from reading the agreement or that he was induced by statements of the other party. Allied Van Lines, Inc. v. Bratton, 351 So.2d 344 (Fla. 1977); Sabin v. Lowe s of Florida, Inc., 404 So.2d 772 (Fla. 5 th DCA 1981). This entrenched principle was rejected in the present Fourth District decision when the court discharged a party s contractual obligation where the contract provision was not hidden in fine print and the contract, by its express terms, gave the parties three days to cancel the agreement; the Fourth District found the contract procedurally unconscionable because the couple was elderly and did not have legal 4

9 training to understand the rights they signed away. Finally, the present decision conflicts with the Fifth District s holding in Sabin v. Lowe s of Florida s, Inc., 404 So.2d 772 (Fla. 5 th DCA 1981) by relieving a party of an obligation to learn about and understand the contents of a proposed contract before he signs and delivers it. ARGUMENT A. STANDARD OF REVIEW ON DISCRETIONARY JURISDICTION The principle circumstances which allow this Court to invoke its conflict discretionary jurisdiction are: the announcement of a rule of law which expressly and directly conflicts with a rule previously announced by this Court or another district court of appeal; or the application of a rule of law to produce a different result in a case involving substantially the same controlling facts as a prior case disposed of by this Court or another district court of appeal. See, e.g., Nielsen v. City of Sarasota, 117 So.2d 731 (Fla. 1960). B. THE PRESENT DECISION EXPRESSLY AND DIRECTLY CONFLICTS WITH: UNICARE HEALTH FACILITIES, INC. V. MORT, 553 So.2d 159 (Fla. 1989). The present case expressly and directly conflicts with this Court s Mort decision by holding the arbitration agreement unenforceable because the agreement allowed the residents to sign away their section statutory entitlement to 5

10 attorney s fees and punitive damages. In Mort, however, this Court held that statutory rights, including entitlement to attorney s fees under section , may be waived in accepting an offer of judgment. Although presented in different factual contexts, the two decisions directly and expressly conflict on an issue of law: This Court s Mort decision upheld a contract which allowed a resident to waive statutory rights under section , while Romano held a contract unenforceable when a resident waived section statutory rights. C. THE PRESENT DECISION EXPRESSLY AND DIRECTLY CONFLICTS WITH: GAINESVILLE HEALTH CARE CENTER, INC. V. WESTON, 857 So.2d 278 (Fla. 1 st DCA 2003); BRASINGTON V. EMC CORP., 855 So.2d 1212 (Fla. 1 st DCA 2003). In the first case, Gainesville Health Care Center, Inc. v. Weston, unlike the present Romano decision, the First District addressed similar facts surrounding the execution of the arbitration agreement and found the agreement was not procedurally unconscionable. In Weston, the resident was admitted by her daughter who signed all of the paperwork. As in Romano, the evidence presented to the trial court showed that the nursing home admitted the mother, but did not ask the family to sign the admission paperwork that day. In fact, in Weston, it was almost two months after the resident s admission before the daughter was given the admission paperwork. 6

11 As in Romano, there was no substantive discussion in Weston regarding the document when the daughter was presented with the agreement. Like Romano, the daughter did not ask any questions and did not indicate that she did not understand the agreement. Under the express terms of the agreement, the Romanos had three days within which they could have cancelled the agreement, and the evidence showed that they would have not been ousted from the home had they elected not to sign the arbitration agreement. In both cases, there was no suggestion that the agreements were presented with the take-it or leave-it attitude described by the Weston court. There is also no evidence in either case that the residents could not obtain other satisfactory placement. The Weston court noted that among the factors to be considered are whether the complaining party had a realistic opportunity to bargain regarding the terms of the contract, or whether the terms were merely presented on a take-it -or leave-it basis; and whether he or she had a reasonable opportunity to understand the terms of the contract...the basic concept is the absence of meaningful choice. [Id. at 284] The facts in this case and the Weston case surrounding the signing of the agreements are substantially similar, yet in Weston procedural unconscionability was not found, while here procedural unconscionability was found. The Romano case is also in direct conflict with Brasington v. EMC Corp. In 7

12 Brasington, the First District also addressed the issue of whether an arbitration agreement was unconscionable. Like Romano, the Brasington court recognized that an arbitration agreement can not be found unconscionable unless it is both procedurally and substantively unconscionable. On facts very similar to those in Romano, the First District found, in contrast in Romano, that the arbitration agreement was not procedurally unconscionable. In Brasington, like Romano, the arbitration clause in a contract was not pointed out and explained to the signor. However, the Brasington court noted that the arbitration terms were located above the signature line, there was no deadline on signing it, and the plaintiff was free to consult a lawyer. Moreover, it was noted that the plaintiff was a business woman and could not rely on her ignorance of the company arbitration policy. In Romano, like Brasington, there was no deadline in signing the agreement, and Romano was also a business man. The Romano agreement on its face expressly advised the signor that he had three days to cancel the agreement. Therefore, the plaintiff in Romano also had freedom to consult a lawyer. Although the three cases present substantially similar facts surrounding the execution of the arbitration agreements, two contracts were held procedurally conscionable and enforced by the First District, while the present Fourth District decision held the third contract procedurally unconscionable and invalid. 8

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14 D. THE PRESENT DECISION EXPRESSLY AND DIRECTLY CONFLICTS WITH; ALLIED VAN LINES, INC. V. BRATTON, 351 So.2d 344 (Fla. 1977); QUBTY V. NAGDA, 817 So.2d 952 (Fla. 5 th DCA 2002); SABIN V. LOWE S OF FLORIDA, INC., 404 So.2d 772 (Fla. 5 th DCA 1981). In Allied Van Lines, Inc., supra at , and Qubty v. N agda, supra at 958, the Supreme Court of Florida and the Fifth District adhered to the following entrenched principle: It has long been held in Florida that one is bound by his contract. Unless one can show facts and circumstances to demonstrate that he was prevented from reading the contract, or that he was induced by statements of the other party to refrain from reading the contract, it is binding. No party to a written contract in this state can defend against its enforcement on the sold ground that he signed it without reading it. In Sabin, The Fifth District also held: A party has a duty to learn and know the contents of a proposed contract before he signs and delivers it and is presumed to know and understand its contents, terms and conditions. Id. at 773. The principles in these three cases were expressly rejected in the present Romano decision where the court discharged a party s contractual obligation where the contract agreement was not hidden in the fine print and the express contract provisions, gave the parties three days to cancel the contract. In Romano, the court relieved the parties of their contractual obligations because they were elderly (even though Mr. Romano owned his own business) and did not have legal training to 10

15 understand the rights he was signing away for his wife. There are no facts in the record which would support any conclusion that the Romanos were prevented from reading the contract or induced by any statements to refrain from reading the contract. Here, the express holding of the Fourth District s decision relieves a party from liability under a contract simply because the party signed it without reading it. This holding directly and expressly conflicts with this Court s decision in Allied Van Lines, Inc. v. Bratton and the Fifth District s decision in Qubty v. Nagda. This holding is also directly contrary to the holding of the Fifth District in Sabin v. Lowe s of Florida, Inc., by relieving a party of an obligation to understand the contents of a proposed contract before he signs and delivers it. CONCLUSION Based on the foregoing citations and authorities, it is respectfully submitted that the present decision creates embarrassing conflicts with decisions from this Court and other district courts of appeal. This court is respectfully requested to accept this case under its discretionary review to correct this confusion. 11

16 CERTIFICATE OF SERVICE WE HEREBY CERTIFY that a true and correct copy of this brief has been mailed on Feb. 18, 2004 to: Susan B. Morrison, Esquire, WILKES & McHUGH, Tampa Commons, One North Dale Mabry Hwy, Suite 601, Tampa, Florida Attorneys for Appellees/Defendants BETSY E. GALLAGHER FBN: COLE, SCOTT & KISSANE, P.A. Bridgeport Center, Suite W. Kennedy Blvd. Tampa, FL gallagher@csklegal.com Telephone: (813) By: BETSY E. GALLAGHER FBN: CERTIFICATE OF COMPLIANCE I HEREBY CERTIFY that the font used in this brief is 14 point font, New Times Roman. BETSY E. GALLAGHER, Esquire FBN: