## Facts

- Owen Small was taken to a nursing-care facility operated by HCF of Perrysburg, Inc.
- At admission, Owen Small was semiconscious and was transported immediately from the facility to a hospital.
- Owen Small’s wife, acting under a durable power of attorney for health care, signed the facility’s admission agreement, which contained an arbitration clause.
- Owen Small later returned to the facility and allegedly fell from a wheelchair while being transported without safety restraints, sustaining injuries.
- Owen Small later died at a hospital; the estate and family filed negligence and wrongful-death claims alleging the fall and injuries caused his death.
- The arbitration clause required the resident to submit disputes to binding arbitration, while allowing the facility to choose to litigate its own claims in court.
- The clause included a prevailing-party attorney-fee and cost provision and required arbitration to occur at the facility.
- The agreement stated arbitration was not a condition of admission but provided no clear method to reject the arbitration provision.

## Issues

1. Whether the admission agreement’s arbitration clause was unconscionable and therefore unenforceable, making it error to stay the action and compel arbitration.
2. Whether the trial court erred by compelling arbitration without conducting a hearing on unconscionability.

## Decision

- The appellate court reversed the order staying the case and compelling arbitration.
- The court held the arbitration clause was unconscionable and unenforceable under Ohio law.
- The cause was remanded to the trial court for further proceedings.
- In light of the ruling that the clause was unenforceable on the record, the lack-of-hearing claim did not require reinstatement of arbitration.

## Legal Principles

- Ohio’s policy favoring arbitration does not require enforcement of an arbitration clause that is unconscionable.
- Unconscionability has two components: procedural unconscionability (defects in the bargaining process) and substantive unconscionability (unfair or one-sided terms).
- The party resisting arbitration must show both procedural and substantive unconscionability, evaluated on a sliding scale.
- Features supporting substantive unconscionability include a clause that binds only one side to arbitration, imposes fee-shifting that may deter claims, selects a forum favoring the drafter, or lacks a meaningful opt-out mechanism.
- Stressful, time-pressured health-care admission circumstances, coupled with form contracting and unequal bargaining power, may support procedural unconscionability.

## Conclusion

The court declined to enforce a nursing-home admission arbitration provision because its one-sided terms, combined with the pressured circumstances of execution, rendered it procedurally and substantively unconscionable; the stay and order compelling arbitration were reversed and the case returned to the trial court.


Small v. HCF of Perrysburg, Inc., 159 Ohio App. 3d 66, 823 N.E.2d 19 (Ohio Ct. App. 6th Dist. 2004)