Facts
- A nursing-home resident was admitted to a facility operated by multiple related entities (the Owners).
- Two days after admission, the resident signed admission paperwork, including a separate arbitration agreement that was conspicuously labeled and stated it was not required to receive care.
- The arbitration agreement provided that the facility would pay the first $500 of arbitration fees and costs; remaining arbitration expenses would be split 60% to the facility and 40% to the resident; each party would pay its own attorney’s fees.
- About one year later, the resident (through an attorney-in-fact) sued in Florida circuit court alleging negligence and related claims arising from her care.
- The Owners moved to dismiss and compel arbitration.
- At an evidentiary hearing, the resident argued arbitration was unaffordable because she could not pay her 40% share; she relied on examples of invoices from unrelated arbitrations and testimony about strained finances.
- Evidence also indicated the resident’s care expenses had decreased since admission and could potentially be reduced further; the resident declined to provide evidence of her attorney’s fees or anticipated litigation costs.
- The trial court denied the motion to compel arbitration, finding it was financially impossible for the resident to arbitrate and that requiring her to pay 40% of arbitration costs would be unconscionable.
Issues
- Whether the resident proved impossibility of performance because she could not afford the arbitration-cost allocation.
- Whether the resident proved the arbitration agreement was unconscionable under Florida law, including due to its cost provisions.
- Whether the resident met the evidentiary burden to invalidate arbitration based on a claim that arbitration would be prohibitively expensive.
Decision
- The appellate court reversed the order denying the motion to compel arbitration and remanded with directions to compel arbitration.
- The resident did not present competent, substantial evidence that arbitration would be impossible to perform or that the agreement was unconscionable.
- The resident’s cost evidence was speculative and not case-specific; she also failed to provide information enabling a meaningful comparison between arbitration costs and litigation costs.
Legal Principles
- A party resisting enforcement of an arbitration agreement bears the burden to produce competent, substantial evidence supporting a contract defense such as impossibility or unconscionability.
- Impossibility of performance requires more than showing performance is difficult or expensive; the opponent must show objective impossibility or impracticability supported by concrete evidence.
- Under Florida law, invalidation for unconscionability generally requires proof of both procedural unconscionability (formation circumstances) and substantive unconscionability (overly harsh or one-sided terms).
- A cost-based challenge to arbitration requires specific, individualized evidence of the likely arbitration costs in the case and why those costs are prohibitive in light of the party’s resources; generalized examples from other disputes are insufficient.
Conclusion
The court required arbitration because the resident’s evidence did not reliably establish the likely costs of arbitration in her case or show that the cost-sharing terms made arbitration impossible or unconscionable.