Florida Law Weekly – October 4, 2013

Zebhyr Haven, Health and Rehab Center v. Hardin (2d DCA): In this case, the Second District Court of Appeal held that the trial court erred in denying a nursing home’s motion to compel arbitration on the grounds that the arbitration agreement, which required the Plaintiff to pay 40% of the costs of arbitration, was substantively unconscionable and impossible to perform. The trial court agreed that it was impossible for the Plaintiff to pay this amount in arbitration and accordingly, denied the motion to compel arbitration. The Second District Court of Appeal reversed, holding that this argument could not support the trial court’s decision because the risk associated with agreeing to the arbitration provision (that being the payment of arbitration costs) was foreseeable when the agreement was made. The Second District Court of Appeal noted that this is true even where the performance becomes impossible after execution of the agreement. The Second District Court of Appeal further noted that the Plaintiff failed to establish how performance of the contract was impossible. Finally, the Second District Court of Appeal held that because the Plaintiff failed to present evidence of procedural unconscionability (which is also required to establish that an arbitration agreement should not be enforced), the trial court was bound to enforce the arbitration provision.

Notably, it does not appear that the Plaintiff made any argument that the arbitration agreement was void as against public policy as argued in Franks v. Bowers, 116 So.3d 1240 (Fla. 2014), providing further support in opposition to the argument that the Franks Court declared all private medical malpractice arbitration agreements void as against public policy.