South Carolina Appellate Courts issued two new legal decisions related to the enforceability of arbitration agreements hidden in nursing home admission paperwork. The Court of Appeals issued an opinion in the nursing home neglect case of Vera Brown. The case name is Rawl v. West Ashley.
Rawl v. West Ashley
“The circuit court found the Agreement was unconscionable because the Agreement was oppressive and one-sided, and there was inherent disparity in bargaining power between the parties. The court noted the Agreement was presented to Brown upon her admission, when she was ill, “on a take-it-or[-]leave[-]it basis,” without Brown’s contribution to the drafting, and without the bargaining power to negotiate. The court found the Agreement “was inconspicuously buried in the admission paperwork and ‘hastily’ presented to Ms. Brown for her signature.”
“In South Carolina, unconscionability is defined as the absence of meaningful choice on the part of one party due to one-sided contract provisions, together with terms that are so oppressive that no reasonable person would make them and no fair and honest person would accept them.” [cite omitted]. The “[a]bsence of meaningful choice” requirement “speaks to the fundamental fairness of the bargaining process in the contract at issue.” [cite omitted]. Even if an arbitration clause is technically conspicuous, it may be improper if it is “sprung on [a consumer] along with a flurry of other” documents during a hasty transaction. [cite omitted]. “Unconscionability is gauged at the time the contract was made.” [cite omitted]. The following should be taken into account by courts in determining unconscionability: “the nature of the injuries suffered by the plaintiff; whether the plaintiff is a substantial business concern; the relative disparity in the parties’ bargaining power; the parties’ relative sophistication; whether there is an element of surprise in the inclusion of the challenged clause; and the conspicuousness of the clause.” [cite omitted].