In enforcing the arbitration agreement in a purchase agreement for a luxury penthouse, a federal district court in the District of Columbia applied Prima Paint and rejected an unconscionability challenge to the agreement.

In Olle v. 5401 W. Ave. Residential, LLC, No. Civ. A. 07-2056, 2008 WL 2986478 (D. D.C. Aug. 6, 2008), Laura and Peter Olle contracted to purchase a luxury penthouse sight unseen, stipulating they would be able to remodel the unit to suit their needs. Once they visited, they discovered that they would be unable to do so. After attempting to rescind the purchase contract and recover their deposit, the Olles filed suit against Residential.

Residential moved to compel arbitration based on the arbitration agreement in the purchase agreement. The Olles opposed, claiming the agreement was unconscionable.

This Court rejected the Olles' contention. The Olles had an opportunity to read the contract and initialed all 22 pages individually. They did not allege that they were unable to understand or were misled by the arbitration agreement. The Olles were also provided 15 days within which to review and cancel the contract.

The Court decided that it did not matter that Residential was given the right to pursue costs if a suit was filed and the Olles were not, because that aspect of the arbitration agreement was not at issue in this case. Regardless, the Court determined that because the agreement was silent on the issue of whether the Olles could pursue costs if Residential filed suit, it would construe the provision as applying symmetrically to both parties.

Moreover, the arbitration agreement was found to be severable from the rest of the contract. The Olles alleged only that the purchase agreement as a whole was fraudulently induced. To take the dispute away from the arbitrator, a party must specifically allege fraud in the making of the arbitration agreement. See Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403-04 (1967).

Finally, the Olles did not point to any explicit provision in consumer protection statutes that reserved the resolution of such disputes to a judicial forum.

Accordingly, finding the Olles' arguments "wholly unpersuasive," the Court granted the motion to compel arbitration.