|
According to a Washington State Appellate Court, an order compelling arbitration cannot be vacated merely because the party opposed to arbitration failed to determine whether the proceedings would be prohibitively costly before the order was issued.
In Minor v. 24 Hour Fitness USA, Inc., No. 56840-0-I, 2006 WL 2873785 (Wash. Ct. App. Oct. 2, 2006), Minor sued 24 Hour Fitness for the unauthorized use of her image in their buildings. 24 Hour Fitness filed a motion to compel arbitration according to an arbitration provision in Minor’s membership agreement. The arbitration provision provided that Minor would be required to pay all the arbitration fees.
The trial court granted the motion to compel arbitration, and Minor paid the $375 filing fee with the American Arbitration Association (AAA) to commence arbitration of her claim. When AAA billed Minor an additional $1,125 in arbitration fees, Minor refused to pay.
Minor then brought an action under Washington Superior Court Rule CR 60(b)(11), arguing that the order compelling arbitration should be vacated because of the newly discovered evidence of the prohibitive cost of arbitration. The trial court denied Minor’s motion, and she appealed.
On appeal, the Court reviewed the applicability of CR 60(b)(11), which governs motions to vacate based on newly discovered evidence. The Court concluded that Minor’s discovery of the cost of arbitration did not qualify as newly discovered evidence. “[N]ewly discovered evidence must involve something more than the belated discovery of a claim or evidence that could have been discovered prior to the order sought to be vacated.”
Minor had access to the total cost of arbitration because the information had always been available on the AAA website. While the Court refused to release Minor from the trial court’s order requiring arbitration, it did articulate how Minor could have properly challenged the arbitration provision.
According to the Court, Minor should have raised her argument of an unconscionable arbitration agreement based on prohibitive cost in response to 24 Hour Fitness’ motion to compel arbitration. At that point, the trial court judge would have determined whether or not the terms of the arbitration agreement were unconscionable. However, “[Minor’s] failure to do the same in this case is not grounds for relief under CR 60(b)(11).”
Subscribe to a free weekly update on ADR case law and
legislation
|