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In upholding an arbitration clause in an assisted living agreement, the North Carolina Court of Appeals reversed the trial court's ruling that the arbitration agreement was unconscionable.
In Raper v. Oliver House, LLC, No. COA06-236, 2006 WL 3487256 (N.C. Ct. App. Dec. 5, 2006), Raper, as administrator of a decedent's estate, sued Oliver House, an assisted living facility, for negligence, wrongful death, and punitive damages. In response, Oliver House filed a motion to compel arbitration. The trial court found the arbitration agreement unconscionable and denied the motion.
The Court of Appeals (the Court) held that the trial court erred in finding the arbitration agreement unconscionable. Specifically, there was no evidence to support the trial court's finding that there was unequal bargaining power or a lack of independent negotiation because Raper admitted that she voluntarily entered into the agreement.
Moreover, the use of a preprinted form did not mean that the arbitration agreement was unconscionable. To the contrary, the arbitration agreement was prominently displayed, and there was no attempt to conceal it from Raper. Also, in light of North Carolina's strong public policy favoring arbitration, there was no evidence to support the trial court's conclusion that the arbitration agreement was unconscionable because it dealt with a "matter of substantial public interest."
Finally, the Court found that Raper was estopped from "claim[ing] the benefit of the contract and simultaneously avoid[ing] its burdens." For those reasons, the Court remanded the matter with instructions to order arbitration.
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