AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• The Plaintiff, acting as the personal representative of his deceased mother's wrongful death estate, filed a lawsuit against Skilled Healthcare Group, Inc., and others, alleging wrongful death and other claims related to the care his mother received at the Rehabilitation Center of Albuquerque. The Defendants sought to compel arbitration based on an arbitration agreement signed by the Plaintiff on behalf of his mother upon her admission to the Facility (paras 2-3).

Procedural History

• District Court of Bernalillo County: Denied Defendants' motion to compel arbitration, finding the arbitration agreement substantively unconscionable and therefore unenforceable (para 1).

Parties' Submissions

• Plaintiff: Argued that the arbitration agreement was unconscionable because it contained an unfairly one-sided exception for collections actions (para 3).
• Defendants: Filed a motion to dismiss and/or stay litigation and to compel arbitration based on the admission agreement and the arbitration agreement. They later argued that the district court erred by not applying the substantive unconscionability analysis set forth in Bargman and by failing to follow recent Tenth Circuit case law holding that the Federal Arbitration Act preempts New Mexico’s substantive unconscionability doctrine (paras 3, 8).

Legal Issues

• Whether the arbitration agreement is substantively unconscionable and therefore unenforceable (para 1).
• Whether the Federal Arbitration Act preempts New Mexico’s substantive unconscionability doctrine (para 7).

Disposition

• The Court of Appeals affirmed the district court's ruling that the arbitration agreement is substantively unconscionable and unenforceable (para 1).
• The Court of Appeals also affirmed the district court's denial of Defendants' motion for summary judgment on federal preemption grounds (para 1).

Reasons

• VANZI, Chief Judge (J. MILES HANISEE, Judge concurring; KIEHNE, Judge dissenting) The Court agreed with the district court's finding that the arbitration agreement was substantively unconscionable due to its practical effect, which unreasonably favored Defendants by mandating arbitration for Plaintiff’s most important and likely claims while exempting from arbitration the claims most likely to be brought by Defendants. This was deemed unfair and unreasonably one-sided. The Court also held that New Mexico’s substantive unconscionability doctrine is not preempted by federal law, as it applies generally applicable contract defenses and does not single out arbitration agreements for suspect status (paras 9-24).
  KIEHNE, Judge (dissenting) Judge Kiehne dissented, arguing that Defendants presented sufficient evidence to show that the collections exclusion was not unfairly one-sided and was justified. He highlighted that the Facility had never filed a collections lawsuit and that it would not be cost-effective to arbitrate such claims. He disagreed with the majority's view on the practical effect of the collections exception and would have reversed and remanded for enforcement of the arbitration agreement (paras 26-31).