Bayes v. Merle's Metro builders/blvd. Constr., 2007-L-067 (12-28-2007)

2007 Ohio 7125
CourtOhio Court of Appeals
DecidedDecember 28, 2007
DocketNo. 2007-L-067.
StatusPublished
Cited by7 cases

This text of 2007 Ohio 7125 (Bayes v. Merle's Metro builders/blvd. Constr., 2007-L-067 (12-28-2007)) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bayes v. Merle's Metro builders/blvd. Constr., 2007-L-067 (12-28-2007), 2007 Ohio 7125 (Ohio Ct. App. 2007).

Opinions

OPINION
{¶ 1} Appellants, Tommy and Patricia Bayes ("the Bayes"), appeal the trial court's decision to stay trial pending the outcome of arbitration of a dispute arising under a construction contract between the Bayes and appellees, Merle's Metro Builders/Boulevard Construction, LLC, et al.

{¶ 2} On March 24, 2006, the Bayes contacted Merle Sobol, the 71-year-old owner of Merle's Metro Builders/Boulevard Construction, LLC, to discuss adding an *Page 2 addition to their home and remodeling their basement bathroom. Sobol described the nature of the work that would need to be done and quoted a price of $70,000. On the evening of March 24, 2006, the parties entered into an agreement for the work. The general provisions of the one-page contract were pre-printed and contained an arbitration provision, which required any controversy or claim emanating from the agreement to be arbitrated "by the American Arbitration Association under its Commercial Arbitration Rules[.]"

{¶ 3} At the time the contract was signed, the Bayes made a $1,000 down payment to Sobol. Shortly thereafter, the remodeling work commenced. In July 2006, the Bayes expressed some concerns about the work and alerted Sobol they wished to cancel the agreement. After a heated discussion, Sobol advised the Bayes that he would refer the matter to arbitration pursuant to the March 24, 2006 contract. On November 15, 2006, in an attempt to avoid arbitration, the Bayes filed a complaint in the Lake County Court of Common Pleas. On December 14, 2006, appellees filed a motion to dismiss the Bayes' complaint or, in the alternative, stay proceedings pending arbitration. On February 9, 2007, the Bayes filed their motion in opposition. On March 21, 2007, the trial court granted appellees' motion to stay the proceedings while the matter was arbitrated. The Bayes now appeal.1

{¶ 4} Under their sole assignment of error, the Bayes allege: *Page 3

{¶ 5} "The trial court erred, as a matter of law, in granting defendants'-appellees' motion to stay proceedings and enforce arbitration, reasoning that the arbitration clause was not unconscionable."

{¶ 6} Generally, an appellate court reviews a trial court's determination of a motion to stay trial pending arbitration for an abuse of discretion. Ball v. Ohio State Home Servs., Inc.,168 Ohio App.3d 622, 2006-Ohio-4464, at ¶ 5. However, the legal issue of whether an arbitration provision in an underlying contract is unconscionable is reviewed de novo. Id., citing Featherston v. Merrill Lynch, Pierce,Fenner Smith, Inc., 159 Ohio App.3d 27, 2004-Ohio-5953, at ¶ 12. The determination of whether a contractual provision is unconscionable is fact-dependant and requires an analysis of the circumstances of the particular case before the court. Featherston v. Merrill Lynch, Pierce,Fenner Smith, Inc., at ¶ 12, citing Eagle v. Fred Martin MotorCo., 157 Ohio App.3d 150, 2004-Ohio-829, at ¶ 13. Pursuant to this standard, this court possesses a plenary power of review affording the trial court's analysis no deference. Eagle v. Fred Martin MotorCo., at ¶ 11.

{¶ 7} Ohio public policy favors arbitration and, therefore, such provisions are ordinarily valid and enforceable. See R.C. 2711.01(A). As a result, a court must indulge a strong presumption in favor of arbitration and resolve any doubts in favor of arbitrability. Ball v.Ohio State Home Servs., Inc., 2006-Ohio-4464, at ¶ 6, quotingNeubrander v. Dean Witter Reynolds, Inc. (1992), 81 Ohio App.3d 308,311. "However, an arbitration provision may be held unenforceable under [R.C. 2711.01(A)] on `grounds that exist at law or in equity for the revocation of any contract.'" Ball v. Ohio State Home Servs., Inc., at ¶ 6. One such ground is unconscionability. Id. *Page 4

{¶ 8} "An unconscionable contract clause is one in which there is an absence of meaningful choice for the contracting parties, coupled with draconian contract terms unreasonably favorable to the other party."Eagle v. Fred Martin Motor Co., 2004-Ohio-829, at ¶ 30. An arbitration provision can be rendered invalid where a party demonstrates the provision is both procedurally and substantively unconscionable.Featherston v. Merrill Lynch, Pierce, Fenner Smith, Inc.,2004-Ohio-5953, at ¶ 13.

{¶ 9} Substantive unconscionability goes to the specific terms of the contract. Ball v. Ohio State Home Servs., Inc., 2006-Ohio-4464, at ¶ 7. When considering substantive unconscionability, the court should observe whether the terms of the contract are commercially reasonable.Eagle v. Fred Martin Motor Co., 2004-Ohio-829, at ¶ 31. With respect to this issue, the Second Appellate District has observed:

{¶ 10} "Because the determination of commercial reasonableness varies with the content of the contract terms at issue in any given case, no generally accepted list of factors has been developed for this category of unconscionability. However, courts examining whether a particular * * * clause is substantively unconscionable have considered the following factors: the fairness of the terms, the charge for the service rendered, the standard in the industry, and the ability to accurately predict the extent of future liability." Collins v. ClickCamera Video, Inc. (1993), 86 Ohio App.3d 826,834.

{¶ 11} Alternatively, procedural unconscionability requires a court to consider factors related to the bargaining power of each party, "including age, education, intelligence, business acumen, experience in similar transactions, whether the terms were explained to the weaker party, and who drafted the contract." Eagle v. Fred Martin MotorCo., 2004-Ohio-829, at ¶ 31. "Procedural unconscionability concerns the *Page 5 formation of the agreement and occurs when no voluntary meeting of the minds is possible." Porpora v. Gatliff Building Co.,160 Ohio App.3d 843, 2005-Ohio-2410, at ¶ 7.

{¶ 12} The arbitration clause at issue reads:

{¶ 13}

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Bluebook (online)
2007 Ohio 7125, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bayes-v-merles-metro-buildersblvd-constr-2007-l-067-12-28-2007-ohioctapp-2007.