[Cite as Grimm v. Professional Dental Alliance, L.L.C., 2024-Ohio-637.]
IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT PORTAGE COUNTY
SUSAN GRIMM, D.D.S., M.S., CASE NO. 2023-P-0054
Plaintiff-Appellant, Civil Appeal from the - vs - Court of Common Pleas
PROFESSIONAL DENTAL ALLIANCE, LLC, Trial Court No. 2023 CV 00356
Defendant-Appellee.
OPINION
Decided: February 20, 2024 Judgment: Reversed and remanded
Paul V. Wolf, 700 West St. Clair Avenue, Suite 400, Cleveland, OH 44113 (For Plaintiff- Appellant).
Evelyn P. Schonberg and Peter O’Grady, Ross, Brittain & Schonberg, Co., LPA, 6480 Rockside Woods Boulevard, South, Suite 350, Cleveland, OH 44131 (For Defendant- Appellee).
MARY JANE TRAPP, J.
{¶1} Appellant, Susan Grimm, D.D.S., M.S. (“Dr. Grimm”), appeals from the
judgment of the Portage County Court of Common Pleas, which stayed her age
discrimination action against appellee, Professional Dental Alliance, LLC (“Prof. Dental”),
and ordered the parties to resolve their dispute through binding arbitration pursuant to
their professional services agreement.
{¶2} Dr. Grimm raises one assignment of error on appeal, contending the trial
court erred to her prejudice by granting Prof. Dental’s “Motion to Stay Proceedings and Compel Arbitration.” More specifically, she contends the arbitration provision in the
agreement is unenforceable because it contains a “loser pays” clause, which is
unconscionable and contrary to public policy.
{¶3} After a careful review of the record and pertinent law, we find Dr. Grimm’s
assignment of error has merit in part since the trial court failed to address Dr. Grimm’s
allegation and determine whether the “loser pays” clause is unconscionable and contrary
to public policy. Further, the record has not been sufficiently developed for us to ascertain
unconscionability, i.e., there are no factual findings and/or evidence of the circumstances
surrounding the agreement.
{¶4} Accordingly, we reverse the judgment of the Portage County Court of
Common Pleas and remand for the trial court to determine whether the “loser pays” clause
is unconscionable and/or contrary to public policy and thus unenforceable, with factual
findings supporting its determinations.
Substantive and Procedural History
{¶5} In May 2023, Dr. Grimm filed a complaint alleging she was wrongfully
terminated from her employment with Prof. Dental as an orthodontist due to age
discrimination.
{¶6} Approximately one month later, Prof. Dental filed a “Motion to Compel
Arbitration and Stay Proceedings” pursuant to R.C. 2711.02 since Dr. Grimm agreed in
the parties’ professional services agreement to submit any claims from or related to her
employment to mandatory arbitration. Attached to the motion were the parties’
professional services agreement and an email to Dr. Grimm’s counsel notifying him of the
arbitration provision.
Case No. 2023-P-0054 {¶7} In turn, Dr. Grimm filed a “Brief in Opposition to Defendant’s Motion to
Compel Arbitration and Stay Proceedings,” arguing the mandatory arbitration provision is
invalid and unenforceable because it contains a “loser pays” clause, which is
unconscionable and against public policy.
{¶8} After Prof. Dental filed a reply, the trial court issued a judgment entry
granting Prof. Dental’s motion, staying the proceedings, and ordering the parties “to
resolve their dispute through binding arbitration, as provided for in the parties’
Agreement.”
{¶9} Dr. Grimm filed the instant appeal, raising one assignment of error for our
review:
{¶10} “The trial court erred to the prejudice of Plaintiff-Appellant in granting
Defendant-Appellee’s Motion to Stay Proceedings and Compel Arbitration.”
Unconscionability
{¶11} In her sole assignment of error, Dr. Grimm contends the trial court erred in
granting Prof. Dental’s motion to stay and compel arbitration because the “loser pays”
clause in the parties’ professional services agreement is unconscionable and contrary to
public policy.
{¶12} A trial court’s decision whether to grant a stay pending arbitration
proceedings pursuant to R.C. 2711.02 is generally reviewed under an abuse of discretion
standard. Robie v. Maxill, Inc., 11th Dist. Trumbull No. 2021-T-0007, 2021-Ohio-2644, ¶
30. However, when the trial court’s grant or denial of a stay is premised upon questions
of law, such as the unconscionability of an arbitration agreement, our review is de novo.
Id. at ¶ 31. See, e.g., Taylor Bldg. Corp. of Am. v. Benfield, 117 Ohio St.3d 352, 2008-
Case No. 2023-P-0054 Ohio-938, 884 N.E.2d 12, ¶ 2 (“the proper standard of review of a determination of
whether an arbitration agreement is enforceable in light of a claim of unconscionability is
de novo”). In such a case, any related factual findings made by the trial court must be
afforded appropriate deference. Id.
{¶13} Ohio courts recognize a “‘presumption favoring arbitration’” that arises
“‘when the claim in dispute falls within the scope of the arbitration provision.’” Id. at ¶ 27,
quoting Williams v. Aetna Fin. Co., 83 Ohio St.3d 464, 471, 700 N.E.2d 859 (1998).
{¶14} “Ohio law directs trial courts to grant a stay of litigation in favor of arbitration
pursuant to a written arbitration agreement on application of one of the parties, in
accordance with R.C. 2711.02(B).” Id. at ¶ 28.
{¶15} Pursuant to R.C. 2711.02(B), “If any action is brought upon any issue
referable to arbitration under an agreement in writing for arbitration, the court in which the
action is pending, upon being satisfied that the issue involved in the action is referable to
arbitration under an agreement in writing for arbitration, shall on application of one of the
parties stay the trial of the action until the arbitration of the issue has been had in
accordance with the agreement, provided the applicant for the stay is not in default in
proceeding with arbitration.”
{¶16} Further, Ohio law authorizes appellate review of such orders. Taylor Bldg.
at ¶ 30.
{¶17} Pursuant to R.C. 2711.02(C), “[A]n order under division (B) of this section
that grants or denies a stay of a trial of any action pending arbitration * * * is a final order
and may be reviewed, affirmed, modified, or reversed on appeal pursuant to the Rules of
Case No. 2023-P-0054 Appellate Procedure and, to the extent not in conflict with those rules, Chapter 2505. of
the Revised Code.”
{¶18} “‘Unconscionability includes both “an absence of meaningful choice on the
part of one of the parties together with contract terms which are unreasonably favorable
to the other party.”’” Hayes v. Oakridge Home, 122 Ohio St.3d 63, 2009-Ohio-2054, 908
N.E.2d 408, ¶ 20, quoting Lake Ridge Academy v. Carney, 66 Ohio St.3d 376, 383, 613
N.E.2d 183 (1993), quoting Williams v. Walker-Thomas Furniture Co., 350 F.2d 445, 449
(D.C.Cir.1965). The party asserting unconscionability of a contract bears the burden of
proving that the agreement is both procedurally and substantively unconscionable. Id.;
see Taylor Bldg. at ¶ 34 (a party challenging an arbitration agreement must prove a
quantum of both procedural and substantive unconscionability).
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[Cite as Grimm v. Professional Dental Alliance, L.L.C., 2024-Ohio-637.]
IN THE COURT OF APPEALS OF OHIO ELEVENTH APPELLATE DISTRICT PORTAGE COUNTY
SUSAN GRIMM, D.D.S., M.S., CASE NO. 2023-P-0054
Plaintiff-Appellant, Civil Appeal from the - vs - Court of Common Pleas
PROFESSIONAL DENTAL ALLIANCE, LLC, Trial Court No. 2023 CV 00356
Defendant-Appellee.
OPINION
Decided: February 20, 2024 Judgment: Reversed and remanded
Paul V. Wolf, 700 West St. Clair Avenue, Suite 400, Cleveland, OH 44113 (For Plaintiff- Appellant).
Evelyn P. Schonberg and Peter O’Grady, Ross, Brittain & Schonberg, Co., LPA, 6480 Rockside Woods Boulevard, South, Suite 350, Cleveland, OH 44131 (For Defendant- Appellee).
MARY JANE TRAPP, J.
{¶1} Appellant, Susan Grimm, D.D.S., M.S. (“Dr. Grimm”), appeals from the
judgment of the Portage County Court of Common Pleas, which stayed her age
discrimination action against appellee, Professional Dental Alliance, LLC (“Prof. Dental”),
and ordered the parties to resolve their dispute through binding arbitration pursuant to
their professional services agreement.
{¶2} Dr. Grimm raises one assignment of error on appeal, contending the trial
court erred to her prejudice by granting Prof. Dental’s “Motion to Stay Proceedings and Compel Arbitration.” More specifically, she contends the arbitration provision in the
agreement is unenforceable because it contains a “loser pays” clause, which is
unconscionable and contrary to public policy.
{¶3} After a careful review of the record and pertinent law, we find Dr. Grimm’s
assignment of error has merit in part since the trial court failed to address Dr. Grimm’s
allegation and determine whether the “loser pays” clause is unconscionable and contrary
to public policy. Further, the record has not been sufficiently developed for us to ascertain
unconscionability, i.e., there are no factual findings and/or evidence of the circumstances
surrounding the agreement.
{¶4} Accordingly, we reverse the judgment of the Portage County Court of
Common Pleas and remand for the trial court to determine whether the “loser pays” clause
is unconscionable and/or contrary to public policy and thus unenforceable, with factual
findings supporting its determinations.
Substantive and Procedural History
{¶5} In May 2023, Dr. Grimm filed a complaint alleging she was wrongfully
terminated from her employment with Prof. Dental as an orthodontist due to age
discrimination.
{¶6} Approximately one month later, Prof. Dental filed a “Motion to Compel
Arbitration and Stay Proceedings” pursuant to R.C. 2711.02 since Dr. Grimm agreed in
the parties’ professional services agreement to submit any claims from or related to her
employment to mandatory arbitration. Attached to the motion were the parties’
professional services agreement and an email to Dr. Grimm’s counsel notifying him of the
arbitration provision.
Case No. 2023-P-0054 {¶7} In turn, Dr. Grimm filed a “Brief in Opposition to Defendant’s Motion to
Compel Arbitration and Stay Proceedings,” arguing the mandatory arbitration provision is
invalid and unenforceable because it contains a “loser pays” clause, which is
unconscionable and against public policy.
{¶8} After Prof. Dental filed a reply, the trial court issued a judgment entry
granting Prof. Dental’s motion, staying the proceedings, and ordering the parties “to
resolve their dispute through binding arbitration, as provided for in the parties’
Agreement.”
{¶9} Dr. Grimm filed the instant appeal, raising one assignment of error for our
review:
{¶10} “The trial court erred to the prejudice of Plaintiff-Appellant in granting
Defendant-Appellee’s Motion to Stay Proceedings and Compel Arbitration.”
Unconscionability
{¶11} In her sole assignment of error, Dr. Grimm contends the trial court erred in
granting Prof. Dental’s motion to stay and compel arbitration because the “loser pays”
clause in the parties’ professional services agreement is unconscionable and contrary to
public policy.
{¶12} A trial court’s decision whether to grant a stay pending arbitration
proceedings pursuant to R.C. 2711.02 is generally reviewed under an abuse of discretion
standard. Robie v. Maxill, Inc., 11th Dist. Trumbull No. 2021-T-0007, 2021-Ohio-2644, ¶
30. However, when the trial court’s grant or denial of a stay is premised upon questions
of law, such as the unconscionability of an arbitration agreement, our review is de novo.
Id. at ¶ 31. See, e.g., Taylor Bldg. Corp. of Am. v. Benfield, 117 Ohio St.3d 352, 2008-
Case No. 2023-P-0054 Ohio-938, 884 N.E.2d 12, ¶ 2 (“the proper standard of review of a determination of
whether an arbitration agreement is enforceable in light of a claim of unconscionability is
de novo”). In such a case, any related factual findings made by the trial court must be
afforded appropriate deference. Id.
{¶13} Ohio courts recognize a “‘presumption favoring arbitration’” that arises
“‘when the claim in dispute falls within the scope of the arbitration provision.’” Id. at ¶ 27,
quoting Williams v. Aetna Fin. Co., 83 Ohio St.3d 464, 471, 700 N.E.2d 859 (1998).
{¶14} “Ohio law directs trial courts to grant a stay of litigation in favor of arbitration
pursuant to a written arbitration agreement on application of one of the parties, in
accordance with R.C. 2711.02(B).” Id. at ¶ 28.
{¶15} Pursuant to R.C. 2711.02(B), “If any action is brought upon any issue
referable to arbitration under an agreement in writing for arbitration, the court in which the
action is pending, upon being satisfied that the issue involved in the action is referable to
arbitration under an agreement in writing for arbitration, shall on application of one of the
parties stay the trial of the action until the arbitration of the issue has been had in
accordance with the agreement, provided the applicant for the stay is not in default in
proceeding with arbitration.”
{¶16} Further, Ohio law authorizes appellate review of such orders. Taylor Bldg.
at ¶ 30.
{¶17} Pursuant to R.C. 2711.02(C), “[A]n order under division (B) of this section
that grants or denies a stay of a trial of any action pending arbitration * * * is a final order
and may be reviewed, affirmed, modified, or reversed on appeal pursuant to the Rules of
Case No. 2023-P-0054 Appellate Procedure and, to the extent not in conflict with those rules, Chapter 2505. of
the Revised Code.”
{¶18} “‘Unconscionability includes both “an absence of meaningful choice on the
part of one of the parties together with contract terms which are unreasonably favorable
to the other party.”’” Hayes v. Oakridge Home, 122 Ohio St.3d 63, 2009-Ohio-2054, 908
N.E.2d 408, ¶ 20, quoting Lake Ridge Academy v. Carney, 66 Ohio St.3d 376, 383, 613
N.E.2d 183 (1993), quoting Williams v. Walker-Thomas Furniture Co., 350 F.2d 445, 449
(D.C.Cir.1965). The party asserting unconscionability of a contract bears the burden of
proving that the agreement is both procedurally and substantively unconscionable. Id.;
see Taylor Bldg. at ¶ 34 (a party challenging an arbitration agreement must prove a
quantum of both procedural and substantive unconscionability).
{¶19} Procedural unconscionability considers the circumstances surrounding the
contracting parties’ bargaining, such as the parties’ age, education, intelligence, business
acumen and experience, and who drafted the contract. Taylor Bldg. at ¶ 44.
{¶20} Additional factors may include a belief by the stronger party that there is no
reasonable probability that the weaker party will fully perform the contract; knowledge of
the stronger party that the weaker party will be unable to receive substantial benefits from
the contract; knowledge of the stronger party that the weaker party is unable to reasonably
protect his interests by reason of physical or mental infirmities, ignorance, illiteracy or
inability to understand the language of the agreement, or similar factors. Id.
{¶21} “An assessment of whether a contract is substantively unconscionable
involves consideration of the terms of the agreement and whether they are commercially
reasonable.” Hayes at ¶ 33. “Factors courts have considered in evaluating whether a
Case No. 2023-P-0054 contract is substantively unconscionable include 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.” Id. “No bright-line set of factors for determining substantive
unconscionability has been adopted by [the Supreme Court of Ohio]. The factors to be
considered vary with the content of the agreement at issue.” Id.
{¶22} A review of the trial court’s judgment entry reveals the court failed to
address Dr. Grimm’s allegations and determine whether the “loser pays” clause is
unconscionable and contrary to public policy. Further, the record has not been sufficiently
developed for us to ascertain unconscionability, i.e., there are no factual findings and no
evidence of the circumstances surrounding the agreement.
{¶23} In Paradie v. Turning Point Builders, Inc., 2021-Ohio-2178, 174 N.E.3d 940,
(11th Dist.), we explained that an appellate court cannot determine the enforceability of
an arbitration provision where there is a lack of a record to support such a holding. Id. at
¶ 31. Thus, the matter must be remanded for an evidentiary hearing or further
proceedings on the issue. Id.
{¶24} Similarly, in Brownell v. Van Wyk, 2d Dist. Montgomery No. 24042, 2010-
Ohio-6338, the Second District reversed and remanded for an evidentiary hearing on the
issue of unconscionability where the trial court made no factual findings supporting its
determination that the arbitration provision was unconscionable and the circumstances
surrounding the arbitration agreement were not sufficiently developed in the record. Id.
at ¶ 31. See also Robie, supra, at ¶ 55 (the trial court should have the first opportunity to
address the existence or nonexistence of unconscionability); Verandah Properties, LLC
v. Ullman Oil Co., LLC, 11th Dist. Geauga No. 2019-G-0213, 2020-Ohio-1559, ¶ 34 (an
Case No. 2023-P-0054 allegation that the arbitration clause is unenforceable as unconscionable places the
validity of the provision at issue and requires a court to determine enforceability before it
can grant a motion to stay).
{¶25} Accordingly, we reverse the judgment of the trial court and remand for the
trial court to determine whether the “loser pays” clause is unconscionable and/or contrary
to public policy and thus unenforceable, with factual findings supporting its
determinations.
{¶26} Finding Dr. Grimm’s assignment of error to have merit in part, the judgment
of the Portage County Court of Common Pleas is reversed and remanded in accordance
with this opinion.
MATT LYNCH, J.,
ROBERT J. PATTON, J.,
concur.
Case No. 2023-P-0054