Sosa v. Paulos

924 P.2d 357, 299 Utah Adv. Rep. 26, 1996 Utah LEXIS 83, 1996 WL 539543
CourtUtah Supreme Court
DecidedSeptember 20, 1996
Docket940590
StatusPublished
Cited by45 cases

This text of 924 P.2d 357 (Sosa v. Paulos) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sosa v. Paulos, 924 P.2d 357, 299 Utah Adv. Rep. 26, 1996 Utah LEXIS 83, 1996 WL 539543 (Utah 1996).

Opinions

DURHAM, Justice:

Plaintiff Doneene Sosa signed a document entitled “Physician-patient Arbitration Agreement” shortly before undergoing knee surgery performed by defendant Lonnie Pau-los, an orthopedic surgeon. After she filed a civil suit for medical malpractice related to the surgery, Dr. Paulos moved to stay the proceedings and compel arbitration under the agreement. The trial court denied the motion on the ground that the agreement was proeedurally and substantively unconscionable. Dr. Paulos appeals.

This case is extremely close on its facts. We emphasize preliminarily that arbitration agreements are favored in Utah and that no public policy requires such agreements to be subjected to a different analysis when they are between physicians and patients. They are enforceable if they meet the standards applicable to all contracts. Indeed, the Utah Arbitration Act so provides:

A written agreement to submit any existing or future controversy to arbitration is valid, enforceable, and irrevocable, except upon grounds existing at law or equity to set aside the agreement....

Utah Code Ann. § 78-31a-3 (1992). Of course, under Utah law, an unconscionable agreement is not enforceable. Bekins Bar V Ranch v. Huth, 664 P.2d 456, 459-62 (Utah 1983).

The relevant facts are as follows: On November 6, 1991, Dr. Paulos performed a posterior cruciate ligament reconstruction on Ms. Sosa’s left knee. According to the record, less than one hour prior to the surgery, after Ms. Sosa was undressed and in her surgical clothing, “someone from Dr. Paulos’ office” gave her three documents and asked her to sign them. They were a “Patient Informed Consent and Release of Claims,” a “Consent for Use of Freeze Dried or Flesh Donor Tissue,” and the arbitration agreement in question here. Ms. Sosa stated in her affidavit that she signed all three documents without reading them. She specifically recalled that neither Dr. Paulos nor any member of his staff discussed the arbitration agreement with her at any time, either when she signed it or during any of her prior office visits. Immediately upon awaking from the anesthesia, Ms. Sosa became aware of a surgical complication. On July 15, 1994, Ms. Sosa filed a complaint for medical malpractice.

The arbitration agreement that Ms. Sosa signed discusses the following subjects:

1. Article 1, entitled “Agreement to Arbitrate,” provides that disputes “as to medical malpractice ... will be determined by submission to arbitration.” Article 1 also states that both parties waive their constitutional right to a jury trial.

2. Article 2, entitled “All Claims Must Be Arbitrated,” provides that all conceivable claims between the parties are subject to arbitration.

3. Article 3, entitled “Procedure and Applicable Law,” establishes the manner in which the arbitration panel is selected and [360]*360also contains a cost-shifting provision. First, the contract provides that each party may choose one arbitrator, both of whom will pick the third arbitrator. Second, the contract requires, “Each arbitrator shall be a board-certified orthopedic surgeon.” Third,

if the arbitrators award patient less than one-half (½) of the amount sought by patient in arbitration, then the patient shall be responsible for ... payment of all expenses, costs, arbitrators’ fees, and reasonable attorneys’ fees incurred by physician in connection with the arbitration, including payment to physician at the rate of $150.00 per hour for time spent by physician defending himself in connection with the arbitration.

4. Article 4, entitled “General Provisions,” generally states that Utah’s statute of limitations applies to its arbitration proceedings.

5. Article 5, entitled “Revocation,” allows the agreement to be revoked “by written notice delivered to' the physician or mailed ... within 14 days after signature.”

6. Article 6, entitled “Read and Understood,” is a declaration that the patient has read and understands the agreement and that the “[p]hysieian or his assistant has explained the above agreement to me and to my satisfaction and I do not have any unanswered questions.” It also states that the patient “has executed this agreement of [her] own free will and not under any duress.”

7. Article 7, entitled “Received Copy,” declares that the patient has received a copy of the agreement.

8. The final two clauses of the agreement provide as follows:

If any provision of this Arbitration Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and shall not be affected by the invalidity of the other provisions.
NOTICE: BY SIGNING THIS CONTRACT YOU ARE AGREEING TO HAVE ANY ISSUE OF MEDICAL MALPRACTICE DECIDED BY NEUTRAL ARBITRATION AND YOU ARE GIVING UP YOUR RIGHT TO A JURY OR COURT TRIAL. SEE ARTICLE 1 OF THIS CONTRACT.

Ms. Sosa argues that the facts surrounding her signing of the agreement, together with the substance of the agreement itself, demonstrate that it was procedurally and substantively unconscionable, as the trial court determined, and therefore unenforceable. Dr. Paulos, on the other hand, argues that the agreement is fair and even-handed and that Ms. Sosa had plenty of time to read the agreement and ask questions concerning its content. Because arbitration agreements are favored in Utah, Dr. Paulos argues, the trial court improperly failed to compel arbitration pursuant to the parties’ agreement.

A trial court’s denial of a motion to compel arbitration presents a question of law which we review for correctness. See Docutel Olivetti Corp. v. Dick Brady Sys., Inc., 731 P.2d 475, 479 (Utah 1986) (review of trial court’s intexpretation that contract did not require arbitration presents question of law). The determination of whether a contract is unconscionable is also a question of law for the court. See Resource Management Co. v. Weston Ranch, 706 P.2d 1028, 1041 (Utah 1985); see also Maxwell v. Fidelity Fin. Servs., Inc., 184 Ariz. 82, 907 P.2d 51, 56 (1995) (“[T]he law in every other jurisdiction that has ruled on this issue, clearly provides that the determination of uneonscionability is to be made by the court as a matter of law.”).

Close examination of the standard this court articulated in Resource Management reveals our acknowledgment that “unconscionable is a term that defies precise definition.” 706 P.2d at 1041. To simplify the analysis, a majority of courts divide uneon-seionability doctrine into two branches: procedural uneonscionability, which focuses on the formation of the agreement, and substantive uneonscionability, which focuses on the agreement’s contents. Maxwell, 907 P.2d at 57. In adopting this division, we stated in Resource Management that unconscionability includes “ ‘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.’ ” 706 P.2d at 1043 (quoting Williams v. Walker-Thomas Furniture Co.,

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924 P.2d 357, 299 Utah Adv. Rep. 26, 1996 Utah LEXIS 83, 1996 WL 539543, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sosa-v-paulos-utah-1996.