Arbitration & Mediation

Does the Fourth DCA's New Slusser Case Help Define Digati and Blankfeld?

By Christopher B. Hopkins, Esq.

The Fourth DCA certainly has been fodder for any number of posts on this website. In Romano v. Manor Care, the court decided there was an unprecedented "sliding scale" unconscionability analysis and then tried to suggest their was a strong Florida precedent for that approach. There wasn't then and there still is no precedent outside of the 4th DCA today. In Blankfeld v. Richmond Health, the same court turned from the unconscionability analysis and launched into a discussion of public policy as grounds to strike an arbitration clause (indeed, careful arbitration watchers might have noticed a line of cases issued before Blankfeld which seemed to lead up to that en banc decision). Other examples abound of the unique relationship between the Fourth DCA and long term care arbitration but parties disputing arbitration often don't know what to expect when they are before the court -- although plaintiff's lawyers generally confide that they feel their best chance to escape arbitration is with the Fourth DCA.

A new decision, Florence M. Slusser as guardian for Brian Slusser v. Life Care Centers of America, Inc., Forrest L. Preston, Life Care Center of Port St. Lucie et al., may dispell some pre-conceived notions. But let's traipse through past history before we get to that new February 2008 case. You decide if it proves to be all that important.

In the dark ages of 2004, there was little to no Florida precedent on arbitration, much less nursing home arbitration. The Fourth DCA issued a curious little decision, Richmond Healthcare Inc. v. Digati (Farmer, Taylor, Gross). In that case, the admission agreement required arbitration through the National Health Lawyers Association (NHLA) which had specific rules for discovery and evidence which were different than Florida civil remedies under the nursing home statute. In short, the plaintiff complained that the NHLA standards for the plaintiff to prove its case were higher than the standards to recover in a Florida courtroom.

The court pointed out repeatedly that it was NOT applying unconscionability but, instead, was addressing whether a court has the power "to decline to enforce an arbitration agreement simply because it waives the judicial remedy of access to a court to resolve claims arising under statutory rights." Lacking the use of unconscionability, the court held that it was "unable to find any statutory authority allowing judges to refuse to enforce valid arbitration provisions in nursing home admission contracts of competent parties for reasons other than unconscionability."

In sum, it *sounded* like, back in 2004, the Fourth DCA was only going to deny arbitration if there were both forms of unconscionability. Indeed, the court so remanded.

Almost a year to the day, the Fourth DCA appeared to have a change of heart. And a big one. In the en banc decision of Melvin Blankfeld v. Richmond Health Care, Inc., the court ruled inter alia that "a contractual provision void as contrary to public policy is distinct from holding that a contract is unenforceable because it is unconscionable." Strange, isn't it, that in Digati the court said that unconscionability was the only way to attack arbitration and then, a year later, it said the opposite? But more oddities abound. One, the defendant is the same in both cases. Two, it appears that both cases involve nearly the same arbitration language. Three, Judge Farmer wrote the passive Digati but then came down harshly on the nursing home industry, health care proxies, and his colleagues on the bench in a concurrence in Blankfeld.

The Fourth DCA never explained the Digati-Blankfeld incongruity but likely the solution is in the careful wording of the Digati holding. In the key line of Digati, the court says it would would not shoot down a "valid" arbitration provision for reasons other than unconscionability. That leaves open the flap to allow the Blankfeld public policy camel into the tent. Indeed, once you read Digati with post-Blankfeld eyes, you see (1) Digati has never been a strong precedent for the court, although it remains, and (2) the Fourth DCA clearly underwent some arbitration soul searching between 2004 and 2005.

Let's go back to Blankfeld for the moment. In that anti-arbitration decision, the court shot down the NHLA arbitration language which it had apparently been itching to strike down since Digati (we never knew the procedural unconscionability issues in Digati, but given the way the court bent over backwards and then applied the sliding scale in Romano v. Manor Care, we suspect they would have found something). The Blankfeld opinion itself is about seven pages long. Three pages address public policy (with some unconscionability) which defeats arbitration. The rest of the decision includes either facts or another legal issue. BUT, then-Chief Justice Farmer appends an 11-page concurrence where he "part[s] company" with the rest of the court. He finds that the Florida Arbitration Code and the Florida Nursing Home Residents Rights Act are "in direct conflict." Apparently focusing on the NHLA language, he concludes:

"I would hold that a construction of the statutes allowing the [NHLA] arbitration provision to be given effect leads to the absurd result of eviscerating the nursing home code for nearly every patient intended to be protected by it."

Judge Farmer's concurrence has been taken up by some as the battle cry against long term care arbitration because it criticized the facility's attempt to contract away the nursing home regulations. Very few nursing home related arbitration evidentiary hearings occur in the State of Florida without the avoiding party mentioning Blankfeld or Judge Farmer's strident criticism of nursing home arbitration clauses.

So now we move forward in time. After Blankfeld, it was hard for practitioners to employ Digati. Many lawyers felt that Blankfeld at worst had overruled it and, at best, had marginalized Digati. A quick search on Westlaw shows it is the infrequently cited blacksheep of the Fourth DCA arbitration family.

Yet, in early 2008, out comes Slusser v. Life Care (Damoorgian, Klein, Hazouri). Two of those three judges had signed off on Blankfeld (Damoorgian was not on the bench). In a cogent two pages, the Slusser panel slaps down the argument that Chapter 400 as a "police power" is grounds to prevent arbitration. No, says the court citing Digati, an arbitration agreement to resolve claims under Chapter 400 is not unconscionable simply because it waives access to courts. When the plaintiff cites to the Blankfeld concurrence, the Slusser panel writes, "[w]e do not agree with that argument." In short, a voluntary waiver of access to courts to resolve claims under the Nursing Home Resident's Act is valid.

As if we need the last 4 years of arbitration decisions to tell us that...

We have another post coming on Slusser once we pull the court briefs. The losing argument in Slusser seems very close to an argument we've seen in another case.

Full post as published by Florida Arbitration Law on February 26, 2008 (boomark / email).