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Gullett v. Kindred Nursing Centers West, L.L.C. - 2/15/2017

Arizona Court of Appeals Division Two holds that on a motion to compel arbitration, limited discovery on the issue of procedural unconscionability is permissible.

A man was admitted to a care center and signed an arbitration agreement.  He died the following month.  His estate sued the care center in superior court.  The care center moved to compel arbitration.  The Estate alleged procedural unconscionability in the formation of the agreement and sought leave to take discovery on that issue.  The court denied the requested discovery and granted the motion to compel arbitration.  The Estate appealed.

The Court of Appeals vacated and remanded to allow discovery on procedural unconscionability.  A motion to compel arbitration is analogous to a motion for summary judgment.  The moving party has the burden to show an absence of dispute as to any material fact.  On summary judgment, the party opposing must usually be given an opportunity to conduct adequate discovery.  The discovery rules allow the development of legitimate claims through the discovery of admissible evidence known only to the opposing party.  Other jurisdictions have approved pre-arbitration discovery on the issue of unconscionability and validity.  Here, the patient died approximately one month after signing the arbitration agreement and so limited discovery is necessary to oppose arbitration on the basis of procedural unconscionability.  Trial courts can exercise their discretion to appropriately limit the extent of such discovery.

Judge Staring authored the opinion; Presiding Judge Howard and Judge Espinosa concurred.

Posted By: Brian K. Mosley


Posted On: 3/3/2017