{ "id": 4188226, "name": "NINA R. STRAUSBERG, Plaintiff-Appellant, v. LAUREL HEALTHCARE PROVIDERS, LLC, and ARBOR BROOK, LLC, d/b/a ARBOR BROOK HEALTHCARE, Defendants-Appellees", "name_abbreviation": "Strausberg v. Laurel Healthcare Providers, LLC", "decision_date": "2012-01-06", "docket_number": "No. 33,331; Docket No. 29,238", "first_page": "138", "last_page": "149", "citations": [ { "type": "official", "cite": "2012-NMCA-006" } ], "court": { "name_abbreviation": "N.M. Ct. App.", "id": 9025, "name": "Court of Appeals of New Mexico" }, "jurisdiction": { "id": 52, "name_long": "New Mexico", "name": "N.M." }, "cites_to": [ { "cite": "183 F.3d 173", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 11544075 ], "year": 1999, "pin_cites": [ { "page": "181", "parenthetical": "applying Pennsylvania law in a suit where the plaintiffs claimed to be victims of a fraudulent home improvement scheme that the \"party challenging a contract provision as unconscionable generally bears the burden of proving unconscionability\"" } ], "opinion_index": 0, "case_paths": [ "/f3d/183/0173-01" ] }, { "cite": "294 F.3d 1298", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 9413196 ], "year": 2002, "pin_cites": [ { "page": "1306-07" } ], "opinion_index": 0, "case_paths": [ "/f3d/294/1298-01" ] }, { "cite": "368 F.3d 269", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 9244022 ], "year": 2004, "pin_cites": [ { "page": "277", "parenthetical": "stating that \"the burden of proving such unconscionability lies with the party challenging the contract provision\" in a case addressing whether the arbitration agreement in an employment contract is unconscionable" } ], "opinion_index": 0, "case_paths": [ "/f3d/368/0269-01" ] }, { "cite": "361 F.3d 1048", "category": "reporters:federal", "reporter": "F.3d", "year": 2004, "pin_cites": [ { "page": "1053" } ], "opinion_index": 0 }, { "cite": "547 F.3d 1148", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 6051732 ], "year": 2008, "pin_cites": [ { "page": "1158", "parenthetical": "holding that employees challenging the arbitration agreement in their employment contract failed to meet \"their burden of establishing that the arbitration clause at issue in this case is unconscionable\"" } ], "opinion_index": 0, "case_paths": [ "/f3d/547/1148-01" ] }, { "cite": "117 N.M. 688", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1552744 ], "weight": 2, "year": 1994, "pin_cites": [ { "page": "692", "parenthetical": "remanding because the district court applied the wrong legal standard in deciding whether voluntary intoxication was relevant to a waiver of Miranda rights" }, { "page": "1123", "parenthetical": "remanding because the district court applied the wrong legal standard in deciding whether voluntary intoxication was relevant to a waiver of Miranda rights" } ], "opinion_index": 0, "case_paths": [ "/nm/117/0688-01" ] }, { "cite": "128 N.M. 111", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 106566 ], "weight": 2, "year": 1999, "pin_cites": [ { "page": "\u00b6 36", "parenthetical": "reversing and remanding for a new suppression hearing where trial court applied incorrect standard in reviewing alleged falsehoods and omissions in a search warrant affidavit" }, { "parenthetical": "reversing and remanding for a new suppression hearing where trial court applied incorrect standard in reviewing alleged falsehoods and omissions in a search warrant affidavit" } ], "opinion_index": 0, "case_paths": [ "/nm/128/0111-01" ] }, { "cite": "2011 WL 2611327", "category": "reporters:specialty_west", "reporter": "WL", "year": 2011, "opinion_index": 0 }, { "cite": "150 N.M. 669", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 4251314 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nm/150/0669-01" ] }, { "cite": "2002-NMSC-029", "category": "reporters:neutral", "reporter": "NMSC", "case_ids": [ 260666 ], "weight": 4, "pin_cites": [ { "page": "\u00b6 6" } ], "opinion_index": 0, "case_paths": [ "/nm/132/0715-01" ] }, { "cite": "102 N.M. 607", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1580076 ], "weight": 2, "year": 1985, "pin_cites": [ { "page": "608" }, { "page": "881" } ], "opinion_index": 0, "case_paths": [ "/nm/102/0607-01" ] }, { "cite": "299 F.3d 1216", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 11453477 ], "year": 2002, "pin_cites": [ { "page": "1220", "parenthetical": "\"The presumption in favor of arbitration . . . disappears when the parties dispute the existence of a valid arbitration agreement.\"" } ], "opinion_index": 0, "case_paths": [ "/f3d/299/1216-01" ] }, { "cite": "243 P.3d 1146", "category": "reporters:state_regional", "reporter": "P.3d", "opinion_index": 0 }, { "cite": "149 N.M. 64", "category": "reporters:state", "reporter": "N.M.", "opinion_index": 0 }, { "cite": "2010-NMCERT-010", "category": "reporters:neutral", "reporter": "NMCERT", "opinion_index": 0 }, { "cite": "2010-NMCA-105", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 4249888 ], "weight": 3, "pin_cites": [ { "page": "\u00b6\u00b6 3, 16" } ], "opinion_index": 0, "case_paths": [ "/nm/149/0287-01" ] }, { "cite": "2003-NMCA-148", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 77181 ], "weight": 5, "pin_cites": [ { "page": "\u00b6 9" }, { "page": "\u00b6 9" }, { "page": "\u00b6 8", "parenthetical": "\"The presumption in favor of arbitration . . . disappears when the parties dispute the existence of a valid arbitration agreement.\"" } ], "opinion_index": 0, "case_paths": [ "/nm/134/0630-01" ] }, { "cite": "2010-NMCA-046", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 4247903 ], "weight": 3, "pin_cites": [ { "page": "\u00b6 15" } ], "opinion_index": 0, "case_paths": [ "/nm/148/0784-01" ] }, { "cite": "2008-NMCA-046", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 3783630 ], "pin_cites": [ { "page": "\u00b6 22" } ], "opinion_index": 0, "case_paths": [ "/nm/143/0726-01" ] }, { "cite": "132 U.S. 406", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 5699541 ], "weight": 2, "year": 1889, "pin_cites": [ { "page": "411", "parenthetical": "quoting Earl of Chesterfield v. Janssen, 2 Ves. Sen. 125, 155, 28 Eng. Rep. 82, 100 (Ch. 1750)" } ], "opinion_index": 0, "case_paths": [ "/us/132/0406-01" ] }, { "cite": "1999-NMCA-040", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 827316 ], "weight": 3, "pin_cites": [ { "page": "\u00b6 19" } ], "opinion_index": 0, "case_paths": [ "/nm/126/0748-01" ] }, { "cite": "111 N.M. 383", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 715232 ], "weight": 2, "year": 1991, "pin_cites": [ { "page": "390", "parenthetical": "stating that the touchstone for substantive unconscionability is gross unfairness" }, { "page": "39", "parenthetical": "stating that the touchstone for substantive unconscionability is gross unfairness" } ], "opinion_index": 0, "case_paths": [ "/nm/111/0383-01" ] }, { "cite": "103 N.M. 506", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 711312 ], "weight": 14, "year": 1985, "pin_cites": [ { "page": "510", "parenthetical": "\"Substantive unconscionability is concerned with contract terms that are illegal, contrary to public policy, or grossly unfair.\"" }, { "page": "679", "parenthetical": "\"Substantive unconscionability is concerned with contract terms that are illegal, contrary to public policy, or grossly unfair.\"" }, { "page": "511" }, { "page": "680" }, { "page": "510" }, { "page": "679" }, { "page": "509" }, { "page": "678" }, { "page": "509" }, { "page": "678" }, { "page": "510" }, { "page": "679" }, { "page": "510" }, { "page": "679" } ], "opinion_index": 0, "case_paths": [ "/nm/103/0506-01" ] }, { "cite": "2008-NMSC-046", "category": "reporters:neutral", "reporter": "NMSC", "case_ids": [ 4002330 ], "weight": 5, "pin_cites": [ { "page": "\u00b6 20" }, { "page": "\u00b6 22" }, { "page": "\u00b6 20" } ], "opinion_index": 0, "case_paths": [ "/nm/144/0464-01" ] }, { "cite": "98 N.M. 541", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1582518 ], "weight": 2, "year": 1982, "pin_cites": [ { "page": "545", "parenthetical": "setting forth the same options under Article II of the Uniform Commercial Code" }, { "page": "829", "parenthetical": "setting forth the same options under Article II of the Uniform Commercial Code" } ], "opinion_index": 0, "case_paths": [ "/nm/98/0541-01" ] }, { "cite": "2009-NMSC-021", "category": "reporters:neutral", "reporter": "NMSC", "case_ids": [ 4243196 ], "weight": 12, "pin_cites": [ { "page": "\u00b6 21" }, { "page": "\u00b6 21" }, { "page": "\u00b6 24" }, { "page": "\u00b6 22" }, { "page": "\u00b6 22" }, { "page": "\u00b6 25" }, { "page": "\u00b6 31" }, { "page": "\u00b6 34" }, { "page": "\u00b6 23" }, { "page": "\u00b6 23" } ], "opinion_index": 0, "case_paths": [ "/nm/146/0256-01" ] }, { "cite": "9 U.S.C. \u00a7 2", "category": "laws:leg_statute", "reporter": "U.S.C.", "year": 2006, "opinion_index": 0 }, { "cite": "1999-NMSC-010", "category": "reporters:neutral", "reporter": "NMSC", "case_ids": [ 257742 ], "weight": 3, "pin_cites": [ { "page": "\u00b6 28" } ], "opinion_index": 0, "case_paths": [ "/nm/127/0020-01" ] }, { "cite": "2006-NMCA-028", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 2541686 ], "weight": 3, "pin_cites": [ { "page": "\u00b6 14" } ], "opinion_index": 0, "case_paths": [ "/nm/139/0235-01" ] }, { "cite": "2003-NMCA-138", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 77196 ], "weight": 4, "pin_cites": [ { "page": "\u00b6 8" } ], "opinion_index": 0, "case_paths": [ "/nm/134/0558-01" ] }, { "cite": "2005-NMCA-018", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 929129 ], "weight": 5, "pin_cites": [ { "page": "\u00b6 4" }, { "page": "\u00b6 5" }, { "page": "\u00b6 5" } ], "opinion_index": 0, "case_paths": [ "/nm/137/0057-01" ] }, { "cite": "2011-NMSC-033", "category": "reporters:neutral", "reporter": "NMSC", "case_ids": [ 4250808 ], "weight": 11, "pin_cites": [ { "page": "\u00b6 42" }, { "page": "\u00b6 43" }, { "page": "\u00b6 43" }, { "page": "\u00b6 45" }, { "page": "\u00b6 45" }, { "page": "\u00b6 46" }, { "page": "\u00b6 44" } ], "opinion_index": 0, "case_paths": [ "/nm/150/0398-01" ] }, { "cite": "908 N.E.2d 408", "category": "reporters:state_regional", "reporter": "N.E.2d", "pin_cites": [ { "page": "\u00b6 20" } ], "opinion_index": 1 }, { "cite": "2009-Ohio-2054", "category": "reporters:neutral", "reporter": "Ohio", "opinion_index": 1 }, { "cite": "122 Ohio St. 3d 63", "category": "reporters:state", "reporter": "Ohio St. 3d", "case_ids": [ 4269459 ], "opinion_index": 1, "case_paths": [ "/ohio-st-3d/122/0063-01" ] }, { "cite": "23 So. 3d 741", "category": "reporters:state_regional", "reporter": "So. 3d", "case_ids": [ 7052508 ], "year": 2009, "pin_cites": [ { "page": "742", "parenthetical": "\"The party seeking to avoid the arbitration provision has the burden to establish unconscionability.\"" } ], "opinion_index": 1, "case_paths": [ "/so3d/23/0741-01" ] }, { "cite": "894 So. 2d 661", "category": "reporters:state_regional", "reporter": "So. 2d", "case_ids": [ 9179402 ], "year": 2004, "pin_cites": [ { "page": "665", "parenthetical": "\"The burden of proving unconscionability of an arbitration agreement rests with the party challenging the agreement.\" (internal quotation marks and citation omitted)" } ], "opinion_index": 1, "case_paths": [ "/so2d/894/0661-01" ] }, { "cite": "266 P.3d 632", "category": "reporters:state_regional", "reporter": "P.3d", "year": 2011, "opinion_index": 1 }, { "cite": "150 N.M. 763", "category": "reporters:state", "reporter": "N.M.", "year": 2011, "opinion_index": 1 }, { "cite": "2011-NMCERT-006", "category": "reporters:neutral", "reporter": "NMCERT", "year": 2011, "opinion_index": 1 }, { "cite": "2011-NMCA-062", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 4249741 ], "weight": 3, "year": 2011, "pin_cites": [ { "page": "\u00b6\u00b6 34, 37" } ], "opinion_index": 1, "case_paths": [ "/nm/149/0681-01" ] }, { "cite": "2006-NMCA-077", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 2543410 ], "weight": 4, "pin_cites": [ { "page": "\u00b6 16" }, { "parenthetical": "citation omitted" } ], "opinion_index": 1, "case_paths": [ "/nm/139/0750-01" ] }, { "cite": "108 N.M. 535", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1592895 ], "weight": 2, "year": 1989, "pin_cites": [ { "page": "538" }, { "page": "740" } ], "opinion_index": 1, "case_paths": [ "/nm/108/0535-01" ] }, { "cite": "62 N.M. 425", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2713457 ], "weight": 2, "year": 1957, "pin_cites": [ { "page": "429", "parenthetical": "holding that the party seeking to set a contract aside for fraud has the burden of proof" }, { "page": "654", "parenthetical": "holding that the party seeking to set a contract aside for fraud has the burden of proof" } ], "opinion_index": 1, "case_paths": [ "/nm/62/0425-01" ] }, { "cite": "92 N.M. 106", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1557070 ], "weight": 2, "year": 1978, "pin_cites": [ { "page": "107", "parenthetical": "stating that the answer to a complaint contained the \"affirmative defense\" of unconscionability" }, { "page": "471", "parenthetical": "stating that the answer to a complaint contained the \"affirmative defense\" of unconscionability" } ], "opinion_index": 1, "case_paths": [ "/nm/92/0106-01" ] }, { "cite": "2009-NMCA-009", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 4242515 ], "weight": 3, "pin_cites": [ { "page": "\u00b6 12" } ], "opinion_index": 1, "case_paths": [ "/nm/145/0494-01" ] }, { "cite": "183 F.3d 173", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 11544075 ], "year": 1999, "pin_cites": [ { "parenthetical": "internal quotation marks and citation omitted" } ], "opinion_index": 1, "case_paths": [ "/f3d/183/0173-01" ] }, { "cite": "2011 WL 2611327", "category": "reporters:specialty_west", "reporter": "WL", "weight": 3, "year": 2011, "opinion_index": 1 }, { "cite": "2010-NMCA-105", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 4249888 ], "weight": 2, "pin_cites": [ { "page": "\u00b6 16" } ], "opinion_index": 1, "case_paths": [ "/nm/149/0287-01" ] }, { "cite": "2003-NMCA-148", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 77181 ], "pin_cites": [ { "page": "\u00b6\u00b6 11-14" } ], "opinion_index": 1, "case_paths": [ "/nm/134/0630-01" ] } ], "analysis": { "cardinality": 1343, "char_count": 31943, "ocr_confidence": 0.834, "pagerank": { "raw": 6.759579850464235e-08, "percentile": 0.4091642022372733 }, "sha256": "9685de9816b87312d1d4bdcb39ae7f3e2139c648bd16f4e0c5e7395aca215076", "simhash": "1:167bf9b903eba9ed", "word_count": 4936 }, "last_updated": "2023-07-14T17:47:49.050081+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "MICHAEL E. VIGIL, Judge", "MICHAEL D. BUSTAMANTE, Judge", "JAMES J. WECHSLER, Judge (dissenting).", "JAMES J. WECHSLER, Judge" ], "parties": [ "NINA R. STRAUSBERG, Plaintiff-Appellant, v. LAUREL HEALTHCARE PROVIDERS, LLC, and ARBOR BROOK, LLC, d/b/a ARBOR BROOK HEALTHCARE, Defendants-Appellees." ], "opinions": [ { "text": "OPINION\nVIGIL, Judge.\n{1} A party who seeks to compel arbitration has the burden to prove the existence of a valid agreement to arbitrate. In this case, however, the district court shifted the burden to Plaintiff to prove that the agreement is invalid, and granted Defendants\u2019 motion to compel arbitration under a nursing home mandatory arbitration agreement. We reverse and remand.\nBACKGROUND\n{2} Plaintiff was required to sign an arbitration agreement in order to be admitted into a nursing home, Arbor Brook Healthcare (Arbor Brook) to rehabilitate from back surgery. Notwithstanding the agreement to arbitrate, Plaintiff filed a complaint for damages in the district court against the operator of Arbor Brook, Arbor Brook LLC, d/b/a Arbor Brook Healthcare, and Laurel Healthcare Providers, LLC as its owner, operator, or manager (Defendants). Plaintiff alleged that during her stay at Arbor Brook, she developed painful and preventable decubitus ulcers at or near her surgical wound; that her surgical wound became infected; that the infection was ignored or not properly treated, leading to a staph infection; and that her care was negligent in several other respects.\n{3} Defendants responded by filing a motion to dismiss the complaint and compel arbitration, alleging that under the arbitration agreement between Plaintiff and Arbor Brook, all of Plaintiffs claims are subject to arbitration. Plaintiff replied that the arbitration agreement is invalid because it is unconscionable. The district court first ruled that the arbitration agreement is not substantively unconscionable and then held an evidentiary hearing to determine whether the arbitration agreement is procedurally unconscionable. At the hearing, Plaintiff and the nurse liaison who obtained Plaintiffs signature to the arbitration agreement testified what they recalled about the circumstances under which Plaintiff signed the arbitration agreement.\n{4} The district court then issued a letter decision setting forth its ruling and reasoning. The district court said,\nthe issue presented was difficult because of the credibility of the witnesses, not in the sense of their truthfulness, but in the sense of their ability to recall the events surrounding the signing of the contract. Only two witnesses testified, one for the Plaintiff and one for Defendant. Ultimately, however, it was Plaintiff\u2019s burden to establish the contract she signed is unenforceable.\nThe district court specifically noted that Plaintiff\u2019s testimony demonstrated she was confused about signing the arbitration agreement and attributed her confusion to the pain medication she was under at the time. The district court also ruled that the factors considered to determine the validity of the arbitration agreement \u201cgenerally are evenly balancedf.]\u201d One of the factors it considered was whether Plaintiff had the option of going to another nursing home facility. As to this factor, the district court found, \u201cPlaintiff believed that her only option was to be discharged from the hospital to Defendants\u2019] care, but did not testify whether she looked into other placement options, and it was her burden to prove the contract at issue is unenforceable.\u201d Ultimately, the district court ruled that the arbitration agreement was not procedurally unconscionable. A formal order was filed granting Defendants\u2019 motion to dismiss and to compel arbitration, and Plaintiff appeals.\n{5} To place our holding in context, we first address our standard of review, followed by a discussion of: (1) the enforcement of a valid arbitration agreement; (2) the elements of substantive unconscionability in an arbitration agreement; and (3) the elements ofprocedural unconscionability in an arbitration agreement. Within this context we then address: (4) which party has the burden of proof when one party seeks dismissal of a suit to compel arbitration under an arbitration agreement, and the other party asserts it is unconscionable; and (5) whether shifting the burden of proof resulted in reversible error.\nDISCUSSION\nStandard of Review\n{6} \u201cWhether a contract provision is unconscionable and unenforceable is a question of law that we review de novo.\u201d Rivera v. Am. Gen. Fin. Servs., Inc., 2011-NMSC-033, \u00b6 42, 150 N.M. 398, 259 P.3d 803. Our review of a district court order granting or denying a motion to compel arbitration is also de novo. Piano v. Premier Distrib. Co., 2005-NMCA-018, \u00b6 4, 137 N.M. 57, 107 P.3d 11; Heye v. Am. Golf Corp., Inc., 2003-NMCA-138, \u00b6, 134 N.M. 558, 80 P.3d 495. Finally, our review of whether the district court applied the correct evidentiary rule or legal standard in deciding the claim before it is likewise de novo. See Mayeux v. Winder, 2006-NMCA-028, \u00b6 14, 139 N.M. 235, 131 P.3d 85 (stating that the plaintiff\u2019s argument that the district court erred in applying the wrong legal standard to their breach of fiduciary claim is reviewed de novo); see also State v. Torres, 1999-NMSC-010, \u00b6 28, 127 N.M. 20, 976 P.2d 20 (\u201c[T]he threshold question of whether the trial court applied the correct evidentiary rule or standard is subject to de novo review on appeal.\u201d).\nThe Enforcement of Arbitration Agreements\n{7} Arbitration agreements are enforced under both New Mexico and federal law. See Piano, 2005-NMCA-018, \u00b6 5; see also NMSA 1978, \u00a7 44-7A-7(a) (2001) (\u201cAn agreement contained in a record to submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract.\u201d); 9 U.S.C. \u00a7 2 (2006) (\u201c[A] contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.\u201d).\n{8} However, unconscionability is an equitable doctrine rooted in public policy under which an arbitration agreement may be deemed unenforceable. Rivera, 2011-NMSC-033, \u00b6 43; Cordova v. World Fin. Corp. of N.M., 2009-NMSC-021, \u00b6 21, 146 N.M. 256, 208 P.3d 901. New Mexico recognizes both substantive unconscionability and procedural unconscionability under the doctrine of contractual unconscionability. Rivera, 2011-NMSC-033, \u00b6 43; Cordova, 2009-NMSC-021, \u00b6 21. While a mandatory arbitration clause may be invalidated for unconscionability when both substantive and procedural unconscionability are present, \u201cthere is no absolute requirement in our law that both must be present to the same degree or that they both be present at all.\u201d Cordova, 2009-NMSC-021, \u00b6 24.\n{9} When a contractual term is deemed to be unconscionable, two possible remedial actions can be taken.\nIf a contract or term thereof is unconscionable at the time the contract is made a court may refuse to enforce the contract, or may enforce the remainder of the contract without the unconscionable term, or may so limit the application of any unconscionable term as to avoid any unconscionable result.\nId. \u00b6 39 (internal quotation marks and citation omitted); see also Smith v. Price\u2019s Creameries, 98 N.M. 541, 545, 650 P.2d 825, 829 (1982) (setting forth the same options under Article II of the Uniform Commercial Code).\nSubstantive Unconscionability\n{10} Contractterms themselves determine whether they are illegal, contrary to public policy, or grossly unfair, and therefore, substantively unconscionable. Rivera, 2011-NMSC-033, \u00b6 45 (\u201cSubstantive unconscionability concerns the legality and fairness of the contract terms themselves.\u201d (quoting Cordova, 2009-NMSC-021, \u00b6 22)); Fiser v. Dell Computer Corp., 2008-NMSC-046, \u00b6 20, 144 N.M. 464, 188 P.3d 1215 (\u201cSubstantive unconscionability relates to the content of the contract terms and whether they are illegal, contrary to public policy, or grossly unfair.\u201d); Guthmann v. La Vida Llena, 103 N.M. 506, 510, 709 P.2d 675, 679 (1985) (\u201cSubstantive unconscionability is concerned with contract terms that are illegal, contrary to public policy, or grossly unfair.\u201d); State ex rel. State Highway & Transp. Dep\u2019t v. Garley, 111 N.M. 383, 390, 806 P.2d 32, 39 (1991) (stating that the touchstone for substantive unconscionability is gross unfairness). In determining whether a contract suffers substantive unconscionability, the \u201canalysis focuses on such issues as whether the contract terms are commercially reasonable and fair, the purpose and effect of the terms, the onesidedness of the terms, and other similar public policy concerns.\u201d Rivera, 2011-NMSC-033, \u00b6 45 (quoting Cordova, 2009-NMSC-021, \u00b6 22).\n{11} InNew Mexico, a contract provision that unreasonably benefits one party over another is substantively unconscionable. Rivera, 2011-NMSC-033, \u00b6 46; Cordova, 2009-NMSC-021, \u00b6 25; Guthmann, 103 N.M. at 511, 709 P.2d at 680; Monette v. Tinsley, 1999-NMCA-040, \u00b6 19, 126 N.M. 748, 975 P.2d 361. In making this determination, a NewMexico courtno longerneeds to find that the terms must be \u2018\u201csuch as no man in his senses and not under delusion would make on the one hand, and as no honest and fair man would accept on the other.\u2019\u201d Cordova, 2009-NMSC-021, \u00b6 31 (quoting Hume v. United States, 132 U.S. 406, 411 (1889) (quoting Earl of Chesterfield v. Janssen, 2 Ves. Sen. 125, 155, 28 Eng. Rep. 82, 100 (Ch. 1750)). \u201cIt is sufficient if the provision is grossly unreasonable and against our public policy under the circumstances.\u201d Id.\nProcedural Unconscionability\n{12} A contract or provision therein is procedurally unconscionable where there is such gross inequality in bargaining power between the parties that one party\u2019s choice is effectively non-existent. Guthmann, 103 N.M. at 510, 709 P.2d at 679.\n{13} While not a prerequisite, a contract of adhesion may result in a procedurally unconscionable agreement. Rivera, 2011-NMSC-033, \u00b6 44. But see Cordova, 2009-NMSC-021, \u00b6 34 (noting that a contract of adhesion may result in substantive unconscionability) ; Fiser, 2008-NMSC-046, \u00b6 22 (same). To determine whether an adhesion contract exists, the court inquires into three factors: \u201c(1) whether it was prepared entirely by one party for the acceptance of the other; (2) whether the party proffering the contract enjoyed superior bargaining power because the weaker party could not avoid doing business under the particular terms; and [(3)] whether the contract was offered to the weaker party without an opportunity for bargaining on a take-it-or-leave-itbasis.\u201d Fiser, 2008-NMCA-046, \u00b6 22; Guthmann, 103 N.M. at 509, 709 P.2d at 678; Rivera v. Am. Gen. Fin. Servs., Inc., 2010-NMCA-046, \u00b6 15, 148 N.M. 784, 242 P.3d 351, rev\u2019d by 2011-NMSC-033. Accordingly, a contract of adhesion may result if all the competitors ofthe dominate party use essentially the same contract terms or when that dominate party has a monopoly on the relevant geographic market. Guthmann, 103 N.M. at 509, 709 P.2d at 678.\n{14} Thus, to determine if a contractual provision has the stigma of procedural unconscionability, the circumstances surrounding the formation of the contract must be examined. Cordova, 2009-NMSC-021, \u00b6 23; Fiser, 2008-NMSC-046, \u00b6 20; Guthmann, 103 N.M. at 510, 709 P.2d at 679. Circumstances in the contract formation to be examined include whether sharp practices or high pressure tactics were used, the relative sophistication, education, and wealth of the parties, a particular party\u2019s ability to understand the terms of the contract, the relative bargaining power of the parties, the relative scarcity of the subject matter of the contract, and the extent to which either party felt free to accept or decline the terms demanded by the other. Cordova, 2009-NMSC-021, \u00b6 23; Guthmann, 103 N.M. at 510, 709 P.2d at 679.\nWho Has the Burden of Proof\n{15} A legally enforceable contract is a prerequisite to arbitration under the New Mexico Uniform Arbitration Act, and without such a contract, the parties will not be forced to arbitrate. Piano, 2005-NMCA-018, \u00b6 5; Heye, 2003-NMCA-138, \u00b6 8; DeArmond v. Halliburton Energy Servs., Inc., 2003-NMCA-148, \u00b6 9, 134 N.M. 630, 81 P.3d 573. The party who seeks to compel arbitration has the burden of proof to establish the existence of a valid agreement to arbitrate. See Corum v. Roswell Senior Living, LLC, 2010-NMCA-105, \u00b6\u00b6 3, 16, 149 N.M. 287, 248 P.3d 329 (stating that the party attempting to compel arbitration has the burden to demonstrate a valid agreement to arbitrate), cert. denied, 2010-NMCERT-010, 149 N.M. 64, 243 P.3d 1146; DeArmond, 2003-NMCA-148, \u00b6 9 (stating that party relying on a contract has the burden to prove it is legally valid and enforceable). Moreover, when the parties dispute the existence of a valid arbitration agreement, any presumption in favor of arbitration disappears. See DeArmond, 2003-NMCA-148, \u00b6 8; see also Dumais v. Am. Golf Corp., 299 F.3d 1216, 1220 (10th Cir. 2002) (\u201cThe presumption in favor of arbitration . . . disappears when the parties dispute the existence of a valid arbitration agreement.\u201d).\n{16} The foregoing rules are well embedded in New Mexico jurisprudence. For example, in Shaw v. Kuhnel & Associates, Inc., 102 N.M. 607, 608, 698 P.2d 880, 881 (1985), superceded by statute as stated in Aguilera v. Palm Harbor Homes, Inc., 2002-NMSC-029, \u00b6 6, 132 N.M. 715, 54 P.3d 993, our Supreme Court repeats that parties are generally bound to resolve disputes by arbitration when they have contractually agreed to do so. \u201cHowever, a motion to compel arbitration is essentially a suit for specific performance of an agreement to arbitrate.\u201d Id. Clearly, a party seeking specific performance has the burden of proving grounds for such relief. In this case, it is the existence of a legally valid and enforceable contractual agreement to arbitrate.\n{17} We acknowledge and recognize that most courts that have considered the question, place the burden on the party seeking to set aside an arbitration agreement on unconscionability grounds. However, these cases all deal with commercial transactions, and we conclude that they are distinguishable and unpersuasive in the context before us.\n{18} The case before us is not a mere commercial transaction. When individuals are dealing with admission into a nursing home, the health issue making nursing home care a necessity is often so grave, critical, or severe, that the only focus is on getting proper treatment, with everything else being secondary. In a nutshell, such individuals are often at their most vulnerable, emotionally or physically, or both. And this often includes immediate family members. Moreover, the context does not usually allow for measured consideration of what nursing homes are available, the terms required for admission, and the like. Thus, we have already noted that admission agreements and other admission-related documents such as mandatory arbitration agreements are often presented to aging and infirmed individuals and their families \u201cwhen they are at their most vulnerable, in need of quick assistance, and potentially can easily be taken advantage of.\u201d Barron v. The Evangelical Lutheran Good Samaritan Soc\u2019y, 2011 -NMCA-094, \u00b6 41, 150 N.M. 669, 265 P.3d 720.\n{19} In recognition of these realities, the West Virginia Supreme Court has declared that all mandatory arbitration clauses in nursing home admission agreements are unconscionable and unenforceable. Brown v. Genesis Healthcare Corp., No. 35494, 2011 WL 2611327 (W. Va. 2011). We have not been asked to, and therefore decline to adopt the holding of Brown. Nevertheless, we consider the following expressed reasons for treating nursing home contracts with mandatory arbitration agreements differently from mere commercial contracts very persuasive:\nBecause of illness, incapacitation, or physical or mental impairment, people being admitted to a nursing home are usually quite vulnerable ....\n[I]n the 1980s, the government changed the way hospitals were paid for their Medicare patients; since the change, discharge planning occurs \u201cquicker and sicker.\u201d The weakened physical and emotional condition of a person from an acute illness is one of the most significant factors that compels a decision to seek post-hospital nursing home placement. Compounding the dangers of this decision-making time, not only is the person being discharged \u201cquicker and sicker,\u201d but the hospital treatment itself often further debilitates the person. A person\u2019s \u201cdecision\u201d to enter a nursing home is, therefore, often made when the person\u2019s decision-making abilities are seriously impaired.\nUnlike the situation that exists when a consumer signs a contract for a product or service, people entering a nursing home have to sign admissions contracts in the midst of a crisis, without time to comparison shop or to negotiate the best service and price combination. Put simply, there is usually little time to investigate options or to wait for an opening at a nursing home of choice. Time pressure during the hospital discharge process significantly impairs people\u2019s ability to seek and carefully consider alternatives.\nUltimately, people being admitted to long-term care facilities and their families have to sign admission contracts without time to comparison shop or to negotiate the best service and price combination. The pressures of deciding placement at such a time, coupled with physical and/or mental infirmities, facing discharge from the hospital, financial limitations, and/or lack of knowledge about long-term care options make consumers vulnerable and dependent on full disclosure by facilities.\n(internal quotation marks and footnotes omitted).\n{20} We therefore hold that when a nursing home relies upon an arbitration agreement signed by a patient as a condition for admission to the nursing home, and the patient contends that the arbitration agreement is unconscionable, the nursing home has the burden of proving that the arbitration agreement is not unconscionable.\nShifting The Burden of Proof Resulted in Reversible Error\n{21} Defendants had the burden of proving that the arbitration agreement is not unconscionable. However, the district court shifted the burden to Plaintiff to prove that the arbitration agreement is not unconscionable. We conclude this was reversible error.\n{22} We have demonstrated that many factual issues must be decided by a district court in determining whether an arbitration agreement is unconscionable. In determining whether the contract is procedurally unconscionable, the district court said the issues were difficult to decide because neither Plaintiff nor the nurse who obtained her signature on the arbitration agreement had clear recollections of the factual circumstances, and that the factors it considered to determine whether the arbitration agreement is unconscionable \u201cgenerally are evenly balanced}.]\u201d The district court said that the \u201cdeciding factor\u201d in its mind was Plaintiff\u2019s understanding of the arbitration agreement at the time she signed it. However, we have no way of assessing what weight the court would have given this evidence, or whether the district court would have come to the same conclusion if the burden of proof had been properly allocated to Defendants. In addition, we have no way of determining whether the district court applied the correct burden of proof in ruling that the mandatory arbitration agreement is not substantively unconscionable. Moreover, when the issue of substantive unconscionability was first considered, the parties and the district court did not have the benefit of our Supreme Court\u2019s opinion in Rivera, 2011-NMSC-033. We therefore reverse the order of the district court. See State v. Fernandez, 128 N.M. 111, \u00b6 36, 990 P.2d 224 (Ct. App. 1999) (reversing and remanding for a new suppression hearing where trial court applied incorrect standard in reviewing alleged falsehoods and omissions in a search warrant affidavit); see also State v. Young, 117 N.M. 688, 692, 875 P.2d 1119, 1123 (Ct. App. 1994) (remanding because the district court applied the wrong legal standard in deciding whether voluntary intoxication was relevant to a waiver of Miranda rights).\n{23} On remand, we encourage the district court to enter findings of fact and conclusions of law pursuant to Rule 1-052 NMRA to facilitate appellate review of its factual determinations relating to unconscionability and its legal ruling on whether the arbitration is legally unconscionable.\nCONCLUSION\n{24} We reverse and remand for further proceedings in accordance with this Opinion.\n{25} IT IS SO ORDERED.\nMICHAEL E. VIGIL, Judge\nI CONCUR:\nMICHAEL D. BUSTAMANTE, Judge\nJAMES J. WECHSLER, Judge (dissenting).\nSee, e.g., Rogers v. Royal Caribbean Cruise Line, 547 F.3d 1148, 1158 (9th Cir. 2008) (holding that employees challenging the arbitration agreement in their employment contract failed to meet \u201ctheir burden of establishing that the arbitration clause at issue in this case is unconscionable\u201d); Faber v. Menard, Inc., 361 F.3d 1048, 1053 (8th Cir. 2004) (noting that \u201c[ujnder Iowa law, the burden of proof that a particular provision or contract is unconscionable rests on the party claiming it is unconscionable\u201d and concluding that the employee failed to meet his burden of proving that the arbitrator\u2019s fees made the agreement unconscionable due to their prohibitive cost); Parilla v. IAP Worldwide Servs. VI, Inc., 368 F.3d 269, 277 (3d Cir. 2004) (stating that \u201cthe burden of proving such unconscionability lies with the party challenging the contract provision\u201d in a case addressing whether the arbitration agreement in an employment contract is unconscionable) (citing E. Allen Farnsworth, Farnsworth on Contracts \u00a7 4.28 & n.14 (3d ed. 1999)); Bess v. Check Express, 294 F.3d 1298, 1306-07 (11th Cir. 2002) (stating that \u201c[ujnder Alabama law, unconscionability is an affirmative defense to the enforcement of a contract, and the party asserting that defense bears the burden of proving it by substantial evidence\u201d in a class action case for alleged violations of state and federal law arising out of \u201ccash advances\u201d or deferred payment transactions between the plaintiffs and the defendants); Harris v. Green Tree Fin. Corp., 183 F.3d 173, 181 (3d Cir. 1999) (applying Pennsylvania law in a suit where the plaintiffs claimed to be victims of a fraudulent home improvement scheme that the \u201cparty challenging a contract provision as unconscionable generally bears the burden of proving unconscionability\u201d).", "type": "majority", "author": "VIGIL, Judge." }, { "text": "WECHSLER, Judge\n(dissenting).\n{26} Our Supreme Court has stated the \u201cfundamental principle that arbitration is a matter of contract.\u201d Rivera, 201 l-NMSC-033, \u00b6 16 (internal quotation marks and citation omitted). To this end, \u201ccourts must place arbitration agreements on an equal footing with other contracts}.]\u201d Id. (internal quotation marks and citation omitted). I therefore do not agree with shifting the burden to the party seeking to enforce an arbitration agreement to prove that an arbitration agreement is not unconscionable, because this position does not have a basis in well-established contract law. As a result, I respectfully dissent.\n{27} The majority correctly states that \u201c[t]he party who seeks to compel arbitration has the burden of proof to establish the existence of a valid agreement to arbitration.\u201d Majority Opinion \u00b6 15. However, the cases cited by the majority indicate that this burden applies to contract formation issues, not to defenses by a party seeking to stop the enforcement of an otherwise valid contract. For example, in DeArmond, 2003-NMCA-148, \u00b6\u00b6 11-14, the issues addressed by this Court were whether a party to an arbitration agreement had knowledge of a change in his employment contract that included a mandatory arbitration clause and therefore accepted the modification and, alternatively, whether mutuality existed to form a binding contract. Corum, 2010-NMCA-105, \u00b6 16, similarly addresses contract formation issues. In particular, the issue in Corum was whether the individual who entered into an arbitration agreement on behalf of a nursing home patient had statutory authority to enter into the agreement. Id.\n{28} Unconscionability, on the other hand, is an equitable doctrine that is a defense or \u201cexception\u201d to enforcing an otherwise valid contract. See Montano v. N.M. Real Estate Appraiser\u2019s Bd., 2009-NMCA-009, \u00b6 12, 145 N.M. 494, 200 P.3d 544 (\u201cWe will allow equity to interfere with enforcing clear contractual obligations only when well-defined equitable exceptions, such as unconscionability, mistake, fraud, or illegality justify deviation from the parties\u2019 contract.\u201d (internal quotation marks and citation omitted)); see also Fidelity Nat\u2019l Bank v. Tommy L. Goff, Inc., 92 N.M. 106, 107, 583 P.2d 470, 471 (1978) (stating that the answer to a complaint contained the \u201caffirmative defense\u201d of unconscionability). Generally, a party seeking to set aside enforcement of a contract based on a defense or exception, such as unconscionability, has the burden of proof. See Mason v. Salomon, 62 N.M. 425, 429, 311 P.2d 652, 654 (1957) (holding that the party seeking to set a contract aside for fraud has the burden of proof); see also W. Commerce Bank v. Gillespie, 108 N.M. 535, 538, 775 P.2d 737, 740 (1989) (declining to shift the burden of persuasion to the party challenging a contract because the action was \u201ca simple contract issue\u201d requiring the court to determine whether the \u201cmaking of the contract\u201d satisfied the \u201cconditionfs] precedent\u201d as opposed to an action seeking to set aside a contract on a ground such as fraud, mistake, misrepresentation, or undue influence). Similarly, Farmington Police Officers Ass\u2019n Commc\u2019n Workers of Am. Local 7911 v. City of Farmington, 2006-NMCA-077, \u00b6 16, 139 N.M. 750, 137 P.3d 1204, addressed the burden of proof in an arbitration case and concluded that the party seeking to enforce an arbitration clause in a collective bargaining agreement had the burden of persuasion as to whether the clause applied to the dispute. In Farmington Police Officers Ass\u2019n, this Court stated that\nwe believe that where the meaning of a material contract term is in dispute a party seeking affirmative relief based upon its interpretation necessarily bears the burden of establishing that its interpretation controls. This approach is consistent with the general default rule allocating the burden of persuasion in civil cases to the party who invokes the authority of a court to alter the extrajudicial status quo.\nId. (citation omitted).\n{29} As the majority acknowledges, most courts that have addressed the issue have placed the burden on the party seeking to set aside an arbitration agreement on unconscionability grounds. Majority Opinion \u00b6 17 n.l. Consistent with these other courts, this Court has recently clarified that the party challenging a provision of an arbitration agreement that banned class action claims on unconscionability grounds has the burden of proof. See Felts v. CLK Mgmt., Inc., 2011-NMCA-062, \u00b6\u00b6 34, 37, 149 N.M. 681, 254 P.3d 124, cert. granted, 2011-NMCERT-006, 150 N.M. 763, 266 P.3d 632 (Nos. 33,011 and 33,013, June 8, 2011).\n{30} The majority distinguishes Felts and cases from other jurisdictions because the cases involve \u201ccommercial transactions.\u201d Majority Opinion \u00b6 17. However, even cases in other jurisdictions specifically involving challenges to arbitration agreements in nursing home admission documents impose the burden of proof upon the party challenging the agreement. See, e.g., Briarcliff Nursing Home, Inc. v. Turcotte, 894 So. 2d 661, 665 (Ala. 2004) (\u201cThe burden of proving unconscionability of an arbitration agreement rests with the party challenging the agreement.\u201d (internal quotation marks and citation omitted)); Estate of Perez v. Life Care Ctrs. of Am. Inc., 23 So. 3d 741, 742 (Fla. Dist. Ct. App. 2009) (\u201cThe party seeking to avoid the arbitration provision has the burden to establish unconscionability.\u201d); Hayes v. Oakridge Home, 122 Ohio St. 3d 63, 2009-Ohio-2054, 908 N.E.2d 408, at \u00b6 20 (\u201cThe party asserting unconscionability of a contract bears the burden of proving that the agreement is both procedurally and substantively unconscionable.\u201d).\n{31} I also note that in Brown, 2011 WL 2611327, the West Virginia Supreme Court stated the policy considerations quoted in Paragraph 19 of the majority opinion as background to establish the context of the agreements in the case, rather than as the basis for its holding that mandatory arbitration clauses in nursing home admission documents adopted prior to the negligent incident at issue are unconscionable. West Virginia recognizes, as a matter of public policy, a \u201cpublic service\u201d exception to the enforcement of pre-injury contracts that either absolves a public service provider of liability for personal injuries or wrongful death or that allows a public service provider to escape public scrutiny in the courtroom. Id. Brown invalidated the arbitration agreements based on the public service exception because a nursing home is a public service provider and the arbitration agreements prevented the nursing homes from \u201ccourtroom scrutiny of their negligent conduct that caused a personal injury or wrongful death[.]\u201d Id.\n{32} Although I share the majority\u2019s concern that \u201cindividuals are often at their most vulnerable, emotionally or physically, or both\u201d when seeking admission to a nursing home, I do not believe this concern justifies a sweeping exception to well-established law for nursing home patients that the majority creates. Majority Opinion \u00b6 18. I would therefore treat an arbitration agreement signed by a patient as a condition for nursing home admission the same as any other arbitration agreement and would hold that, generally, a party seeking to set aside the arbitration agreement has the burden of proving that the arbitration agreement is unconscionable. A party\u2019s vulnerability is a fact for the court to consider in determining the issue of procedural unconscionability.\n{33} Moreover, even assuming that there may be appropriate cases for a district court to shift the burden of proof to a party seeking to set aside an arbitration agreement when the facts of the case indicate that the party seeking to enforce the arbitration agreement would be in a better position to prove whether an arbitration agreement is unconscionable, this is not such a case. The district court found that upon admission to the nursing home on April 11, 2007, Plaintiff was confused as the result of pain medication, that she had ten minutes to complete forty minutes of paperwork during the admission process, and that she did not have her glasses. However, the district court further found that Plaintiff signed the arbitration agreement on April 10, 2007, before the transfer to the nursing home; and Plaintiff presented no testimony regarding her state of mind or condition on that date. Additionally, the district court stated that the \u201cdeciding factor\u201d in determining that the arbitration agreement was not unconscionable was Plaintiffs understanding ofthe agreement at the time she signed it. Importantly, Plaintiff admitted that she understood that the arbitration agreement \u201csignificantly limited her rights,\u201d even though she was medicated. Under these circumstances, the district court did not err in determining that Plaintiff had the burden to prove that the arbitration agreement was unconscionable, and I respectfully dissent.\nJAMES J. WECHSLER, Judge", "type": "dissent", "author": "WECHSLER, Judge" } ], "attorneys": [ "Harvey Law Firm, LLC Dusti D. Harvey Jennifer J. Foote Albuquerque, NM for Appellant", "Keleher & McLeod, P.A. Mary Behm Hari-Amrit Khalsa Albuquerque, NM for Appellees" ], "corrections": "", "head_matter": "Certiorari Granted January 6, 2012,\nNo. 33,331\nIN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO\nOpinion Number: 2012-NMCA-006\nFiling Date: November 4, 2011\nDocket No. 29,238\nNINA R. STRAUSBERG, Plaintiff-Appellant, v. LAUREL HEALTHCARE PROVIDERS, LLC, and ARBOR BROOK, LLC, d/b/a ARBOR BROOK HEALTHCARE, Defendants-Appellees.\nHarvey Law Firm, LLC Dusti D. Harvey Jennifer J. Foote Albuquerque, NM for Appellant\nKeleher & McLeod, P.A. Mary Behm Hari-Amrit Khalsa Albuquerque, NM for Appellees" }, "file_name": "0138-01", "first_page_order": 154, "last_page_order": 165 }