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Broemmer v. Otto5/9/1991
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Neither § 211 nor Darner permits an individual to repudiate a written contract by asserting failure to read it or by claiming that some provisions were unexpected. See also Rocz v. Drexel Burnham Lambert, Inc., 154 Ariz. 462, 743 P.2d 971 (App.1987). Darner also holds the drafter to:
140 Ariz. at 394, 682 P.2d at 400.
The arbitration agreement signed by Broemmer does not contain bizarre or oppressive terms, nor does it undercut the primary purpose of the transaction. The agreement simply provides an arbitration method for resolving disputes. It was given to Broemmer the day prior to surgery as a separate document which highlighted that it should be read and that it would affect her legal rights.
In adopting Restatement § 211 in Darner, the court held that such boilerplate terms will be enforced unless the drafter had reason to believe the adhering party would not have assented to the term had she known of its presence. 140 Ariz. at 391-94, 682 P.2d at 396-99. We find nothing in the record from which an inference can be drawn that ASP had reason to know that Broemmer would have rejected the agreement had she known that it provided for arbitration of medical malpractice claims.
UNCONSCIONABILITY
A bargain is "unconscionable" if it is "such 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." Restatement (Second) of Contracts § 208, comment b (1979); quoting Hume v. United States, 132 U.S. 406, 10 S.Ct. 134, 33 L.Ed. 393 (1889); quoting in turn Earl of Chesterfield v. Janssen, 2 Ves. Sen. 125, 155, 28 Eng. Rep. 82, 100 (Ch. 1750). Unconscionability involves overreaching. It may involve procedural as well as substantive concerns. Pacific American Leasing Corp. v. S.P.E. Building Systems, Inc., 152 Ariz. 96, 103, 730 P.2d 273, 280 (App.1986). The reason for refusing to enforce unconscionable agreements is to prevent oppression and unfair
surprise stemming from superior bargaining power. Restatement (Second) of Contracts § 208, comment b.
Broemmer argues that the particular arbitration terms which she signed are unconscionable because of the costs of arbitration and the selection of a biased arbitrator. She contends that the agreement incorporates the rules of the American Arbitration Association (AAA) which require a minimum fee of $300 and an automatic fee of $750.00 for claims between $25,000 and $50,000, plus 2% of the excess over $25,000. Commercial Rules, Administrative Fee Schedule. Claims between $50,000 and $100,000 obligate the initiating party to forward $1,250 plus 1% of the excess over $50,000. Id.
Appellees rely on A.P. Brown Co. v. Superior Court, 16 Ariz. App. 38, 490 P.2d 867 (1971). That case held that the parties had incorporated the AAA rules and could not escape them simply by saying that they had not read them. It does not address whether the fees were unconscionable. Therefore, that case is not dispositive on the alleged unconscionability of the AAA fee schedule.
Broemmer states that while her damages are unliquidated the AAA rules obligate her to make a determination of the amount of money that can compensate her for her injuries. She argues that her decision as to this amount may have to depend upon her financial constraints with respect to payment of the administrative fee. She contends that even if she had read the arbitration agree
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