Hunt v. Rio at Rust Centre

                                                        Office of the
                                                            Director    New Mexico
                                                                        Compilation
                                                         2022.08.19     Commission
                                                    '00'06- 15:07:22
          IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number: 

Filing Date: June 11, 2020

No. A-1-CA-37406 and A-1-CA-37902
(consolidated for purpose of opinion)

LEE HUNT, as Personal Representative
of the WRONGFUL DEATH ESTATE OF
SUI YAN, Deceased,

      Plaintiff-Appellee,

v.

THE RIO AT RUST CENTRE, LLC, a
for-profit New Mexico company, d/b/a
THE RIO AT CABEZON; ONPOINTE
BUSINESS SERVICES, LLC, a for-profit
Texas company; and RCZ MANAGEMENT,
LLC, a for-profit Texas company,

      Defendants-Appellants,

and

IPC HOSPITALISTS OF NEW MEXICO,
INC., a for-profit New Mexico company,

      Defendant.

APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Francis J. Mathew, District Judge

Released for Publication October 5, 2021.

McGinn, Montoya, Love & Curry, PA
Kathy J. Love
Katie Curry
Michael E. Sievers
Albuquerque, NM

for Appellee
Modrall, Sperling, Roehl, Harris & Sisk, P.A.
Michelle A. Hernandez
Tomas J. Garcia
Albuquerque, NM

The Checkett Law Firm, PLLC
Paul J. Sheston
Scottsdale, AZ

for Appellants

                                            OPINION

HANISEE, Chief Judge.

{1}     This opinion consolidates two appeals arising from a single cause of action in
district court brought by Lee Hunt (Plaintiff), personal representative of the wrongful
death estate of Sui Yan (Decedent), against The Rio at Rust Center, LLC (The Rio), a
Rio Rancho skilled nursing facility, OnPointe Business Services, LLC (OnPointe) and
RCZ Management, LLC (RCZ), the management/employment entities 1 for The Rio
(collectively, Defendants) following Decedent’s death while in Defendants’ care. Both
appeals raise questions related to arbitrability. Specifically, (1) did the arbitration
agreement between Decedent and The Rio contain a valid delegation clause such that
the threshold questions of arbitrability should have been left to the arbitrator?; and (2)
were the arbitration provisions in either or both the admissions agreement or the
arbitration agreement unconscionable under New Mexico case law? In the first appeal,
OnPointe and RCZ challenge the district court’s order granting partial summary
judgment to Plaintiff based upon its rejection of Defendants’ affirmative defense
regarding arbitration, which asserted that the district court “lack[ed] subject matter
jurisdiction as a result of an enforceable arbitration agreement[.]” In the second appeal,
The Rio appeals the district court’s order denying its motion to compel arbitration. We
affirm the district court’s orders in both appeals.

FACTUAL BACKGROUND

{2}      Following Decedent’s hip fracture, corrective surgery, and rehabilitation, she and
her family hoped Decedent could return to living with her son, Stephan Yan, as soon as
possible. However, the Yan family understood that a prerequisite to Decedent qualifying
for home healthcare, which she needed since she was no longer able to move freely or
take care of herself without falling, was admission to a rehabilitation facility for 90 to 100
consecutive days. The Yan family learned that The Rio was accepting new admissions
when other such facilities were not at that time. The family was eager for Decedent to
be admitted to The Rio rather than being discharged from the facility overseeing her
initial recovery and rehabilitation, because any gap in Decedent’s admission status

1RCZ is an independently contracted management company that handles the day-to-day operations of
The Rio. OnPointe is an affiliate of RCZ that acts as an employee leasing entity.
would permanently disqualify her for in-home healthcare and rehabilitation services
under Medicare/Medicaid.

{3}    On Friday, October 30, 2015, Decedent was admitted to The Rio to continue her
recovery. When she arrived, admissions staff did not ask Decedent to read and sign the
necessary admissions paperwork or review it with her, despite there being no
information suggesting that Decedent was incompetent or otherwise unable to
understand or sign such documentation. Rather, admissions staff was aware that
Decedent’s primary language was Cantonese and she had only limited fluency in
English. For such circumstances, however, The Rio had an interpreter hotline, including
personnel able to speak Cantonese. Yet in this instance, The Rio’s staff did not use this
dedicated resource to communicate with Decedent, and instead sought signatures from
Decedent’s daughter, Cathy Yan, who possessed a power of attorney for Decedent. In
that capacity, Cathy occasionally signed documents on behalf of Decedent, and usually
with Decedent present so that Decedent could understand what Cathy was signing on
Decedent’s behalf, ask any questions she might have, and so Cathy could translate for
Decedent what medical providers said.

{4}     On a typical day, the admissions assistant of The Rio, Alexis Elizondo, reviewed
admissions paperwork with three to seven residents or family members. Ms. Elizondo
would mark beforehand all the locations in the agreement that had to be signed or
initialed. Nicole Balido, the admissions director who trained Ms. Elizondo, confirmed that
when reviewing admission paperwork with residents or family members, staff members
would go through agreements and ask residents to “initial, initial, [and] sign.” Ms. Balido
also acknowledged that she and Ms. Elizondo would “paraphrase” rather than read
portions of the agreement verbatim. Ms. Elizondo claimed that she would go through the
boldfaced type in the admission agreement with residents or family members and
summarize it in her own words. Neither Ms. Balido nor Ms. Elizondo had formal training,
or training from lawyers, about the admissions agreement or the implication of its terms,
nor did either possess authority to negotiate any of its terms.

{5}    Per The Rio’s policy, the admissions agreement—a standardized, pre-prepared
contract—had to be signed within forty-eight to seventy-two hours of a patient’s arrival,
including weekends. If a resident refused to sign the agreement, the resident would be
discharged from the facility. Accordingly, the admissions assistant, Ms. Elizondo, called
Cathy to inform her that, as Decedent’s power of attorney, Cathy needed to travel to
New Mexico as soon as possible to sign the admissions paperwork, and that if Cathy
did not sign the paperwork authorizing her mother’s care, Decedent would be
discharged. Because Cathy lived in Tucson, Arizona at the time, she drove to
Albuquerque on Sunday, November 1, 2015, so that she could be present to sign the
admissions agreement on Monday morning.

{6}    Cathy visited Decedent on Sunday evening at The Rio, but she did not speak
with the admissions personnel, nor was she given any paperwork. The next day,
Monday, November 2, 2015, Cathy met Ms. Elizondo to sign the admissions paperwork
in the morning, and the meeting lasted less than fifteen minutes. The thirty-page
admission agreement Cathy was provided to initial and sign included an “optional” four-page “Agreement Regarding the Resolution of Legal Disputes and Waiver of Right to
Jury Trial” (the Arbitration Agreement), and the signature page of that Arbitration
Agreement stated that it “May Be Revoked By Sending Written Notice To The Facility
Within Ten (10) Days After Signature.” However, Section 22 of the admissions
agreement also contained an additional, conflicting, arbitration provision, which was not
optional and mandated the arbitration of all disputes between the resident and The Rio.
Furthermore, although Defendants maintain that the Arbitration Agreement was
optional, the vice president of operations for OnPointe—an entity with a management
agreement for The Rio—reported that the Arbitration Agreement had never been
questioned, revoked, or refused by any resident or family member. Moreover, at no
point was Decedent, as the resident, involved in the discussion or shown the
admissions agreement, and it was Cathy’s understanding that The Rio required that she
alone, as power of attorney, be the one to sign the paperwork.

{7}     Cathy explained that she felt rushed when she signed the paperwork, but she
understood that the admissions agreements had to be signed for Decedent to remain at
The Rio, and she did not want her mother to become permanently ineligible for in-home
rehabilitation services if Decedent was discharged. Ms. Elizondo did not spend
significant time explaining the four-page Arbitration Agreement, nor did she ask if Cathy
understood what arbitration is. Ms. Elizondo also did not in any way highlight or
emphasize Section 22, the separate and non-optional binding arbitration clause that is
standard in all of The Rio’s admission agreements.

{8}     With the admissions paperwork complete, Decedent lived at The Rio from lateOctober 2015 to mid-February 2016. During her time at The Rio, her health
deteriorated, she lost almost twenty pounds, she fell on several occasions, and she
suffered a severe pressure ulcer on her sacrum such that the bone was exposed. On
February 21, 2016, Decedent was transferred from The Rio to the emergency
department at the adjacent Rust Medical Center, a hospital, where she was diagnosed
with a severely advanced pressure ulcer. Due to her declining, and then incurable
physical condition, Decedent was discharged home to receive palliative care during her
final days. She passed away on March 3, 2016.

PROCEDURAL HISTORY

{9}     Plaintiff, as personal representative of Decedent’s estate, filed a wrongful death
suit alleging multiple claims related to the nursing care and treatment Decedent
received at The Rio. The Rio filed a motion to compel arbitration, as to which RCZ and
OnPointe filed a “notice of joinder.” Plaintiff opposed the joinder as improper under Rule
1-007 NMRA and separately filed a motion for partial summary judgment asking the
district court to declare that RCZ and OnPointe were not entitled to enforce the
Arbitration Agreement in Decedent’s admission contract with the Rio because those
Defendants were not parties to nor third-party beneficiaries of the Arbitration
Agreement. The district court granted Plaintiff’s motion for partial summary judgment,
concluding as a matter of law that neither RCZ nor OnPointe had a right to enforce the
Arbitration Agreement. The district court also denied The Rio’s motion to compel
arbitration, finding that the Arbitration Agreement was unenforceable because it was
substantively and procedurally unconscionable, and because it was not supported by
independent consideration. Defendants appeal the district court’s orders, pursuant to
NMSA 1978, Section 44-7A-29(a)(1) (2001) (stating that “[a]n appeal may be taken from
. . . an order denying a motion to compel arbitration”).

DISCUSSION

{10} In their appeal, OnPointe and RCZ contend that although they are not specifically
named in the Arbitration Agreement, they are parties or third-party beneficiaries entitled
to enforcement of the Arbitration Agreement. We need not resolve this issue, however,
because even assuming without deciding that OnPointe and RCZ were parties or third-party beneficiaries to the Arbitration Agreement, we nevertheless conclude that the
manner in which arbitration was presented to Cathy was procedurally unconscionable
and affirm the district court’s denial of The Rio’s motion to compel arbitration on that
basis. See Rivera v. Am. Gen. Fin. Servs., Inc., 

, 

,

 (“Under New Mexico principles of contract law, a finding of
unconscionability may be based on either procedural or substantive unconscionability,
or a combination of both.”); Cordova v. World Fin. Corp. of N.M., 

,

, 

 (“While there is a greater likelihood of a contract’s being
invalidated for unconscionability if there is a combination of both procedural and
substantive unconscionability, there is no absolute requirement in our law that both
must be present to the same degree or that they both be present at all.”). Before
explaining our unconscionability analysis, we first address a question that Defendants in
both appeals raise—whether there was a valid delegation clause in the Arbitration
Agreement such that the questions of arbitrability should have been delegated to the
arbitrator.

I.    The Threshold Questions of Arbitrability Were Not Specifically Delegated to
      the Arbitrator

{11} Defendants contend that there is a valid delegation clause in the Arbitration
Agreement, and that the district court erred by not delegating the interpretation of the
Arbitration Agreement to the arbitrator. Specifically, RCZ and OnPointe argue that the
question of whether they were entitled to enforce the Arbitration Agreement fell within
the scope of the delegation clause, and The Rio argued that the validity and
enforceability of the Arbitration Agreement should have been decided by an arbitrator.
We disagree.

{12} “Arbitration agreements are a species of contract, subject to the principles of
New Mexico contract law.” L.D. Miller Constr., Inc. v. Kirschenbaum, 

, ¶
18, 

. “Accordingly, we apply New Mexico contract law in [the] interpretation
and construction of the [a]rbitration [a]greement.” 

 We review questions of contractual
interpretation de novo, Thompson v. Potter, 

, 

, and
our task is to determine the meaning of the words in the arbitration agreement and their
legal impact. See Kirschenbaum, 

, ¶ 18.

{13} “The general rule is that the arbitrability of a particular dispute is a threshold
issue to be decided by the district court unless there is clear and unmistakable evidence
that the parties decided otherwise under the terms of their arbitration agreement.” Felts
v. CLK Mgmt., Inc. (Felts I), 

, 

, 

(emphasis added), aff’d on other grounds, Felts v. CLK Mgmt., Inc. (Felts II), 

 (Nos. 33,011, 33,013, Aug. 23, 2012) (dec.); see Rent-A-Center, W., Inc. v.
Jackson, 

, 68-69 (2010) (“We have recognized that parties can agree to
arbitrate ‘gateway’ questions of ‘arbitrability,’ such as whether the parties have agreed
to arbitrate or whether their agreement covers a particular controversy.”); First Options
of Chicago, Inc. v. Kaplan, 

 (1995) (“Courts should not assume that
the parties agreed to arbitrate arbitrability unless there is clear and unmistakable
evidence that they did so.” (alterations, internal quotation marks, and citation omitted));
AT&T Techs., Inc. v. Commc’ns Workers of Am., 

 (1986) (“Unless the
parties clearly and unmistakably provide otherwise, the question of whether the parties
agreed to arbitrate is to be decided by the court, not the arbitrator.” (emphasis added)).
This position is further embraced by New Mexico’s Uniform Arbitration Act, NMSA 1978,
§§ 44-7A-1 to -32 (2001), which provides that the court shall determine whether there is
an enforceable agreement to arbitrate and issue an order accordingly. Section 44-7A-8.

{14} Moreover, even though the parties’ agreement is also subject to the Federal
Arbitration Act (FAA), we explained in Felts I that “although the FAA has limited the role
of courts in the arbitration context, certain gateway issues involving arbitration
provisions have remained within the purview of judicial review.” 

.
These gateway arbitrability issues include matters such as the “validity of an arbitration
provision, the scope of an arbitration provision, or whether an arbitration agreement
covers a particular controversy.” Id.; see Strausberg v. Laurel Healthcare Providers,
LLC, 

, 

 (“Congress did not, however, intend the FAA
to entirely displace state law governing contract formation and enforcement. Courts may
invalidate arbitration agreements through the application of generally applicable contract
defenses, such as fraud, duress, or unconscionability, without violating the FAA.”
(internal quotation marks and citations omitted)). Yet as has the United States Supreme
Court, we too have previously recognized that although questions of arbitrability are
typically for the courts to decide, the parties can agree to arbitrate these gateway
questions, and where there is “clear and unmistakable” intent to have these issues
decided by the arbitrator rather than the court, the delegation provision should be
upheld. Felts I, 

 (internal quotation marks and citation omitted).
Such a delegation provision is “simply an additional, antecedent agreement the party
seeking arbitration asks the . . . court to enforce.” 

 (internal quotation marks and
citation omitted). And so, the question we must answer is whether the arbitration
provision here included “clear and unmistakable evidence of a delegation clause
requiring that questions of arbitrability regarding the validity of the arbitration provision
be submitted to an arbitrator.” Id. ¶ 21.
{15} The answer in this instance is no. The clause in the arbitration agreement that
Defendants claim constitutes such a delegation provides that “[a]ny disputes regarding
the interpretation of this [a]greement shall be submitted to arbitration.” Although the
clause provides that disputes regarding the interpretation of the agreement should be
delegated to an arbitrator, the arbitration agreement fails to specify that distinct
threshold questions of arbitrability (i.e. questions about the validity, enforceability, or
scope of the arbitration agreement) should also be resolved by an arbitrator. See id. ¶
22 (stating that “courts must interpret the provisions of an arbitration agreement
according to the rules of [state] contract law and apply the plain meaning of the contract
language in order to give effect to the parties’ agreement” (alteration, internal quotation
marks, and citation omitted)). Because the Arbitration Agreement is silent or at most
ambiguous about who should decide arbitrability—a question distinct from
interpretational analyses—we conclude that the court, and not an arbitrator, bore the
authority to decide that issue. We will not “interpret silence or ambiguity on the ‘who
should decide arbitrability’ point as giving the arbitrators that power, for doing so might
too often force unwilling parties to arbitrate a matter they reasonably would have
thought a judge, not an arbitrator, would decide.” First Options of Chicago, Inc., 

 (internal quotation marks omitted); see Heye v. Am. Golf Corp., Inc., 2003-
NMCA-138, ¶ 14, 

, 

 (interpreting an arbitration agreement
under rules of state contract law and stating that when an agreement to arbitrate is
ambiguous, “[w]e construe ambiguities . . . against the drafter to protect the rights of the
party who did not draft” the agreement).

{16} Defendants rely heavily on Rent-A-Center for the proposition that the United
States Supreme Court allows parties to agree to arbitrate “gateway” questions of
arbitrability. See 561 U.S. at 68-69. True, but the arbitration clause at issue in Rent-A-
Center specified that “the [a]rbitrator, and not any federal, state, or local court or
agency, shall have exclusive authority to resolve any dispute relating to the
interpretation, applicability, enforceability or formation of this [a]greement including, but
not limited to any claim that all or any part of this [a]greement is void or voidable.” Id. at
66 (emphasis added) (alteration, internal quotation marks, and citation omitted). The
Court construed that language as an explicit delegation to the arbitrator to decide
whether the arbitration agreement was unconscionable. Id. at 65. In the present case,
by contrast, there is no such specificity in the purported delegation clause
demonstrating a “clear and unmistakable” intent to have arbitrability decided by the
arbitrator instead of the court. We interpret the wording of the clause to be, at best,
ambiguous, and therefore, the clause does not “clearly and unmistakably” provide that
the threshold question of arbitrability should be decided by arbitrator. Accordingly, such
was properly subject to independent review by the district court. See Felts I, 2011-
NMCA-062, ¶ 17; see also First Options, 

; Salazar v. Citadel Commc’ns
Corp., 

, 

, 

 (stating “a prerequisite to
compelling arbitration is the existence of a valid agreement to arbitrate”).

II.    The District Court Did Not Err in Denying The Rio’s Motion to Compel
       Arbitration
{17} Defendants contend that the district court erred in denying The Rio’s motion to
compel arbitration and in its findings and conclusions stating that the Arbitration
Agreement lacked independent consideration, and that it was substantively and
procedurally unconscionable. We conclude that the Arbitration Agreement was
procedurally unconscionable.

{18} We review a district court’s denial of a motion to compel arbitration de novo.
Cordova, 

. Similarly, we evaluate the legal question of whether
an arbitration agreement is unconscionable de novo. 

 Neither Plaintiff nor Defendants
challenge the district court’s findings of fact, and consequently, we accept them as
true. See Seipert v. Johnson, 

, 

, 

 (“An
unchallenged finding of the trial court is binding on appeal.”). Additionally, while we
acknowledge federal and state policy favoring arbitration, which Defendants highlight as
foundational, we emphasize that state contract law also applies to arbitration
agreements, and even the FAA permits arbitration agreements to be invalidated by
generally applicable contract defenses such as unconscionability, which state law
governs. See Cordova, 

 (holding that the FAA does not
preclude our examination of the enforceability of an arbitration agreement based on
New Mexico’s generally applicable doctrine of contractual unconscionability).

{19} “Unconscionability is an equitable doctrine, rooted in public policy, which allows
courts to render unenforceable an agreement that is unreasonably favorable to one
party while precluding a meaningful choice of the other party.” Id. ¶ 21. Procedural
unconscionability “relates to procedural deficiencies in the contract formation process,
such as deception or a refusal to bargain over contract terms, today often analyzed in
terms of whether the imposed-upon party had meaningful choice about whether and
how to enter into the transaction.” 8 Samuel Williston & Richard A. Lord, Williston on
Contracts § 18:10 (4th ed. 2019).

{20} “Procedural unconscionability may be found where there was inequality in the
contract formation.” State ex rel. King v. B & B Inv. Grp., Inc., 

,

. A contract is procedurally unconscionable “only where the inequality is so
gross that one party’s choice is effectively non-existent.” Guthmann v. LaVida Llena,

, ¶ 18, 

, 

, overruled on other grounds by
Cordova, 

. Whether a party has a meaningful choice is
“determined by examining the circumstances surrounding the contract formation,
including the particular party’s ability to understand the terms of the contract and the
relative bargaining power of the parties.” Guthmann, 

, ¶ 16.
Accordingly, when we evaluate whether an arbitration agreement is procedurally
unconscionable, we look beyond the four corners of the contract and examine “the
particular factual circumstances surrounding the formation of the contract, including the
[(1)] relative bargaining strength[; (2)] sophistication of the parties[;] and [(3)] the extent
to which either party felt free to accept or decline terms demanded by the other.”
Cordova, 

; see City of Raton v. Arkansas River Power Auth., 

 (D.N.M. 2009) (“In analyzing whether a contract or a term in a
contract is procedurally unconscionable, New Mexico courts consider several factors,
including the use of high pressure tactics, the relative scarcity of the subject matter of
the contract, and the relative education, sophistication and wealth of the parties.” (citing
Guthmann, 

)).

{21} Furthermore, we also consider “whether the agreement is a contract of adhesion,
i.e., a standardized contract offered by a transacting party with superior bargaining
strength to a weaker party on a take-it-or-leave-it basis, without opportunity for
bargaining.” Strausberg, 

 (internal quotation marks and citation
omitted). “Adhesion contracts generally warrant heightened judicial scrutiny because the
drafting party is in a superior bargaining position.” Rivera, 

.
“Although not all adhesion contracts are unconscionable, an adhesion contract is
procedurally unconscionable and unenforceable ‘when the terms are patently unfair to
the weaker party.’ ” 

 (quoting Cordova, 

). While unfairness to a
party is more typically a matter that relates to substantive unconscionability, our
Supreme Court recognizes its applicability in the procedural context as relates to
adhesion contracts. See, e.g., Peavy v. Skilled Healthcare Group., Inc., 2020-NMSC-
010, ¶ 11, 

 (“Substantive unconscionability concerns the legality and
fairness of the contract terms themselves.” (internal quotation marks and citation
omitted)).

{22} Against this legal framework, Plaintiff first concedes that Cathy is a relatively
sophisticated party, considering that she is a business woman who engages with
various contracts and holds a bachelor’s degree in business accounting and
management. However, Plaintiff contends the two remaining factors in the procedural
unconscionability analysis—the relative bargaining strength and the extent to which a
party felt free to accept or decline terms demanded by the other—overwhelmingly favor
Plaintiff because there was gross inequality in the parties’ bargaining strength and
neither Decedent nor Cathy were “free to accept or decline the terms of the agreement.”

{23} In this case, the district court made undisputed findings regarding the inequality
of the parties’ bargaining power. The court found that The Rio’s admissions agreement
was a “pre-prepared contract” or a “standardized contract” used for all its residents that
“must be signed in order to move forward with [a] resident’s treatment” and that “[i]f a
resident refused to sign the admission agreement, the resident would be discharged
from the facility.” The district court further found that The Rio had “superior bargaining
strength over the resident, or the resident’s representative, a weaker party, offering an
agreement on essentially a take-it-or-leave-it basis, without a real opportunity for
bargaining.” These unchallenged factual findings are binding on appeal. Seipert, 2003-
NMCA-119, ¶ 26. In any case, our review of the record, including the admissions
agreement, confirms that in this instance The Rio had vastly superior bargaining power
compared to Cathy and that the contract is one of adhesion, warranting heightened
judicial scrutiny. See Rivera, 

.

{24} It is not enough that the parties’ bargaining power was unequal, however; we
must evaluate whether the inequality was so gross that the party’s choice was rendered
effectively non-existent before concluding that the contract was procedurally
unconscionable. See Guthmann, 

, ¶ 18; 8 Williston, supra, § 18:10
(stating that procedural unconscionability is “today often analyzed in terms of whether
the imposed-upon party had [a] meaningful choice about whether and how to enter into
the transaction”). In this inquiry, we look to additional factual circumstances surrounding
the formation of the contract, such as the extent to which Decedent and Cathy were free
to accept or decline terms of the agreement, as well as the use of high pressure tactics
and the relative scarcity of the subject matter of the contract.

{25} We note initially that the Yan family was faced with an urgent need to place
Decedent in a rehabilitation facility in order to avoid a gap in her admission status so
that Decedent would not be foreclosed from receiving needed in-home healthcare down
the road. As well, the record establishes that other facilities were not accepting
admissions. These facts bear upon whether Decedent and Cathy had a meaningful
choice as to whether to accept the terms offered by The Rio. Cf. Guthmann, 1985-
NMSC-106, ¶¶ 17-19 (rejecting the plaintiff’s argument that no meaningful choice
existed where the only other local life care center that was acceptable to the decedent
had no immediate openings, in part because the decedent had engaged in extensive
comparative shopping and neither her health or financial circumstances required her
immediate admission). After all, if Cathy refused to sign the agreement, Decedent would
have been discharged, and Ms. Elizondo, the admissions assistant who reviewed the
documents with Cathy, had no authority to negotiate or modify the terms of the
agreement on behalf of The Rio. See State ex rel. King, 

(determining it was procedurally unconscionable when payday loan contracts are
prepared entirely by the defendants with superior bargaining power, employees could
not modify the terms of the agreement, and these loans are offered to the weaker
party—the borrower—on a take-it-or-leave-it basis).

{26} Defendants contend that assent to the Arbitration Agreement was “not a
condition of admission to The Rio.” Defendants also point out that the Arbitration
Agreement specifically states the resident or the resident’s agent has the right to consult
an attorney before signing and that the agreement could be revoked within ten days.
However, this characterization wholly fails to account for Section 22 of the admissions
contract, which is distinct from the Arbitration Agreement, and, importantly, non-optional, providing that that any legal disputes arising out of the admission agreement
“shall be resolved exclusively by binding arbitration.” Given these conflicting terms
regarding arbitration in the admissions contract, we construe these ambiguities against
The Rio as the drafter in order to protect the rights of the resident, the party who did not
draft the contract. See Heye, 

 (“We conclude that the conflicting
terms of the arbitration agreement render it ambiguous [and w]e construe ambiguities in
a contract against the drafter to protect the rights of the party who did not draft it.”).
Moreover, we note that Section 22, rather than being highlighted in some way, was
consistent with the other thirty-four sections of the agreement in both format and style.
See Rankin v. Brinton Woods of Frankford, LLC, 

 (Md. Ct. Spec. App.
2019) (explaining that the failure to highlight the binding nature of an arbitration clause,
when considering the format and location of the clause as simply a numbered
paragraph presented in the same format as every other provision supports a finding of
procedural unconscionability). In effect, when Cathy signed the admissions paperwork
that included Section 22 for Decedent’s admission to The Rio, Cathy waived Decedent’s
constitutional rights to a jury trial, and Ms. Elizondo did not in any manner emphasize
the binding arbitration clause nor did she explain that even had Decedent, or Cathy as
her power of attorney, opted to exercise the ten-day right of revocation as to the later
Arbitration Agreement, such would have been meaningless under Section 22. We
therefore agree with the district court that Section 22 effectively rendered any choice to
revoke the “optional” Arbitration Agreement a legal nullity because Cathy was not, in
fact, free to decline the arbitration clause in Section 22.

{27} Additional facts buttress our conclusion that neither Decedent nor Cathy felt free
to accept or decline terms of the agreement. First, Decedent was never consulted
regarding her admissions agreement to The Rio, even though no information suggested
that Decedent was incompetent to understand or sign the agreement, and The Rio
chose not to use a hotline that was readily available for Cantonese language translation.
Decedent simply was not given the opportunity to accept or decline the terms of the
admissions agreement herself. Nevertheless, because Cathy had a general durable
power of attorney, permitting her to execute contracts and provide consent for any and
all medical care and treatment on Decedent’s behalf, we focus our attention to the
circumstances surrounding Cathy’s signing of the agreement.

{28} The district court noted Ms. Elizondo had Cathy initial and sign pre-marked spots
in a thirty-page agreement that included a four-page Arbitration Agreement in a matter
of fifteen minutes. Our review identifies approximately twenty instances where Cathy
either initialed or signed the admissions paperwork. It is unsurprising that the district
court found that Cathy felt rushed when she signed the paperwork because the limited
time suggests that Cathy barely, if at all, had time to read what she was signing.
Moreover, the district court stated that other facilities were not accepting new
admissions at the time, and that Cathy understood that she had to sign the paperwork
for Decedent to remain at The Rio. If Cathy failed to sign the agreement on Monday,
November 2, 2015, Decedent would have been discharged from the facility since it was
the latter end of the seventy-two-hour timeframe permitted by The Rio to complete the
paperwork, and Decedent was initially admitted on Friday, October 30, 2015. If
Decedent was discharged, Decedent “would not [receive] necessary rehabilitation
services and she would become permanently ineligible for Medicare/Medicaid payment
for in-home rehabilitation services.” Taken together, these particular facts indicate that
Cathy’s choice was rendered effectively non-existent because Cathy was not free to
decline the terms of the agreement without losing medical coverage for her mother.

{29} Defendants cite THI of New Mexico at Vida Encantada, LLC v. Lovato to support
their claim that the facts in this case do not support a legal determination of procedural
unconscionability. 

 (D.N.M. 2012). Defendants
emphasize Cathy’s sophistication in education and business and note that there was no
evidence that Cathy requested additional time or explanations, nor that Ms. Elizondo
employed sharp practices, high pressure tactics, fraud, or misrepresentation to induce
consent. We are unpersuaded.
{30} Our review of Lovato indicates three key points of distinction. See 

 First, no
separate clause in the admissions agreement there rendered the “optional” arbitration
agreement effectively meaningless. Second, the resident in Lovato was not faced with
the ordeal of finding a facility on an emergency basis, nor with the danger of losing
medical coverage as here, and the family there had been looking for a place for a month
prior to the resident’s admission. See 

. Finally, the arbitration agreement in
Lovato was only two pages long, with directions in bold, capital letters to “please read
carefully.” 

 (internal quotation marks omitted). However, in our case, the thirty-page
admissions agreement included Section 22—a binding arbitration clause—that was no
way highlighted in addition to the four-page “optional” Arbitration Agreement.

{31} To reiterate, the discussion over a thirty-page agreement here lasted a mere
fifteen minutes. Cf. Barron v. Evangelical Lutheran Good Samaritan Soc’y, 2011-NMCA-
094, ¶ 46, 

, 

 (concluding there was no procedural
unconscionability where the admissions representative and the resident’s agent had an
hour-and-a-half to review every section of the arbitration agreement wherein it was
specifically explained that the arbitration was not a condition of admission, and there
was no evidence that the resident’s agent was rushed in signing any of the documents).
Fifteen minutes, compared to an hour and a half, is a considerably lesser period of time
in which to grasp a thirty-page document that—at least as to arbitration disputes—
contained internally conflicting terms. Moreover, in Barron, cases from other
jurisdictions identifying instances in which procedural unconscionability was determined
to be present are comparable to the facts in this case and lend additional support to
affirming the district court’s finding of procedural unconscionability. See, e.g., Woebse v.
Health Care & Ret. Corp. of Am., 

 (Fla. Dist. Ct. App. 2008) (holding
that procedural unconscionability existed where a nursing home resident’s daughter met
with the home’s administrator for about five minutes, during which time she was
presented with a thirty-seven page document that included an arbitration clause, and
instructed that her father’s continued stay in the home was conditioned upon her signing
the papers, which the administrator flipped through and presented the signature pages);
Prieto v. Healthcare & Ret. Corp. of Am., 

 (Fla. Dist. Ct. App.
2005) (agreeing with the trial court’s finding of procedural unconscionability where a
nursing home resident’s daughter was “hurried into signing numerous documents” that
were not explained to her). Given the facts of this case, we conclude that the total
circumstances under which Cathy was presented with and signed the agreement
eliminated her freedom to decline the terms of the agreement or to circumvent the
requirement of arbitration. Accordingly, we affirm the district court’s order denying The
Rio’s motion to compel arbitration on procedural unconscionability grounds. Given the
dispositive nature of our holding, we decline to reach the additional bases relied upon
by the district court for invalidating the Arbitration Agreement here. See, e.g., Living
Cross Ambulance Serv., Inc. v. N.M. Pub. Regulation Comm’n, 

,

 (“Because we determine that the attorney disqualification issue is
dispositive, we do not reach the other issues in this case.”); State ex rel. Office of State
Eng’r v. Romero, 

, 

 (“As our holding on the issue of
partial forfeiture is dispositive of the matter, we need not reach the abandonment
issue.”), cert. granted, 2020-NMCERT-___ (No.S-1-SC-37903, Dec. 26, 2019).
CONCLUSION

{32}   For the foregoing reasons, we affirm the district court’s orders in both appeals.

{33}   IT IS SO ORDERED.

J. MILES HANISEE, Chief Judge

WE CONCUR:

MEGAN P. DUFFY, Judge

ZACHARY A. IVES, Judge