The opinion of the court was delivered by
Plaintiff commenced this personal injury action against, among others, defendant Care One at Valley,1 which operates a nursing facility that moved to compel arbitration of plaintiff's claims based on a clause contained in plaintiff's admission agreement. Defendant apparently imposes on its patients an obligation to arbitrate disputes because it can. The Federal Arbitration Act (FAA), 9 U.S.C.A. §§ 1-16, which the Supreme Court of the United States broadly construes in favor of arbitration, overrides all state policies and concerns, including the Nursing Home Act's2 express prohibition against the enforcement of such agreements, N.J.S.A. 30:13-8.1.3 See Marmet Health Care Ctr., Inc. v. Brown, 565 U.S. ___, ___, 132 S.Ct. 1201, 1203, 182 L.Ed.2d 42, 45 (2012) (holding that West Virginia's similar nursing home statute, which prohibits arbitration of personal injury and wrongful death suits, takes a backseat to the FAA and the federal policy in favor of arbitration); see also Estate of Ruszala v. Brookdale Living Communities, Inc., 415 N.J.Super. 272, 292-93, 1 A.3d 806 (App.Div.2010).4
Despite its broad interpretation of the FAA and its supremacy over specific state policies and practices,5 the Supreme Court has recognized the "fundamental principle that arbitration is a matter of contract," Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 130 S.Ct. 2772, 2776, 177 L.Ed.2d 403, 410 (2010), thereby permitting application of state contract law to ascertain whether the parties had a meeting of the minds when contracting, and whether a party, who has ostensibly agreed to waive the right to trial by jury, has clearly and unambiguously consented to arbitration, Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430, 442, 444, 99 A.3d 306 (2014), cert. denied, ___ U.S. ___, 135 S.Ct. 2804, 192 L.Ed.2d 847 (2015). In light of these principles, we turn to the specific facts of this case.
Because the trial judge summarily granted defendant's motion to compel arbitration and because our review of that determination is de novo, we assume as true the factual opposition presented by plaintiff in response to defendant's motion. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540, 666 A.2d 146 (1995). In opposition to the motion, Frank J. McMahon asserted his then eighty-five-year-old sister, plaintiff Mary T. Kleine, was "still suffering from the consequences of the trauma she had endured" at a nursing facility operated by the other defendants,6 when, through a power of attorney, he sought her admission at defendant's facility. An individual in the admissions office presented him with "a stack of papers, of which the admission agreement was one of several" documents, and he was told "to sign and initial wherever indicated." McMahon was then "left alone to do so, without any further explanations or instructions."
McMahon further asserted:
No one told me, and I did not notice, that the agreement contained a waiver of my sister's civil rights, including her right to a jury trial and her right to appeal any adverse decision to an appellate court. I also was not told that my sister would have to pay for one-half the cost of the arbitration. In fact, the admission person said nothing to me about the contents of the agreement, except that I had to sign it for my sister, and that I had to sign it right away because my sister was being admitted to that nursing home.
No one told me that I had a right to consult with counsel before signing or that my sister's admission to the facility was not contingent upon my signing the agreement. If I had understood that such a provision was contained in the admission agreement, I would have asked for an explanation so I could understand what this provision meant. If I had been told that by signing I would not only give up her right to a jury trial, but also would waive her right to appeal from any decision, and that she would have to pay for one-half the cost of any proceeding to determine whether Care One was negligent or caused her injury, I would certainly have asked whether I was required to agree as a condition of her admission, and I would probably have spoken with an attorney to fully understand the effect of this agreement.
. . . .
My sister's finances are very limited. She is currently paying the cost of the Allendale Nursing Home (about $5,000 per month) from the proceeds of the sale of her house in 2010, which funds should last her another two years or so, so long as she does not have any large unanticipated expenses. Her only income is the $1,191 she receives from Social Security. When her savings are expended, she will have to apply for Medicaid coverage. My understanding is that qualified arbitrators charge $400-500 or more per hour for their services. If our case required 4-5 seven hour days to present all the testimony and documentary evidence, plus another day for the arguments of counsel and the arbitrator's consideration of the evidence, the arbitrator's fees would range from $14,000-18,000 and maybe more if more hearing days are needed or the arbitrator was more expensive, which means my sister would have to pay $7,000-9,000 or more, plus the cost of a transcript if we want to obtain one, all with her limited resources. Consequently, my sister could only afford to pay for an arbitrator to hear the case if she sacrificed her ability to pay for her continued life at the assisted living facility. I do not believe that is a choice she should have to make — and I would not have signed the admission agreement as worded if I had been told that she would have to pay that amount of money in order to have her claims heard.
The trial judge was required to assume the truth of these sworn statements and assume there was no meeting of the minds about the arbitration of disputes.
Defendant's arbitration clause provided in upper case and bold lettering:
Any controversy or claim arising out of or relating to this agreement and brought by the resident, his/her personal representatives, heirs, attorneys or the responsible party shall be submitted to binding arbitration by a single arbitrator selected and administered pursuant to the commercial arbitration rules of the American Arbitration Association.... Any claimant contemplated by this paragraph hereby waives any and all rights to bring any such claim or controversy in any manner not expressly set forth in this paragraph, including, but not limited to, the right to a jury trial.
It is well-established that the party from whom an arbitration clause has been extracted must "clearly and unambiguously" agree to a waiver of the right to sue. Atalese, supra, 219 N.J. at 443, 99 A.3d 306; see also Morgan v. Raymours Furniture Co., 443 N.J.Super. 338, 343, 128 A.3d 1127 (App.Div.2016), certif. denied, ___ N.J. ___ (Apr. 25, 2016). We agree the arbitration clause unambiguously declares the resident's waiver of the right to pursue a claim in any fashion other than as set forth, but other aspects of the clause suggest it may be unconscionable.
For example, it is only the resident or the resident's representative who is asked to waive the right to seek redress in the courts; the clause's insistence on the utilization of arbitration applies to "any controversy or claim arising out of or relating to this agreement and brought by the resident [or the resident's representatives9]" (emphasis added). If the use of the word "and" were not sufficient to demonstrate the promise to arbitrate was made only by the resident or her representatives, certainly the clause's last sentence, which describes the waiver of the right to pursue the claim or controversy in some manner other than arbitration, is expressed only by "any claimant contemplated by this paragraph," i.e., the resident or her representatives. In short, only the plaintiff was bound; defendant made no such promise, retaining for itself not only the right to sue the resident or her representatives in any court of competent jurisdiction but also the right to have its own claims resolved by trial by jury.
As observed earlier, arbitrability was decided summarily. At that stage, the judge was required to assume the truth of McMahon's sworn statements and consider the language of the agreement in the light most favorable to plaintiff. Brill, supra, 142 N.J. at 540, 666 A.2d 146. Had the judge done so, the one-sided waiver extracted by defendant, as well as an assumption of the truth of McMahon's assertions about the manner in which the contract was formed, would have required an evidentiary hearing related to unconscionability. See, Muhammad v. Cnty. Bank of Rehoboth Beach, 189 N.J. 1, 15, 912 A.2d 88 (2006), cert. denied, 549 U.S. 1338, 127 S.Ct. 2032, 167 L.Ed.2d 763 (2007). If that was all that was before us, we would remand for such an evidentiary hearing and the judge's consideration of both procedural and substantive unconscionability factors related to the contract. See Sitogum Holdings, Inc. v. Ropes, 352 N.J.Super. 555, 564-66, 800 A.2d 915 (Ch.Div.2002) (recognizing that procedural unconscionability includes consideration of "a variety of inadequacies, such as age, literacy, lack of sophistication, hidden or unduly complex contract terms, bargaining tactics, and the particular setting existing during the contract formation process," and substantive unconscionability involves consideration of harsh or unfair one-sided terms embedded in the contract). The application of our common law unconscionability principles in this fashion would not create an obstacle inconsistent with FAA principles. See AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339-40, 131 S.Ct. 1740, 1746, 179 L.Ed.2d 742, 751 (2011).
But we reverse because the arbitration process contemplated by the clause in question was not available when the parties executed their contract. In opposing the motion to compel arbitration, plaintiff provided a certification, which authenticated an attached AAA statement that unequivocally expressed that, as of January 1, 2003, AAA would "no longer accept the administration of cases involving individual patients without a post-dispute agreement to arbitrate." Consequently, when the parties contracted, their exclusive forum for arbitration was no longer available; there being no agreement to arbitrate in any other forum, arbitration could not be compelled. In short, even assuming the clause was otherwise enforceable and consented to by plaintiff, there was no meeting of the minds as to an arbitral forum if AAA was not available.10 As Atalese instructs, the party from whom such a provision has been extracted must be able to understand — from clear and unambiguous language — both the rights that have been waived and the rights that have taken their place. See Atalese, supra, 219 N.J. at 444, 99 A.3d 306; see also Khan v. Dell, Inc., 669 F.3d 350, 357-59 (3rd Cir.2012) (Sloviter, J., dissenting). Because AAA was not available to administer the arbitration of this dispute at the time the contract was formed, or even at the time the trial court ruled on the application,11 the judge mistakenly compelled arbitration of plaintiff's personal injury claims against this defendant.12
The April 21, 2015 order compelling arbitration is reversed.13