Calusinski v. Alden-Poplar Creek Rehabilitation & Health Care Center, Inc. , 2022 IL App (1st) 220508 ( 2022 )

2022 IL App (1st) 220508No. 1-22-0508
Opinion filed September 30, 2022.
First Division
IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
PAUL CALUSINSKI, as Independent Administrator of the ) Appeal from the
Estate of Margaret Hostetler, Deceased, ) Circuit Court of
) Cook County.
Plaintiff-Appellee, )
)
v. ) No. 2019 L 9303
)
ALDEN-POPLAR CREEK REHABILITATION AND )
HEALTH CARE CENTER, INC., an Illinois Corporation ) The Honorable
d/b/a Alden Poplar Creek, and ALDEN MANAGEMENT ) Patricia O’Brien Sheahan,
SERVICES, INC., ) Judge Presiding.
)
Defendants-Appellants. )
PRESIDING JUSTICE LAVIN delivered the judgment of the court, with opinion.
Justices Hyman and Coghlan concurred in the judgment and opinion.
OPINION
¶1 Plaintiff, Paul Calusinski, as independent administrator of his mother’s estate, brought a
wrongful death and survival action against defendants, Alden-Poplar Creek Rehabilitation and
Health Care Center, Inc., an Illinois Corporation d/b/a Alden Poplar Creek, and Alden
Management Services, Inc. Plaintiff alleged that his mother, Margaret Hostetler, suffered and
died due to defendants’ negligent care and treatment of her at a nursing home. Defendants
No. 1-22-0508
subsequently moved to compel arbitration pursuant to an agreement between the parties. The
circuit court initially granted defendants’ motion but later granted plaintiff’s motion to reconsider
that judgment, concluding the arbitration agreement was not enforceable as a matter of law
because it was substantively unconscionable.
¶2 On appeal, defendants argue that the enforceability of the arbitration agreement had to be
determined by an arbitrator, not by a court of law, and that the agreement was an enforceable
contract in any event. We disagree, and for the reasons that follow, we affirm the circuit court’s
judgment.
¶3 BACKGROUND
¶4 Plaintiff’s mother, Margaret Hostetler, now deceased, resided at Alden-Poplar Creek, a
long-term care facility operated by Alden-Poplar Creek Rehabilitation and Health Care Center,
Inc., between August 2017, and February 2018. Plaintiff, acting under a power of attorney for his
mother, entered into an arbitration agreement with Alden-Poplar Creek when his mother was first
admitted to the nursing home. At the same time, plaintiff, again acting under a power of attorney
for his mother, entered into a separate residential agreement with Alden-Poplar Creek,
concerning, among other things, costs and payment related to his mother’s care at the home. As
will be discussed in more detail below, the arbitration agreement required any claims or disputes
brought by plaintiff arising out of his mother’s care at the nursing home to be resolved through
mediation and/or arbitration. Yet, the agreement permitted the nursing home to litigate claims
against plaintiff for nonpayment of nursing home costs in a court of law.
¶5 Plaintiff’s mother eventually developed an unstageable pressure sore at the nursing home
that required debridement. She died shortly thereafter on February 20, 2018.
-2-
No. 1-22-0508
¶6 Plaintiff, as independent administrator of his mother’s estate, filed the instant wrongful
death and survival action against defendants, alleging that defendants’ negligence was the direct
and proximate cause of his mother’s suffering and death. Defendants thereafter moved to compel
arbitration of plaintiff’s survival claims, pursuant to the arbitration agreement between the
parties. In response, plaintiff argued that the agreement was not enforceable because it was so
one-sided in defendants’ favor that it was both procedurally and substantively unconscionable.
Specifically, plaintiff asserted that the agreement waived his statutory right to attorney fees, as
well as his right to a jury trial and a class action suit, among other things.
¶7 The circuit court initially granted defendants’ motion, concluding that plaintiff’s claims
fell within the agreement and thus had to be resolved by an arbitrator. The court, however, then
allowed additional discovery and ultimately granted plaintiff’s motion to reconsider its judgment
compelling arbitration in which plaintiff expanded upon his unconscionability arguments.
Specifically, plaintiff pointed to his own testimony that, when he signed the arbitration
agreement upon his mother’s admittance to the nursing home, no explanation was given as to
what he was signing or what rights he was waiving and that he was never specifically told that an
arbitration agreement was among the documents he had to sign. Furthermore, the nursing home’s
office manager, Justine Johnson, admitted, among other things, that she did not provide plaintiff
with a detailed description of what he was signing, that she did not know what was meant by
binding arbitration, that she did not know the difference between arbitration and a jury trial or
what statutory damages were available to plaintiff, and that plaintiff was not allowed to make
changes to the agreement, which was presented to him on a tablet.
¶8 In granting plaintiff’s motion to reconsider, the circuit court concluded that the arbitration
agreement was substantively unconscionable because it was so one-sided in favor of defendants
-3-
No. 1-22-0508
and waived plaintiff’s right to statutory attorney fees without adequate consideration. The court
noted defendants’ unilateral ability to select the mediation and/or arbitration service and that
defendants could sue plaintiff, while plaintiff could never sue them. Finally, the court exercised
its discretion to not sever the offending portions of the arbitration agreement. The court thus
denied defendants’ request to compel arbitration, and they appealed.
¶9 ANALYSIS
¶ 10 In this case, the circuit court concluded that the parties’ arbitration agreement was
substantively unconscionable, and therefore unenforceable, because it waived plaintiff’s right to
statutory attorney fees without adequate consideration. We agree and proceed in our de novo
review. See Bain v. Airoom, LLC, 2022 IL App (1st) 211001, ¶ 21 (whether an arbitration
agreement is enforceable is a question of law, which we review de novo).
¶ 11 Like other contracts, an arbitration agreement may be invalidated by state law contract
defenses such as fraud, duress, or unconscionability. Carter v. SSC Odin Operating Co., 2012 IL
113204, ¶ 18. An arbitration agreement is “substantively unconscionability” where, as here, the
contract terms are so one-sided that they oppress or unfairly surprise an innocent party and there
is an overall imbalance in the obligations and rights imposed by the bargain, as well as
significant cost-price disparity. Kinkel v. Cingular Wireless, LLC, 223 Ill. 2d 1, 28 (2006). And if
an arbitration agreement is unconscionable, it is unenforceable. Hubbert v. Dell Corp., 359 Ill.
App. 3d 976, 986 (2005). 1
¶ 12 “Consideration,” on the other hand, is the “ ‘bargained-for exchange of promises or
performances, and may consist of a promise, an act or a forbearance.’ ” Carter, 2012 IL 113204,
1
Notably, section 2 of the Federal Arbitration Act (9 U.S.C. § 2 (2000)) provides that arbitration
agreements are enforceable except on “such grounds as exist at law or in equity for the revocation of any
contract.”
-4-
No. 1-22-0508
¶ 23 (quoting McInerney v. Charter Golf, Inc., 176 Ill. 2d 482, 487 (1997), citing Restatement
(Second) of Contracts § 71 (1981)). An act or promise that is beneficial to one party while
disadvantageous to the other party is sufficient consideration to support a contract. Id. As such,
the enforceability of plaintiff’s promise to arbitrate, rather than to litigate, his claims against
defendants and to forego his right to statutory attorney fees is dependent upon whether
defendants suffered a detriment, or whether plaintiff received a benefit, in exchange for that
promise. Id.
¶ 13 Here, plaintiff’s survival claims against defendants were premised on violations of the
Nursing Home Care Act (Act) (210 ILCS 45/1-101 et seq. (West 2018)), which specifically calls
for an award of attorney fees if those claims are successful. The Act states that “[t]he licensee
shall pay the actual damages and costs and attorney’s fees to a facility resident whose rights ***
are violated.” Id. § 3-602. Yet, the arbitration agreement in this case provided that plaintiff
“waive[d] any and all costs and attorney’s fees under the Illinois Nursing Home Care Act.” A
ban of those statutory attorney fees therefore violated Illinois law.
¶ 14 While this violation is not a generally applicable contract defense that negates federal
arbitration law, defendants did not give sufficient consideration for plaintiff to waive his right to
attorney fees under state law. The arbitration agreement here permitted defendants to litigate
claims against plaintiff for nonpayment in a court of law, but it did not allow plaintiff to litigate
any claims against defendants in court, and it included a total ban on class action suits.
Furthermore, the agreement vested only defendants with the right to choose a substitute mediator
and/or arbitrator in the event that the primary mediator was unavailable or rejected the parties’
mediation. Finally, the agreement stated that defendants would pay “up to a maximum of
$2,000” for the “mediator and/or arbitrator’s fees and other reasonable costs associated with
-5-
No. 1-22-0508
mediation and arbitration” but that any additional costs for mediation and/or arbitration were to
be “borne equally by the parties” and that each party was “responsible for their own attorney fees
and costs.” This is not sufficient consideration given there is no guarantee that defendants would
have to pay the entire $2,000 for mediation/arbitration costs, and furthermore, plaintiff could
easily incur more than that amount in attorney fees alone.
¶ 15 Defendants nonetheless argue that the issue of whether plaintiff can waive his right to
attorney fees must be decided by an arbitrator, not by a court of law. This puts the cart before the
horse as it would be futile to arbitrate an issue if the arbitration agreement itself is not
enforceable. 2 See, e.g., Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 70-71 (2010) (where a
party challenges specifically the validity of an agreement to arbitrate, “the federal court must
consider the challenge before ordering compliance with that agreement”). Regardless, defendants
have not cited any relevant authority to support their claim that only an arbitrator can decide
whether plaintiff lawfully waived his right to statutory attorney fees.
¶ 16 Based on the foregoing, we conclude that the parties’ arbitration agreement was not
enforceable because it waived plaintiff’s right to attorney fees under the Act without adequate
consideration by defendants. Since we affirm on that basis, we need not address the parties’
alternative arguments concerning the enforceability of the arbitration agreement.
¶ 17 Finally, defendants have not shown, or even argued, that the circuit court abused its
discretion when it refused to sever the anti-fee provision from the rest of the arbitration
agreement, thereby forfeiting the issue. See Ill. S. Ct. R. 341(h)(7) (eff. Oct. 1, 2020) (stating that
“[p]oints not argued are forfeited and shall not be raised in the reply brief, in oral argument, or
2
To the extent defendants rely on the Seventh Circuit’s decision Carbajal v. H&R. Block Tax
Services, Inc., 372 F.3d 903, 906 (7th Cir. 2004) in arguing that an arbitrator must decide whether a party
can waive its right to attorney fees under state law, this involved ancillary provisions of an arbitration
clause, not an entire, stand-alone arbitration agreement, which is the case here.
-6-
No. 1-22-0508
on petition for rehearing”). Instead, defendants assert that the severability issue must be decided
by an arbitrator, not by a court of law. Because plaintiff specifically challenged the validity of
the arbitration agreement, however, this ancillary issue was properly determined by the circuit
court (see supra ¶ 15).
¶ 18 CONCLUSION
¶ 19 For the reasons set forth above, we affirm the circuit court’s judgment.
¶ 20 Affirmed.
-7-
No. 1-22-0508
Calusinski v. Alden-Poplar Creek Rehabilitation & Health Care Center, Inc.,
2022 IL App (1st) 220508Decision Under Review: Appeal from the Circuit Court of Cook County, No. 2019-L-9303;
the Hon. Patricia O’Brien Sheahan, Judge, presiding.
Attorneys Johanna L. Tracy and Michael Shacter, of Carden & Tracy, of
for Chicago, for appellants.
Appellant:
Attorneys Michael W. Rathsack, of Park Ridge, and Steven M. Levin and
for Nicholas J. Emerson, of Levin & Perconti, of Chicago, for
Appellee: appellee.
-8-