JAMES DUHON v. ACTIVELAF LLC SKYZONE LAFAYETTE AND UNDERWRITERS AT LLOYDS LONDON

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Supreme Court of Louisiana.

JAMES DUHON v. ACTIVELAF, LLC, D/B/A SKYZONE LAFAYETTE AND UNDERWRITERS AT LLOYDS, LONDON

NO. 2016-CC-0818

Decided: October 19, 2016

I respectfully dissent from the majority's reversal of the ruling of the court of appeal. In my view, the arbitration clause in the Sky Zone Agreement is not part of a contract of adhesion which would render it unenforceable.

As the majority correctly states, a contract of adhesion is a “standard contract, usually in printed form, prepared by a party of superior bargaining power for adherence or rejection of the weaker party.” Aguillard v. Auction Management Corp., 2004-2804, 2004-2857, p.9 (La. 6/29/05), 908 So.2d 1, 8-9. It is undisputed that the real issue in a contract of adhesion analysis is consent, whether the non-drafting party, considered to be the weaker party, truly consented to all the printed terms. Id. In addressing the issue of consent, a court must look to the form, print, or unequal terms of the contract by considering the factors set forth in Aguillard, namely, the physical characteristics and distinguishing features of the arbitration clause, the relative bargaining position of the parties, and the mutuality or lack thereof in the arbitration clause. Id., 2004-2804, 2004-2857, p. 9, 908 So.2d at 17.

As an initial matter, I disagree with the majority's finding that the arbitration clause was hidden and camouflaged within the Sky Zone Agreement in such a way that would indicate the plaintiff's consent to the agreement could be called into question. Neither the print nor the font size of the arbitration clause differed from that of the remainder of the contract executed by the plaintiff. The standard form agreement was relatively short and straightforward, consisting of a total of nine paragraphs, three of which were set off with boxes to be checked to signify the patron's consent. The arbitration clause, while not set off alone, consisted of one-half of a paragraph that was required to be checked off. The clause commenced midway through the paragraph and ran until the end of the paragraph. The plaintiff does not dispute that he checked off the box reflecting his consent to the terms of the arbitration clause.

Furthermore, the record is absent any evidence that the plaintiff was not in an equal bargaining position with the defendants. At the heart of the transaction, the plaintiff was seeking admittance to a recreational facility. Indisputably, this was not a contract to which the plaintiff was compelled to enter into the terms. He could have simply elected to not sign the agreement and bypass the recreational activity. Instead, the plaintiff signed the arbitration agreement acknowledging that he had sufficient opportunity to read the entire document and understood its terms. Having signed the agreement, the plaintiff cannot seek to avoid his obligations by contending that he did not read or understand it. Basic contract law dictates that a party who signs a written instrument is presumed to know its contents and cannot avoid its obligations by contending that he did not read it, that he did not understand it, or that the other party failed to explain it to him. Coleman v. Jim Walter Homes, Inc., 2008-1221, p. 7 (La. 3/17/09), 6 So.3d 179, 183 (citing Tweedel v. Brasseaux, 433 So.2d 133, 137 (La.1983)). To overcome the presumption, the party has the burden of proving with reasonable certainty that he was deceived. Id. The plaintiff is unable to satisfy this burden, because there is no evidence in the record that the plaintiff made any effort to contact the defendant for an explanation or to discuss the terms of the contract in any respect.

Next, the arbitration clause at issue substantially mirrors the Aguillard arbitration clause, which this court found to be mutual. The plaintiff has not shown anything in the clause that reserves Sky Zone's right to litigate disputes related to the agreement that is not equally afforded to the plaintiff. As such, the majority errs in finding the lack of mutuality as to the parties.

Finally, in Aguillard, this court addressed the presumption of arbitrability:

[E]ven when the scope of an arbitration clause is fairly debatable or reasonably in doubt, the court should decide the question of construction in favor of arbitration. The weight of this presumption is heavy and arbitration should not be denied unless it can be said with positive assurance that an arbitration clause is not susceptible of an interpretation that could cover the dispute at issue. Therefore, even if some legitimate doubt could be hypothesized, this Court, in conjunction with the Supreme Court, requires resolution of the doubt in favor of arbitration.

Id., 04-2804 at 18, 908 So.2d at 25.

In light of the controlling law indicating the favorable consideration afforded arbitration agreements, coupled with the plaintiff's failure to satisfy his burden of proving the contract was adhesionary, the majority erred in invalidating the contract. Accordingly, I respectfully dissent and would affirm the ruling of the court of appeal.

GUIDRY, J., dissents and assigns reasons.