(251) 299-0101

FUNERAL SERVICES; ARBITRATION - NEWELL V. SCI ALABAMA FUNERAL SERVICES, LLC

Newell v. SCI Alabama Funeral Services, LLC, [Ms. 1151078, Mar. 17, 2017] __ So. 3d __ (Ala. 2017). The Court affirms an order of the Mobile Circuit Court granting a motion to compel arbitration filed by a funeral services company alleged to have mishandled human remains prior to cremation. The Court rejected an argument the arbitration provision was unconscionable noting,

In order to meet [the] burden, the party seeking to invalidate an arbitration provision on the basis of unconscionability must establish both procedural and substantive unconscionability. Blue Cross Blue Shield of Alabama v. Rigas, 923 So. 2d 1077, 1087 (Ala. 2005). As this Court explained in Rigas:

“Substantive unconscionability

“‘“relates to the substantive contract terms themselves and whether those terms are unreasonably favorable to the more powerful party, such as terms that impair the integrity of the bargaining process or otherwise contravene the public interest or public policy; terms (usually of an adhesion or boilerplate nature) that attempt to alter in an impermissible manner fundamental duties otherwise imposed by the law, fine-print terms or provisions that seek to negate the reasonable expectations of the nondrafting party, or unreasonably and unexpectedly harsh terms having to do with price or other central aspects of the transaction.”’

Ex parte Thicklin, 824 So. 2d 723, 731 (Ala. 2002) (emphasis omitted) (quoting Ex parte Foster, 758 So. 2d 516, 520 n. 4 (Ala. 1999), quoting in turn 8 Richard A. Lord, Williston on Contracts § 18:10 (4th ed. 1998)). See also Leeman v. Cook’s Pest Control, Inc., 902 So. 2d 641 (Ala. 2004).

“Procedural unconscionability, on the other hand, ‘deals with “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.”’ Thicklin, 824 So. 2d at 731 (quoting Foster, 758 So. 2d at 520 n. 4, quoting in turn 8 Williston on Contracts § 18:10).”

923 So. 2d at 1086-87.

Ms. *7-9. Here, the Court rejected the contentions that the arbitration provision was substantively and procedurally unconscionable: Because the arbitration provision was “expressly limited to only those claims ‘relating to the transaction contemplated by this agreement,’ [the Court could not] say that it is so overly broad as to be unconscionable.” Ms. *12-13.

Relatedly, the arbitration provision was not substantively unconscionable merely because it gave the arbitrator the authority to determine arbitrability. Ms. *13-14. Further, the provision was not substantively unconscionable by reserving to the funeral home the right to avail itself of courts while forcing a plaintiff to arbitrate claims.

Finally, the provision was not procedurally unconscionable due to unequal bargaining power. The Court rejected the contention that funeral matters should not require grieving family members to shop around for a funeral home that does not require execution of such a provision in order to show that there was no meaningful alternative. Ms. *19.

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