King v. Bryant – NC Appellate Court Calls Medical Malpractice Arbitration Agreement Unconscionable

An increasing number of businesses – including health care providers – are including forced arbitration agreements as part of their terms of service. These agreements allow that if a dispute arises regarding the quality of the product or service, the consumer agrees to forfeit his or her right to a jury trial, and instead have the matter heard by a private arbitrator.
Our Asheville medical malpractice attorneys know that for health care providers, such agreements are seen as beneficial, not only because the awards for damages tend to be less, but the burden of proof may also be lesser. Plus, the findings of the arbitrator can be ordered to remain confidential, and no matter the outcome, doctors can often avoid being listed as malpractitioners on the National Practitioner Data Bank.

But the loss to the patient/consumer is considerable. While the agreements are routinely enforced, we are finding that when clauses are buried as “take it or leave it” agreements, buried in the fine print, and where one side has more substantial bargaining power and sophistication, these courts are granting them closer scrutiny.

One of the grounds on which a plaintiff can challenge an arbitration agreement is by arguing it is “unconscionable.” This is essentially means that it is inherently unfair. This was what the North Carolina Court of Appeals decided in the recent case of King v. Bryant, in which the appellate panel affirmed the trial court’s ruling denying defendant’s motion to dismiss the complaint and compel arbitration.

The facts that gave way to the King case are this:
The patient, 68-years-old, has a high school education and has a limited ability to read. In April 2009, he and his wife visited the defendant doctor’s office to discuss laparoscopic surgery to repair a hernia, following a referral from the plaintiff’s primary physician. The surgery did not go as intended, and the patient suffered complications resulting in injury.

Prior to the surgery, while sitting in the waiting area, the plaintiff received a stack of forms to fill out. Included in those was an arbitration agreement. Neither the receptionist nor anyone else in the office drew the patient’s attention to the fact that the arbitration agreement was a legal contract that would result in forfeiture of his right to sue, should something go wrong. Nowhere in the document did it include the words “jury,” “judge” or “trial.” The document also did not indicate the patient had the right to consult with an attorney before signing.

The patient said he signed all the forms without actually reading them, assuming they were all necessary medical forms. He was not provided with a copy.

The court would later find the wording of the arbitration agreement was “poorly-drafted, confusing and nonsensical.” For example, one line insinuates health care services are provided by the patient, rather than the doctor. Further, at no point is the term “arbitration” defined.

The court found that all these facts in concert result in a situation in which the doctor and his agents breached the fiduciary duty to the patient by failing to disclose all material terms of the agreement and by not dealing with him openly, honestly, fairly and without oppression, fraud or imposition.

The court found the agreement to be the result of constructive fraud, and also found it to be unconscionable, and therefore, unenforceable.

This does not mean the patient will necessarily win his case. However, it does mean he will be given his day in court.

Contact the North Carolina injury lawyers at the Lee Law Offices by calling 800-887-1965.

Additional Resources:
King v. Bryant, July 15, 2014, North Carolina Court of Appeals

More Blog Entries:
Gallant v. MacDowell: Medical Malpractice and the Discovery Rule, July 14, 2014, Asheville Medical Malpractice Lawyer Blog

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