The Court of Appeals of Tennessee at Jackson issued its opinion in the case of Wolford v. M. J. Edwards & Son Funeral Home, Inc., et al, 2015 WL 7428743 (2015) in involving the enforcement of a mandatory arbitration clause in a funeral contract. According to the facts in the case:
Wolford’s father died on June 10, 2013. Wolford was a college student at the time of her father’s death and an aunt assisted her in making the funeral arrangements. The family contacted M. J. Edwards & Son Funeral Home, Inc. (Edwards) to arrange for the funeral services. Edwards took possession of the father’s remains, requested the insurance proceeds, embalmed the remains, assisted the family in developing an obituary notice, procured a death certificate, and ordered a casket on June 11, 2013. Also on that date Edwards provided Wolford with a Statement of Funeral Goods and Services that did not contain an arbitration provision and no one at Edwards discussed arbitration with Wolford.
On June 12, 2013 Edwards requested Wolford sign the final paperwork (Contract) that contained the prices for each service. The Contract contained a Notice to Purchaser section above the signature line that provided:
“2 BY SIGNING THIS AGREEMENT, YOU ARE AGREEING THAT ANY CLAIM YOU MAY HAVE AGAINST THE SELLER SHALL BE RESOLVED BY ARBITRATION AND YOU ARE GIVING UP YOUR RIGHT TO A COURT OR JURY TRIAL, AS WELL AS YOUR RIGHT OF APPEAL.”
This section also referred to a Part 3 to the Contract that contained additional terms and conditions that were incorporated by reference into the Contract. However, it was undisputed for purposes of the appeal that Wofford was not provided a copy of Part 3 of the Contract. Part 3 of the Contract provided further detail about arbitrations indicating it was agreed that any claim would be interpreted and processed in accordance with the applicable rules of the American Arbitration Association.
At the time, Wolford was satisfied with the services and merchandise provided by Edwards. However, the father’s remains were interred at a local cemetery and subsequently it was discovered that the cemetery was improperly handling and disposing of human remains. A class action was filed against the cemetery and Edwards was joined with other funeral homes on the basis the funeral homes had breached their duty to their customers in failing to supervise burials and ensure that the burials of those entrusted to their care was “accomplished in a proper fashion.”
Edwards filed a Motion to Compel Arbitrations and to stay any other proceedings pending the resolution of the Arbitration. The lower court Judge reviewed the Contract and depositions related to the Wolford services. He denied the Motion because, admittedly, the Contract provided to Wolford did not contain Part 3. The Judge also indicated that even when parties to a Contract are agreeing to Arbitration there has to be a clear explanation of the rights and obligations, not just a reference. The Judge determined the enforcement of the Arbitration clause would be unconscionable and ordered that Edwards was subject to the class action proceedings. Edwards requested a stay of the proceedings and filed the appeal.
The Appeals Court (Court) reviewed the Tennessee law and indicated that the law and the courts encouraged Arbitration. The Court indicated arbitration clauses generally would be enforced. However, in this case the clause would not be enforced because it was unconscionable. The Court based its decision on several factors including the special nature of funeral arrangements and the fact the Contract had been entered into after Edwards had taken possession of the remains, embalmed them, ordered a casket, etc. Subscribers that have contracts with mandatory arbitration clauses should review this decision and alert their attorneys about it.
This article is for the information of subscribers and does not constitute legal advice about this subject. All subscribers should accordingly consult with their own attorney to make sure they are in compliance with the laws in their state.