Arbitration is an alternative dispute resolution where the parties agree in advance that any dispute between them will be decided in a private proceeding by a neutral third party called an arbitrator. By signing an arbitration agreement, the parties waive the right to litigate claims they may have against one another in a court of law. Nonetheless, since an arbitration agreement is a contract, the validity of an arbitration agreement can often be decided by a judge based on defenses applicable to all contracts, such as fraud or duress.
In Carlos E. Lopez Rivera v. Steven W. Stetson, the Appeals Court reversed the ruling of a trial court judge who held that the defendant’s failure to translate the arbitration agreement into Spanish amounted to a “fraud in the inducement” and, therefore, the arbitration agreement was unenforceable.
The plaintiff, whose primary language is Spanish, engaged the defendant eye surgeon to perform Lasik surgery. Before the surgery, the surgeon’s staff presented the plaintiff with four different forms, including one form entitled “PATIENT ARBITRATION AGREEMENT,” consisting of several paragraphs that contained the word “arbitration.” The patient signed and dated the Arbitration Agreement on the lines indicated. After the surgery, the plaintiff sued the surgeon for medical malpractice in Superior Court. The surgeon moved to dismiss the lawsuit and compel arbitration based upon the terms of the Arbitration Agreement. After an evidentiary hearing, the Superior Court judge found that neither the surgeon nor his staff had explained the terms of the Agreement to the patient in Spanish, even though a translator had been available at the surgeon’s office if the plaintiff had requested one. The judge also found that the plaintiff did not have sufficient understanding of English to read and comprehend what he was signing and, since he had been presented with Arbitration Agreement along with several medical forms, he had been led to believe that he was signing another medical form. Finding that the Arbitration Agreement was unenforceable, the judge declined to compel arbitration. The surgeon appealed.
After considering all the circumstances under which the plaintiff signed the Arbitration Agreement, the Appeals Court concluded that the parties had formed a valid agreement to arbitration because the plaintiff received reasonable notice of the terms of the contract and he manifested his assent by signing it. The Court concluded that the plaintiff’s “lack of facility with the English language” did not change its analysis, citing a 1927 case that held, “[t]he general rule is that, in the absence of fraud, one who signs a written agreement is bound by its terms whether he reads and understands it or not. This rule applies to a person who cannot read.” It further cited to a 1928 case that held the rule also applied to a party who did not speak English or understand the contract at issue. Moreover, the Court held because the plaintiff had ample time to review the Arbitration Agreement, had access a translator who was already on site, or could have asked questions to the surgeon’s staff, there was no evidence of duress. The Appeals Court rejected the plaintiff’s argument that the Arbitration Agreement was “a different species of document,” and found an arbitration agreement is no different from any other contract and ordinary contract principles apply to its interpretation.
Although the enforceability of any arbitration agreement is fact- and case-specific, this case underscores the longstanding rule in contract law that, unless a contract is procured by fraud, a person who signs it is bound by its terms, even if he/she did not read the contract, did not understand its terms, or could not read them.