Phoenix Partner Kevin C. Nicholas, Portland/Phoenix Partner Bruce C. Smith, and Phoenix Associate Sarah Schade, were victorious before the Arizona Supreme Court in a case involving a motion to compel arbitration. As reported in the Law360 article titled, "Atty-Client Fee Deals Relevant In Arb. Rows, Ariz. Justices Say," the plaintiff in this matter claimed that she was attacked by a fellow resident in the nursing care facility managed by Lewis Brisbois' client. She subsequently sued our client, alleging negligence and abuse of a vulnerable adult.

At the time that the plaintiff moved into the facility at issue, she signed two agreements that included arbitration clauses. As such, in response to her complaint, our client filed a motion to compel arbitration. The trial court denied the motion, determining that a provision that required the plaintiff to cover the cost of arbitration, win or lose, was unfair. The Arizona Court of Appeals subsequently ruled that the case was governed by the Federal Arbitration Act, the arbitration provision was not procedurally unconscionable, there was no requirement that the long-term care facility explain the arbitration provision to the family, and that an arbitration provision violated the reasonable expectation of the parties. The Court of Appeals further found that a provision shifting all arbitration costs was unconscionable, but severable, saving the arbitration provision.

The Arizona Supreme Court agreed to hear an appeal to determine only whether it was appropriate for trial courts to consider the terms of a contingency fee agree on the issue of whether the litigant could afford arbitration. If the plaintiff could not afford arbitration, then enforcement of an arbitration agreement or clause would have been found substantively unconscionable. Ultimately, the Arizona Supreme Court issued a unanimous opinion and held that a contingency fee agreement could be considered. In doing so, it found that the plaintiff failed to show that she could not afford to arbitrate the case because costs were advanced by her attorney. The Arizona Supreme Court also rejected the claim by the trial lawyers that the contingency fee agreement was a type of collateral source, and ordered the case remanded to the trial court for entry of an order compelling arbitration.