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Click here for the full text of this decision FACTS:Remigio and Martha Ayala contracted with Olshan Foundation Repair Co. for the installation of foundation stabilization to their home. Alleging that the foundation system installed by Olshan failed, the Ayalas filed suit against Olshan, asserting claims for breach of contract, violations of the Deceptive Trade Practices Act, fraud and negligence. In response, Olshan moved to stay the proceedings and compel arbitration pursuant to an arbitration agreement with the Ayalas. On Feb. 13, 2003, the trial court granted Olshan’s motion and ordered the parties to arbitrate. In accordance with the terms of their agreement, Olshan and the Ayalas initiated the arbitration process with the American Arbitration Association. In September 2004, the Ayalas received notice that the arbitration of the case would cost the parties approximately $63,670, and that the Ayalas’ portion of that amount was more than $33,000. The Ayalas again objected to arbitration. The Ayalas contended that their inability to pay the cost of the arbitration effectively barred them from asserting their claims, thus rendering the arbitration clause substantively unconscionable. The trial court granted the Ayalas’ motion and, following an evidentiary hearing, denied Olshan’s motion to compel arbitration based upon its finding that the cost of arbitration rendered the agreement unconscionable. Olshan appealed the decision of the trial court. HOLDING:Affirmed. Arbitration agreements are interpreted under general contract principles. The Ayalas argued that the cost of the proposed arbitration was so prohibitive as to render the arbitration agreement substantively unconscionable. On this issue, both the U.S. and Texas Supreme Courts have recognized the possibility that the excessive costs of an arbitration might, under certain circumstances, render an arbitration agreement unconscionable. Green Tree Fin. Corp. v. Randolph, 531 U.S. 79 (2000); In re FirstMerit Bank N.A., 52 S.W.3d 749 (Tex. 2001). Given the strong policy favoring arbitration agreements, however, the party opposing the arbitration must prove the likelihood of incurring such costs. While neither court specified how detailed the showing of prohibitive expenses must be, the Texas Supreme Court did hold that “there is no doubt that some specific information of future costs is required.” The Ayalas produced evidence establishing that 1. the AAA will preside over the arbitration; 2. a panel of three structural engineers approved by the AAA will conduct the arbitration; and 3. the arbitration will cost the parties over $63,670. The Ayalas further presented the court with a copy of an invoice from the AAA showing that they owed $33,150, “payment due upon receipt,” for their part of the arbitration expenses. At the hearing, the evidence concerning the Ayalas’ costs and expense was uncontroverted by Olshan. In addition, the Ayalas asserted that these costs would serve to effectively deprive them of the opportunity to bring their claims against Olshan. Even more compelling than Ayala’s personal inability to pay the arbitration fee, is the actual amount of the fee in relation to the amount of the underlying claim. The cost of arbitration as proposed by the AAA was almost three times the cost of the original contract between the Ayalas and Olshan. Pursuant to the contract with Olshan, the Ayalas paid $22,650 for the installation of foundation stabilization to their home. The arbitration fees, however, total nearly $70,000. This disparity between the amount in controversy and the amount charged to arbitrate the controversy is so large that the trial court acted within its discretion when it ruled the arbitration agreement unconscionable. Olshan argues that because both parties to the arbitration agreement will owe a substantially similar amount to the AAA for the arbitration, the agreement was not unconscionable. Given Green Tree and FirstMerit, the court does not find this fact, by itself, dispositive of the issue. The mere fact that both the Ayalas and Olshan will owe a similar amount does not somehow make the amount owed fair, reasonable or conscionable. “Indeed, the fees to be charged for arbitration of the Ayalas’ claim are, by any definition, shocking.” The trial court had the information necessary to reasonably consider the policy of the unconscionability doctrine and evaluate the oppressiveness of the fees and costs of the arbitration in reaching its decision. Olshan failed to establish that the trial court abused its discretion in failing to compel arbitration. OPINION:Stone, J.; Stone, Angelini and Speedlin, JJ.

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