The opinion of the court was delivered by: Simandle, District Judge
This matter is before the Court on Plaintiff John Adamson's motion to find the arbitration agreement he signed with Defendants to be unconscionable and unenforceable*fn1 [Docket Item 37], and a motion to dismiss and compel arbitration submitted by Defendants Foulke Management Corporation and Triad Financial Corporation (collectively, "Defendants")*fn2 [Docket Item 7], which the Court decided only in part on April 6, 2009, Adamson v. Foulke Mgmt. Corp., No. 08-4819, 2009 WL 961378 (D.N.J. Apr. 6, 2009).
In his moving papers, Plaintiff attacks two aspects of the agreement: (1) the costs of arbitration, including filing fees, interpreter, and arbitrator; and (2) the requirement that he pay all reasonable attorney's fees and costs that Defendants incurred in seeking dismissal of this lawsuit. Towards the end of his moving papers Plaintiff also suggests that the arbitration agreement is unconscionable, regardless of his ability to pay, because under the agreement he loses access to a free sign language interpreter, as would be provided in federal court. On October 2, 2009, during a telephone conference to discuss the possible resolution of this dispute regarding arbitration, Plaintiff's counsel argued for the first time that the provision requiring application of New Jersey law is unconscionable. Finally, at an evidentiary hearing held on November 10, 2009, Plaintiff's counsel suggested that American Arbitration Association provides a hostile forum for arbitration, because it requires Plaintiff to pay the costs of his own interpreter.*fn3 Defendants maintain that the arbitration agreement is enforceable and that even if some provisions are unconscionable, the Court must sever those provisions and compel arbitration.
For the reasons discussed below, the Court finds that Plaintiff has failed to meet his burden of providing credible, reliable evidence to show that arbitration would be prohibitively expensive. The Court will deny Plaintiff's motion attacking the arbitration agreement as unenforceable based on financial hardship, and will grant the moving Defendants' motion to dismiss the Complaint against them and to compel arbitration. Plaintiff's suggestion that any arbitration agreement requiring a deaf person to pay the costs of his own American Sign Language interpreter is violative of anti-discrimination laws is preserved for future adjudication if necessary, but such a claim is presently undeveloped on the record and is premature.
This action arises out of Plaintiff's attempt to purchase a vehicle from Defendant Foulke Management Corporation ("Defendant Foulk"), and to obtain financing for the vehicle through Triad Financial Corporation ("Defendant Triad") and DaimlerChrysler Financial Services ("Defendant DaimlerChrysler"). Plaintiff seeks relief under various federal and state anti-discrimination and consumer fraud statutes for alleged discriminatory and fraudulent conduct by Defendants against Plaintiff during the purchasing and financing process, including their alleged refusal to procure an American Sign Language ("ASL") interpreter to assist Plaintiff while he attempted to purchase a vehicle. Defendants Foulke and Triad moved to dismiss this action and to compel arbitration arguing, inter alia, that Plaintiff was bound by a written arbitration agreement to submit his claims against Foulke and Triad to a binding arbitration process.
On April 6, 2009, this Court addressed the Foulke and Triad motion to dismiss and compel arbitration, declined to address Defendants' motion to dismiss on the merits, and reserved decision as to whether arbitration could be compelled in this case, pending discovery regarding Plaintiff's financial resources and the expected costs of the arbitration. Adamson v. Foulke Mgmt. Corp., No. 08-4819, 2009 WL 961378 (D.N.J. Apr. 6, 2009). The Court found that "there exists a valid contract to arbitrate Plaintiff's claims in this action against Defendants Foulke and Triad," and further that the procedural aspects of the contract between the parties did not render the contract unenforceable. Id. at *7-8. Nevertheless, the Court concluded that it could not rule on Plaintiff's substantive challenge to the enforceability of the arbitration agreement, in which he argued that the contract was prohibitively expensive and unconscionable because he would be forced to pay arbitration fees as well as the costs of an ASL interpreter, without a more developed record. Id. at *9. The Court gave Plaintiff and Defendants Foulke and Triad the opportunity to engage in limited discovery regarding Plaintiff's financial condition and the costs of arbitration and ordered additional motion practice on the subject. Id.
In response to this Court's April 6th Opinion and Order, Plaintiff and Foulke and Triad have engaged in discovery and Plaintiff has moved the Court to find the arbitration agreement unconscionable because it is prohibitively expensive, requires Plaintiff to pay for an ASL interpreter and because he may be required to pay for Defendants' costs in moving to dismiss this action. Defendants respond that Plaintiff has failed to meet his burden of showing that arbitration would be prohibitively expensive, adding that Defendants will pay all costs of arbitration (whatever they may be), and that any unconscionable provision should be severed so that arbitration must proceed.
In light of Defendants' challenge to Plaintiff's credibility, the Court held an evidentiary hearing on November 10, 2009. Plaintiff presented the testimony of Iris Boshes, Executive Director of the Deaf-Hearing Communication Centre, Inc. in Swarthmore, Pennsylvania, regarding the costs of ASL interpreters. Plaintiff then testified regarding his assets, income, and expenses. Defendants presented the testimony of William Kopp, General Manager of Foulke Management. On November 19, 2009, the Court heard oral argument from Plaintiff and Defendants, at which point it became apparent that Plaintiff's financial situation was still very much in dispute. The Court reopened the record and gave Plaintiff an opportunity to provide copies of all of his bank statements beginning in November 2008 to the present (along with an affidavit certifying to the completeness and accuracy of the records) and allowed Defendants an opportunity to respond in writing to these documents, as set forth in this Court's Order filed November 19, 2009. The Court finally closed the record on December 4, 2009. This opinion follows.
B. The Arbitration Agreement
This dispute focuses on several provisions of the arbitration agreement that Defendants seek to enforce. The agreement has this to say about costs: "COST OF ARBITRATION: If you start arbitration, you agree to pay the initial filing fee and required deposit required by the American Arbitration Association ["AAA"]. If we start arbitration, we will pay the filing fee and required deposit." (Arbitration Agreement, P-4.) Also relevant, is this provision in the agreement: "ARBITRATION RULES: Arbitration will be conducted under the 'Commercial Arbitration Rules' of the [AAA] that are in effect at the time arbitration is started and under the rules set forth in this agreement. If there is any conflict between what the Commercial Arbitration Rules say and what this agreement says, what this agreement says will govern." (Id.) As a consequence, both Plaintiff and Defendants cited to the AAA rules in speculating as to the necessary costs for arbitration.
In addition, the agreement addresses costs of any motion to dismiss under the heading "STARTING ARBITRATION," stating that if either party refuses to dismiss a suit on a demand for arbitration, that party must pay the costs and attorney's fees of the party seeking to compel arbitration.
As previously noted, during a telephonic conference, Plaintiff also challenged the choice of law provision of the agreement which states:
The arbitrator shall render his/her decision only in conformance with New Jersey law and evidence rules. If the arbitrator fails to render a decision in conformance with New Jersey law or evidence, then the award may be reversed by a court of competent jurisdiction for mere errors of New Jersey law. A mere error is the failure to follow New Jersey law.
Finally, the arbitration agreement has a provision for severance: "If any term of this agreement is unenforceable, the remaining terms of this agreement are severable and enforceable to the fullest extent of the law." (Id.)
C. Evidence of Plaintiff's Financial Situation and the Costs of Arbitration
Both parties have submitted evidence regarding Plaintiff's financial situation and the costs of arbitration in this case. Defendants' evidence is focused on Plaintiff's credibility and the applicability of the Consumer Rules of the American Arbitration Association ("AAA"). Plaintiff offers his own testimony and various documents, including tax returns and his bank statements, along with the testimony of Ms. Boshes.
1. Plaintiff's Financial Situation
Plaintiff, who is a college graduate experienced in accounting, submitted two affidavits, along with his own testimony, regarding his financial situation. In his initial affidavit, dated May 13, 2009, Plaintiff swore that he is married with four children between the ages of two months and nine years. (Adamson Aff. 1, P-2 ¶ 5.) He and his entire family, including all four children, have been bilaterally deaf since birth. (Id.) Plaintiff states that has been unemployed since March 26, 2008, when he was laid-off from his job as an accountant. (Id. ¶ 8.) His wife similarly does not work. (Id. ¶ 7.) Plaintiff stated that his only source of income was his Social Security Disability payments of approximately $1,300 per month, as his Pennsylvania Unemployment Compensation of $2,120 per month expired in April 2009. (Id. ¶¶ 10-11.) At the time of his signing, Plaintiff had a joint checking and savings account with a balance of less than $500 and a college savings plan for the children with approximately $2,466. (Id. ¶¶ 14-15.) He owned a home in Philadelphia, Pennsylvania, on which he made mortgage payments. (Id. ¶ 12.) Attached to this first affidavit is a chart prepared by Plaintiff that includes his representations of his income and expenses, with many expenses (Geico, AT&T, PECO Electric) shown as being the same each month. (Pl. Exh. 2.)
Plaintiff's supplemental affidavit, prepared in response to Defendants' various challenges to Plaintiff's credibility (noting, for example, that Plaintiff's tax returns state he is single and observing that Plaintiff had failed to present any documents to support his asserted expenses), states that he described himself as "single" on his tax returns "because no other member of [his] immediate family receives any earned income." (Adamson Aff. 2, P-3 ¶ 5.) Plaintiff states that he confirmed this practice both with the Internal Revenue Service ("IRS") and H&R Block. (Id. ¶¶ 5-7.)*fn4 Plaintiff also submitted what he described as PDF documents supplied by Geico, AT&T, Philadelphia Gas Works ("PGW"), Philadelphia Water Revenue Bureau, and Countrywide, in response to his request for records of what he paid in bills. (Id. ¶¶ 8-9.) Almost all of those documents are dated after the emails to which they were allegedly attached (for example, the email from PECO is dated May 4, 2009, and the attachment supposedly provided by PECO is dated May 11, 2009) and appear to use the same font and the same format for the various companies. (Id., Attachment B.) Each document indicates that Plaintiff paid an identical amount each month for each of his utilities and all documents and emails are signed by various departments and agencies, not individuals. (Id.)
At the evidentiary hearing, Plaintiff confirmed that he is the deaf father of four deaf children and husband to a deaf wife who has been unemployed since March 2008. Plaintiff testified that his only source of income is $1,300 in Social Security Disability benefits and that his wife and children also receive Social Security benefits, so that their income helps cover excess expenses. Plaintiff says his entire disability benefits go toward living expenses. Plaintiff testified that, on August 31, 2009, he moved his family to Maryland because the schools were better. Plaintiff sold his house, but states that he did not make a profit on the sale, and now rents a home in Frederick, Maryland for $1,400 per month. He testified that his grandmother gave them $3,500 to cover the rent deposit on the new home. Plaintiff listed his assets as a 1994 Buick LeSaber and ...