June 15, 2022- Beatrice Juarez v. THI of New Mexico at Sunset Villa, LLC, No. A-1-CA-39144

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO	1
Opinion Number: _____________	2
Filing Date: JUNE 15, 2022	3
No. A-1-CA-39144	4
BEATRICE JUAREZ,	5
Plaintiff-Appellee,	6
v.	7
THI OF NEW MEXICO AT SUNSET	8
VILLA, LLC, a foreign limited liability	9
company, d/b/a SUNSET VILLA CARE	10
CENTER,	11
Defendant-Appellant.	12
APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY	13
Francis J. Mathew, District Judge	14
Parnall Law Firm, LLC	15
Una Campbell	16
Albuquerque, NM	17
for Appellee	18
Wilson Elser Moskowitz Edelman & Dicker, LLP	19
Lori D. Proctor	20
Houston, TX	21
Coleman M. Proctor	22
Dallas, TX	23
for Appellant	24
Court of Appeals of New Mexico
Filed 6/15/2022 9:14 AM

OPINION	1
MEDINA, Judge.	2
{1} 	Defendant THI of New Mexico at Sunset Villa, LLC (Sunset Villa) appeals	3
the district court’s denial of Defendant’s motion to compel arbitration, pursuant to	4
the New Mexico Uniform Arbitration Act (NMUAA), NMSA 1978, § 44-7A-	5
29(a)(1) (2001). We reverse, and remand.	6
BACKGROUND	7
{2} 	In July 2018, Plaintiff Beatrice Juarez was admitted to Sunset Villa care	8
facility for rehabilitation following a knee replacement surgery. As a condition of	9
her admission, Plaintiff signed both an “Admission Agreement” and an arbitration	10
agreement titled “Agreement for Dispute Resolution Program” (DRP), which were	11
provided to Plaintiff at the same time, along with other admission materials. Plaintiff	12
alleges that she signed the Admission Agreement and DRP the day after she was	13
admitted to the facility, while Defendant asserts that she was presented with the	14
documents and executed them at the time of admission and that the contracts are	15
dated accordingly.	16
{3} 	In bold at the beginning of the document, the DRP stated:	17
YOUR ADMISSION TO THE FACILITY IS CONTINGENT ON	18
YOU AND YOUR REPRESENTATIVE, IF ANY, ENTERING INTO	19
THIS 	AGREEMENT 	TO 	PARTICIPATE 	IN 	THE 	DRP. 	BY	20
CHOOSING 	TO 	HAVE 	DISAGREEMENTS 	RESOLVED	21
THROUGH THE DRP, YOU WILL BE WAIVING THE RIGHT TO	22
HAVE 	A 	JUDGE 	OR 	A 	JURY 	RESOLVE 	ANY 	SUCH	23

2
DISAGREEMENT 	IN 	COURT. 	INSTEAD, 	IF 	THERE 	IS 	A	1
DISPUTE BETWEEN US, IT WILL BE RESOLVED THROUGH	2
THE DRP. THIS MEANS THAT, IF ALL ELSE FAILS, OUR	3
DISPUTE 	WILL 	BE 	RESOLVED 	BY 	A 	DECISION 	BY 	AN	4
ARBITRATOR INSTEAD OF A JUDGE OR JURY.	5
The DRP also stated that all parties “acknowledge that they are agreeing to mutual	6
arbitration, regardless of who makes the claim” so long as it does not fall into the	7
small claims exception; that “[Defendant] will pay for 100% of the fees charged by	8
the mediator and the arbitrators”; and that “[Defendant] will pay up to $5,000 in	9
attorney[] fees that you actually incur if our dispute is arbitrated.”	10
{4} 	The DRP contained a delegation clause, which stated in part:	11
The arbitrator is required to apply and enforce the terms of this	12
[a]greement. To the fullest extent permitted by law, any disagreements	13
regarding the applicability, enforceability or interpretation of this	14
[a]greement will be decided by the arbitrator and not by a judge or jury.	15
Additionally, the DRP specified “[p]rocedurally, and unless otherwise governed by	16
the [Federal Arbitration Act (FAA)], the arbitration will follow the rules and	17
procedures of the Judicial Arbitration and Mediation Services (JAMS).” Finally, the	18
DRP notified the parties that “[t]his [a]greement relates to matters, among others,	19
that 	are 	covered 	by 	the 	Admission 	Agreement, 	incorporates 	the 	Admission	20
Agreement and should be read together with the Admission Agreement.”	21
{5} 	The Admission Agreement stated that “this [a]greement represents the entire	22
agreement and understanding between the parties and supersedes all previous	23
representations, understandings or agreements, oral or written,” and that “[t]he	24

3
undersigned further acknowledges that he/she has received and read the Admission	1
Handbook and other Admissions materials and understand[s] that these documents	2
are made a part of this [a]greement by reference herein.”	3
{6} 	Approximately seven months after her admission to Sunset Villa, Plaintiff	4
filed 	a 	complaint 	against 	Defendant, 	alleging 	claims 	of 	medical 	negligence;	5
respondeat 	superior 	and 	vicarious 	liability; 	and 	negligent 	hiring, 	training,	6
supervision, and retention of employees. After filing an answer, Defendant moved	7
to compel arbitration, asserting that there was no dispute that Plaintiff signed the	8
DRP, that Defendant was entitled to enforce the DRP, that the DRP was a valid,	9
enforceable agreement supported by consideration, and that the delegation clause	10
clearly required any questions about arbitrability be submitted to the arbitrator.	11
{7} 	Plaintiff responded that the DRP was substantively unconscionable because it	12
contained provisions that were unfair and against public policy. Plaintiff also argued	13
that the circumstances of signing the agreement made the DRP procedurally	14
unconscionable. Plaintiff attached an affidavit in support, alleging, among other	15
things, that Plaintiff did not read the paperwork, was not asked to review the	16
paperwork, felt as if she had no choice but to sign, and was on medication at the time	17
of signing. Plaintiff stated that “Plaintiff also challenges this ‘delegation clause’	18
under the same grounds she challenges the ‘Agreement.’”	19

4
{8} 	In reply, Defendant argued that Plaintiff failed to specifically challenge the	1
delegation clause and, therefore, a court is prevented from considering the contract	2
enforcement challenges to the arbitration agreement under New Mexico law.	3
Instead, the challenges are required to be submitted to an arbitrator. Defendant also	4
maintained 	that 	Plaintiff 	failed 	to 	establish 	both 	procedural 	and 	substantive	5
unconscionability.	6
{9} 	In May 2020, the district court held a hearing on Defendant’s motion to	7
compel arbitration. Plaintiff’s counsel reiterated that “the delegation clause in the	8
[DRP] is unenforceable for the same reasons that I have mentioned here, that the	9
[DRP] itself is unenforceable.” The district court denied Defendant’s motion, citing	10
four grounds for the denial. The district court found that (1) Defendant “failed to	11
present evidence as to the reasonableness of the arbitration provision”; (2) Defendant	12
failed to provide an affidavit to contradict Plaintiff’s, although Defendant “referred	13
to and challenged [the affidavit] in argument”; (3) if the DRP was signed before the	14
Admission Agreement, then “it was superseded by the [A]dmission [A]greement”;	15
and (4) if vice versa, “then [there is] no consideration.” The district court did not	16
explain its reasoning for rejecting Defendant’s argument that the district court was	17
prevented 	from 	considering 	the 	unconscionability 	arguments 	because 	of 	the	18
delegation clause. This appeal followed.	19

5
DISCUSSION	1
{10} 	On appeal, Defendant maintains that the district court erred in considering	2
Plaintiff’s contract enforceability arguments because the language of the delegation	3
clause in the DRP requires these questions be submitted to the arbitrator and not the	4
district court. In the alternative, if we were to consider Plaintiff’s enforcement	5
arguments, 	Defendant 	argues 	Plaintiff 	failed 	to 	show 	both 	substantive 	and	6
procedural unconscionability. Further, Defendant argues that the district court erred	7
in denying the motion on contract validity grounds because (1) neither party raised	8
these issues below; (2) the DRP is supported by multiple forms of consideration; and	9
(3) the DRP was not superseded by the Admission Agreement, but rather the two	10
documents should be construed together.	11
{11} 	We hold that the district court erred in denying the motion to compel	12
arbitration on contract validity grounds because the DRP was supported by	13
alternative consideration, and under the facts of this case, we construe the DRP and	14
Admission Agreement as one instrument. We additionally hold that the language of	15
the 	delegation 	clause 	requires 	that 	questions 	regarding 	enforceability 	and	16
unconscionability be submitted to the arbitrator. We therefore do not address	17
Plaintiff’s enforcement arguments on appeal.	18
{12} 	“Arbitration agreements are a species of contract, subject to the principles of	19
New Mexico contract law.” Hunt v. Rio at Rust Ctr., LLC, 2021-NMCA-043, ¶ 12,	20

6
495 P.3d 634 (internal quotation marks and citation omitted). “Accordingly, we	1
apply New Mexico contract law in the interpretation and construction of the	2
arbitration agreement.” 	Id. 	(alterations, internal quotation marks, and citation	3
omitted). “We review questions of contractual interpretation de novo.” Id. “We	4
apply a de novo standard of review to a district court’s denial of a motion to compel	5
arbitration.” Peavy ex rel. Peavy v. Skilled Healthcare Grp., Inc., 2020-NMSC-010,	6
¶ 9, 470 P.3d 218 (internal quotation marks and citation omitted).	7
I. 	There Was a Valid Contract to Arbitrate Between the Parties	8
{13} 	We begin with the district court’s decision to deny Defendant’s motion to	9
compel arbitration on contract validity grounds. “A legally enforceable contract is a	10
prerequisite to arbitration under the [NMUAA], and without such a contract, the	11
parties will not be forced to arbitrate.” Luginbuhl v. City of Gallup, 2013-NMCA-	12
053, ¶ 15, 302 P.3d 751 (internal quotation marks and citation omitted). “For such a	13
contract to be legally enforceable, New Mexico courts require evidence of an offer,	14
acceptance, consideration, and mutual assent.” Id. (alteration, internal quotation	15
marks, and citation omitted). “Consideration consists of a promise to do something	16
that a party is under no legal obligation to do or to forbear from doing something he	17
has a legal right to do.” 	Id. 	(internal quotation marks and citation omitted).	18
“Furthermore, a promise must be binding. When a promise puts no constraints on	19
what a party may do in the future—in other words, when a promise, in reality,	20

7
promises nothing—it is illusory, and it is not consideration.” Talbott v. Roswell	1
Hosp. Corp., 2005-NMCA-109, ¶ 16, 138 N.M. 189, 118 P.3d 194 (internal	2
quotation marks and citation omitted).	3
{14} 	Although not raised by the parties, the district court based its denial of the	4
motion to compel arbitration on either (1) Plaintiff’s contention that she was already	5
admitted to the facility when she signed the DRP or (2) the district court’s	6
interpretation of the Admission Agreement and DRP as distinct contracts such that	7
one superseded the other. Because the district court denied Defendant’s motion to	8
compel arbitration on these grounds, we consider the parties’ arguments on these	9
issues made for the first time on appeal. See Piano v. Premier Distrib. Co., 2005-	10
NMCA-018, ¶¶ 16-17, 137 N.M. 57, 107 P.3d 11.	11
{15} 	We turn first to the district court’s conclusion that if Plaintiff signed the DRP	12
after she signed the Admission Agreement, the DRP lacked consideration and was	13
therefore an invalid contract. A review of the terms included in the DRP reveal	14
various forms of consideration. The DRP requires Defendant and Plaintiff to bring	15
all claims arising out of Plaintiff’s admission to the facility that fall outside of the	16
small claims exception to arbitration. When both parties are mutually bound to	17
arbitration, a mutual obligation exists, and the arbitration agreement is supported by	18
consideration that is not illusory. See Sisneros v. Citadel Broad. Co., 2006-NMCA-	19
102, ¶ 34, 140 N.M. 266, 142 P.3d 34.	20

8
{16} 	In addition, the terms of the DRP require Defendant to pay up to $5,000 of	1
Plaintiff’s attorney fees when resolving a claim through arbitration and to cover all	2
costs and fees of arbitration. Although Plaintiff argues this is illusory, we disagree.	3
See N.M. Right to Choose/NARAL v. Johnson, 1999-NMSC-028, ¶ 9, 127 N.M. 654,	4
986 P.2d 450 (“New Mexico adheres to the so-called American rule that, absent	5
statutory or other authority, litigants are responsible for their own attorney[] fees.”	6
(internal quotation marks and citation omitted)); see also NMSA 1978, § 44-7A-	7
22(d) (2001) (“An arbitrator’s expenses and fees, together with other expenses, must	8
be paid as provided in the award.”); JAMS Comprehensive Arbitration Rules &	9
Procedures, 	Rule 	31(a) 	(June 	1, 	2021), 	https://www.jamsadr.com/rules-	10
comprehensive-arbitration/ (“Each [p]arty shall pay its pro rata share of JAMS fees	11
and expenses as set forth in the JAMS fee schedule in effect at the time of the	12
commencement of the [a]rbitration, unless the [p]arties agree on a different	13
allocation of fees and expenses.”). Here, Defendant has promised to do something it	14
is not under a legal obligation to do, therefore creating adequate consideration to	15
support the DRP. Consequently, the district court erred in denying Defendant’s	16
motion to compel arbitration by determining that the DRP was not supported by	17
consideration.	18
{17} 	Second, to the extent the district court alternatively found that if Plaintiff	19
signed the DRP before she signed the Admission Agreement, the Admission	20

9
Agreement superseded the DRP, we disagree. While the Admission Agreement does	1
state “this [a]greement represents the entire agreement and understanding between	2
the 	parties 	and 	supersedes 	all 	previous 	representations 	understandings 	or	3
agreements, oral or written,” the Admission Agreement and the DRP were signed at	4
the same time and therefore one did not supersede the other. We explain.	5
{18} 	Superseding requires two separate agreements, instruments, or contracts	6
between the parties that take place at different times. See, e.g., LensCrafters, Inc. v.	7
Kehoe, 2012-NMSC-020, ¶ 22, 282 P.3d 758 (stating that nonrenewal letters that	8
included new, different sublease contracts superseded the defendant’s right to renew	9
the existing contracts); Cont’l Life Ins. Co. v. Smith, 1936-NMSC-074, ¶¶ 2, 22, 41	10
N.M. 82, 64 P.2d 377 (stating that the “verbal contract was in full force and effect	11
until it was superseded by the written contract” signed two years later); West v.	12
Wash. Tru Sols., LLC, 2010-NMCA-001, ¶¶ 2, 18, 147 N.M. 424, 224 P.3d 651	13
(stating that a previous agreement or representation may be superseded by other	14
representations made later); see also Supersede, Black’s Law Dictionary (11th ed.	15
2019) (“To annul, make void, or repeal by taking the place of.”). But here, we view	16
the DRP and the Admission Agreement as one instrument because they were	17
presented to Plaintiff at the same time, executed at the same time, and involved the	18
same parties. Randles v. Hanson, 2011-NMCA-059, ¶ 24, 150 N.M. 362, 258 P.3d	19
1154 (“In the absence of anything to indicate a contrary intention, instruments	20

10
executed at the same time, by the same parties, for the same purpose, and in the	1
course of the same transaction, are, in the eye of the law, one instrument, and will	2
be read and construed together.” (alterations, internal quotation marks, and citation	3
omitted)). Although Plaintiff argues that there is no intent to read the Admission	4
Agreement and the DRP together, the Admission Agreement references other	5
admission materials, including the DRP, and the DRP explicitly mentions the	6
Admission Agreement. This provides additional support that the parties intended	7
these two documents to be read together and construed as one instrument. Master	8
Builders, Inc. v. Cabbell, 1980-NMCA-178, ¶ 9, 95 N.M. 371, 622 P.2d 276	9
(“Another situation in which two documents are properly construed together is when	10
one or both documents refer to the other.”).	11
{19} 	Because the Admission Agreement and the DRP are read together, neither	12
document could supersede the other because superseding requires two distinct	13
instruments. See, e.g., LensCrafters, Inc., 2012-NMSC-020, ¶ 22. Therefore, we	14
hold the district court erred in denying Defendant’s motion to compel arbitration by	15
determining that the Admission Agreement superseded the DRP.	16
II. 	Framework to Determine the Scope of an Arbitration Delegation Clause	17
{20} 	We next turn to the district court’s decision to deny Defendant’s motion to	18
compel arbitration on contract enforceability grounds and Defendant’s argument that	19
the delegation clause required these arguments be submitted to the arbitrator. “The	20

11
general rule is that the arbitrability of a particular dispute is a threshold issue to be	1
decided by the district court unless there is clear and unmistakable evidence that the	2
parties decided otherwise under the terms of their arbitration agreement.” Hunt,	3
2021-NMCA-043, ¶ 13 (internal quotation marks and citation omitted); see Rent-A-	4
Center, W., Inc. v. Jackson, 561 U.S. 63, 68-69 (2010) (“We have recognized that	5
parties can agree to arbitrate ‘gateway’ questions of ‘arbitrability,’ such as whether	6
the parties have agreed to arbitrate or whether their agreement covers a particular	7
controversy.”); First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995)	8
(“This Court, however, has . . . added an important qualification, applicable when	9
courts decide whether a party has agreed that arbitrators should decide arbitrability:	10
Courts should not assume that the parties agreed to arbitrate arbitrability unless there	11
is clear and unmistakable evidence that they did so.” (alterations, internal quotation	12
marks, and citation omitted)). The NMUAA, NMSA 1978, §§ 44-7A-1 to -32	13
(2001), enforces this position, providing that a court shall order the parties to	14
arbitrate if it finds that there is an enforceable agreement to do so. See § 44-7A-8(b).	15
{21} 	Even though the parties’ agreement is subject to the FAA, we previously	16
explained that “although the FAA has limited the role of courts in the arbitration	17
context, certain gateway issues involving arbitration provisions have remained	18
within the purview of judicial review.” Felts v. CLK Mgmt., Inc., 2011-NMCA-062,	19
¶ 17, 149 N.M. 681, 254 P.3d 124, aff’d on other grounds, Nos. 33,011, 33,013, dec.	20

12
(N.M. Sup. Ct. Aug. 23, 2012) (non-precedential). “These gateway arbitrability	1
issues include matters such as the validity of an arbitration provision, the scope of	2
an arbitration provision, or whether an arbitration agreement covers a particular	3
controversy.” Hunt, 2021-NMCA-043, ¶ 14 (internal quotation marks and citation	4
omitted). Like the United States Supreme Court, we have recognized that a	5
delegation clause should be upheld when there is “clear and unmistakable” intent to	6
have these gateway questions determined by an arbitrator rather than a court. Id.	7
{22} 	However, even if there is a clear and unmistakable intent to arbitrate, a court	8
may still consider a challenge to the delegation clause in an arbitration agreement	9
under certain circumstances. “[A] party must specifically challenge the delegation	10
provision in order for a court to consider the challenge rather than referring the	11
matter to an arbitrator.” Clay v. N.M. Title Loans, Inc., 2012-NMCA-102, ¶ 11, 288	12
P.3d 888 (internal quotation marks and citation omitted). “The challenge need not	13
be made in a specific document, such as the complaint; rather, what matters is the	14
substantive basis of the challenge.” Id. (alteration, internal quotation marks, and	15
citation omitted). “Our inquiry, then, turns on two questions: (1) was there a clear	16
and unmistakable agreement to arbitrate arbitrability? and (2) did [the challenger]	17
mount a ‘specific challenge’ to that agreement?” Id. With this framework in mind,	18
we now turn to Defendant’s argument that the district court erred in determining the	19

13
merits of Plaintiff’s unconscionability arguments instead of submitting the questions	1
to an arbitrator.	2
A. 	The Delegation Clause Clearly and Unmistakably Delegates Questions of	3
Arbitrability to the Arbitrator	4
{23} 	Defendant argues that the language of the delegation clause clearly delegates	5
the question of arbitrability. Defendant also argues that the DRP’s incorporation of	6
the JAMS rules further shows a clear intent to delegate questions of arbitrability.	7
Plaintiff contends that the delegation clause does not clearly and unmistakably	8
delegate because the delegation clause does not delegate questions of “validity” or	9
“voidness.” Plaintiff further argues that the JAMS rules only apply to procedural	10
matters and that incorporating “an entire set of rules, without reference to the	11
particular 	rule 	that 	is 	meant 	to 	govern 	arbitrability, 	does 	not 	clearly 	and	12
unmistakably indicate an intent for the arbitrator to decide arbitrability.” Defendant	13
replies that there is no authority separating “validity” from “enforcement,” and that	14
questions of unconscionability are considered questions of contract enforcement.	15
{24} 	Here, we hold that the plain language of the delegation clause presents clear	16
and unmistakable evidence that the parties intended to have an arbitrator decide the	17
threshold issue of arbitrability. The delegation clause states, “[t]o the fullest extent	18
permitted by law, any disagreements regarding the applicability, enforceability or	19
interpretation of this [a]greement will be decided by the arbitrator and not by a	20
judge 	or 	jury.” 	(Emphases 	added.) 	The 	emphasized 	language 	is 	clear 	and	21

14
unmistakable evidence that the parties intended to arbitrate questions of arbitrability.	1
See Felts, 2011-NMCA-062, ¶ 22 (“Our Supreme Court has stated that courts must	2
interpret the provisions of an arbitration agreement according to the rules of contract	3
law and apply the plain meaning of the contract language in order to give effect to	4
the parties’ agreement.” (alteration, internal quotation marks, and citation omitted)).	5
{25} 	In addition, the language of the delegation clause here is similar to language	6
we have previously held showed clear and unmistakable intent to delegate questions	7
of arbitrability. Compare Clay, 2012-NMCA-102, ¶ 12 (holding delegation clause	8
language of “disputes about the validity, enforceability, arbitrability or scope” are	9
subject to arbitration “was clear and unmistakable evidence of the parties’ intent to	10
‘have an arbitrator decide threshold issues of arbitrability’” (internal quotation marks	11
and citation omitted)), and Felts, 2011-NMCA-062, ¶ 23 (holding delegation clause	12
language of “any and all claims, disputes or controversies arising out of [the	13
a]greement to [a]rbitrate [a]ll [d]isputes including disputes as to the matters subject	14
to arbitration” to be clear and unmistakable evidence of intent (citation omitted) (text	15
only)), with Hunt, 2021-NMCA-043, ¶ 15 (holding that the delegation clause	16
language that “any disputes regarding the interpretation of [the] agreement shall be	17
submitted to arbitration” was not clear and unmistakable evidence of intent because	18
the agreement failed to specify that “distinct threshold questions of arbitrability (i.e.	19
questions about the validity, enforceability, or scope of the arbitration agreement)	20

15
should also be resolved by an arbitrator” (alterations and internal quotation marks	1
omitted)).	2
{26} 	Although Plaintiff argues that the inclusion of the JAMS rules in the DRP	3
should not be considered evidence of clear and unmistakable intent, our case law	4
requires the opposite conclusion. The DRP states “[p]rocedurally, and unless	5
otherwise governed by the FAA, the arbitration will follow the rules and procedures	6
of the [JAMS].” JAMS Rule 11 states,	7
Jurisdictional and arbitrability disputes, including disputes over the	8
formation, existence, validity, interpretation or scope of the agreement	9
under which [a]rbitration is sought, and who are proper [p]arties to the	10
[a]rbitration, shall be submitted to and ruled on by the [a]rbitrator. The	11
[a]rbitrator has the authority to determine jurisdiction and arbitrability	12
issues as a preliminary matter.	13
JAMS Comprehensive Arbitration Rules & Procedures, supra, Rule 11(b). Further,	14
Rule 11(c) states, “[d]isputes concerning the appointment of the [a]rbitrator shall be	15
resolved by JAMS.” JAMS Comprehensive Arbitration Rules & Procedures, supra,	16
Rule 11(c). Incorporation of rules of arbitration that give the arbitrator authority to	17
decide questions of arbitrability is considered clear and unmistakable evidence of	18
intent to delegate questions of arbitrability. See Felts, 2011-NMCA-062, ¶ 24.	19
{27} 	To the extent Plaintiff contends that the absence of the words “validity” or	20
“voidable” in the delegation clause invalidates it because unconscionability is a	21
question of contract validity, and the delegation clause does not send issues of	22
validity to the arbitrator, we disagree. In New Mexico, unconscionability is a	23

16
question of contract enforcement and not a question of validity. See Strausberg v.	1
Laurel Healthcare Providers, LLC, 2013-NMSC-032, ¶ 44, 304 P.3d 409 (“A	2
showing of unconscionability may render an otherwise valid contract voidable,	3
revocable, and unenforceable.”); see also Figueroa v. THI of N.M. at Casa Arena	4
Blanca, LLC, 2013-NMCA-077, ¶¶ 17-18, 306 P.3d 480 (stating “consideration and	5
unconscionability are two different analyses under contract law,” and explaining that	6
“[c]onsideration is a prerequisite to the legal formation of a valid contract” whereas	7
“[u]nconscionability, on the other hand, is an equitable doctrine, rooted in public	8
policy, 	which 	allows 	courts 	to 	render 	unenforceable 	an 	agreement 	that 	is	9
unreasonably favorable to one party,” and therefore “New Mexico law does not	10
equate adequate consideration with a conscionable contract” (emphasis, internal	11
quotation marks, and citations omitted)). We cannot agree with such a narrow	12
reading of the delegation clause as argued for by Plaintiff to create ambiguity in the	13
intent to submit arbitrability questions to the arbitrator.	14
{28} 	Because we hold that the delegation clause clearly and unmistakably delegates	15
questions of arbitrability to the arbitrator, we next turn to whether Plaintiff	16
specifically challenged the delegation clause.	17
B. 	Plaintiff Did Not Specifically Challenge the Delegation Clause	18
{29} 	Defendant argues that Plaintiff’s challenge to the delegation clause on the	19
same grounds as her challenge to the DRP as a whole is not a specific challenge and	20

17
that 	the 	record 	does 	not 	support 	Plaintiff’s 	claim 	that 	her 	procedural	1
unconscionability argument was directed specifically to the delegation clause.	2
Plaintiff maintains that the procedural unconscionability argument goes to the	3
circumstances of signing the agreement, which includes the delegation clause, and	4
therefore, the argument specifically challenges the delegation clause. Plaintiff	5
additionally argues that her challenge to the JAMS rules should be considered a	6
specific challenge to the delegation clause.	7
{30} 	We first addressed the requirement of a specific challenge in Felts. In Felts,	8
the 	plaintiff 	entered 	into 	three 	online 	loans 	with 	various 	payday 	lending	9
organizations. 2011-NMCA-062, ¶ 4. The plaintiff signed virtually identical loan	10
agreements that contained a delegation provision stating “any and all claims,	11
disputes or controversies between the borrower and lender shall be resolved by	12
binding individual (and not class) arbitration by and under the Code of Procedure of	13
the National Arbitration Form (NAF).” Id. ¶¶ 4-5 (alteration and internal quotation	14
marks omitted). The arbitration agreement contained a similar “class action ban” in	15
the body of the agreement. Id. ¶ 5. The plaintiff brought a class action complaint	16
against the lending organization, and the named defendant moved to compel	17
arbitration. Id. ¶¶ 7-8. The district court denied the motion, finding that it had	18
jurisdiction to decide the validity of the arbitration agreement and that the class	19
action ban was against public policy, making the agreement unenforceable. Id. ¶ 9.	20

18
{31} 	A second defendant then also moved to compel arbitration, arguing that the	1
district court lacked jurisdiction and that arbitrability questions must be submitted	2
to an arbitrator. Id. ¶ 10. The district court denied the second motion on the same	3
grounds as it denied the first motion to compel arbitration. Id. ¶ 11. Both defendants	4
appealed, and the appeals were consolidated before this Court. Id. ¶ 12.	5
{32} 	This Court clarified that there are two categories of challenges to a delegation	6
provision: “(1) those challenging specifically the validity of the agreement to	7
arbitrate; and (2) those challenging the contract as a whole, either on a ground that	8
directly affects the entire agreement or on the ground that the illegality of one of the	9
contract’s provisions renders the whole contract invalid.” Id. ¶ 19 (citation omitted)	10
(text only). We held that a “district court is precluded from deciding a party’s claim	11
of unconscionability unless that claim is based on the alleged unconscionability of	12
the delegation provision itself.” Id. ¶ 20.	13
{33} 	We agreed with the plaintiff in Felts that their argument was a specific	14
challenge to the delegation clause. See id. ¶ 30. The plaintiff argued that the	15
delegation clause itself was invalid because it also contained a class action ban, and	16
because the delegation clause was impossible to follow because the NAF had	17
stopped performing consumer arbitration services. See id. As such, the “arguments	18
were both clearly directed against the validity of the delegation clause alone, and	19
were distinct from [the plaintiff’s] claims against the [l]oan [a]greements [on other	20

19
grounds].” Id. We therefore affirmed the district court in denying the motions to	1
compel arbitration and ruling on the merits of the plaintiff’s unconscionability	2
arguments. See id. ¶¶ 33, 45.	3
{34} 	We next addressed a specific challenge to a delegation clause in Clay. Clay	4
involved a loan agreement signed by the plaintiff using his vehicle as collateral that	5
contained a delegation arbitration clause applying to “any claim, dispute or	6
controversy” between the plaintiff and the defendant “that in any way arises from or	7
relates to [the a]greement” and included “disputes about the validity, enforceability,	8
arbiltrality or scope of [the a]rbitration [p]rovision or [the a]greement.” 2012-	9
NMCA-102, ¶¶ 2, 12 (emphasis and internal quotation marks omitted). The plaintiff	10
failed to pay back the loan, and was permanently injured during an altercation when	11
the defendant attempted to repossess the vehicle. Id. ¶ 2. The plaintiff brought suit	12
for the injury, and the defendant moved to compel arbitration under the agreement.	13
Id. ¶ 3. The district court denied the motion, finding the delegation provision	14
substantively unconscionable. See id.	15
{35} 	On appeal, this Court agreed that the plaintiff had specifically challenged the	16
delegation clause. Id. ¶ 13. The plaintiff argued that the defendant fraudulently	17
induced 	the 	contract 	by 	allegedly 	misrepresenting 	the 	neutrality 	of 	the 	two	18
organizations identified to administer the arbitration proceedings, the NAF and the	19
American Arbitration Association, because the organizations had stopped arbitrating	20

20
collection actions. Id. We compared this argument to the argument made in Felts	1
because both the delegation clauses were “‘rendered impossible because the NAF	2
had ceased its consumer arbitration business.’” Id. (omission omitted) (quoting	3
Felts, 2011-NMCA-062, ¶ 30). Therefore, like in Felts, this argument was a specific	4
challenge to the delegation clause because it went directly to the delegation clause	5
itself. See id.	6
{36} 	Here, Plaintiff asks us to interpret her procedural unconscionability argument	7
as only directed to the delegation clause and argues for the first time on appeal that	8
her challenge to the JAMS rules should also be considered a specific challenge to	9
the delegation clause. However, “[w]e will not entertain an argument made for the	10
first time on appeal.” State Farm Mut. Auto. Ins. Co. v. Barker, 2004-NMCA-105,	11
¶ 20, 136 N.M. 211, 96 P.3d 336. “Appellate courts review only those matters that	12
were presented to the trial court.” Id. Therefore, we decline to address Plaintiff’s	13
argument regarding the JAMS rules.	14
{37} 	In her response to Defendant’s motion to compel arbitration, Plaintiff argued	15
that she “also challenges this ‘delegation clause’ under the same grounds she	16
challenges the ‘[DRP],’” and during the hearing on the motion, Plaintiff similarly	17
stated “the delegation clause in the [DRP] is unenforceable for the same reasons that	18
I have mentioned here, that the [DRP] itself is unenforceable.” Neither of these	19
statements sufficiently challenges the delegation clause.	20

21
{38} 	Plaintiff’s statements attack the validity of the delegation clause only so far as	1
the 	delegation 	clause 	is 	included 	in 	the 	DRP 	because 	Plaintiff’s 	procedural	2
unconscionability argument both in the district court and on appeal is directed at the	3
validity of the DRP in its entirety. As such, this argument is “challenging the contract	4
as a whole” and is not “clearly directed against the validity of the delegation clause	5
alone.” Felts, 2011-NMCA-062, ¶¶ 19, 30 (alteration, internal quotation marks, and	6
citation omitted); see also Rent-A-Center, 561 U.S. at 70 (stating that “challenges	7
[to] the contract as a whole” are not “relevant to a court’s determination whether the	8
arbitration agreement at issue is enforceable” (alteration, internal quotation marks,	9
and citation omitted)).	10
{39} 	Finally, Plaintiff’s other substantive unconscionability arguments that (1) the	11
DRP is facially one-sided when read in conjunction with the Admission Agreement	12
and the JAMS rules; (2) the JAMS rules unreasonably favor defendants; and (3) the	13
DRP contains a small claims exception to arbitration are also not specific attacks on	14
the delegation provision. None of these arguments discuss the language or the	15
application and enforcement of the delegation clause, which is required to make a	16
specific challenge. See Clay, 2012-NMCA-102, ¶ 13; Felts, 2011-NMCA-062, ¶ 30.	17
We therefore hold that Plaintiff did not specifically challenge the delegation clause.	18
{40} 	Because 	the 	parties 	clearly 	and 	unmistakably 	delegated 	questions 	of	19
arbitrability to the arbitrator, and Plaintiff did not specifically challenge the	20

22
delegation clause, the proper forum for Plaintiff to bring her claims and raise	1
defenses to the DRP is arbitration and not the district court. See Felts, 2011-NMCA-	2
062, ¶ 20. “When a party agrees to a non-judicial forum for dispute resolution, the	3
party should be held to that agreement.” Lisanti v. Alamo Title Ins. of Tex., 2002-	4
NMSC-032, ¶ 17, 132 N.M. 750, 55 P.3d 962. Therefore, the district court erred in	5
denying Defendant’s motion to compel arbitration by reaching Plaintiff’s contract	6
enforcement arguments.	7
CONCLUSION	8
{41} 	We reverse and remand with instructions for the district court to enter an order	9
compelling arbitration.	10
{42} 	IT IS SO ORDERED.	11
______________________________	12
JACQUELINE R. MEDINA, Judge	13
WE CONCUR:	14
______________________________	15
KRISTINA BOGARDUS, Judge	16
______________________________	17
GERALD E. BACA, Judge	18