No. 2--07--0802 Filed: 5-19-08

______________________________________________________________________________ IN THE AP PE LLATE COU RT OF ILLIN OIS SECOND DI STRICT

______________________________________________________________________________ JUDITH WIL

LI AMS, Individually

and as ) Appeal from the Circuit Court Independent Executor of the Estate of ) of

Jo Da vi es s C ou nt y. Kenneth Williams, ) ) Plaintiff -Appella nt, )

) v. ) No. 06--L--22 ) JO-CARROLL ENERGY, I NC., )

) Defendant-Appellee ) ) Honorab le (BP Corporation North America, I nc., and ) Wi ll ia m A . K el ly, ABC Corporation, Defendants). ) Judge , Pres idin g.

______________________________________________________________________________ JUSTICE McLA REN delive

red the o pinion of t

he court : Plaintiff, Judith Williams , individua lly and as ind

epende nt executor of the e state of K enneth Williams, sued def

endant Jo- Carroll E

nergy , Inc ., alleging that

stray voltage from its overhead pow er lines had injured cattle on her dai ry f arm. Defendant moved to dismiss the action, based on an arbitration

clause i n its b ylaws. Th e tria l cour t cons trued the mo tion as one to st ay the proc eedin gs pending arbitration and granted it. Plaintif

f appea ls, conte nding tha t the arb itration c lausewas both procedu rally and substa

ntively unconsc ionable
. We disagree, affirm, and rema nd for further procee dings. Plaintiff and her l ate husband, Kenneth , operat ed a dair y f arm in Elizabeth . Defen

dant is a cooperative that provides electrical power in northwest Illinois. In 1974, plaintiff and her husbandNo. 2--07--0802

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signed an application for membership and for electrical service. The application provided that it was subject to the "by-la

ws of the Cooperative, and such rules and regulations as may

from time

to time be adopted by the c ooperative." The by laws then in effec t provided tha t the application was an agreement

to "comply with and be

bound by the cer

tificate of incorporation of the Cooperative and theseby-laws and a

ny amendments there

to." Article XIV, se ction 2, of the bylaws provide d that the bylawscould be amended by a majority

vote of the active members present at any regular or

special meeti ng. In2003, defendant proposed to amend its by laws to include the arbi tration pro vision. Defendant

mailed to all members a notice of an annual meeting, including the c omple

te te xtof the proposed amendme

nt. The c lauseprovides

that any "claim or contro versy

between [defendant] and any Member w

hich ari ses out of

or rela tes to the p

rovision by [de fendant

] to the memb er of el ectric power or other

related services shall, at the request of any such par

ty, be submitted to arbitration." Plaintiff does not deny rec eiving the notice. At the meeting, on March 22, 2003, defend ant's attorne y in troduce d the arb itration proposal, whichwas the subject of a question-and-answer session. Ultimately , a majority of the m emb ers present approved the amendment. Plaintiff , who al so wor ked fo r defen dant, was at the me eting. However, according to plaintiff's af fi davit, she was working at the reg istration desk and never entere d the mee

ting room. Plaintiff filed her complaint on December 13, 2006. Defendant moved to dismiss the action, citing the arbitration clause. I n response to the motion, plaintiff filed an affidavit averring as follows. As an emp loy ee of de fendant , plaintiff typically worked the registration tables during the annual meetings and "w ould not h ave paid attention to specific matters presented to consumer-No. 2--07--0802

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members for voting." She further aver red that "it was well understood by the employees and it wa s
even written c ompany

policy that if an employee

talked to a member

of the Board of Directors about anything work-related, the employ ee in question could be fired." As a result of this "somewhat chill ing" work env

ironment, plaintiff

did not con

cern he rself "with c hallenging any

thing that the Board might set forth

as a change in policy

or procedure." As plaintiff saw it, "tha twas their job." The trial court ordered the parties to submit to arbitration and stayed the cour

t action. The trial court also stayed the

action as it relates to defendant BP Corporation North America, I nc. (BP), and found that there was no just reason to delay the enforcement or appe al of its order . Plaintiff timely appeals. BP is nota party to this app eal. A thi

rd named defenda nt, "AB C Corpora

tion," is identified as a "fictitious corporation," and its relationship to this action is not clear. Befor e turning to the mer

its, we br iefly clarify the

basis of our jurisdiction. The trial court purporte dly

made a finding of immediate appealability pursuant to Supreme Court Rule 304(a) (210 Ill. 2d R. 304(a)). Plaintiff asserts that jurisdiction is proper pursuant to Supreme Court Rule 301 (155 Ill . 2d R. 301). In reality, we have jurisdiction under Supreme Court Rule 307(a)(1), w hic h provides for the immediate appeal of an order g ranting an injunction (188 Ill. 2d R. 3 07 (a)(1)), because an order compelling arbitration is injunctive. See Salsitz v. Kr eiss , 198 I ll . 2d 1, 11-12 (2001). Plaintiff

argues on

appeal that the trial cou

rt erre d by

compellin

g her to arbitra te her di spute with defendant, because the arbitration provision in defe ndant's byla

w s is both procedurally

and substantiv ely

unco nscionabl e. She ar

gues tha t the clau se is proc edurall y un conscionable bec ause it was not part of the by

laws when

she and her husband signed the membership agr eement in 1974; that the agreement wasa contra ct of adhesion as t

here isno other provider of electrical power in theNo. 2--07--0802

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area where plaintiff lives; that she was not a ctually aware of the ar bitration provision until after her claim arose; and that s he bel ieved a "chil ling at mosp here" ex isted that p rohib ited d efenda nt's employees

fromdiscussing the proposed amendment to the bylaws. Plaintiff believes the a rbitration provision is substan tively unconscionable be cause it imposes on her a portion of the costs of a proceeding

without giving any

indication of what those costs will be and deprives her of her constituti onal rig

ht to a jury

trial. Defendant

responds that the me

mbershipa greement was subject to the "by -laws and any amendme nts thereto " and tha

t defend ant prope rly amended the by laws purs uant t o the by

laws. Defendant

further arguesthat the agreement imposes no unduly burdensome terms on plaintiff a nd merely desig

nates a particular forum in which to resolve the par ties' dispute. Illinois courts favor using arbitration as a means of settling disputes. Jenkins v. Trinity EvangelicalLutheran Church , 356 I ll. App. 3d 504, 507 ( 2005). I f a valid agree ment to ar

bitrate exists, cour

ts will enforc e it. 710 I

LCS 5/2 (a) (Wes t 2004); Jenkins , 356 Ill. App. 3d at 511-12. Nevertheless, a contract provision will not be

enforc ed if it

is unconsc ionable. Unconsc ionability
ma y be either procedural or substantive, or a combination of both. Kinkel v. Cingula r Wir eless , LLC , 223 I ll. 2d 1, 21 (2006). " 'Procedural unconsc ionability refers to a situation where a term

is
so difficult to find, read, or understand that the plaintiff cannot fairly be said to have been aware he
was agreeing to it ** *.' " Kinkel , 223 Ill. 2d at 22, quot ing Razor v. Hyundai Motor America , 222 Ill. 2d 75, 100 (2006). This analysis also take s into account the dispari ty of b argaining power between the drafter of the contra ct and the party cla

iming unconscionability. Razor , 222 Ill. 2d at 100. On the other hand, substantive unconscionability " 'concernsthe actual terms of the contract and examines the relative fairness of the obligat

ions assumed' an

d is indica

ted by 'contr act term s soNo. 2--07--0802

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one-sided as to oppr ess or unf airly surprise an innocent party , anoverall imbalance in the obligations
a nd rights impo sed by the bargain, and s ignificant co st-price di sparity.' " Hutcherson v. Sear s Roebuck & Co. , 342 Ill. App. 3 d 109, 121 (2 003), quot ing Maxwell v. Fidelity Financial Service s, Inc. , 184 Ariz. 82, 89, 907 P.2d 51, 58 (1995). Whether a portion of

a contra ct is unconscionab le is a question of law, which we review de novo
. Kinkel , 223 Ill. 2d at 22. We do not find the arbitration provision in question to be procedurally unconscionable. Plaintiff and her husband signed the membership ag reement, which explicitly stated that it was subject to defendant's by

laws. The bylaw s provided that a membership agreement wa s subject to the bylawsthen existing or as thereafter amended. More over, when the arbitration provision was added, defendant followed the procedurespecified in the byla ws for amending the by

laws. The amendment
was approved by a

majority of the members a ttending defendan

t's annu al meeting. Defendant provided a notice of the meeting, including the entire text of the proposed amendment. There was simply nothing unconscionable a bout this procedure. Citing Razor , plaintiff argues that the arbitration provision was unconscionable because she did not learn about it until long after she signed the membership ag reement. In Razor , the plaintiff purchased a new

car. The warranty

contained a provision excluding consequential damage s. The court found the provision unconsc ionable primarily because the plaintiff was not given a copy of the
warran ty before she signed the sa

le c ontract . The war

ranty was par t of the ow

ner's manual, contained in the car's glove

compartment; the plaintiff did not see it until she had driven the car off the lot. Razor , 222 Ill. 2d at 100-01. Here, by contrast, the membe rship agre ement explicitly stated that it was subject to the byl aws, which in turn stated that they c ould be amended. Defendant provided notice of the proposedNo. 2--07--0802

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amendme nt, which was approved by a majority of

the membe

rs. Sever al case s have he ld

that, where
anagreement provides that it may be amended, and it is properly amended, a

party is bound by

the amendme nt if he or she conti nues to ac cept the

benefit s of the a

greement. In Hutcherson , an arbitration clause that the defen dant added to the parties' credit card agreement

was found not to be procedurally unconscionable. The original agreeme nt provided that it could be amended and that any a mendments would be sent to the customers. "Thus," the court concluded, "the amendment a dding the arbitra ti on provisi on should not have been a surprise." Hu tcherson , 342 Ill. App. 3d at 119. The court noted that the notice of the amendment gave the plaintiffs a chance to reject the amendment, but they did not do so. Hutcherson , 342 Ill. App. 3d at 120. Although Hutcherson applied A

rizona sub stantive l aw due to a choice -of-law

provision inthe agreement, the supreme cour t has cited Hutcherson

with appr

oval as be ing con sistent wit h Illi nois law. Kinkel , 223 Ill. 2d at 28. More similar to the pr esent c ase is Steen v. Modern Woodmen of America , 296 Ill. 104 (1920). There, the defendant association ame nded its bylaws, eff

ectively deny

ing the plaintiff

the right to recover under a life insurance p ol ic y. The court held that the plaintiff was bound by the amendme nt, noting that, where a contract contains an express provision reserving to a norganization the right to amend its bylaw s, the organization has the right to do so. Where a contract provides that members shall be bound by the rules and r egulations "now existing or hereafter enacted" and a member accept s the bene fits of the contract, "it is a

sufficie nt reser vation of the rig ht in the so ciety to amend or change it s by-laws." Steen , 296 Ill. at 111; see also Thomson v. Thomson , 315 Ill. 521, 531 (1925).No. 2--07--0802

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Fi na ll y, quite similar to t

his case is Rushing v. Gold Kist, Inc. , 256 Ga. App. 115, 567 S.E.2d 384 (2002). T

here, the court held

that the p laintiff

was bound

by a n arbitra tion clau se in

the bylaws of th e de fen dan t, an a gri cul tu ral coo per ati ve. Itdid notmatter that the bylaws did not conta in the arbitration

provision when the plaintiff signed h is membership agr

eement; he agreed to be

bound by the existing b yla

ws and any by laws "hereinafter in effec t." Thus, when the defendant's boar d of directors amended the by

laws as provided

in the by laws, the plaintiff was bound

by t he amend ment. Rushing , 256 Ga. App. at 118-19, 567 S.E.2d at 387-88; see also McMillan v . Gold Kist , Inc. , 353 S.C. 353, 3 59-60 , 577 S .E.2d 482, 4 85 (S. C. App . 2003 ) (fol lowi ng Rushing ). Plaintiff complains that

the contract was essentially one of adhesion. She had no meaningful choice, she claims, because defendant is the only provider of electrical power wher e she lives
. However, just because a co ntract is prepared by a party in a supe

rior bargaining position, without allowing the other

party to neg otiate any terms, doe s not meanthat an included a rbitrati on clause

is unconscionable. Zobrist

v. Verizon

Wirele ss , 354 I ll. App. 3d 11 39, 1148 ( 2004). Ra ther, some fraud or s imilar wr

ongdoin g must be

shown to in

validate such a pr

ovision as

unconsc ionable
. Zobrist , 354 Ill. App. 3d at 1148. P laintiff attempts t

o show wrongdoing

by d efenda nt, but thos e attempt s fail. Pla inti ff averre d in her affidavit that she was not specific ally

aware of the by

law amendment adding the arbitration clause. Moreover, a "chilling" wor k environment dissuaded her from discussing proposed changes inpolicy or proce dure with the board of directors. These alleg ations fall far sho rt of establishing fraud or other wrongd oing by defenda nt. Plaintiff does notallege that defendant misled its members about the content of the proposed amendment or that it coerced any

one into voting for it. The record shows that defendant sent the full text of the proposed amendment to its members. Whether

plaintiffNo. 2--07--0802

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was actually aware of the contents of the proposed amendment, or whether she actually

voted for or agains tit, is be side the point. Defendant followed the procedure pr escribed in the by

laws for amendingthe bylaws, and plaintiff doe s not suggest that that process was flawe d. Therefore, we reject plaintiff's argument that the pr ovision is procedurally unconsc ionable. Plaintiff also contends that the a

rbitrati on clause

is substan

tively unconsc ionable

because it imposes on her a portion of the costs of the proceeding without spe cify

ing wha t thosecosts might be and because it deprives her of her c onstitutional right to a ju ry trial. Cou

rts have uniformly rejected the notion that arbitration clauses are invalid per se as depri ving t he parties thereto of substantive rights. In Melena v. Anheuser-Busch, I nc. , 219 Ill. 2d 135 (2006 ), our sup reme court traced the Unite d States Supreme Cour t's rec ent t

reatment of

arbitration clauses, in the context of employ ment law. The cour

t stated a s follows: "[T]he Court has repeatedly 'rejected gene

ralized attacks on arb itration that rest on "suspicion of arbitration as a method of weakening the pr otections afforde d i n the subst antive law. " ' Green Tree Financial Corp.-[Alabama] v. Randolph , 531 U.S. 79, 89-90, 148 L. Ed. 2d 373, 383, 121 S . Ct. 513, 5 21 (20 00), q uoti ng Rodriguez de Qui jas v. Shearson/American Express, Inc. , 490 U.S. 477, 481, 104 L. Ed. 2d 526, 535-36, 109 S. Ct. 1917, 1920 (1989). The Court has emphasized that 'federal st atutory claims may be the subject of arbitration agree ments *** enforceabl e pursua nt to the [Federal Arbitration Act] because the agreement only determ ines t he cho ice of f orum. ' Equal Emp loy

ment Opportunity

Comm 'nv. Waffle House, Inc. , 534 U.S. 279, 295 n.10, 151 L. Ed. 2d 755, 770 n.10, 122 S. Ct. 754, 765 n.10 (2002). According

to the Court , '[b ]y

agreeing to arbitrate

a statutory claim, a par

ty does not forgo the substantive rights af forded by the

statute; it only submits their resolution in anNo. 2--07--0802

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arbitra l, rather than a judi cial, forum .' Mitsubishi Motors Corp. v. Soler Chrysler-Ply mouth, Inc. , 473 U.S. 614, 628, 87 L. Ed. 2d 444, 456, 105 S. Ct . 3346, 335 4 (1985)." Melena , 219 Ill. 2d at 143-44. Inother words, merely re quiring a party to acontract to litigate a dispute in a particular forum is not inheren tly uncon scion able. Howev er, pl ainti ff sei zes u pon l anguage from Kinkel to argue that the arbitration

clause here imposes additional, onerous burdens on potential plaintiffs. In invalidating the clause at issue, the Kinkel court listed the circumstances that caused it to invalidate the provision: "These circumstances include a

contract of adhesion

that req uires the customer to arbitr ate all claims, bu

t does not r

eveal th e cost of

arbitra tion, and c ontain s a liqu idated damages clause that allegedly

operates as an illegal p enalty." Kinkel , 223 Ill. 2d at 42. Plaintiff then comp lains that

"[t]here is simply no way of a

nticipating the total amount of costs and fees that one may

potentia lly pay by participating

in [defendant's] arbitration process." However , plaintiff reads th e single

statemen t from Kinkel to o b ro ad ly. In Kinkel , the pl ainti ff fil ed a cla ss act ion ch allen ging pro visi ons i n the d efenda nt's standard service co nt ra ct th at re qu ir ed th e c us to me r t o c om mi t t o a mi ni mu m s er vi ce te rm an d p ay a $15 0 penalty if he or she terminated service before the e nd of the term. The defendant invoked another provision of the se

rvice c ontract

that req uired cu stomers to

arbitra te dispute s arisin g from the contract and that prohibited class actions in arbitration. Kinkel , 223 Ill. 2d at 5-8. The appl icable American Arbitra tion Assoc iation rul es provid ed that a cla imant had to pay one-half of the arbit rator 's fees, up to a maximum of $125. Kinkel , 223 Ill. 2d at 9. The supr eme cour t agre ed with the plaintiff's argument that the a rbitration provision, combined with the class-action prohibition andNo. 2--07--0802

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the rules imposing a portion of the costs of arbitra tion on the

claimant , made it

virtually impossible to vindicate a small claim such as hers. Kinkel , 223 Ill. 2d at 42. In Kinkel , the cour

t w as acute ly s e nsitive to t he cost is sue beca

use of the relative ly s mall value of the plaintiff's claim. The combined effec t of the arbitration provision and the class-action waiver was to insulate the defendant from an entire class of c laims. Kinkel , 223 Ill. 2d at 42. Here, plaintiff has not sh own that the costs of arbitration will effectively prevent her from litigating her claim. The record con

tains li ttle if any information about her potential damages. We note that plain tiff's complaint that

"[t]here is simply no way of antic ipating

the total a

mount of c osts and fees that one may potentially

pay" applies with equal force to litigation in plaintiff's chosen forum of the circuit court. I n fact, t he chief difficul ty w ithpl ain ti ff' s ar gum ent is th at i t p rov es t oo m uch . If an arbitration

clause w ere con sidered

unconsc ionable b ecause

it failed to predict accur

ate ly the total costs the claimant was likely to incur , virtually no arbitration clause would pass muster. Such is not the case. In Bess v. DirecTV , No. 5--05--0394 (March 18, 2008), the Fifth District noted that a n arbitration

provision is not rende

red inhe rently unconsc ionable b ecause

some of th e arbitr

ation cos ts will be imposed on the customer. Bess , slip op. at14. Rather, where a party se eks to invalidate an arbitration

provision on the ground that the arbitration would be prohibitively e xpensive, thatparty has the burden to show the likelihood of incurring those costs. Bess , slip op. at 14, ci ting Green Tree Financial , 531 U.S . at 92, 148 L. Ed. 2d at 384, 121 S. Ct. at 522; see also Zobrist , 354 Ill. App. 3d at 1 146. Here, plaintiff has not demonstrated that the cost of arbitration would be pr ohibi tivel y expensive. Moreover, as noted, plaintiff has not demonstrated

that the cost of an arbitration hearing will be g reater than that of litiga ting the case in c ourt.No. 2--07--0802

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Plai ntiff 's final contention is that the arbitration provision deprives her of her right to a jury trial. However , the supr eme cour t has reje cted the

argume nt that an

arbitra tion clau se is
unconsc ionable

solely because

it deprives a party

of the right to

a jury trial, hol ding tha

t the rig ht to
a jury trial app lies only

after it is established

that the litigation should proceed before a court . If the claims are pro

perly before an arbit rator pu rsuant to a valid arbitration

agreement, the jury

trial right vanishes
. Melena , 219 Ill. 2d at 1 51, ci ting Caley v. Gulfstream Aerospace Corp. , 428 F.3d 1359, 1371 (11th Cir. 2005). Accordingly , we reject plaintiff's contention that the arbitration provision is substantively unconscionable. The order of

the circ uit court o f Jo Davies s County is affir med, and t

he cause is remanded. Affirmed and remanded. BYRNE, P.J., and BOWMAN, J., concur.