Court Opinion

ID: 2727094
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:11:38.61995+00
Date Added: 2024-06-11T15:47:27.582012
License: Public Domain

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in
accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of
A   p   p    e   l   l   a    t   e       P   r    o   c   e   d   u    r   e   .

                             NO. COA13-1003
                     NORTH CAROLINA COURT OF APPEALS

                            Filed: 15 July 2014

ROBERT E. KING and wife,
JO ANN O’NEAL,
     Plaintiffs,

      v.                                    Cumberland County
                                            No. 11 CVS 8280
MICHAEL S. BRYANT, M.D., and
VILLAGE SURGICAL ASSOCIATES, P.A.,
     Defendants.

      Appeal by Defendants        from Order      entered 10 May 2013         by

Judge Lucy N. Inman in Cumberland County Superior Court. Heard

in the Court of Appeals 22 January 2014.

      Beaver, Holt, Sternlicht &             Courie,    P.A.,    by   Mark    A.
      Sternlicht, for Plaintiffs.

      Walker, Allen, Grice, Ammons & Foy, L.L.P., by O. Drew
      Grice, Jr., for Defendants.

      STEPHENS, Judge.

              I. Factual Context and Procedural Posture

      This case arises from a medical malpractice action filed by

Plaintiffs Robert E. King and Jo Ann O’Neal on 28 September 2011

in Cumberland County Superior Court. Therein, Plaintiffs allege
                                        -2-
that     Defendant    Michael    S.     Bryant    negligently     performed   a

laparoscopic bilateral inguinal hernia repair on King on 14 May

2009. On 4 November 2011, Defendants submitted a motion to stay

proceedings in superior court and to enforce an agreement to

alternative      dispute   resolution     (“the    arbitration     agreement”)

between the parties. Plaintiffs moved the court to deny that

motion    on    16   November   2011,    asserting   that   the    arbitration

agreement is not enforceable.

       In pertinent part, the arbitration agreement provides as

follows:

                      Village Surgical Associates, PA

               Agreement to Alternative Dispute Resolution

               In accordance with the terms of the Federal
               Arbitration Act, 9 USC 1-16, I agree that
               any dispute arising out of or related to the
               provision of healthcare services by me, by
               Village Surgical Associates, PA, or its
               employees, physician members and agents,
               shall be subject to final and binding
               resolution through private arbitration.

               The parties to this Agreement shall agree
               upon three Arbitrators and at least one
               arbitrator of the three shall be a physician
               licensed to practice medicine and shall be
               board certified in the same specialty as the
               physician party. The remaining Arbitrators
               either shall be licensed to practice law in
               NC or licensed to practice medicine in NC.
               The parties shall agree upon all rules that
               shall govern the arbitration, but may be
               guided by the Health Care Claim Settlement
                                       -3-
          Procedures   of  the   American  Arbitration
          Association, a copy of which is available to
          me upon request. I understand that this
          agreement includes all health care services
          which previously have been or will in the
          future be provided to me, and that this
          agreement is not restricted to those health
          care services rendered in connection with
          any particular treatment, office or hospital
          admission. I understand that this agreement
          is also binding on any individual or entity
          and not a precondition to receiving health
          care services.

          . . . .

(Emphasis in original). The arbitration agreement was signed on

29 April 2009, approximately two weeks before King’s surgery.

      A hearing on Defendants’ motion was held on 12 March 2012.

The   trial   court     issued    an    order        that    same    day,   denying

Defendants’    motion     on     the      grounds      that    the     arbitration

agreement:    (1)     “leaves     material      portions       open    to     future

agreements    by    providing,    inter      alia,    that    the   parties    shall

agree upon three arbitrators and . . . agree upon all rules that

shall govern the arbitration”; (2) is an “agreement to agree”;

and (3) is not a binding contract. Defendants appealed the order

to this Court on 10 April 2012 in King v. Bryant, __ N.C. App.

__, __, 737 S.E.2d 802, 805 (2013) [hereinafter King I]. In an

opinion filed 5 February 2013, this Court concluded that the

arbitration    agreement        was    not    invalid        for    indefiniteness
                                             -4-
regarding the identity of the arbitrators or the procedures to

be followed during arbitration. Id. at __, 737 S.E.2d at 807–08.

We declined, however, to address Plaintiffs’ arguments that the

arbitration        agreement    was     unconscionable          and   inapplicable        to

O’Neal      and      remanded    the        case   to     the     trial    court        with

instructions to address those arguments. Id. at __, 737 S.E.2d

at 808.

      A new hearing was held on 21 March 2013. On 10 May 2013,

the   trial       court    entered     an    order      again    denying    Defendants’

motion    to      compel   arbitration.        The      court    concluded       that   the

agreement was unenforceable as to King because it was a product

of constructive fraud and unconscionability. As to O’Neal, the

court concluded that the agreement was not enforceable because

she   did      not    sign     the    agreement         and     because    she    neither

benefitted nor sought to benefit from the agreement. Defendants

appeal.

            II. Appellate Jurisdiction & Standard of Review

      As we noted in King I,

               North Carolina law generally permits a party
               to appeal only from a final judgment of the
               superior court. A final judgment is defined
               as one which disposes of the cause as to all
               the   parties,   leaving   nothing   to   be
               judicially determined between them in the
               trial court. However, the [legislature]
               additionally permit[s] an aggrieved party in
                                       -5-
              a civil proceeding to appeal from any
              interlocutory   order or   judgment  of  a
              superior or district court which affects a
              substantial right.

              Here, the trial court’s order is not a final
              disposition of this case; thus, it is
              interlocutory. However, our courts have held
              that the denial of a motion to compel
              arbitration,   although   interlocutory,   is
              nevertheless immediately appealable, as it
              affects a substantial right. Therefore, we
              have   jurisdiction   to   hear   Defendants’
              appeal.

              A trial court’s determination that an action
              is subject to arbitration is a conclusion of
              law which we review de novo. Under a de novo
              review, the court considers the matter anew
              and freely substitutes its own judgment for
              that of the lower tribunal.

Id. at __, 737 S.E.2d at 805–06 (citations, internal quotation

marks, brackets, and ellipses omitted; emphasis in original). In

addition, the trial court’s findings of fact are conclusive on

appeal   when    supported     by   competent   evidence,    even   where    the

evidence   might      have   supported   findings     to   the   contrary.   See

Evangelistic Outreach Ctr. v. Gen. Steel Corp., 181 N.C. App.

723,   726,     640   S.E.2d   840,   843    (2007)   (affirming    the   trial

court’s denial of the defendant’s motion to compel arbitration).

“Conclusions of law drawn by the trial court from its findings

of fact are reviewable de novo on appeal.” Carolina Power &
                                            -6-
Light Co. v. City of Asheville, 358 N.C. 512, 517, 597 S.E.2d

717, 721 (2004) (citation omitted).

                                   III. Discussion

    On appeal, Defendants argue that the trial court erred by

denying     their       motion     to      compel        arbitration            because      the

arbitration agreement is not a product of constructive fraud and

not unconscionable. Defendants also contend that O’Neal is bound

by the arbitration agreement despite being a non-signatory. We

affirm    the    trial      court’s       opinion       on   the        grounds       that    the

arbitration      agreement        is    unconscionable.            We    do     not     address

Defendants’ argument as it relates to the applicability of the

arbitration agreement to O’Neal.

    1. Background

    In King I, we declined to address the unconscionability and

non-signatory         issues     raised    by     Plaintiffs        because       the     trial

court did not reach those issues in its original order. Id. at

__, 737 S.E.2d at 808–09. Observing that “the trial court is the

appropriate          body   to     determine           whether      the       [arbitration]

agreement       is     unconscionable,”           we     remanded         the     case       with

instructions for the court to undertake “any unconscionability

analysis . . . with an understanding of the unique nature of the

physician/patient relationship.” Id. at __, 737 S.E.2d at 808.
                                   -7-
We also directed the trial court to “apply North Carolina’s law

of   unconscionability”      and    commented    on     the      following

“particularly   important”   considerations     as    relevant    to   the

fiduciary nature of the parties’ physician/patient relationship:

         While nearly every court to consider the
         issue has concluded that medical malpractice
         claims   can    properly    be    submitted    to
         arbitration, issues have been raised as to
         patients’    understanding     of    arbitration
         contracts   and    the   potentially    coercive
         circumstances under which the agreements are
         made. The use of arbitration clauses in
         contracts    for    healthcare     services    is
         distinct from their use in settling labor or
         commercial    disputes    because    the    legal
         relationship between provider and patient is
         determined by both private contract law and
         public tort law. There is tension between
         contract law, the principles of which have
         been applied to binding arbitration clauses
         in labor[] and commercial agreements for
         years[,] and the application of tort law to
         enforce conformity with standards of care
         desired by society, particularly standards
         of professional care.

Id. (citation omitted). In addition, we pointed out that

         [the] fiduciary relationship [carries] an
         [inherent] affirmative duty to disclose all
         facts material to a transaction.

         Under   North    Carolina   law,   fiduciary
         relationships     create     a    rebuttable
         presumption that the plaintiff put his trust
         and confidence in the defendant as a matter
         of law. Once [the] presumptive fiduciary
         relationship is alleged, it is the defendant
         who bears the burden of showing he or she
         acted openly, fairly[,] and honestly in
                                            -8-
            bringing about the transaction. This means
            that the defendant must prove, by the
            greater weight of the evidence, that, with
            regard to the transaction, the defendant
            made a full, open disclosure of material
            facts, that he dealt with the plaintiff
            fairly, without oppression, imposition or
            fraud, and that he acted honestly.

Id. at __, 737 S.E.2d at 809 (citations, internal quotation

marks, and brackets omitted; emphasis in original). Lastly, we

observed     that      the    “North       Carolina    Constitution       provides     a

‘sacred     and       inviolable’        right    to   a   jury     trial     in     all

controversies         at   law       respecting   property”   and    any    agreement

waiving that right “must be examined cautiously, especially in

situations       in   which      a    fiduciary   relationship      is    present,    as

. . . here.” Id. at __, 737 S.E.2d at 809 (brackets and certain

quotation marks omitted).

    “[H]eeding the guidance of the Court of Appeals,” the trial

court     made    the      following       relevant     findings     of     fact     and

conclusions of law on remand:

                                     FINDINGS OF FACT

            . . . .

            2. . . . King, now 68, has no educational
            degree beyond high school and his job
            requires little reading. He has minimal
            experience reading legal documents.

            3. Defendant[s] . . . [have] experience in
            managing patient complaints, responding to
                    -9-
claims   of  medical negligence made  by
patients, and resolving disputes through
arbitration.

4. On April 29, 2009[] Plaintiffs visited
Defendants’ office for the first time to
consult with . . . Bryant about performing
laparoscopic surgery on . . . King to repair
a hernia. . . . King had been referred to
Defendants by his primary care physician.

5. While Plaintiffs were waiting to meet
. . . Bryant and consult with him about
performing    the     surgery,  Defendants’
receptionist   provided   . . . King   with
several intake forms to complete and sign.
. . . King considered the forms to be a
formality.

6. Neither the receptionist, nor . . .
Bryant, nor any agent of Defendants called
to . . . King’s attention the fact that
. . . [the arbitration agreement] differed
from all of the other forms because it did
not concern medical information, insurance
information, or payment for the surgery, all
routine for a new patient. Nor did anyone
disclose to . . . King that the [arbitration
a]greement sought to foreclose his access to
the judicial process in the event that any
dispute arose out of or related to the
surgery to be performed by . . . Bryant.

. . . .

8. The [arbitration a]greement does not
provide that by signing it, the patient
waives his or her right to a trial. The
[arbitration a]greement does not include the
word “jury” or “judge” or “trial.” The
[arbitration a]greement does not provide
that the patient can consult an attorney
before signing it.
                    -10-
9. There is no evidence that [Bryant] or any
agent of Defendants discussed with . . .
King[] any provision of the [arbitration
a]greement.

10. . . . King . . . signed the signature
lines on all the forms, including the
[arbitration   a]greement,  without reading
them, believing they were all routine forms
necessary for his medical care.

11. At the time . . . King signed the
[arbitration a]greement and provided his
medical information on intake forms, even
though he had not yet met . . . Bryant, he
was already placing his confidence and trust
in   Defendants,  as   demonstrated  by   his
willingness   to   share   his   confidential
medical information.

12. . . . King was not provided with a copy
of the signed [arbitration a]greement, so he
had no opportunity to review [it] during the
two weeks after he signed it and before his
scheduled surgery.

13. Defendants or their agents drafted the
[arbitration a]greement, which was identical
to form arbitration agreements presented to
each new patient at Village Surgical for two
years or more prior to . . . King’s first
office visit.

14. The first, bold-faced paragraph of the
[arbitration a]greement is poorly drafted,
confusing, and nonsensical. For example, it
refers to “the provision of healthcare
services by me,” suggesting that “me” refers
to the physician rather than the patient.

15. The [arbitration     a]greement repeatedly
refers to arbitration    without defining that
term. [It] includes no   mention whatsoever of
the judicial process,     a trial, or a jury.
                     -11-
The   [arbitration   a]greement    does   not
disclose Defendants’ intent for . . . King
to waive his rights to the judicial process
. . . in the event of any claim arising from
. . . the surgery. A person of . . . King’s
education   and    experience   should    not
reasonably have been expected to know from
the language of the [arbitration a]greement,
or from any information provided to him by
Defendants, that he had a right to a jury
trial to resolve any potential dispute with
his surgeon. Nor should he have been
expected to understand from the language of
the   [arbitration   a]greement    or   other
information provided to him by Defendants
that by signing the [arbitration a]greement,
he would waive his right to a jury trial.

16.   The  last    sentence   of   the    second
paragraph in the [arbitration a]greement
starts with complex but complete clauses —
“I understand that this agreement is also
binding on any individual or entity” — and
ends with an incomplete clause — “and not a
precondition    to   receiving    health    care
services” — which contains no verb and
assumes   the    reader    infers    that    the
antecedent subject to this clause is the
[arbitration a]greement. A person of . . .
King’s education and experience should not
reasonably be expected to understand the
last, tacked on, incomplete clause to mean
that   he   did    not  need    to   sign    the
[arbitration a]greement in order for . . .
Bryant to perform the surgery.

17. Plaintiff . . . read the [arbitration
a]greement after a copy of it was provided
to him by his attorney, and he still did not
understand its contents or the intended
consequence of signing it.

18. Unlike arbitration agreements which have
been   upheld   and   enforced  in   medical
                     -12-
negligence     cases,     the   [arbitration
a]greement includes no provision allowing or
recommending that the patient consult with
an   attorney   regarding   the [arbitration
a]greement prior to signing it.

. . . .

20. The [arbitration a]greement’s provision
requiring at least one physician arbitrator,
and   its   provision   allowing   all   three
arbitration panelists to be physicians,
confer a benefit to Defendants and a
detriment to Plaintiffs. Although physicians
are not, based solely on their occupations,
excused by courts from serving as jurors in
medical negligence cases, the [c]ourt takes
judicial notice that counsel for physicians
in medical negligence trials generally seek
to   excuse   potential    jurors   who   have
previously been party to a negligence case,
while   counsel   for  patients   in   medical
negligence trials generally seek to excuse
physicians and other medical providers.

. . . .

23. . . . [A] receptionist at Defendant
Village   Surgical[]    stated    in   a   sworn
affidavit    that    the     form    arbitration
agreement   is   included     in   “registration
paperwork” presented to each new patient
when he or she visits the practice for an
initial appointment, prior to meeting with a
physician. [The receptionist’s] affidavit
further stated that each new patient is
given ample time while waiting in the lobby
to ask any questions about any of the
documents   provided     for    completion   and
signature. . . . [She] did not state that
she, . . . Bryant, or any agent of Defendant
Village Surgical routinely makes any effort
to call a new patient’s attention to the
form arbitration agreement or to explain
                         -13-
    that the form seeks to preclude the patient
    from pursuing a claim against Defendants in
    the judicial process. It is reasonable to
    infer from [her] statement that . . . it is
    the practice of Defendants to obscure the
    . . . agreement by presenting it among a
    pile of other documents without pointing it
    out or explaining its contents.

    . . . .

                  CONCLUSIONS OF LAW

    . . . .

    3. Defendants were fiduciaries of . . . King
    as   a   result  of   the  physician-patient
    relationship.

    4.   Defendant[s]   . . .   breached   their
    fiduciary duties to . . . King by failing to
    disclose to him all material terms of the
    [arbitration a]greement and failing to deal
    with him openly, fairly, honestly, and
    without imposition, oppression, or fraud in
    procuring his signature on the [arbitration
    a]greement.

    5. The fact that . . . King did    not read the
    [arbitration a]greement before      signing it
    does not preclude his objection    to its terms
    because the provisions of the      [arbitration
    a]greement   are   far    from      clear   and
    unequivocal.

    6. The [arbitration a]greement is a product
    of constructive fraud and is therefore
    unenforceable.

    7.    The    [arbitration     a]greement    is
    unconscionable      and      is      therefore
    unenforceable.

2. The Validity of the Arbitration Agreement as to King
                                        -14-
     Defendants do not argue that the trial court’s findings of

fact are not based on competent evidence.1 Rather, they assert

that a fiduciary relationship did not exist between the parties

at   the    time    King      signed    the    arbitration        agreement,     which

“indicates       that   the   events    surrounding       the    execution     of    the

arbitration agreement did not involve constructive fraud,” and

argue    that     the    arbitration        agreement     did     not   suffer      from

procedural or substantive unconscionability as a matter of law.

We disagree.

             A. Fiduciary Relationship and Constructive Fraud

     Defendants         assert   that   a     fiduciary       relationship   did     not

exist at the time King signed the arbitration agreement because

Bryant     had    not   yet    accepted     King   as     a    patient.   Therefore,

Defendants argue, the execution of the agreement did not involve

constructive fraud. We lack authority to address this issue on

its merits.

     In King I, we stated that a fiduciary relationship existed

between the parties and directed the trial court to consider

that fact on remand. __ N.C. App. at __, 737 S.E.2d at 809

(observing       that     “considerations        [of    unconscionability]           are

1
  Therefore, the trial court’s findings are presumed to be
supported by competent evidence and are binding on appeal. See
Koufman v. Koufman, 330 N.C. 93, 97, 408 S.E.2d 729, 731 (1991).
                                      -15-
particularly important given the fact that the physician/patient

relationship is a fiduciary one” and directing the trial court

to “be mindful of [the] burden shifting framework [applicable

when the parties have a fiduciary relationship] in evaluating

Plaintiffs’      argument      that   the     [arbitration     a]greement         is

unconscionable”).      That    conclusion     constitutes     the    law   of     the

case    and   cannot   be    disturbed   by   a   subsequent    panel      of   this

Court. See N.C. Nat’l Bank v. Va. Carolina Builders, 307 N.C.

563, 567, 299 S.E.2d 629, 631–32 (1983) (“[O]nce a panel of the

Court of Appeals has decided a question in a given case that

decision becomes the law of the case and governs other panels

which may thereafter consider the case. Further, since the power

of one panel of the Court of Appeals is equal to and coordinate

with that of another, a succeeding panel of that [C]ourt has no

power    to   review   the    decision   of   another   panel       on   the    same

question in the same case.”). As a result, we are bound for

purposes of this opinion by the prior panel’s determination that

a   fiduciary    relationship     existed     between   the    parties.2        Thus,

2
  Defendants limit their argument regarding constructive fraud to
an assertion that the lack of a fiduciary relationship between
King and Bryant “indicates the events surrounding the execution
of the arbitration agreement did not involve constructive
fraud.”   Because   we  are   bound  by   the  previous   panel’s
determination that a fiduciary relationship did exist between
                                 -16-
pursuant to our opinion in       King I,   a rebuttable presumption

exists that King “put his trust and confidence in [Bryant] as a

matter of law,” and Defendants bear the burden of showing that

they acted openly, fairly, and honestly in bringing about the

transaction in this case. See King, __ N.C. App. at __, 737

S.E.2d at 809.

          B. Unconscionability

      Six years ago, in Tillman v. Commercial Credit Loans, Inc.,

our   Supreme    Court   described   the   general   unconscionability

defense to contract formation in the context of an arbitration

agreement as follows:

          Arbitration is favored in North Carolina. As
          with any contract, however, equity may
          require   invalidation  of   an  arbitration
          agreement that is unconscionable. A court
          will find a contract to be unconscionable
          only when the inequality of the bargain is
          so manifest as to shock the judgment of a
          person of common sense, and where the terms
          are so oppressive that no reasonable person
          would make them on the one hand, and no
          honest and fair person would accept them on
          the other.

          An inquiry into unconscionability requires
          that a court consider all the facts and
          circumstances of a particular case, and if
          the provisions are then viewed as so one-
          sided that the contracting party is denied

the parties at the time King signed the agreement, Defendants’
argument as it pertains to constructive fraud is overruled.
                                       -17-
               any opportunity for a meaningful choice, the
               contract should be found unconscionable.

               . . . .

               [To be considered unconscionable, a contract
               must be the result of] both procedural and
               substantive unconscionability. . . .

               . . .      [P]rocedural       unconscionability
               involves “bargaining naughtiness” in the
               form of unfair surprise, lack of meaningful
               choice, and an inequality of bargaining
               power. Substantive unconscionability, on the
               other hand, refers to harsh, one-sided, and
               oppressive    contract    terms.    Of   course,
               unconscionability       is     ultimately      a
               determination made in light of a variety of
               factors   not   unifiable    into   a   formula.
               Therefore, . . . while the presence of both
               procedural    and   substantive    problems   is
               necessary   for    an   ultimate    finding   of
               unconscionability, such a finding may be
               appropriate    when    a    contract    presents
               pronounced substantive unfairness and a
               minimal degree of procedural unfairness, or
               vice versa.

362 N.C. 93, 101–03, 655 S.E.2d 362, 369–70 (2008) (citations,

certain brackets, and certain internal quotation marks omitted;

emphasis added). The plaintiffs in Tillman were residents of

North     Carolina       with   “limited   financial     resources”    who    had

applied    for    and    received    private,    commercial    loans   from   the

defendants. Id. at 94, 655 S.E.2d at 365. During the process of

contracting with the defendant loan companies, the plaintiffs

were    sold     loan    insurance    plans     and   agreed   to   resolve   all
                                        -18-
disputes     through         binding    arbitration        under       the     Federal

Arbitration Act (“FAA”). Id. at 94–95, 655 S.E.2d at 365. The

plaintiffs later brought suit against the defendants on grounds

that they were improperly induced to purchase the insurance. Id.

at 96–97, 655 S.E.2d at 366. The defendants moved to compel

arbitration, and the case was eventually appealed to the Supreme

Court. Id.

      On   appeal,     our    Supreme    Court    held     that      the   arbitration

clauses      in    the       parties’     agreements           was     substantively

unconscionable because (1) the costs borrowers could face under

the   clauses     were    prohibitively         high;    (2)    the    clauses    were

drafted solely by the defendants and, thus, lacked mutuality;

and (3) the clauses prohibited the joinder of claims and class

actions.    Id.   at     104,   655    S.E.2d    at     370–71.      The   “collective

effect” of these characteristics, the Court concluded, was “that

[the] plaintiffs [were] precluded from effectively vindicating

their rights in the arbitral forum.” Id. (citation, internal

quotation marks, brackets, and ellipsis omitted).

      Since Tillman, the United States Supreme Court has issued

two important opinions on the use of state law to set aside an

arbitration agreement when that agreement is governed by the

FAA: AT&T Mobility v. Concepcion, __ U.S. __, 179 L. Ed. 2d 742
                                          -19-
(2011) (determining that the FAA preempted California’s judicial

rule     prohibiting          class     waivers        in     consumer         arbitration

agreements contained within contracts of adhesion) and American

Express Co. v. Italian Colors Rest., __ U.S. __, 186 L. Ed. 2d

417    (2013)   (holding        that   the   FAA    does      not     permit    courts    to

invalidate an arbitration agreement on the grounds that it does

not    permit   class       arbitration).       This    Court       recently     addressed

those    opinions       and    their    impact     on       Tillman    in    Torrence     v.

Nationwide Budget Fin., __ N.C. App. __, 753 S.E.2d 802, disc.

review denied, __ N.C. __, __ S.E.2d __ (2014).

       In   Torrence,       the   plaintiffs       applied      for    and     received    a

number of loans, each of which contained an arbitration clause.

Id. at __, 753 S.E.2d at 803. The clauses were drafted entirely

by the defendants; stipulated that arbitration would be governed

by    the   FAA;    included      an    agreement       not    to     bring,     join,    or

participate        in   a     class    action    against       the     defendants;       and

provided notice in bold, capital letters that the parties:

             WOULD HAVE HAD A RIGHT OR OPPORTUNITY TO
             LITIGATE DISPUTES THROUGH A COURT AND HAVE A
             JUDGE OR JURY DECIDE THE DISPUTES BUT HAVE
             AGREED INSTEAD TO RESOLVE DISPUTES THROUGH
             BINDING ARBITRATION.

Id. at __, 753 S.E.2d at 804 (emphasis in original).
                                 -20-
       Addressing the Supreme Court’s opinion in Concepcion, the

Torrence Court observed the following:

            The Supreme Court held that [section 2 of
            the FAA]3 permits arbitration agreements to
            be declared unenforceable upon such grounds
            as exist at law or in equity for the
            revocation of any contract. This saving
            clause permits agreements to arbitrate to be
            invalidated by generally applicable contract
            defenses,   such   as  fraud,    duress,  and
            unconscionability, but not by defenses that
            apply only to arbitration or that derive
            their   meaning  from   the   fact   that  an
            agreement to arbitrate is at issue.

            . . . [A]lthough [section] 2’s saving clause
            preserves   generally     applicable    contract
            defenses, nothing in it suggests an intent
            to preserve state-law rules that stand as an
            obstacle to the accomplishment of the FAA’s
            objectives. . . . [T]he FAA supersedes any
            state   law  that    sets    aside   arbitration
            agreements    or     holds      them    to    be
            unconscionable    upon     grounds    that   are
            exclusive to arbitration agreements.

3
    Section 2 of the FAA provides that:

            A written provision in any . . . contract
            evidencing a transaction involving commerce
            to settle by arbitration a controversy
            thereafter arising out of such contract or
            transaction    . . .    shall   be    valid,
            irrevocable, and enforceable, save upon such
            grounds as exist at law or in equity for the
            revocation of any contract.

9 U.S.C. § 2 (2012).
                                       -21-
Id. at __, 753 S.E.2d at 809 (citations and internal quotation

marks omitted; emphasis added).

       With regard to the impact of the Supreme Court’s opinions

in Concepcion and           Italian Colors      on Tillman, we               stated that

“[w]hile both Concepcion and Italian Colors dealt with class

action waivers, underlying those decisions was a broader theme

that    unconscionability          attacks    that           are   directed       at    the

arbitration process itself will no longer be tolerated.” Id. at

__,    753   S.E.2d    at    811    (citation      omitted;           emphasis    added).

Accordingly, we concluded that “the legal theories upon which

Tillman’s substantive unconscionability analysis is based have

been undermined by subsequent decisions of the United States

Supreme Court in the context of cases under the FAA.” Id. at __,

753    S.E.2d     at   812.     Specifically,           we     held     that     (1)    the

“prohibitively high” cost factor is no longer applicable to an

unconscionability          analysis;    (2)        an        agreement’s         lack   of

mutuality, alone, is not sufficient to justify a finding of

substantive       unconscionability;         and    (3)        the     prohibition      of

joinder      of   claims     and    class    actions          does     not     render   an

arbitration agreement unconscionable. Id. at __, 753 S.E.2d at

811–12.
                                                  -22-
      In      this       case,     the     FAA    governs       the   parties’        arbitration

agreement.          King      I,   __     N.C.    App.    at    __,     737    S.E.2d       at    806.

Therefore, to support the trial court’s determination that the

agreement          is    unconscionable,           that       determination         must    comport

with our Supreme Court’s general description of the elements of

unconscionability as laid out in Tillman, the objectives of the

FAA     as        addressed        by     the    United        States    Supreme        Court          in

Concepcion          and       Italian     Colors,      and     our    application          of    those

cases        to     the       unconscionability           analysis        as        explained         in

Torrence.          After      careful      review,       we    conclude       the    trial       court

correctly          determined           that    the    arbitration       agreement         here       is

unconscionable.

                          i. Procedural Unconscionability

      Defendants              argue     that     the   arbitration       agreement          did       not

suffer from procedural unconscionability because evidence at the

hearing       suggests          that     King    was     not    “rushed       to    complete          the

paperwork,”             the     agreement        was     prominently          displayed          as    a

separate document, the language in the agreement was clear that

it was “not a precondition to receiving health care services,”

and King had more than a week to sign the agreement before

surgery. We are unpersuaded.
                                   -23-
    First, we note that Defendants do not argue that they took

any active steps, in accordance with their fiduciary duty, to

make a “full, open disclosure of material facts” to King before

he signed the arbitration agreement. At most, they assert that

they did not hinder King’s ability to complete the paperwork and

that the agreement, on its own, was not so obfuscatory as to

render its presentation procedurally unconscionable. This is not

sufficient   to   meet   their   burden   of   showing   that   they   acted

openly, fairly, and honestly in bringing about the transaction.

As such, the mere fact that King was not rushed to complete the

“pile” of documents he was asked to sign is not, in this case,

sufficient to show a lack of procedural unconscionability.

    In addition, the fact that the agreement was displayed as a

separate document, with bold lettering at the top, and included

the language “not a precondition to receive medical services”

does not establish that the agreement was valid and enforceable.

As the trial court observed in its order,

         [g]iven the fiduciary relationship between
         the parties here, the complete absence of
         any mention of waiver, of the judicial
         process, of a trial, or of a jury in the
         [arbitration a]greement, the failure of the
         physician or any of his agents to explain
         the waiver intended to be procured by the
         [arbitration     a]greement,    and      the
         [arbitration     a]greement’s     convoluted
         sentence structure and undefined legalistic
                                        -24-
            terms,   this  case   involves  evidence                      of
            pronounced procedural unfairness.

      In the waiting room on his first visit to Bryant, King was

presented with a “pile” of documents to sign, the majority of

which required him to include the usual and necessary medical,

insurance, and payment           information.           The arbitration agreement

was   a   part   of    that    pile.    The        agreement    itself       lacked     any

reference to the judicial process or King’s constitutional right

to a jury trial, omitting the words “jury,” “judge,” or “trial.”

The agreement did not define the term “arbitration” and included

a “convoluted” sentence at the end, which — among other things —

omitted the verb necessary to understand the meaning of the “not

a   precondition      to    receive    medical          services”    language.         Given

Defendants’      fiduciary      duty    as    well       as   the    defects      in    the

presentation     and       language    of    the        agreement,    even     accepting

arguendo    that      the     agreement           was    “prominently      displayed,”

Defendants have failed to establish that the agreement was not

procedurally     unconscionable.            Cf.    Westmoreland      v.    High    Point

Healthcare Inc., __ N.C. App. __, __, 721 S.E.2d 712, 718 (2012)

(concluding that an arbitration agreement was not procedurally

unconscionable when it advised the plaintiff of her right to

consult with an attorney, advised her of her right to receive an

explanation or clarification from staff, and provided that she
                                           -25-
was not required to sign it                 in order     for her father to be

admitted to the facility).

       Lastly, the fact that King had “more than a week” before

surgery       to   review    and     sign    the   agreement     does   not      save

Defendants’ argument. The trial court’s unchallenged findings of

fact   state       clearly   that    King    was   not   given   a   copy   of   the

arbitration agreement to take with him when he went home. Thus,

even assuming this extra time would have affected the validity

of the agreement, King was not able to take advantage of it.

       Given (1) the fact that we analyze the agreement here in

the context of the fiduciary duty Defendants owed King, (2) the

disparate levels of sophistication between the parties, (3) the

nature of the delivery of the agreement, and (4) Defendants’

burden because of their fiduciary duty to King to provide full

and    open    disclosure       of   the    material     facts   surrounding     the

transaction between the parties, we hold that the arbitration

agreement            suffered         from         significant          procedural

unconscionability. King did not have a meaningful choice between

whether to sign the agreement or not. Accordingly, Defendants’

argument is overruled.

                     ii. Substantive Unconscionability
                                         -26-
     Defendants argue that the arbitration agreement was not a

product of substantive unconscionability because the requirement

of at least one physician arbitrator is irrelevant to the issue

of   unconscionability,         citing    a     number    of   cases       from   other

jurisdictions. Defendants also assert that the agreement is not

unconscionable        because        arbitration         is    not        prohibitively

expensive for Plaintiffs. Pursuant to our opinion in Torrence,

surpa, we agree with Defendants that the cost of arbitration and

the selection of a particular arbitrator is not relevant to the

issue of substantive unconscionability. Nonetheless, we conclude

that the particular terms of this contract evidence a lack of

substantive    fairness      which,       when     coupled      with       Defendants’

fiduciary     duty,    constitutes         some     evidence         of     substantive

unconscionability.

     Here, unlike Torrence, the arbitration agreement includes

no reference to King’s right to litigate any future dispute in a

court   of   law.   The   agreement       does    not     mention     that     King   is

forfeiting his right to a jury or a judge. Moreover, the only

element of the agreement that attempts to communicate to the

would-be signor — here, King — that he is not required to accept

the agreement in order to see his physician is incomprehensible.

These   failures    result      in   a   harsh,    one-sided,        and     oppressive
                                            -27-
instrument        that     is,        at    least           in     part,        substantively

unconscionable.       As   a     result,     an     order        compelling       arbitration

would preclude King from fully and effectively vindicating his

rights. Accordingly, we hold that the trial court did not err by

denying Defendants’ motion to compel arbitration on grounds that

the agreement is substantively unconscionable.

                                      IV. Conclusion

      As    our   Supreme      Court       stated      in     Tillman      and    this    Court

reiterated in Torrence, an ultimate finding of unconscionability

may be made when the contract presents a pronounced measure of

procedural unfairness and only a minimal degree of substantive

unfairness or vice versa. Tillman, 362 N.C. at 103, 655 S.E.2d

at   370;    Torrence,      __    N.C.     App.     at       __,    753    S.E.2d    at    807.

Numerically        speaking,           a     contract              may     be      considered

unconscionable       when        it    suffers         from        even    99%     procedural

unconscionability and only 1% substantive unconscionability or

vice versa. See Tillman, 362 N.C. at 103, 655 S.E.2d at 370;

Torrence, __ N.C. App. at __, 753 S.E.2d at 807. Here, King

signed      the   agreement       pursuant        to     a       pronounced      measure    of

procedural        unconscionability           and        an      adequate        measure     of

substantive unconscionability. This is sufficient to support an

ultimate finding of unconscionability.
                                       -28-
       We also point out that, unlike the arbitration agreements

in    Tillman,   Concepcion,        Italian    Colors,    and    Torrence,     this

agreement is unconscionable because of Defendants’ failure to

properly prepare and present the arbitration agreement to King

in    the    context    of     their    confidential,          physician-patient,

fiduciary relationship. If the agreement had included suitable

notice provisions and Defendants had satisfied their duty to

affirmatively disclose all facts material to the transaction,

the arbitration agreement would have been enforceable. Thus, our

application of the unconscionability defense in this case is not

a broad condemnation of arbitration agreements in general, the

arbitration process itself, or arbitration agreements employed

in    the   physician-patient       context.    Indeed,   we     acknowledge    the

strong      public   policy    in    favor     of   arbitration     under    North

Carolina law and the FAA. Nonetheless, we must conclude that in

the    limited   factual      circumstances      presented      here,   Defendants

submitted an agreement to King that was unconscionable by its

terms — or lack thereof — and the manner of its presentation,

eliminating      any   meaningful       choice      on   the     part   of   King.

Therefore, under section 2 of the FAA and our State’s general

contract formation defense of unconscionability, we hold that
                                     -29-
the   arbitration   agreement   is    invalid.   Accordingly,   the   trial

court’s order is affirmed.4

      AFFIRMED.

      Judges HUNTER, ROBERT C., and STEELMAN concur.

      Report per Rule 30(e).

4
  Because we affirm the trial court’s order denying Defendants’
motion to compel arbitration, we need not determine whether the
arbitration agreement is applicable to O’Neal.