INNOVATIVE IMAGES, LLC v. SUMMERVILLE

848 S.E.2d 75, 309 Ga. 675

• Court: Supreme Court of Georgia
• Decided: September 8, 2020
• Docket: S19G1026
• Status: Published

Opinion

FINAL COPY 309 Ga. 675

S19G1026. INNOVATIVE IMAGES, LLC v. SUMMERVILLE et al.

NAHMIAS, Presiding Justice.

Innovative Images, LLC (“Innovative”), sued its former

attorney James Darren Summerville, Summerville Moore, P.C., and

The Summerville Firm, LLC (collectively, the “Summerville

Defendants”), for legal malpractice. In response, the Summerville

Defendants filed a motion to dismiss the suit and to compel

arbitration in accordance with the parties’ engagement agreement,

which included a clause mandating arbitration for any dispute

arising under the agreement. The trial court denied the motion,

ruling that the arbitration clause was “unconscionable” and thus

unenforceable because it had been entered into in violation of Rule

1.4 (b) of the Georgia Rules of Professional Conduct (“GRPC”) for

attorneys found in Georgia Bar Rule 4-102 (d). In Division 1 of its

opinion in Summerville v. Innovative Images, 349 Ga. App. 592 (826 SE2d 391) (2019), the Court of Appeals reversed that ruling, holding

that the arbitration clause was not void as against public policy or

unconscionable. See id. at 597-598. We granted Innovative’s petition

for certiorari to review the Court of Appeals’s holding on this issue.

As explained below, we conclude that regardless of whether

Summerville violated GRPC Rule 1.4 (b) by entering into the

mandatory arbitration clause in the engagement agreement without

first apprising Innovative of the advantages and disadvantages of

arbitration — an issue which we need not address — the clause is

not void as against public policy because Innovative does not argue

and no court has held that such an arbitration clause may never

lawfully be included in an attorney-client contract. For similar

reasons, the arbitration clause is not substantively unconscionable,

and on the limited record before us, Innovative has not shown that

the clause was procedurally unconscionable. Accordingly, we affirm

the judgment of the Court of Appeals.1

1 The trial court issued a separate order opening an automatic default

against the Summerville Defendants under the “proper case” ground, see 1. Facts and procedural history.

As summarized by the Court of Appeals, the record shows the

following:

In July 2013, Innovative retained Mr. Summerville and his law firm to represent it in post-trial proceedings following an adverse civil judgment, and the parties executed an attorney-client engagement agreement that set out the terms of the representation (the “Engagement Agreement”). A section of the Engagement Agreement entitled “Other Important Terms” included a choice-of- law clause stating that the “agreement and its performance are governed by the laws of the State of Georgia.” That section of the Engagement Agreement also included an arbitration clause (the “Arbitration Clause” or the “Clause”) stating: Any dispute arising under this agreement will be submitted to arbitration in Atlanta, Georgia under the rules and procedures of the State Bar of Georgia Committee on the Arbitration of Attorney Fee Disputes, if concerning fees, or by an arbitrator to be agreed to by the parties, if concerning any other matter. Alternatively,

OCGA § 9-11-55 (b). Innovative cross-appealed that order, arguing that the Summerville Defendants had failed to provide a reasonable explanation for their failure to timely file an answer. See Summerville, 349 Ga. App. at 604. In Division 2 of its opinion, the Court of Appeals affirmed the trial court’s order, saying that “[f]or [the proper case] ground to apply, the defendant must provide a reasonable explanation for the failure to file a timely answer,” and holding that the Summerville Defendants had done so. Id. at 605-606. We recently disapproved Summerville to the extent that it holds that a reasonable excuse is required to open a default under the proper case ground. See Bowen v. Savoy, 308 Ga. 204, 209 n.7 (839 SE2d 546) (2020). Innovative’s petition for certiorari did not seek review of the Court of Appeals’s decision on the cross-appeal. you may choose to arbitrate any dispute arising under this agreement in Atlanta by a single arbitrator provided through the Atlanta office of Judicial Arbitration and Mediation Service (“JAMS”). The decision of any such arbitrator or arbitrators shall be binding, conclusive, and not appealable. In the event a dispute is not or cannot be arbitrated, the parties consent to the jurisdiction of and venue in the courts of Fulton County, Georgia. In October 2017, Innovative filed the present legal malpractice action in the State Court of Fulton County against the Summerville Defendants for the allegedly negligent post-trial representation of Innovative in the underlying civil suit, asserting claims for . . . professional negligence, breach of contract, and breach of fiduciary duties. During the course of the litigation, the Summerville Defendants filed a motion to stay discovery, compel arbitration, and dismiss the legal malpractice action based on the Arbitration Clause (the “Motion to Compel Arbitration”). Innovative opposed the Motion to Compel Arbitration, contending, among other things, that the Arbitration Clause was unconscionable because the Summerville Defendants had not advised Innovative of the possible disadvantages associated with arbitration. The trial court denied the Summerville Defendants’ Motion to Compel Arbitration, agreeing with Innovative that the Arbitration Clause was unconscionable. The trial court reasoned that although the [Georgia Arbitration Code (“GAC”), OCGA § 9-9-1 et seq.,] does not prohibit the arbitration of legal malpractice claims, Rule 1.4 (b) of the [GRPC] . . . and American Bar Association (“ABA”) Formal Opinion 02-425 support imposing a legal requirement on attorneys to explain to their prospective clients the possible disadvantages of binding arbitration clauses contained in attorney-client engagement contracts, such as the waiver of the right to a jury trial, the potential waiver of broad discovery, and the waiver of the right to appeal. And, because there was no evidence in the record that the Summerville Defendants explained the Arbitration Clause to their prospective client, Innovative, before the Engagement Agreement was signed, the trial court found that the Arbitration Clause was unconscionable and thus unenforceable.

Summerville, 349 Ga. App. at 593-595 (footnotes omitted).

The trial court issued a certificate of immediate review, and the

Court of Appeals granted the Summerville Defendants’ application

for interlocutory appeal. In its subsequent opinion reversing the

trial court’s order, the Court of Appeals’s analysis bounced between

case law and concepts related to whether a contract is

unconscionable and case law and concepts related to whether a

contract is void as against public policy. See id. at 595-598. The court

ultimately “decline[d] to adopt a blanket rule that an arbitration

clause in an attorney-client contract is unconscionable and against

public policy if the attorney did not explain the potential

disadvantages of the clause to his prospective client before

execution of the contract.” Id. at 597. The Court of Appeals also noted that this Court “has not addressed whether ABA Formal

Opinion 02-425 should be adopted as the proper interpretation of

[GRPC] Rule 1.4 (b),” and “for these combined reasons,” concluded

“that the trial court erred in finding the Arbitration Clause

unconscionable and in denying the Summerville Defendants’ Motion

to Compel Arbitration.” Id. at 598.

Innovative petitioned for a writ of certiorari, which this Court

granted, directing the parties to address two questions:

1. Under the Georgia Rules of Professional Conduct, is an attorney required to fully apprise his or her client of the advantages and disadvantages of arbitration before including a clause mandating arbitration of legal malpractice claims in the parties’ engagement agreement?

2. If so, does failing to so apprise a client render such a clause unenforceable under Georgia law?

We have now determined that we need not answer the first question

to answer the second question and decide this case.

2. We can decide this case without answering the first question that we asked in granting certiorari.

We consider first the question of whether an attorney violates the GRPC by entering into an agreement with a client mandating

arbitration of legal malpractice claims without first fully apprising

the client of the advantages and disadvantages of arbitration. As it

did in the courts below, Innovative argues that because GRPC Rule

1.4 (b) is identical to ABA Model Rule of Professional Conduct 1.4

(b), we should adopt the reasoning in ABA Formal Opinion 02-425

and conclude that Summerville violated the GRPC by entering into

the Arbitration Clause without first apprising Innovative of the

potential consequences of arbitration. Innovative also points to

several other states that have relied on the reasoning in ABA

Formal Opinion 02-425 to similarly interpret their respective rules

of professional conduct.

Both GRPC Rule 1.4 (b) and ABA Model Rule 1.4 (b) say, “A

lawyer shall explain a matter to the extent reasonably necessary to

permit the client to make informed decisions regarding the

representation.” In 2002, the ABA’s Standing Committee on Ethics

and Professional Responsibility issued Formal Opinion 02-425,

which concluded, relying principally on ABA Model Rule 1.4 (b), that lawyers must fully apprise their clients of the advantages and

disadvantages of arbitration before including a provision in a

retainer agreement mandating arbitration of legal malpractice

claims. The ABA Committee reasoned that “[b]ecause the attorney-

client relationship involves professional and fiduciary duties on the

part of the lawyer that generally are not present in other

relationships, the retainer contract may be subject to special

oversight and review” (footnotes omitted), and that the requirement

that a lawyer explain to the client the type of arbitration clause at

issue in this case derives from those fiduciary duties.2 Courts in

several states have followed the reasoning of ABA Formal Opinion

02-425, interpreting their own rules of professional conduct

regarding attorney-client relationships to require the same sort of

2 In February 2002, a few weeks before the issuance of ABA Formal Opinion 02-425, ABA Model Rule of Professional Conduct 1.8, which deals with the client-lawyer relationship, was amended to add Comment 14 (now Comment 17). The comment says in pertinent part, “This paragraph does not . . . prohibit a lawyer from entering into an agreement with the client to arbitrate legal malpractice claims, provided such agreements are enforceable and the client is fully informed of the scope and effect of the agreement.” This comment has not been added in the GRPC. advice about prospective arbitration clauses. See, e.g., Snow v.

Bernstein, Shur, Sawyer & Nelson, P.A., 176 A3d 729, 737 (Me.

2017); Castillo v. Arrieta, 368 P3d 1249, 1257 (N.M. Ct. App. 2016);

Hodges v. Reasonover, 103 S3d 1069, 1077 (La. 2012).3

ABA formal opinions and the opinions of other state courts and

bar associations interpreting professional conduct rules analogous

to Georgia’s may be persuasive to this Court’s interpretation of the

GRPC. See, e.g., In the Matter of Woodham, 296 Ga. 618, 621-623

(769 SE2d 353) (2015); Frazier v. State, 257 Ga. 690, 694 (362 SE2d

351) (1987). We have determined, however, that we can and should

decide this case without deciding whether GRPC Rule 1.4 (b)

prohibits attorneys from entering into agreements requiring

arbitration of legal malpractice claims without their prospective

3 In other jurisdictions, the bar association has adopted the same requirement by advisory opinion relying principally on conflict-of-interest rules. See, e.g., Vt. Advisory Ethics Op. 2003-07; Ariz. Ethics Op. 94-05. Innovative does not argue that an attorney’s entering into a mandatory arbitration provision without the client’s informed consent violates any of the GRPC’s conflict-of-interest rules, and the courts below did not address that question. We too do not address those rules or any other rules not argued by Innovative. clients’ informed consent. Even if we assume — as we will for the

remainder of this opinion — that such conduct does violate Rule 1.4

(b) such that an attorney may be subject to professional discipline,

the Arbitration Clause in dispute here is neither void as against

public policy nor unconscionable.

Rather than unnecessarily addressing this attorney ethics

issue by judicial opinion, we will leave it to the State Bar of Georgia

to address in the first instance whether this is a subject worthy of a

formal advisory opinion about or amendment to the GRPC. We have

before us only one factual scenario and the arguments only of the

parties and one amicus curiae (the Georgia Trial Lawyers

Association). Under these circumstances, the Bar’s processes

provide better opportunities to obtain input from all types of lawyers

as well as the public and to consider all of the potentially applicable

rules without limitation to a particular litigant’s arguments. See

Georgia Bar Rules 4-101 (“The State Bar of Georgia is hereby

authorized to maintain and enforce, as set forth in rules hereinafter

stated, Georgia Rules of Professional Conduct to be observed by the members of the State Bar of Georgia and those authorized to

practice law in the state of Georgia and to institute disciplinary

action in the event of the violation thereof.”); 4-402 and 4-403

(establishing the Formal Advisory Opinion Board and the process

for promulgating formal advisory opinions concerning the GRPC); 5-

101 to 5-103 (establishing the process for amending Georgia Bar

rules). See also Royston, Rayzor, Vickery & Williams, LLP v. Lopez,

467 SW3d 494, 506-508 (Tex. 2015) (Guzman, J., concurring)

(explaining that defining the parameters of an ethics rule requiring

attorneys to fully inform clients about the potential consequences of

arbitration before entering into an agreement mandating

arbitration of legal malpractice claims is “more aptly suited to [the

bar] rulemaking process, which invites the input of the bench and

bar,” and that “[g]uidance is essential, but rather than articulating

best-practices standards by judicial fiat, the rulemaking process

provides a better forum for achieving clarity and precision”).4

4 We note that the State Bar of Georgia has not issued a pertinent formal

advisory opinion or amended GRPC Rule 1.8 in the 18 years since the ABA 3. The Arbitration Clause is not unenforceable because it is neither void as against public policy nor unconscionable.

The trial court concluded that because Summerville’s entering

into the Arbitration Clause without Innovative’s informed consent

violated GRPC Rule 1.4 (b), the agreement was “unconscionable.”

The trial court’s order cited no Georgia cases addressing whether a

contract was void as against public policy or voidable as

unconscionable. The Court of Appeals reversed the trial court’s

unconscionability ruling after a discussion that blended Georgia

case law and concepts related to the somewhat distinct doctrines of

unconscionable contracts and contracts that are void as against

issued its Formal Opinion 02-425 and added the comment to Model Rule 1.8, and this appears to be the first published Georgia case (civil or disciplinary) in which an arbitration clause of this type has been an issue. We do not know (and unlike the State Bar, we have no good way to ascertain) if Summerville’s inclusion of such an arbitration clause in his firm’s engagement agreement with Innovative was an aberration or reflective of a widespread or developing practice of using such arbitration provisions by Georgia lawyers, which might warrant further ethical guidance. It is also important to recognize that discipline of lawyers for violating the GRPC does not occur through civil actions such as this but rather through the disciplinary process administered by the State Bar. See generally Georgia Bar Rules, Part IV, Chapter 2 (Disciplinary Proceedings); GRPC, Scope [18] (“[These rules] are not designed to be a basis for civil liability.”). Thus, our decision in this case would not have a disciplinary effect on Summerville. public policy, ultimately “declin[ing] to adopt a blanket rule that an

arbitration clause in an attorney-client contract is unconscionable

and against public policy if the attorney did not explain the potential

disadvantages of the clause to his prospective client before execution

of the contract.” Summerville, 349 Ga. App. at 597 (emphasis added).

In this Court, Innovative argues that the Arbitration Clause is

unenforceable because it violates public policy and also suggests

that the clause is procedurally unconscionable because the

Summerville Defendants did not prove that Innovative was a

sophisticated client. As explained below, we conclude that — even

assuming that Summerville violated GRPC Rule 1.4 (b) by entering

into the Arbitration Clause without Innovative’s informed consent

— the clause is neither void as against public policy nor

unconscionable and therefore is not unenforceable on either of those

grounds.

(a) The Arbitration Clause is not void as against public policy.

Innovative’s primary contention is that the Arbitration Clause

is unenforceable because it is void as against public policy. We disagree.

OCGA § 13-8-2 (a) says that “[a] contract that is against the

policy of the law cannot be enforced[,]” and the statute then lists

several types of contracts that are void as against public policy. 5 The

list in OCGA § 13-8-2 (a) is expressly non-exhaustive, and Georgia

courts have on occasion voided contracts as contravening public

policy based on policies found outside of that and other Georgia

statutes. See Emory Univ. v. Porubiansky, 248 Ga. 391, 393-394 (282

SE2d 903) (1981) (holding void as against public policy an

exculpatory clause in an agreement between a patient and a dentist

and dental school because it violates public policy to contract away

5 OCGA § 13-8-2 (a) says in full:

A contract that is against the policy of the law cannot be enforced. Contracts deemed contrary to public policy include but are not limited to: (1) Contracts tending to corrupt legislation or the judiciary; (2) Contracts in general restraint of trade, as distinguished from contracts which restrict certain competitive activities, as provided in Article 4 of this chapter; (3) Contracts to evade or oppose the revenue laws of another country; (4) Wagering contracts; or (5) Contracts of maintenance or champerty. the common law duty of reasonable care). See also Edwards v.

Grapefields, Inc., 267 Ga. App. 399, 404 (599 SE2d 489) (2004).

However, recognizing that “all people who are capable of

contracting shall be extended the full freedom of doing so if they do

not in some manner violate the public policy of this state,” this Court

has long emphasized that “courts must exercise extreme caution in

declaring a contract void as against public policy” and may do so only

“where the case is free from doubt and an injury to the public clearly

appears.” Porubiansky, 248 Ga. at 393 (citations and punctuation

omitted). Importantly, a contract is void as against public policy not

because the process of entering the contract was improper and

objectionable by one party or the other, but rather because the

resulting agreement itself is illegal and normally unenforceable by

either party. See Dept. of Transp. v. Brooks, 254 Ga. 303, 312 (328

SE2d 705) (1985) (“‘A contract cannot be said to be contrary to public

policy unless the General Assembly has declared it to be so, or unless

the consideration of the contract is contrary to good morals and

contrary to law, or unless the contract is entered into for the purpose of effecting an illegal or immoral agreement or doing something

which is in violation of law.’” (citation omitted)).

As both parties in this case recognize, binding arbitration

agreements generally are not in contravention of the public policy of

this State. To the contrary, “[i]n enacting the [GPC], the General

Assembly established ‘a clear public policy in favor of arbitration.’”

Order Homes v. Iverson, 300 Ga. App. 332, 334-335 (685 SE2d 304)

(2009) (citation omitted). There is nothing about attorney-client

contracts in general that takes them outside this policy and makes

mandatory arbitration of disputes arising under them illegal. In

fact, the State Bar, with the approval of this Court, long ago

established a program for the arbitration of fee disputes between

attorneys and clients. See Georgia Bar Rules, Part VI. See also

GRPC Rule 1.5, Comment [9] (“If a procedure has been established

for resolution of fee disputes, such as an arbitration or mediation

procedure established by the State Bar of Georgia, the lawyer should

conscientiously consider submitting to it.”).

Nor are attorney-client agreements mandating arbitration of prospective legal malpractice claims categorically against public

policy in Georgia. The General Assembly effectively excluded

medical malpractice claims from the GAC. See OCGA § 9-9-2 (c) (10)

(excluding from the GAC “[a]ny agreement to arbitrate future claims

arising out of personal bodily injury or wrongful death based on

tort”). But it did not similarly exclude legal malpractice claims.

Moreover, the ABA’s Standing Committee on Ethics and

Professional Responsibility and all of the states that have followed

the reasoning of ABA Formal Opinion 02-425 agree that attorney-

client agreements mandating arbitration of future legal malpractice

claims without limiting the scope of the lawyer’s potential liability

are not prohibited per se; instead, only the process of entering into

such arbitration clauses is regulated by requiring the lawyer to

obtain the client’s informed consent. See, e.g., ABA Formal Op. 02-

425; Snow, 176 A3d at 736; Castillo, 368 P3d at 1257; Hodges, 103

S3d at 1077.6 Innovative and the amicus curiae take the same

6 As explained in ABA Formal Opinion 02-425:

The concern most frequently expressed about provisions position.

Nevertheless, citing one case from this Court and a few from

the Court of Appeals in which contracts that implicate the attorney-

client relationship were held void as against public policy,

Innovative argues that when an attorney violates the GRPC with

regard to an engagement agreement, the resulting agreement

contravenes public policy and is therefore void. See AFLAC, Inc. v.

Williams, 264 Ga. 351, 353-354 (444 SE2d 314) (1994); Eichholz Law

Firm, P.C. v. Tate Law Group, LLC, 310 Ga. App. 848, 850-851 (714

SE2d 413) (2011); Nelson & Hill, P.A. v. Wood, 245 Ga. App. 60, 65-

mandating the use of arbitration to resolve fee disputes and malpractice claims stems from [ABA Model] Rule 1.8 (h) [which is substantially identical to GRPC Rule 1.8 (h)], which prohibits the lawyer from prospectively agreeing to limit the lawyer’s malpractice liability unless such an agreement is permitted by law and the client is represented by independent counsel. Commentators and most state bar ethics committees have concluded that mandatory arbitration provisions do not prospectively limit a lawyer’s liability, but instead only prescribe a procedure for resolving such claims. The Committee agrees that mandatory arbitration provisions are proper unless the retainer agreement insulates the lawyer from liability or limits the liability to which she otherwise would be exposed under common or statutory law. (Footnote omitted.) 66 (537 SE2d 670) (2000); Brandon v. Newman, 243 Ga. App. 183,

187 (532 SE2d 743) (2000). We do not read these cases in the way

Innovative does.7

In Williams, without any mention or analysis of the then-

applicable rules of professional conduct, we held that a provision in

an attorney’s retainer agreement that required the client to pay

liquidated damages in the event the client terminated the attorney

was unenforceable because it prevented the client from exercising

the client’s “‘absolute right to discharge the attorney and terminate

the relation at any time, even without cause.’” Williams, 264 Ga. at

353 (citation omitted). No amount of advice from the attorney to the

client could have rendered the damages provision lawful, because as

a matter of public policy, “[A] client must be free to end the

relationship whenever ‘he ceases to have absolute confidence in . . .

the attorney,’” and “[r]equiring a client to pay damages for

terminating its attorney’s employment contract eviscerates the

7 Our reading of these cases makes it unnecessary to decide whether they

were all correctly decided. client’s absolute right to terminate.” Id. at 353 (citations and

punctuation omitted). Similarly, in the three Court of Appeals cases

cited by Innovative, that court held void as against public policy

what the court deemed to be flatly illegal agreements affecting the

attorney-client relationship. See Eichholz, 310 Ga. App. at 850-853

(voiding a fee-splitting agreement in which an attorney was to

receive a portion of a contingency fee that was earned after he had

been discharged, citing case law and GRPC Rule 1.5 (e) (2)); Nelson

& Hill, 245 Ga. App. at 65-66 (in an alternative holding, noting that

evidence of an oral contingency fee agreement would be inadmissible

to support a quantum meruit claim because such an unwritten

agreement violated public policy, citing Williams, a then-applicable

standard of conduct, and an advisory opinion interpreting that

standard); Brandon, 243 Ga. App. at 186 (voiding an attorney

referral reward based on an illegal fee-splitting agreement between

an attorney and a non-lawyer, citing a then-applicable disciplinary

standard).

As these cases and the list enumerated in OCGA § 13-8-2 (a) illustrate, a contract is void as against public policy when the

agreement itself effectuates illegality; no change in the process of

entering into such an agreement will render it legal and fully

enforceable. Because the Arbitration Clause in dispute here would

be lawful if (as Innovative argues and we are assuming)

Summerville had obtained Innovative’s informed consent in

compliance with GRPC Rule 1.4 (b), the clause is not void as against

public policy. See Watts v. Polaczyk, 619 NW2d 714, 717-718 (Mich.

Ct. App. 2000) (concluding that even though the State Bar of

Michigan had issued informal advisory opinions saying that a

lawyer should allow a client to seek independent counsel before

entering into a retainer agreement mandating arbitration of legal

malpractice claims, the arbitration clause at issue had been entered

in violation of those opinions, and the attorney might face a

disciplinary proceeding, the arbitration clause was not void as

against public policy because such binding arbitration agreements

are permissible under Michigan law).

(b) The Arbitration Clause is not substantively or procedurally unconscionable.

Although Innovative does not specifically argue in this Court

that the Arbitration Clause in dispute is unconscionable, it does

suggest that the Clause was procedurally unconscionable, arguing

that the Summerville Defendants did not prove that Innovative was

a sophisticated client. Moreover, as noted previously, the Court of

Appeals conflated the analyses for whether a contract is void as

against public policy with whether it is unconscionable. We

therefore turn to the question of whether the Arbitration Clause is

unenforceable because it is unconscionable.

This Court has defined an unconscionable contract as one that

“‘no sane man not acting under a delusion would make and that no

honest man would take advantage of,’” one that is “‘abhorrent to

good morals and conscience,’” and “‘one where one of the parties

takes a fraudulent advantage of another.’” NEC Technologies, Inc.

v. Nelson, 267 Ga. 390, 391 n.2 (478 SE2d 769) (1996) (citations omitted).8 We examine unconscionability from the perspective of

substantive unconscionability, which “looks to the contractual terms

themselves,” and procedural unconscionability, which considers the

“process of making the contract.” Id at 392.

Innovative makes no argument that the Arbitration Clause in

dispute is substantively unconscionable. If an arbitration clause of

this type were substantively unconscionable, no amount of advice

from an attorney would render it fully enforceable; it would be

voidable or operable at the election of the injured client. See Brooks,

254 Ga. at 313. But as discussed above, Innovative concedes that the

Arbitration Clause would be mutually enforceable if the engagement

agreement had been entered into after Summerville fully apprised

8 NEC Technologies involved a contract that was subject to the Georgia

Uniform Commercial Code, so we interpreted the doctrine of unconscionability in that case consistent with authority on unconscionability under the UCC. See 267 Ga. at 391; OCGA § 11-2-302. But the basic standards that we set forth in NEC Technologies were drawn from common-law unconscionability cases, and we have since applied them in a non-UCC case. See Dept. of Transp. v. American Ins. Co., 268 Ga. 505, 509-510 n.19 (491 SE2d 328) (1997) (noting that “principles of unconscionability [are] not limited to commercial settings”). See also John K. Larkins, Jr., Ga. Contracts Law and Litigation § 3:18 (2019) (explaining that “there has been a virtual merger of the common law and UCC doctrine of unconscionability in Georgia”). Innovative of the potential consequences of arbitration. Moreover,

the General Assembly has expressed a policy permitting arbitration

agreements in the GAC, and arbitration can be beneficial to either

attorneys or clients, so we cannot say that no sane client would enter

a contract that mandated arbitration of future legal malpractice

claims and no honest lawyer would take advantage of such a

provision. See Louis A. Russo, The Consequences of Arbitrating a

Legal Malpractice Claim: Rebuilding Faith in the Legal Profession,

35 Hofstra L. Rev. 327, 334-337 (2006) (explaining a number of

potential benefits to clients of arbitrating legal malpractice claims,

including speed, efficiency, and confidentiality).

As for procedural unconscionability, Innovative suggests that

the Arbitration Clause is unconscionable because the Summerville

Defendants did not prove that Innovative was a sophisticated client.

But Innovative improperly shifts the burden of proof: where, like

other contracts, a binding arbitration agreement is bargained for

and signed by the parties, it is the complaining party that bears the

burden of proving that it was essentially defrauded in entering the agreement. See, e.g., R. L. Kimsey Cotton Co., Inc. v. Ferguson, 233

Ga. 962, 966-967 (214 SE2d 360) (1975) (holding that the trial court

erred in denying the plaintiff’s motion for summary judgment

seeking enforcement of contracts that the defendants argued were

unconscionable because the defendants did not sufficiently prove

unconscionability). See also Saturna v. Bickley Constr. Co., 252 Ga.

App. 140, 142 (555 SE2d 825) (2001) (explaining that “‘the mere

existence of an arbitration clause does not amount to

unconscionability’” (citation omitted)).

Innovative has not met its burden. This case was adjudicated

on a motion to dismiss and to compel arbitration, and there is no

evidence in the limited existing record that the Summerville

Defendants took fraudulent advantage of Innovative by including

the Arbitration Clause in the Engagement Agreement. Innovative

argued in the trial court that the Arbitration Clause was

“unconscionable” only because it violated the GRPC, not because it

was the result of fraud. Innovative now argues that there is no

evidence in the record to support a finding that it was a sophisticated client, such that a finding of unconscionability is not

foreclosed. But the record indicates that Innovative is a business

that had been involved in litigation before entering the Arbitration

Clause, and in any event, “‘lack of sophistication or economic

disadvantage of one attacking arbitration will not amount to

unconscionability’” without more. Saturna, 252 Ga. App. at 142

(citation omitted). Accordingly, Innovative has not proven that the

Arbitration Clause is unconscionable. See NEC Technologies, 267

Ga. at 394.

(c) In summary, whether or not a lawyer may be subject to

professional discipline under GRPC Rule 1.4 (b) for entering into an

engagement agreement with a client requiring the arbitration of

future legal malpractice claims without first fully apprising the

client of the advantages and disadvantages of arbitration, such an

arbitration clause is neither void as against public policy nor

substantively unconscionable, and Innovative has not proven that

the Arbitration Clause at issue here is procedurally unconscionable

either. Because Innovative has not established that the Arbitration Clause is unenforceable on these grounds, we affirm the judgment

of the Court of Appeals.

Judgment affirmed. All the Justices concur.

Decided September 8, 2020.

Certiorari to the Court of Appeals of Georgia — 349 Ga. App. 592. Warren R. Hinds, for appellant. Hawkins Parnell & Young, Kathryn S. Whitlock, Kelli K. Steele, for appellees. Caleb F. Walker; Taulbee Rushing Snipes Marsh & Hodgin, Daniel B. Snipes, amici curiae.