              IN THE SUPREME COURT OF IOWA
                               No. 12–0790

                           Filed April 5, 2013


BARTLETT GRAIN COMPANY, LP,

      Appellant,

vs.

STEVEN CARL SHEEDER
and MAUREEN JEANETTE PACE,

      Appellees.



      Appeal from the Iowa District Court for Montgomery County,

Kathleen A. Kilnoski, Judge.



      A buyer of grain appeals a district court order denying its

application for confirmation of an arbitration award against a grain

seller. REVERSED AND REMANDED WITH DIRECTIONS.



      Erin C. Herbold, Mark C. Feldmann, and Eldon L. McAfee of

Beving, Swanson & Forrest, P.C., Des Moines, for appellant.



      David L. Leitner of Leitner Law Office, West Des Moines, for

appellees.



      Douglas E. Gross, Adam C. Gregg, and Jonathan M. Gallagher of

Brown, Winick, Graves, Gross and Schoenebaum, P.L.C., Des Moines, for

amicus curiae Agribusiness Association of Iowa.
                                      2

      Judd N. Kruse of Kruse & Dakin, L.L.P., Des Moines, and Marc L.

Fleischaker, Donald C. McLean, and Jennifer S. Allen of Arent Fox LLP,

Washington,    D.C.,   for   amicus   curiae   National   Grain   and   Feed

Association.
                                     3

MANSFIELD, Justice.

      Is there an enforceable agreement to arbitrate if two parties agree

over the phone to a sale of grain and later confirm that agreement with a

signed, written document containing an arbitration clause that was not

part of the phone conversation? That is the question we must answer in

this case. Bartlett Grain Co. (Bartlett) appeals the district court’s denial

of its application to confirm an arbitration award against Steven Sheeder.

      Because the parties signed final, written documents that included

arbitration clauses, we conclude valid agreements to arbitrate existed.
Accordingly, we reverse the district court’s order with directions to

confirm the arbitration award in favor of the grain buyer.

      I. Facts and Procedural Background.

      In 2010, Steven Sheeder entered into eight oral agreements with

Bartlett for the sale of a total of 155,000 bushels of corn to be delivered

at various future dates. Sheeder stated in an affidavit that “[t]he only

terms of the oral contract were price and quantity and anticipated

delivery date. No other terms were discussed or agreed upon.”

      Following each of the oral agreements, Bartlett sent to Sheeder a

two-page “Purchase Confirmation” for both parties to sign.             It is

undisputed that both Sheeder and Bartlett signed the confirmations. All

were identical, except for variations in price, quantity, and delivery dates.

The quantity ranged from 10,000 to 45,000 bushels; the price from $3.77

to $4.26 per bushel. The delivery dates were in 2011, generally after the

2011 harvest.      Each of these two-page documents contained the

following statement on the first page:

      THE LAW RECOGNIZES TELEPHONE TRANSACTIONS TO
      BE LEGALLY BINDING. CONTRACTS ARE SENT TO
      CONFIRM PHONE CONVERSATIONS, ENSURING THAT
      BOTH PARTIES UNDERSTAND THE TERMS, AND AS A
                                    4
      MATTER OF RECORD.        PLEASE REVIEW THIS
      CONFIRMATION AND NOTIFY BARTLETT IF THERE ARE
      ANY TERMS YOU DO NOT UNDERSTAND OR THAT MAY BE
      IN ERROR.

      . . . PLEASE SIGN AND RETURN ONE COPY IMMEDIATELY
      UPON RECEIPT.

Just below that appeared the signatures of Sheeder and a Bartlett

representative.

      Page two began with an introductory paragraph:

      Bartlett is sending you this document to confirm its Contract
      to purchase grain, feed or feed ingredients according to the
      terms set forth on both sides of this document. Failure to
      advise Bartlett immediately of any discrepancies, objections
      to or disagreement with this confirmation of the terms
      constitutes acceptance of those terms.

There then followed various terms, numbered 1 through 16, relating to

the sale of grain.   The first term—the subject of this appeal—read as

follows:

      1. NGFA Trade and Arbitration Rules. Unless otherwise
      provided herein, this Contract is subject to the Trade Rules
      of the National Grain Feed Association (NGFA) current on the
      date of this Contract, which rules are incorporated here in by
      reference. All disputes RELATING to Contract creation,
      performance and liability will be arbitrated according to the
      Arbitration Rules of the NGFA. The decision and award of
      the NGFA arbitrators will be final and binding on both
      parties. Judgment upon an NGFA arbitration award may be
      entered and enforced in any court of competent jurisdiction.
      Copies of the NGFA Trade and Arbitration Rules are available
      from Buyer or from www.ngfa.org.

The next term contained an integration clause that stated: “2. Final and

Complete Agreement. This contract represents the final, complete and

exclusive statement of agreement between the parties.”

      On or about April 19, 2011, Bartlett maintains that it discovered

“reasonable grounds for insecurity” as to whether Sheeder was going to
perform the contracts by delivering grain at the contracted prices. See
                                           5

Iowa Code § 554.2609(1) (2011); Top of Iowa Coop. v. Sime Farms, Inc.,

608 N.W.2d 454, 466–68 (Iowa 2000) (discussing a grain buyer’s

reasonable grounds for insecurity).              Accordingly, Bartlett requested

adequate assurance of performance.               See Iowa Code § 554.2609(1).

Allegedly, Sheeder did not provide such assurance and thereby

repudiated the contracts.          See id. § 554.2609(4).         Bartlett thereafter

initiated an NGFA arbitration to recover damages from Sheeder for

breach of the contracts.

       Pursuant to NGFA arbitration rules, Bartlett filed a complaint with
the NGFA against Steven Sheeder on May 19.1 The NGFA responded by

sending Bartlett an arbitration services contract, which Bartlett executed

and returned with the required arbitration fee.              Meanwhile, the NGFA

sent by certified mail a notice letter to Sheeder that included copies of

Bartlett’s complaint and attachments, the NGFA trade rules, and the

NGFA arbitration rules. Sheeder signed for this mailing on June 20.

       After receiving the signed arbitration services contract and fee from

Bartlett, the NGFA sent the same contract by FedEx to Sheeder asking

him to execute it and pay his fee within fifteen days as required by NGFA

arbitration rules. Sheeder failed to respond to this letter. A follow-up

FedEx mailing by the NGFA to Sheeder in July also drew no response.

Finally, on August 4, the NGFA sent Sheeder yet another FedEx letter

asking him once more to sign the arbitration contract and pay the

required fee within fifteen days. This letter warned,

       Based upon the lack of any response from you thus far, we
       must anticipate that you do not intend to respond. This is

       1Bartlett
               also named Maureen Pace as a defendant in the arbitration proceeding
and obtained an award against her. Pace is Sheeder’s ex-wife. However, Pace did not
sign the purchase confirmations, and Bartlett has abandoned further proceedings
against her. To simplify matters, we will only discuss Bartlett’s efforts to recover from
Sheeder.
                                               6
        our last attempt to elicit a response from you.         A
        default judgment may be entered against you at any
        time, which the Plaintiff may enforce in a court of law.

        When Sheeder failed to respond to this letter, the NGFA, on

October 5, entered a default judgment for Bartlett in the amount of

$406,475, the sum calculated by Bartlett as due for breach of the eight

contracts.2

        On November 15, 2011, Bartlett filed an application with the

Montgomery County District Court for confirmation of the arbitration

award.     Sheeder filed a resistance to the application on January 23,
2012.     He argued there were no written agreements to arbitrate, and,

alternatively,        the      purported       agreements         to    arbitrate    were

unconscionable.

        In reply, Bartlett stated that Sheeder had consented to arbitration

by his “signing of the written confirmation on each of the eight grain

sales contracts.”           It also disputed Sheeder’s claims that the written

agreements to submit to arbitration were unenforceable.

        Following a hearing, the district court ordered on March 23, 2012,

that Bartlett’s application for confirmation of the award be denied. The

court concluded there was no enforceable agreement between the parties

to arbitrate.

        Bartlett now appeals. It contends that Sheeder agreed to arbitrate

when he executed the confirmations and that his agreements to arbitrate

are not unconscionable.


        2Section   5(e) of the NGFA Arbitration Rules states, in relevant part:
               Where a party fails to pay the arbitration service fee and/or fails
        to execute the contract for arbitration, the National Secretary may
        without further submissions by the parties enter a default judgment or
        such other relief as the National Secretary deems appropriate.
NGFA Trade Rules & Arbitration Rules, Arbitration Rule § 5(e) (2011).
                                     7

      II. Scope of Review.

      This is an appeal from an order denying confirmation of an

arbitration award. Iowa Code section 679A.17(2) provides that such an

“appeal shall be taken in the manner and to the same extent as from

orders or judgments in a civil action.” Accordingly, we review the district

court’s judgment here for errors at law. See $99 Down Payment, Inc. v.

Garard, 592 N.W.2d 691, 693 (Iowa 1999).

      III. Legal Analysis.

      A. Was There an Agreement to Arbitrate?            Iowa law favors
arbitration. $99 Down Payment, 592 N.W.2d at 694. “Arbitration avoids

the expense and delay generally associated with traditional civil

litigation, and draws on experts in the specific area of the dispute to

resolve the matter.” Id. Hence, “every reasonable presumption will be

indulged in favor of the legality of an arbitration award.” Humphreys v.

Joe Johnston Law Firm, P.C., 491 N.W.2d 513, 514 (Iowa 1992).

      Nonetheless, the court must make two threshold determinations

before enforcing an arbitration award: “whether there is a valid

agreement to arbitrate and . . . whether the controversy alleged is

embraced by that agreement.”      Lewis Cent. Educ. Ass’n v. Lewis Cent.

Cmty. Sch. Dist., 559 N.W.2d 19, 21 (Iowa 1997).        Here, the dispute

centers on the former determination.

      Unless there is some ground “at law or in equity for the revocation

of the written agreement,” a written agreement to arbitrate is enforceable.

Iowa Code § 679A.1(1).       Following arbitration, a party may apply for

confirmation of the award to the district court, which “shall confirm an

award” unless certain grounds exist to vacate the award.           See id.
§§ 679A.11–.13.    One such ground is if “[t]here was no arbitration

agreement, the issue was not adversely determined in proceedings [to
                                           8

compel or stay arbitration], and the party did not participate in the

arbitration hearing without raising the objection.” Id. § 679A.12(1)(e).3

       Sheeder argued below that there was no written arbitration

agreement, and the district court agreed, based on “ordinary contract

principles.”    We must determine whether the district court erred in

determining that “there is simply not adequate evidence that Steven

Sheeder and Bartlett entered a written arbitration agreement.”

       This case involved the sale of grain, which is a good. Accordingly,

the UCC governs. See St. Ansgar Mills, Inc. v. Streit, 613 N.W.2d 289,
293–94 (Iowa 2000) (applying the UCC statute of frauds in a dispute

regarding the sale of corn).         Iowa Code section 554.2204(1) states, “A

contract for sale of goods may be made in any manner sufficient to show

agreement . . . .”

       “Article 2 does not, of course, entirely eliminate the common law of

contracts.”    Flanagan v. Consol. Nutrition, L.C., 627 N.W.2d 573, 578

(Iowa Ct. App. 2001) (citing Iowa Code § 554.1103). “[A] valid contract

must consist of an offer, acceptance, and consideration.” Margeson v.

Artis, 776 N.W.2d 652, 655 (Iowa 2009). These elements are present in

the written confirmations that contained the arbitration clauses. Both

parties signed the confirmations, and they imposed reciprocal obligations

on both parties. Hence, the basic prerequisites for an enforceable written

agreement have been met.

       Sheeder argues that the original oral agreements were the only

binding contracts and that the documents later signed by both parties


       3Our   decision solely involves Iowa law. Neither party has argued that the
Federal Arbitration Act applies here or preempts Iowa law. See 9 U.S.C. §§ 1–16; see
also Heaberlin Farms, Inc. v. IGF Ins. Co., 641 N.W.2d 816, 823 (Iowa 2002) (finding that
Iowa Code section 679A.1(2)(a) was preempted by the FAA to the extent it does not
enforce arbitration agreements in “adhesion contracts”).
                                            9

were merely “confirmations” without legal effect.4              Yet, he has the law

backwards. Iowa Code section 554.2202 states, in relevant part:

             Terms with respect to which the confirmatory
       memoranda of the parties agree or which are otherwise set
       forth in a writing intended by the parties as a final
       expression of their agreement with respect to such terms as
       are included therein may not be contradicted by evidence of
       any prior agreement or of a contemporaneous oral agreement
       ....

Thus, section 554.2202 indicates that a prior oral agreement cannot be

used to contradict terms “set forth in a writing intended by the parties as

a final expression of their agreement with respect to such terms as are

included therein.”

       On this record, there is no doubt that the confirmations signed by

both parties were “intended by the parties as a final expression of their

agreement with respect to such terms as are included therein.”                      Iowa

Code § 554.2202.         Each of these documents contained an integration

clause, which we have said is “one factor we take into account in

determining whether an agreement is fully integrated.” C & J Vantage

Leasing Co. v. Wolfe, 795 N.W.2d 65, 85 (Iowa 2011).



       4Sheeder  argues Bartlett did not preserve error on any argument relating to “the
doctrine of merger and the other issues arising from the Uniform Commercial Code”
because it did not raise them before the district court. We disagree.
        Apart from unconscionability, Sheeder’s argument below was that he had only
entered into oral agreements and that the subsequent written confirmations did not
amount to contracts in and of themselves. Bartlett disagreed and insisted the written
confirmations were valid written agreements to arbitrate. Both parties presented their
written positions in a fairly conclusory fashion, and neither cited to specific provisions
of the Uniform Commercial Code. Yet, it was not necessary for Bartlett to do so to alert
the court of its essential claim that there was an enforceable written agreement to
arbitrate. See Collister v. City of Council Bluffs, 534 N.W.2d 453, 454–55 (Iowa 1995)
(holding that the city preserved error on a statutory immunity argument by claiming at
trial, without citing the statute, that there was no duty to warn the plaintiffs). On
appeal, both parties have elaborated their positions with UCC and additional case law
citations. We can resolve the parties’ dispute as framed below with the benefit of the
additional legal briefing they have provided in this court.
                                    10

      For present purposes, though, we need not determine whether the

confirmations were “fully integrated.”    Because Sheeder is trying to

contradict a term of the written confirmations (i.e., the arbitration

clause), not merely supplement that term, we need only decide whether

the confirmations were “partially integrated,” that is, whether they were

intended as a final expression “with respect to such terms as are

included therein.”      Cf. Iowa Code § 554.2202(2) (excluding even

“consistent additional terms” when the writing was “intended also as a

complete and exclusive statement of the terms of the agreement”—i.e., a
full integration). See also 1 James J. White, et al., Uniform Commercial

Code § 3:14 (6th ed. 2012) (stating that “even if the judge decides that

the writing is not complete and exclusive, yet decides that it is a final

written expression as to some terms, evidence of contradictory prior or

contemporaneous terms may not be admitted”).

      We have no doubt on this record that the confirmations were

intended as a final expression of at least the terms contained therein.

The second page began, “Bartlett is sending you this document to

confirm its Contract to purchase grain, feed or feed ingredients according

to the terms set forth on both sides of this document. Failure to advise

Bartlett immediately of any discrepancies, objections to or disagreement

with this confirmation of the terms constitutes acceptance of those

terms.”   The first page also advised the seller to “REVIEW THIS

CONFIRMATION AND NOTIFY BARTLETT IF THERE ARE ANY TERMS

YOU DO NOT UNDERSTAND OR THAT MAY BE IN ERROR.” Although

Sheeder contends the written confirmations “contained clauses and

provisos not included within the [oral] contract,” he did not object to any
of those clauses and provisos, but instead signed and returned each

written confirmation.
                                    11

      Sheeder is not trying to “supplement” the written confirmations.

See C-Thru Container Corp. v. Midland Mfg. Co., 533 N.W.2d 542, 544

(Iowa 1995) (holding that even a fully integrated agreement may be

supplemented by usage of trade). Rather, Sheeder is trying to replace

the arbitration clause with its polar opposite—the lack of an arbitration

clause.    The parol evidence rule exists to prevent this result.   See id.

(citing Iowa Code § 554.2202).           Accordingly, we reject Sheeder’s

contention that there was no written arbitration agreement between the

parties.
      We also find persuasive similar cases that have declined to give

effect to a prior telephonic agreement lacking an arbitration clause when

a later written one including an arbitration clause exists.     In T & R

Enterprises, Inc. v. Continental Grain Co., a buyer placed feed corn orders

over the telephone with the seller.    613 F.2d 1272, 1273–74 (5th Cir.

1980). Later, the seller sent confirmation slips, which the buyer signed

and returned to the seller. As here, “arbitration was not mentioned in

any of the telephone conversations.” Id. And as here, the confirmations

“contained a provision for the settlement of any dispute arising under the

contracts by arbitration” by the NGFA.      Id. at 1274.   When a dispute

arose, the seller moved to stay court proceedings, and the district court

granted its motion. Id. Arbitration “resulted in an award adverse to [the

buyer],” which challenged the seller’s motion to confirm the arbitration

award. Id. at 1275.

      On the question of whether an agreement to arbitrate existed, the

court found the buyer’s signature on the written confirmations

dispositive:

      The only item in the record approaching “an unequivocal
      denial that the agreement to arbitrate was made” is T & R’s
      assertion that it believed the telephone conversations with
                                    12
      Continental’s agent constituted the real contracts and that
      the subsequently exchanged signed confirmation slips
      cannot modify or add essential terms. This argument is
      contrary to the universally prevailing rule that, absent
      allegations of misrepresentation, fraud, or deceit, one who
      executes a written contract is bound by its terms. This court
      has expressly held that this principle applies to prevent a
      party from avoiding the effect of his written acceptance of a
      contract which expressly, above his signature, on the face of
      the contract, incorporates the provisions on the reverse side
      including promises to arbitrate.

Id. at 1278 (emphasis added). Accordingly, the Fifth Circuit held, as a

matter of law, that an enforceable agreement to participate in NGFA

arbitration existed. Id.

      In another instructive case, a farmer agreed to sales of corn over

the phone while later signing purchase and confirmation forms that

included NGFA arbitration clauses.       Andersons, Inc. v. Horton Farms,

Inc., 166 F.3d 308, 313 (6th Cir. 1998). When the farmer later sought to

avoid arbitration, the Sixth Circuit rejected the farmer’s argument that

this was a “Battle of the Forms” issue. Id. at 326. Instead, it found that

      by signing each and every written “Purchase Contract and
      Confirmation,” Horton Farms expressly assented to the
      additional terms, material or not. . . . . Mr. Horton received
      the document, supposedly read it, and signed it on behalf of
      Horton Farms, thereby affirmatively agreeing to the terms
      contained therein.

Id. The Sixth Circuit also rejected the argument that the farmer could

avoid the effect of the arbitration clause because it “did not read it or

thought that its terms were different.” Id. at 326–27; see also Peak v.

Adams, 799 N.W.2d 535, 543 (Iowa 2011) (noting that “[it] is well-settled

that failure to read a contract before signing it will not invalidate the

contract” (citation and internal quotation marks omitted)).

      Citing McCubbin Seed Farm, Inc. v. Tri-Mor Sales, Inc., 257 N.W.2d
55 (Iowa 1977), Sheeder argues that written confirmations are meant to
                                    13

satisfy the UCC statute of frauds and do not by themselves prove the

existence of a contract.    However, McCubbin is inapposite here.          It

involved a confirmatory memorandum sent by one party, and never

answered by the other.     See McCubbin, 257 N.W.2d at 56, 59.           That

scenario, we pointed out in McCubbin, is recognized in Iowa Code section

554.2201 as a potential exception to the statute of frauds. Id. at 58. Yet

we noted, “Nothing in the section makes a written confirmation binding

on either party, simply because it is not responded to.”           Id.    We

elaborated, “To be sure, the writing may be very useful evidence against
its author, or against its recipient under the merchant rule; but the

contract must nonetheless be proved by the one alleging it.” Id.

      McCubbin is simply not on point.      This is not a case where a

merchant sent a written confirmation and heard nothing back.             Both

parties signed the confirmation. The writing signed by both parties itself

establishes the existence of a contract.

      Finally, the UCC rule on modifications leads us to the same

conclusion that Bartlett and Sheeder entered into written agreements to

arbitrate. Assuming that the parties initially entered into binding oral

agreements that did not include arbitration clauses, those agreements

were modified by the later signed writings. See Iowa Code § 554.2209(1)

(recognizing contract modifications and stating that “[a]n agreement

modifying a contract within this Article needs no consideration to be

binding”).   The Sixth Circuit addressed this issue on nearly identical

facts in Andersons.

            As an initial matter, we note that under Michigan law,
      a sales contract may be modified without additional
      consideration. Thus, Horton Farms’ contention that the
      preexisting oral contracts did not include an agreement to
      arbitrate does not resolve this matter.
                                     14
Andersons, 166 F.3d at 326 (internal citation omitted).

      B. Is the Agreement to Arbitrate Unconscionable? Sheeder has

also urged that even if an agreement to arbitrate existed, it was

nonetheless unenforceable on account of its unconscionability. See Iowa

Code § 679A.1(1) (stating that a written agreement to arbitrate shall not

be enforced when “grounds exist at law or in equity for the revocation of

the written agreement”); see also id. § 554.2302(1) (“If the court as a

matter of law finds the contract or any clause of the contract to have

been unconscionable at the time it was made the court may refuse to

enforce the contract, or it may enforce the remainder of the contract

without the unconscionable clause, or it may so limit the application of

any unconscionable clause as to avoid any unconscionable result.”).

      “A contract is unconscionable where no person in his or her right

senses would make it on the one hand, and no honest and fair person

would accept it on the other hand.” C & J Vantage, 795 N.W.2d at 80.

In determining whether a contract is unconscionable, we examine factors

of “assent, unfair surprise, notice, disparity of bargaining power, and

substantive unfairness.” Id. (quoting C & J Fertilizer, Inc. v. Allied Mut.

Ins. Co., 227 N.W.2d 169, 181 (Iowa 1975)). “However, the doctrine of
unconscionability does not exist to rescue parties from bad bargains.”

Id.; see also Home Fed. Sav. & Loan Ass’n of Algona, 357 N.W.2d 613,

619 (1984) (quoting comment 1 to this section of the UCC, which

provides that “[t]he principle is one of the prevention of oppression and

unfair surprise . . . and not . . . disturbance of allocation of risks because

of superior bargaining power”).

      There     are    two     generally    recognized     components       of
unconscionability: procedural and substantive. The former includes the

existence of factors such as “sharp practices[,] the use of fine print and
                                          15

convoluted language, as well as a lack of understanding and an

inequality of bargaining power.” In re Marriage of Shanks, 758 N.W.2d

506, 515 (Iowa 2008) (citation and internal quotation marks omitted).

The latter includes “harsh, oppressive, and one-sided terms.”                      Id.

(internal quotation marks and citation omitted). Whether an agreement

is unconscionable must be determined at the time it was made. See Iowa

Code § 554.2302(1); see also C & J Vantage, 795 N.W.2d at 81.

       Sheeder argued below, without any specific support, that he had

no bargaining power compared to the “corporate giant” Bartlett.5                  But
Sheeder did not deny he could have sought out other buyers. Grain is a

commodity.       See C & J Vantage, 795 N.W.2d at 81 (rejecting an

unconscionability claim where “[t]here is no evidence of unequal

bargaining power between the parties or a lack of understanding on the

part of Lake MacBride.”); see also Andersons, 166 F.3d at 324 (rejecting a

procedural unconscionability argument, in part, because “Horton Farms

has failed to present evidence that it searched for other alternatives and

that there were none”).        Sheeder further insisted, without evidentiary

support, that “no negotiation was allowed.”               Still, the confirmations

invited Sheeder to notify Bartlett if he disagreed with any terms, did not

understand any of them, or believed any of them were in error.                    See

Andersons, 166 F.3d at 325 (noting a similar warning as support for its

holding that there was no procedural unconscionability). Despite these

invitations to alert Bartlett of any disagreement, no indication exists that

Sheeder made any attempt to negotiate.




       5The  record suggests that Sheeder’s farming operation is substantial, since he
contracted to sell 155,000 bushels of corn, all but 10,000 of which was to be delivered
at the conclusion of the 2011 crop year.
                                      16

        Sheeder also argued the NGFA arbitration fee was unfair.           The

NGFA Arbitration Rules provide that “each disputant must pay an

arbitration service fee” of $900, plus one-half percent of the claim. NGFA

Trade Rules & Arbitration Rules, Arbitration Rule § 5(c). In this case,

that would amount to a $2932.38 fee, on a claim of $406,475.               We

cannot conclude that this level of fee would preclude access to justice in

a commercial case where 155,000 bushels of corn and over $400,000 are

at issue.   See Andersons, 166 F.3d at 314 (rejecting unconscionability

arguments in a NGFA arbitration clause case in which the grain seller’s
fee was $1500 and the award was $271,030.44).               Sheeder does not

contend he could not afford the fee and has not provided any evidence,

beyond the amount of the fee itself, to establish it was unconscionable.

See Faber v. Menard, Inc., 367 F.3d 1048, 1053 (8th Cir. 2004) (noting in

an employment case that “[a] fee-splitting arrangement may be

unconscionable if information specific to the circumstances indicates

that fees are cost-prohibitive and preclude the vindication of statutory

rights in an arbitral forum,” but “[t]he burden of showing that arbitrators’

fees will be cost-prohibitive falls on the party seeking to avoid

arbitration” and must be “more than just a hypothetical inability to pay”);

Harrington v. Pulte Home Corp., 119 P.3d 1044, 1056 (Ariz. Ct. App.

2005)    (rejecting   an   argument    that   fees   were    prohibitive   and

unconscionable, despite plaintiffs’ claim that they could not afford

arbitration, because “[t]he affidavits offer no specific facts regarding

appellees’ financial situations, only conclusory statements”); Shamrock

Foods Co. v. Munn & Assocs., Ltd., ___ S.W.3d ___, ___, No. 06–12–00081–

CV, 2013 WL 150810, at *6–7 (Tex. App. Jan. 15, 2013) (rejecting a fee-
based unconscionability claim because “arbitration agreements are
                                      17

enforceable in the absence of individualized evidence to establish that the

costs of arbitration are prohibitive”).

      Sheeder also insisted that Bartlett “sprang” the arbitration clauses

upon him after the parties had entered into their oral agreements.

However, Sheeder does not say in his affidavit that he failed to read the

clause; after all, he had eight opportunities to do so. In any event, “a

failure to fully read and consider the contract cannot relieve him of its

provisions.” Bryant v. Am. Express Fin. Advisors, Inc., 595 N.W.2d 482,

486 (Iowa 1999). Furthermore, the arbitration provision was not hidden
or obscured. Each confirmation was only two pages long, with a clear

indication that the first page (the signature page) was “Page # 1 of 2.”

The arbitration clause appeared as term number one at the top of the

second page and stated directly that disputes would be “arbitrated

according to the Arbitration Rules of the NGFA” and “[t]he decision and

award of the NGFA arbitrators will be final and binding on both parties.”

Cf. Timmerman v. Grain Exch., LLC, 915 N.E.2d 113, 120–21 (Ill. App. Ct.

2009) (holding that the party “cannot fairly be said to have been aware”

of an agreement to arbitrate where “[t]he contracts in the case at bar did

not themselves mention arbitration, and the Rules, which contained the

arbitration provision, had not been provided to or made available to the

plaintiffs before they signed the contracts”). But see Bryant, 595 N.W.2d

at 486–87 (holding that an employee was bound to arbitrate a claim

against his employer even though the arbitration provision was not found

in the document he signed and noting he could have read the NASD

Code of Arbitration, which was incorporated into his application).

      Finally, Sheeder argued that the NGFA arbitration process itself
was biased because the NGFA is Bartlett’s “surrogate” and Bartlett is a

member of the NGFA whereas Sheeder is not. The NGFA’s rules appear
                                     18

to militate against the possibility of direct bias against Sheeder, and he

has not provided any evidence that such bias existed.             The NGFA

Arbitration Rules state that arbitrators

      should be commercially disinterested with respect to the
      particular dispute intended to be presented to him for
      judgment. If an individual arbitrator changes employment or
      affiliation as an active partner, principal, officer or director
      from one member firm to another member firm, the
      individual must continue to be commercially disinterested or
      be replaced.

NGFA Trade Rules & Arbitration Rules, Arbitration Rule § 4(b)(2).

      Sheeder has not pointed to any evidence that suggests such direct

bias slipped through the cracks here. Instead, he appears to advance an

argument of systemic bias, stemming from Bartlett’s membership in the

NGFA.    A federal district court rejected a similar argument in a case

concerning the issue of bias under the Federal Arbitration Act:

      [The Plaintiffs] do not mean by this that any of the
      arbitrators is biased in the sense that he has a stake in the
      outcome. The argument, rather, is that approximately half
      of the [NGFA]’s members use [similar] contracts, and the
      Association has filed amicus briefs arguing that these
      contracts comply with federal law. It follows, plaintiffs insist,
      that the Association cannot conduct arbitration impartially.
      This is functionally the same as arguing that because the
      United States depends on tax revenues, and has a mammoth
      bureaucracy (the IRS) devoted to collecting hundreds of
      billions of dollars annually, federal judges cannot be
      impartial in tax cases.        No sensible person uses this
      definition of partiality, however.

Nagel v. ADM Investor Servs. Inc., 65 F. Supp. 2d 740, 745 (N.D. Ill.

1999), aff’d, 217 F.3d 436 (7th Cir. 2000).           We agree with this

observation and note that Sheeder’s argument, if accepted, would call

into question other alternative dispute resolution forums such as the

Financial Industry Regulatory Authority.
                                    19

      We are not able to conclude that the arbitration clause was even a

“bad bargain” for Sheeder. See C & J Vantage, 795 N.W.2d at 81 (finding

an agreement not unconscionable even though it “ultimately amounted

to a bad bargain”). For all we know, Sheeder had no viable defense on

the merits and would have had the same final judgment entered against

him—earlier—if sued in district court.

      Sheeder’s arguments are not new. In a number of cases from other

jurisdictions, courts have declined to vacate NGFA arbitration awards

based on assertions that the process is unconscionable, biased, or
otherwise unfair. See Hoffman v. Cargill Inc., 236 F.3d 458, 463 (8th Cir.

2001) (reversing district court’s order vacating an NGFA arbitration

award and noting that “[n]othing compels us to conclude that this

process was fundamentally unfair”); Harter v. Iowa Grain Co., 220 F.3d

544, 557 (7th Cir. 2000) (rejecting Federal Arbitration Act-based

assertion   that   NGFA   arbitration    involved   bias   against   farmers);

Andersons, 166 F.3d at 323–26 (rejecting procedural and substantive

unconscionability arguments against a contract calling for NGFA

arbitration, and noting “the NGFA rules provide that the arbitrators may

not themselves have a commercial interest in a particular dispute”);

Nagel, 65 F. Supp. 2d at 744–46 (upholding NGFA arbitration

agreements under the Federal Arbitration Act and overruling the

argument that NGFA arbitration would be biased because the arbitrators

were grain merchants); In re Robinson, 256 B.R. 482, 487 (Bankr. S.D.

Ohio 2000) (rejecting a debtor’s objection to an NGFA arbitration award

based on concerns of systemic bias), aff’d, 265 B.R. 722 (B.A.P. 6th Cir.

2001), aff’d on other grounds, 326 F.3d 767 (6th Cir. 2003); Andersons,
Inc. v. Crotser, 7 F. Supp. 2d 931, 933 (W.D. Mich. 1998) (holding that a

contract is arbitrable, despite unconscionability concerns, because “[t]he
                                          20

record shows that Crotser makes these allegations with regard to the

entirety of the contracts at issue, rather than only with regard to the

arbitration clauses contained in those contracts”); Bunge Corp. v.

Williams, 359 N.E.2d 844, 847 (Ill. App. Ct. 1977) (rejecting farmers’

argument that an NGFA arbitration clause was unconscionable because

it was on the back and they did not consent to it); Cargill, Inc. v.

Poeppelmeyer, 328 S.W.3d 774, 775–76 (Mo. Ct. App. 2010) (rejecting a

wheat seller’s adhesion argument regarding a NGFA arbitration clause

because the seller failed to meet his burden to produce evidence that the
agreement was invalid).

       Accordingly,     after   careful    consideration      of   procedural     and

substantive factors, we conclude that the written agreements between

Sheeder and Bartlett were not unconscionable.

       IV. Conclusion.

       For the foregoing reasons, we reverse the order below and remand

this case to the district court with directions to confirm the arbitration

award against Sheeder.6

       REVERSED AND REMANDED WITH DIRECTIONS.




        6As noted above, Bartlett has abandoned its appeal as to Pace and we leave that

part of the court’s order undisturbed.
