Barnett Attorney, P.A., Mickey D. Barnett, Phillip W. Cheves, David Good. Garcia, Amy B. Bailey, Albuquerque, NM, Wolf and you can Fox, P.C., Amy B. Bailey, Albuquerque, NM, getting Petitioner.
This area should maybe not make-up a beneficial waiver off Lender’s liberties afterwards to find certain administration of the liberties significantly less than which Agreement inside the big event Debtor will demand a great counterclaim otherwise right of setoff this kind of judicial otherwise low-official step
Feferman & Warren, Richard Letter. Feferman, Robert Dale Treinen, Albuquerque, NM, Social Justice, P.C., F. Paul Dull, Jr., Arizona, D.C., to own Respondent.
Doerr & Knudson, P.Good., Randy J. Knudson, Portales, NM, AARP Base, Deborah M. Zuckerman, Arizona, D.C., to possess Amicus Curiae AARP.
Gary K. Queen, Attorneys General, David K. Thomson, Assistant Lawyer Standard, Scott Fuqua, Assistant Lawyer General, Santa Fe, NM, for Amicus Curiae Office of the Attorney General.
CHARLES W. DANIELS, Fairness We Agree: EDWARD L. CH payday loans IA?VEZ, Captain Fairness, PATRICIO Meters. SERNA, Justice, PETRA JIMENEZ MAES, Fairness, RICHARD C. BOSSON, Fairness.
<1>This case requires us to review the validity of a small loan company’s form arbitration provision that would limit a borrower to mandatory arbitration as a forum to settle all disputes whatsoever, while reserving for the lender the exclusive option of access to the courts for all remedies the lender is most likely to pursue against a borrower. We hold that such an inherently one-sided agreement is against New Mexico public policy and is therefore void as unconscionable.
<2>Defendant World Finance Corporation of New Mexico (World Finance) specializes in small loans at over 100% annual interest rates. Over the course of several years, Plaintiff Laura Cordova (Cordova) signed ten separate loan agreements with World Finance that grew out of just two original loans. The loans were repeatedly rolled over into new loans, and Cordova never succeeded in paying off any of them before signing each new agreement.
<3>All ten of World Finance’s loan agreements included the company’s separately-signed form arbitration attachment. The first paragraph of the printed arbitration provision broadly stated that the parties must arbitrate all disputes arising under, but not limited to:
? the mortgage Arrangement and you may any early in the day otherwise after that mortgage from Lender and you will people previous otherwise further merchandising installment sales deal made out of/otherwise assigned to Lender along with all of the files relating to exact same and you may insurance policies bought in contact with your order;
? people claim based upon a national otherwise state law along with, yet not restricted to, happening-in-financing Act and you may Control Z; the brand new Equivalent Borrowing Chance Act and Control B, condition insurance rates legislation, condition usury and you may credit laws and regulations also condition user security laws and regulations and you will regulations;
Although we differ slightly within legal research, i affirm the option of your Judge off Appeals and you will hold the district judge is actually right in doubting the loan organizations motion to help you compel arbitration of your borrower’s judicial states
? people disagreement regarding the closing, maintenance, gathering or enforcing the borrowed funds Arrangement or other mortgage otherwise merchandising cost conversion process plans anywhere between Bank and you may Debtor
<4>However, a separate paragraph in the form also provided that the lender alone had the exclusive and unlimited alternative to seek any judicial remedies it might otherwise have available to it in law or in equity in the event of a default by the borrower:
Notwithstanding this Agreement, in the eventuality of a standard within the Financing Contract, Bank will get seek its remedies within the a hobby in the law or into the collateral, and additionally although not limited by, judicial foreclosure or repossession. Financial also can do so its most other cures provided with laws (such as, but not restricted to, the proper off self-help repossession under Post 9 of Uniform Commercial Password otherwise other applicable laws and you will/or even the foreclosure strength from profit).
