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Barnett Attorney, P.A beneficial., Mickey D. Barnett, Phillip W. Cheves, David An excellent. Garcia, Amy B. Bailey, Albuquerque, NM, Wolf and Fox, P.C., Amy B. Bailey, Albuquerque, NM, to own Petitioner.
Feferman & Warren, Richard Letter. Feferman, Robert Dale Treinen, Albuquerque, NM, Societal Justice, P.C., F. Paul Fantastically dull, Jr., Arizona, D.C., to have Respondent.
Doerr & Knudson, P.An excellent., Randy J. Knudson, Portales, NM, AARP Base, Deborah Yards. Zuckerman, Washington, D.C., getting Amicus Curiae AARP.
Gary K. King, Lawyer Standard, David K. Thomson, Secretary Lawyer Standard, Scott Fuqua, Secretary Attorneys Standard, Santa Fe, NM, for Amicus Curiae Office of your own Attorneys Standard.
CHARLES W. DANIELS, Justice We Concur: EDWARD L. CH?VEZ, Captain Justice, PATRICIO Meters. SERNA, Justice, PETRA JIMENEZ MAES, Fairness, RICHARD C. BOSSON, Justice.
<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 Agreement and you may one early payday loans Rhode Island in the day or further loan off Financial and you may people past otherwise further shopping installment sales offer fashioned with/otherwise assigned to Financial plus all the files in accordance with same and insurance coverage sold in experience of the order;
? one allege reliant a national otherwise state law and additionally, but not simply for, happening-in-lending Operate and you may Controls Z; the new Equal Borrowing Opportunity Operate and you may Regulation B, state insurance coverage statutes, county usury and you may financing legislation along with state consumer cover legislation and you will regulations;
? any conflict in the closing, repair, event or enforcing the loan Arrangement or other financing otherwise merchandising installment conversion process agreements anywhere between Financial and you can 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 so it Agreement, if there is a default under the Financing Agreement, Financial may look for their treatments in the a task in the rules otherwise from inside the equity, together with but not restricted to, official property foreclosure or repossession. Bank may also get it done the other cures provided with legislation (such as for example, not limited to, just the right out of care about-let repossession less than Post nine of the Uniform Industrial Code or most other applicable law and you can/or the foreclosure strength out of business).