CORDOVA V. Industry Fund CORP. From NM

Barnett Attorney, P.An effective., Mickey D. Barnett, Phillip W. Cheves, David A beneficial. Garcia, Amy B. Bailey, Albuquerque, NM, Wolf and you may Fox, P.C., Amy B. Bailey, Albuquerque, NM, getting Petitioner.

So it section shall not make-up good waiver out of Lender’s legal rights afterwards to get certain enforcement of their legal rights significantly less than which Contract in the the function Borrower should assert a beneficial counterclaim otherwise right regarding setoff such official otherwise non-judicial action

Feferman & Warren, Richard N. Feferman, Robert Dale Treinen, Albuquerque, NM, Social Fairness, P.C., F. Paul Terrifically boring, Jr., Arizona, D.C., for Respondent.

Doerr & Knudson, P.A great., Randy J. Knudson, Portales, NM, AARP Base, Deborah M. Zuckerman, Washington, D.C., to own Amicus Curiae AARP.

Gary K. King, Attorneys General, David K. Thomson, Secretary Attorney General, Scott Fuqua, Assistant Attorneys Standard, Santa Fe, NM, getting Amicus Curiae Office of your Attorney General.

CHARLES W. DANIELS, Justice We Consent: EDWARD L. CH?VEZ, Captain Justice, PATRICIO Yards. SERNA, Justice, PETRA JIMENEZ MAES, Justice, 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 borrowed funds Arrangement and you may one earlier in the day otherwise further loan out-of Financial and one previous or then retail installment conversion offer created using/or allotted to Bank plus most of the documents based on exact same and you will insurance sold in contact with the www.pdqtitleloans.com/payday-loans-va/ order;

? people claim based upon a national or county statute and additionally, however restricted to, the way it is-in-lending Operate and Controls Z; the brand new Equal Borrowing from the bank Options Operate and Controls B, county insurance coverage statutes, condition usury and you will lending legislation and additionally condition consumer safeguards statutes and you will regulations;

Although we differ slightly within our courtroom research, we affirm the option of one’s Legal away from Is attractive and you will hold the area courtroom is actually right inside denying the mortgage business’s actions to help you compel arbitration of borrower’s official claims

? people disagreement regarding closing, upkeep, gathering otherwise implementing the borrowed funds Arrangement and other loan or merchandising fees conversion process preparations ranging from Lender and 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:

In spite of it Arrangement, in the eventuality of a default in Loan Arrangement, Financial may seek its remedies during the an activity within laws otherwise in equity, together with not limited by, judicial foreclosure otherwise repossession. Bank may get it done the other cures provided by legislation (particularly, yet not simply for, the best of notice-assist repossession lower than Article nine of your own Uniform Industrial Password otherwise almost every other appropriate law and you can/or the foreclosure power off selling).