CORDOVA V. Business Finance CORP. Regarding NM

Barnett Firm, P.A good., 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, to possess Petitioner.

Which point should perhaps not form a beneficial waiver out-of Lender’s legal rights thereafter to find specific administration of their rights lower than it Agreement inside the event Debtor shall assert a good counterclaim or correct regarding setoff this kind of judicial or non-judicial step

Feferman & Warren, Richard N. Feferman, Robert Dale Treinen, Albuquerque, NM, Societal Justice, P.C., F. Paul Fantastically dull, Jr., Arizona, D.C., for Respondent.

Doerr & Knudson, P.A., Randy J. Knudson, Portales, NM, AARP Basis, Deborah Meters. Zuckerman, Arizona, D.C., getting Amicus Curiae AARP.

Gary K. Queen, Attorneys Standard, David K. Thomson, Assistant Attorneys Standard, Scott Fuqua, Assistant Attorney Standard, Santa Fe, NM, to possess Amicus Curiae Workplace of your Lawyer Standard.

CHARLES W. DANIELS, Justice We Agree: EDWARD L. CH?VEZ, Captain Fairness, PATRICIO M. SERNA, Fairness, 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 Agreement and you may any previous otherwise further financing off Lender and you will one early in the day otherwise further retail installment conversion process bargain made out of/otherwise allotted to Bank also every data files based on same and you will insurance policies purchased in connection with the order;

? people claim depending a federal or state statute and additionally, however limited by, your situation-in-lending Operate and you may Control Z; the brand new Equivalent Borrowing Options Work and you can Controls B, county insurance regulations, condition usury and you may financing regulations together with county user protection statutes and regulations;

While we disagree quite in our courtroom research, we affirm the choice of one’s Courtroom out-of Is attractive and you can keep that the area judge try best in the doubting the mortgage business’s motion so you’re able to force arbitration of the borrower’s judicial says

? people argument on the closure, upkeep, event otherwise enforcing the loan Arrangement or any other loan otherwise merchandising fees conversion process preparations between Lender and you will Borrower

<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:

Despite so it Agreement, if there is a standard underneath the Loan Agreement, Bank get search their treatments in a hobby within laws otherwise during the security, and yet not limited to, official property foreclosure or repossession. Bank may do it its most other cures provided by law (for example, but not simply for, the proper regarding self-let repossession significantly less than Blog post nine of Consistent Industrial Password otherwise almost every other relevant laws and/or perhaps the foreclosure fuel away from marketing).