CORDOVA V. Globe Loans CORP. Regarding NM

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

This section shall not comprise good waiver away from Lender’s legal rights after that to look for certain administration of its rights under which Agreement inside case Borrower shall assert a counterclaim otherwise proper of setoff in such official or non-official step

Feferman & Warren, Richard N. Feferman, Robert Dale Treinen, Albuquerque, NM, Personal Fairness, P.C., F. Paul Humdrum, Jr., Arizona, D.C., to have Respondent.

Doerr paydayloansexpert.com/payday-loans-wy/ & Knudson, P.A., Randy J. Knudson, Portales, NM, AARP Foundation, Deborah M. Zuckerman, Washington, D.C., to own Amicus Curiae AARP.

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

CHARLES W. DANIELS, Justice I Agree: EDWARD L. CH?VEZ, Master Fairness, PATRICIO Meters. SERNA, Justice, PETRA JIMENEZ MAES, Justice, 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 borrowed funds Agreement and you may any earlier in the day or further mortgage off Financial and any prior or then retail payment conversion price made with/or allotted to Financial along with every data files per exact same and insurance rates purchased in connection with your order;

? one allege based upon a federal otherwise state statute plus, however simply for, the fact-in-financing Act and you may Control Z; the latest Equal Credit Options Work and you can Control B, county insurance coverage legislation, county usury and you can financing legislation together with county consumer defense statutes and you can regulations;

While we disagree some in our court study, we affirm the option of Courtroom off Is attractive and hold your region courtroom is actually proper during the doubting the loan business’s action so you can force arbitration of borrower’s judicial says

? people disagreement in the closure, repair, event or enforcing the loan Contract or other mortgage otherwise shopping payment conversion process arrangements anywhere between Bank and you will 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:

Regardless of that it Contract, in the eventuality of a default under the Loan Arrangement, Bank can get look for its cures in the a task during the legislation otherwise for the equity, along with but not restricted to, judicial property foreclosure otherwise repossession. Bank may also get it done the almost every other treatments provided by legislation (including, not restricted to, ideal out of worry about-help repossession around Post nine of your own Uniform Industrial Code otherwise most other appropriate rules and you may/and/or foreclosures electricity regarding selling).