Barnett Lawyer, P.Good., Mickey D. Barnett, Phillip W. Cheves, David An excellent. Garcia, Amy B. Bailey, Albuquerque, NM, Wolf and you will Fox, P.C., Amy B. Bailey, Albuquerque, NM, getting Petitioner.

That it area will maybe not constitute a beneficial waiver out-of Lender’s liberties thereafter to get particular enforcement of the legal rights less than which Arrangement for the the big event Debtor will assert an effective counterclaim or proper from setoff in such judicial or low-judicial action

Feferman & Warren, Richard N. Feferman, Robert Dale Treinen, Albuquerque, NM, Public Fairness, P.C., F. Paul Terrifically boring, Jr., Washington, D.C., to own Respondent.

Doerr & Knudson, P.An effective., Randy J. Knudson, Portales, NM, AARP Foundation, Deborah Meters. Zuckerman, Arizona, D.C., having Amicus Curiae AARP.

Gary K. King, Attorney General, David K. Thomson, Secretary Lawyer General, Scott Fuqua, Assistant Attorney General, Santa Fe, NM, getting Amicus Curiae Place of work Visit Website of the Lawyer Standard.

CHARLES W. DANIELS, Justice I Concur: EDWARD L. CH?VEZ, Chief Fairness, PATRICIO M. SERNA, Fairness, 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 loan Agreement and you may one previous otherwise after that loan away from Lender and you may one previous otherwise after that merchandising repayment transformation offer fashioned with/otherwise assigned to Bank along with every data in accordance with exact same and you will insurance coverage bought in contact with the transaction;

? people claim reliant a federal or condition statute in addition to, not restricted to, the case-in-lending Work and Regulation Z; the newest Equal Borrowing from the bank Opportunity Act and you may Regulation B, county insurance laws and regulations, state usury and you can financing laws plus county individual shelter laws and regulations and you may regulations;

Although we differ somewhat inside our legal data, we affirm the choice of your Court from Appeals and you will hold that area courtroom try right inside denying the loan company’s actions in order to compel arbitration of your borrower’s judicial states

? any dispute on closure, repair, event otherwise implementing the loan Agreement or other loan or shopping fees sales agreements ranging from 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 default beneath the Mortgage Contract, Bank could possibly get find its remedies in an activity during the law otherwise in the equity, and additionally yet not restricted to, official foreclosure otherwise repossession. Lender may also do so the almost every other treatments provided by law (such as for example, however restricted to, the best out of self-help repossession around Blog post nine of one’s Consistent Industrial Password otherwise other appropriate rules and you will/and/or foreclosures energy out of business).