CORDOVA V. Community Funds CORP. Of NM

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CORDOVA V. Community Funds CORP. Of NM

Barnett Law firm, P.A., Mickey D. Barnett, Phillip W. Cheves, David A good. Garcia, Amy B. Bailey, Albuquerque, NM, Wolf and Fox, P.C., Amy B. Bailey, Albuquerque, NM, to have Petitioner.

So it area shall not form an effective waiver regarding Lender’s rights after that to get certain enforcement of their legal rights lower than this Contract from inside the the big event Debtor shall believe a beneficial counterclaim otherwise right of setoff such official otherwise non-judicial action

Feferman & Warren, Richard Letter. Feferman, Robert Dale Treinen, Albuquerque, NM, Personal Fairness, P.C., F. Paul Incredibly dull, Jr., Arizona, D.C., having Respondent.

Doerr & Knudson, P.A., Randy J. Knudson, Portales, NM, AARP Basis, Deborah Yards. Zuckerman, Washington, D.C., having Amicus Curiae AARP.

Gary K. Queen, Attorney General, David K. Thomson, Assistant Attorneys Standard, Scott Fuqua, Assistant Attorney Standard, Santa Fe, NM, to own Amicus Curiae Office of your Attorney General.


<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 Arrangement and people earlier otherwise subsequent financing regarding Financial and people past otherwise then merchandising payment sales price made out of/or assigned to Financial plus all the data per same and you can insurance policies purchased in connection with the transaction;

? one claim centered a national otherwise condition statute along with, however limited by, the truth-in-lending Work and Control Z; new Equivalent Borrowing from the bank Possibility Work and you may Controls B, condition insurance policies legislation, condition usury and lending laws and regulations including state consumer defense laws and regulations and you will regulations;

While we disagree some within our courtroom analysis, i affirm the option of your own Judge of Is attractive and you may hold the region judge are best in the doubt the mortgage organization’s motion so you can force arbitration of your borrower’s judicial says

? any disagreement on closure, repair, event otherwise implementing the borrowed funds Arrangement or other loan or shopping payment sales agreements anywhere between Lender and you may 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 which Arrangement, in case of a default underneath the Loan Agreement, Bank could possibly get search their remedies inside an action within legislation or in equity, plus but not restricted to, official property foreclosure otherwise repossession. Financial also can exercise its other remedies provided with laws (eg, but not limited to, the right from self-help repossession around Article nine of your own Consistent Commercial Code or most other relevant laws and/or perhaps the foreclosures power away from deals).

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