Arnold v. United Companies Lending Corp

Facts

Michael Searls came to the residence of Orville and Maxine Arnold (P), an elderly couple. Searls offered to arrange a loan for the Arnolds, acting as a loan broker. P paid Searls $50.00 to begin processing their loan. Searls got the loan for P and out of the proceeds, he obtained a mortgage broker fee of $940.00. The lender, United Lending had the benefit of legal counsel at closing and P did not. P was presented with 25 documents including a promissory note, a deed of trust to the lender and an agreement to arbitrate and mediate. The arbitration agreement stated, in ordinary type, that 'all . . . legal controversies [that are not resolved by mediation] . . . relating to the extension of credit (the 'Loan') by Lender to Borrower . . . including . . . the validity and construction of this arbitration provision shall be resolved solely and exclusively by arbitration. Further terms are listed in the Burton Casebook 2^nd page 281. Between January and May of 1997, P paid off their loan from United Lending. They then filed suit against United and Searls seeking a declaratory judgment adjudging the arbitration agreement to be void and unenforceable. United Lending moved to dismiss based on the compulsory arbitration agreement. P moved for partial summary judgment against United Lending, seeking a declaratory judgment that the 'arbitration clause' is void and unenforceable. The circuit court certified the questions to this West Virginia Supreme Court.

Issues

Rule of Law

Holding and Decision

Legal Analysis

© 2007-2024 ABN Study Partner.