Arnold v. United Companies Lending Corp.

511 S.E.2d 854 (1998)

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Nature of the Case

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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.