Brewer v. Missouri Title Loans

364 S.W.3d 486 (2012)

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Nature of the Case

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Facts

Brewer (P) borrowed $2,215 from D. The loan was secured by the title to P's automobile. The annual percentage rate on the loan was 300 percent. The agreement provided that P must resolve any claim against the title company in binding, individual arbitration governed by the Federal Arbitration Act (the act). D specifically retained its 'right to seek possession of the Collateral in the event of default by judicial or other process including self-help repossession.' D could utilize the courts to repossess P's vehicle, but P must go to arbitration to complain about violations of its rights under the contract. In addition, the agreement stated that 'the parties agree to be responsible for their expenses, including fees for attorneys, experts, and witnesses.' The agreement did not provide an attorney fee multiplier or guaranteed minimum recovery if the consumer is awarded more than the title company's last offer. P made two payments to D of more than $1,000, but the payment only reduced her loan principal by 6 cents. P filed a class action petition against D alleging violations of numerous statutes, including the state merchandising practices act. The title company filed a motion to dismiss or to stay the claims and to compel P to arbitrate her claims individually. The court held the class arbitration waiver in the loan agreement unconscionable and unenforceable. It also found that the agreement was one-sided because only customers gave up their rights while D could pursue self-help or relief in the courts and that D had admitted that the provision that each party be responsible for its costs and attorney's fees in arbitration placed a high burden on consumers. D appealed. The state Supreme Court held that the class arbitration waiver was unconscionable and struck the arbitration agreement in its entirety. The Supreme Court granted certiorari and it vacated and remanded the case for further consideration in light of the Concepcion case.