CASH LOAN INC v. HARRIS. After Harris encountered difficulties repaying the attention due on her behalf loans, she filed suit, separately as well as on behalf of similarly situated people, against E-Z Cash.
Supreme Court of Arkansas.
E-Z CASH LOAN, INC. v. Deborah HARRIS.
Determined: 06, 2001 december
Appellant E-Z advance loan, Inc., appeals your order regarding the Pulaski County Circuit Court doubting its motion to compel arbitration. For reversal, E-Z Cash contends that a contract finalized by Appellee Deborah Harris included a valid arbitration clause, hence preventing her from filing suit in circuit court. We disagree, and therefore, affirm.
This appeal is due to a dispute about the legality of particular loan deals involving E-Z Cash and Harris. E-Z money is a corporation this is certainly in the business of supplying money loans to people who provide individual checks which are held until the debtor’s next payday. These deals are generally named вЂњpayday loans.вЂќ In June 2000, Harris presented E-Z Cash with a personal sign in the quantity of $400 it decided to hold until Harris’s next payday. Harris ended up being necessary to go back to E-Z money to either redeem the mortgage for the face that is full of this check or even to restore the mortgage. She chose to restore the mortgage if you are paying the attention and presenting a brand new search for the initial number of the bucks received, plus one more solution cost for the extensive term. Within the transaction, Harris finalized an вЂњArkansas Deferred Presentment Agreement,вЂќ saying that there clearly was a check cashing cost of $40, also a $10 deferred presentment cost. This kind additionally reported that the $50 constituted a finance charge, with an percentage that is annual of 372.4 per cent. Thereafter, Harris received $350 in money. Harris proceeded this arrangement with E-Z money until 3, 2000 august.
inside her problem, Harris alleged that E-Z money violated Article 19, В§ 13, regarding the Arkansas Constitution by recharging fascination with a quantity surpassing the utmost rate Nevada title loans that is allowable. Particularly, Harris averred that the вЂњservice costвЂќ imposed by E-Z Cash amounts to interest, due to the fact term can be used in part 13, while the yearly interest levels vary anywhere from 300 to 720 %, therefore violating Arkansas’s constitutional prohibition against usury. Harris asked for that she be appointed on your behalf associated with the class and prayed for judgment in a quantity add up to twice the attention compensated by each known person in the course, costs, and lawyer’s charges. Harris additionally asked for that the court declare the agreements at problem null and void.
E-Z Cash reacted with a movement to dismiss Harris’s suit on the floor that Harris finalized a valid arbitration contract and had been hence banned from bringing suit in circuit court. Inside her reaction to the movement to dismiss, Harris contended that the circuit court should proceed with the thinking of other jurisdictions which have refused to compel arbitration, especially in circumstances involving loan that is payday where in fact the underlying loan deals are unlawful or unenforceable. E-Z Cash then filed a motion to compel arbitration. Harris reacted that the agreements are void ab initio and are therefore invalid, and therefore, a void agreement is almost certainly not arbitrated.
The test court held a hearing regarding the movement to compel on January 18, 2001. No witnesses testified, but solicitors representing both ongoing parties presented their arguments to your court. The test court orally denied the movement to compel, saying through the workbench:
I have got to deny it, needless to say. We am talking about I’ve see the agreement and it’s really just like an adhesion clause. Plus, there is, needless to say, comparable situations with this.
It is a contract that is one-sided respect to arbitration. I do not see just about any option to see clearly. There isn’t any responsibility on the part of check cashiers to accomplish certainly not sue them.
In its written purchase, filed January 25, 2001, the test court denied the movement to compel, plus the movement to dismiss, due to the fact arbitration clause ended up being found in an adhesion agreement, ended up being one-sided, and unjust. The court further unearthed that the contract lacked mutuality, and ended up being consequently unenforceable against Harris. From that ruling, comes the immediate appeal.
During the outset we observe that a purchase doubting a movement to compel arbitration is an order that is immediately appealable. Ark. R.App. P.-Civ. 2(a)(12); Showmethemoney Check Cashers, Inc. v. Williams, 342 Ark. 112, 27 S.W.3d 361 (2000); Walton v. Lewis, 337 Ark. 45, 987 S.W.2d 262 (1999). We review an endeavor court’s purchase doubting a motion to compel de novo from the record. Id.
We. Arkansas Law Governs
E-Z Cash’s first point on appeal is twofold. First, it contends that this court should use the conditions associated with Federal Arbitration Act (вЂњFAAвЂќ) to find out whether or otherwise not there clearly was a arbitration that is valid in cases like this, due to the fact underlying transactions involve commerce. E-Z Cash then avers that the FAA declares a good policy that is public benefit of arbitration that mandates the enforcement of arbitration agreements. Therefore, based on E-Z money’s logic, this court should enforce the arbitration contract in this full instance because public policy requires just as much.
Harris contends that neither the FAA nor the Arkansas Arbitration Act are applicable right here, as the agreement at problem is usurious and, therefore, void. Instead, Harris contends there is no agreement that is enforceable arbitrate, as the contract lacks the mandatory component of mutuality. Our company is not able to achieve the merits of Harris’s argument about the usurious nature regarding the agreement, because she did not get a ruling through the test court with this argument. Her failure to have such a ruling is a procedural club to our consideration with this problem on appeal. See Barker v. Clark, 343 Ark. 8, 33 S.W.3d 476 (2000).