Credit Acceptance Corp. v. Robert J. and Billye S. Front, etc. ( 2013 )

No. 11-1646 – Credit Acceptance Corp. v. Robert J. Front and Billye S. Front
and
No. 12-0545 – Credit Acceptance Corp. v. Ocie Shrewsbury FILED
June 19, 2013
released at 3:00 p.m.
RORY L. PERRY II, CLERK
SUPREME COURT OF APPEALS
OF WEST VIRGINIA
Justice Ketchum, concurring:
I concur with the majority’s opinion, but write separately to make two
points.
First, in crafting Syllabus Point 3, the majority opinion relied upon the
recent case of Kahn v. Dell, Inc., 669 F.3d 350 (3rd Cir. 2012), in deciding whether the
unavailability of a chosen arbitration forum renders an arbitration agreement
unenforceable. Syllabus Point 3 makes a distinction between whether the choice of the
arbitration forum is an “ancillary logistical concern” or an “integral” part of the
agreement to arbitrate.
However, the majority opinion gives no guidelines as how to determine if
an agreement’s choice of a forum is an “ancillary logistical concern” or an “integral” part
of the arbitration agreement. I would have, like the Kahn case, made this clear by adding
the following sentence at the end of Syllabus Point 3: “In this light, the parties must have
unambiguously expressed their intent not to arbitrate their disputes in the event that the
designated arbitral forum is unavailable.” Kahn 669 F.3d at 354. I believe that a court
should decline to appoint an alternate arbitrator only when the original choice of forum
was “so central to the arbitration agreement that the unavailability of that arbitrator
[brings] the agreement to an end.” Id.
1
Second, our recent cases discussing unconscionability in contracts have
held that there must be proof of both procedural and substantive unconscionability,
judged on a sliding scale. Syllabus Point 20, Brown v. Genesis Healthcare Corp., 228
W.Va. 646, 724 S.E.2d 250 (2011) [“Brown I”]. Under our recent case law, “[t]o be
unenforceable, a contract term must—at least in some small measure—be both
procedurally and substantively unconscionable.” Dan Ryan Builders, Inc. v. Nelson, 230
W.Va. 281, 289, 737 S.E.2d 550, 558 (2012) (quotations omitted).
However, in footnote 8 of the majority opinion, Justice Davis questioned
the need for the sliding scale adopted in Syllabus Point 20 of Brown I that requires both
substantive and procedural unconscionability. This Court was one of the twelve state
supreme courts to have adopted or reaffirmed a sliding scale approach since 2000. See
Melissa T. Lonegrass, Finding Room For Fairness in Formalism – The Sliding Scale
Approach to Unconscionability, 44 Loy. U. Chi. L. J. 1, 6 (2012). However, of these
twelve courts, “five have further expanded the sliding scale approach to hold that a
finding of unconscionability may rest on evidence of either procedural or substantive
unconscionability without requiring evidence of both.” Id.1
1
See Razor v. Hyundai Motor Am., 854 N.E.2d 607, 622 (Ill. 2006)
(“Unconscionability can be either ‘procedural’ or ‘substantive’ or a combination of both.”);
Brewer v. Mo. Title Loans, Inc., 323 S.W.3d 18, 22 (Mo. 2010) (en banc), vacated on other
grounds, 131 S. Ct. 2875 (2011) (mem.) (“Under Missouri law, unconscionability can be
procedural, substantive or a combination of both.”); Cordova v. World Fin. Corp. of N.M.,
208 P.3d 901, 907-08 (N.M. 2009) (“While there is a greater likelihood of a contract’s being
invalidated for unconscionability if there is a combination of both procedural and substantive
unconscionability, there is no absolute requirement in our law that both must be present to
2
Furthermore, our Legislature has suggested that both forms of
unconscionability are not required. For example, the Uniform Commercial Code
provisions pertaining to leases state that a lease contract or any clause of a lease contract
may be voided if it is either procedurally or substantively unconscionable.2 Likewise, the
West Virginia Consumer Credit and Protection Act says that, regarding consumer credit
sales, leases, or loans, a contract may be voided if it was either “induced by
unconscionable conduct” or if the terms of the contract were unconscionable “at the time
it was made.”3
the same degree or that they both be present at all.”); Glassford v. BrickKicker, 35 A.3d
1044, 1049 (Vt. 2011) (citing Val Preda Leasing, Inc. v. Rodriguez, 540 A.2d 648, 652 (Vt.
1987)) (“The superior court was mistaken in assuming that the presence of procedural
unconscionability is required to void a contract based on it containing unconscionable
terms.”); Adler v. Fred Lind Manor, 103 P.3d 773, 782-83 (Wash. 2004) (en banc);
(“Substantive unconscionability alone can support a finding of unconscionability.”).
2
W.Va. Code § 46-2A-108 [1996] states, in part (with emphasis added):
(1) If the court as a matter of law finds a lease contract
or any clause of a lease contract to have been unconscionable
at the time it was made the court may refuse to enforce the
lease contract. . . .
(2) With respect to a consumer lease, if the court as a
matter of law finds that a lease contract or any clause of a
lease contract has been induced by unconscionable conduct . .
. the court may grant appropriate relief.
(3) Before making a finding of unconscionability under
subsection (1) or (2), the court, on its own motion or that of a
party, shall afford the parties a reasonable opportunity to
present evidence as to the setting, purpose, and effect of the
lease contract or clause thereof, or of the conduct.
3
W.Va. Code § 46A-2-121 [1996] states, in part:
(1) With respect to a transaction which is or gives rise to a
3
Justice Davis correctly finds that this issue was neither briefed by the
parties nor needed to be addressed to resolve this case. However, in the future, I believe
that this Court should revisit Syllabus Point 20 of Brown v. Genesis Healthcare Corp.
[Brown I] and clarify this point of law.
consumer credit sale, consumer lease or consumer loan, if the
court as a matter of law finds:
(a) The agreement or transaction to have been
unconscionable at the time it was made, or to
have been induced by unconscionable conduct,
the court may refuse to enforce the agreement[.]
4