Family Sec. Credit Union v. Etheredge

Summary

The Alabama Supreme Court reviewed the denial of Family Security Credit Union's motions to compel arbitration in eight related vehicle-financing cases. The court held that the purchasers had not established procedural unconscionability, that the arbitration provisions were supported by consideration, and that the broad language of the provisions encompassed their tort claims against the credit union. The court reversed and remanded all eight cases.

Holdings

1. A party seeking to invalidate an arbitration provision on unconscionability grounds must establish both procedural and substantive unconscionability. Because the purchasers presented no evidence concerning the contract-formation process, the trial court erred in finding the provisions unconscionable.
2. The arbitration provisions did not fail for lack of consideration merely because the credit union retained certain judicial and self-help remedies while the purchasers were required to arbitrate covered disputes.
3. The purchasers' negligence, wantonness, and conspiracy claims against Family Security Credit Union fell within arbitration provisions covering '[a]ny controversy or claim arising out of or relating to' the agreements.
4. The purchasers' argument concerning the validity of a jury waiver did not provide a basis to affirm the denial of arbitration because the provision at issue was an arbitration provision, not a separate jury-waiver provision, and no jury-waiver issue was properly before the court.

Questions Presented

1. Whether the purchasers established procedural and substantive unconscionability sufficient to invalidate the arbitration provisions.
2. Whether the arbitration provisions lacked consideration because they allegedly required the purchasers to arbitrate while allowing the credit union to pursue judicial remedies.
3. Whether the purchasers' tort claims against Family Security Credit Union fell within the scope of the broad arbitration provisions.
4. Whether an asserted lack of a valid jury-trial waiver provided a basis for denying the motions to compel arbitration.

Disposition

reversed_and_remanded