Opinion ID: 1837578
Heading Depth: 2
Heading Rank: 2

Heading: whether the trial court erred in denying equifirst's motion to compel arbitration.

Text: ¶ 15. We have distinguished between procedural and substantive unconscionability. East Ford, 826 So.2d at 714. In East Ford, this Court stated: The courts have recognized two types of unconscionability, procedural and substantive. Pridgen v. Green Tree Fin. Servicing Corp., 88 F.Supp.2d 655 (S.D.Miss.2000) (quoting York v. Georgia-Pac. Corp., 585 F.Supp. 1265, 1278 (N.D.Miss.1984)). Procedural unconscionability may be proved by showing a lack of knowledge, lack of voluntariness, inconspicuous print, the use of complex legalistic language, disparity in sophistication or bargaining power of the parties and/or a lack of opportunity to study the contract and inquire about the contract terms. Id. Substantive unconscionability may be proven by showing the terms of the arbitration agreement to be oppressive. York, 585 F.Supp. at 1278. Substantively unconscionable clauses have been held to include waiver of choice of forum and waiver of certain remedies. ¶ 16. Here, the Borrowers' allegations fall into the category of procedural unconscionability. The substance of the Borrowers' claims made in the affidavits of Melvin Jackson and Brenda Manning are that they did not read the documents they signed at the loan closing, including the arbitration rider, to purchase their homes and they were told that they had to sign each document. The Borrowers admit in their affidavits they were told the title/name of each document and that one of the documents was called an arbitration rider. Their contention is that no one told us we had the right to read any of the documents or to ask questions. However, nothing indicates that anyone prevented them from reading the documents or asking any questions. [1] ¶ 17. In McKenzie Check Advance of Mississippi, L.L.C. v. Hardy, 866 So.2d 446, 455 (Miss.2004), we stated: It is well settled under Mississippi law that a contracting party is under a legal obligation to read a contract before signing it. First Family Financial Services, Inc. v. Fairley, 173 F.Supp.2d 565, 572 (S.D.Miss.2001). See Godfrey, Bassett & Kuykendall Architects, Ltd. v. Huntington Lumber & Supply Co., 584 So.2d 1254, 1257 (Miss.1991). See also Koenig v. Calcote, 199 Miss. 435, 25 So.2d 763 (1946); McCubbins v. Morgan, 199 Miss. 153, 23 So.2d 926 (1945). ¶ 18. Jackson alleged in his affidavit that he had a twelfth grade education. Jackson contended that, despite his education level, he has difficulty reading. However, Jackson does not claim that he informed anyone at the loan closing that he had difficulty reading. Brenda Manning alleged in her affidavit that she felt hurried because the loan closing could not be rescheduled after 5:00 p.m. to accommodate her husband's work schedule. She stated that her husband did not get off work until 5:00 p.m. However, she stated they had approximately a week's notice of the loan closing date and time. Furthermore, her husband attended the loan closing. ¶ 19. In Norwest Fin. Miss., Inc. v. McDonald, 905 So.2d 1187, 1194 (Miss. 2005), this Court addressed a similar situation where the borrowers claimed the lenders did not explain what arbitration was and did not tell the borrowers they were giving up their rights to a jury trial. The Court held: In Washington Mutual Fin. Group, LLC v. Bailey, 364 F.3d 260 (5th Cir. 2004), the court ruled that under Mississippi law, the inability of borrowers to read did not render them incapable of possessing adequate knowledge of the arbitration agreement they signed. Id. at 264-65. The court also concluded that the trial court erred by finding the agreement unconscionable under Mississippi law because the lenders failed to specifically inform the plaintiffs that they were signing an arbitration agreement. In the present case, each borrower signed a single-page arbitration agreement, written in plain language. None of the borrowers claimed to be unable to read. There is no claim that the borrowers asked anyone to explain the process of arbitration or to explain what arbitration meant; the borrowers simply state that no one informed them that they were signing an arbitration agreement, or told them what an arbitration agreement was. Any reasonable person reading this document prior to signing it would expect to be subject to arbitration and would know that they were waiving their right to a jury trial. There is also no evidence that a reasonable person would not sign this document in return for a desired loan. Norwest, 905 So.2d at 1194 (emphasis added). ¶ 20. As previously stated, the language clearly stated in bold typesetting above the signature line that by signing the arbitration rider they were waiving their right to litigate those claims and disputes in a court or jury trial or to participate as a representative or member of any class of claimants in connection with a claim or dispute. The provision further stated that other rights they would have if they went to court may also not be available in arbitration. Clearly, a review of the arbitration rider reveals it was conspicuous, and the language was not convoluted. In Russell, we held: The arbitration agreement in the Purchase Agreement is preceded by boldface and capitalized headings and was almost immediately succeeded by the signature line. In Mississippi, a person is charged with knowing the contents of any document that he executes. J.R. Watkins Co. v. Runnels, 252 Miss. 87, 96, 172 So.2d 567, 571 (1965) (A person cannot avoid a written contract which he has entered into on the ground that he did not read it or have it read to him.). 826 So.2d at 726 (emphasis added). ¶ 21. Based on the analysis above, we find the trial court erred in denying EquiFirst's motion to compel arbitration under the arbitration rider signed by the Borrowers.