Court Opinion

ID: 9862721
Source: CourtListenerOpinion
Date Created: 2023-09-25 01:59:58.212071+00
Date Added: 2024-06-11T11:31:09.952679
License: Public Domain

Justice LaVECCHIA
delivered the opinion of the Court.
This matter presents a question of law certified and submitted by the United States Court of Appeals for the Third Circuit pursuant to the procedures set forth in Rule 2:12A. We have been asked whether an arbitration agreement found in a consumer loan contract is unconscionable, in whole or in part, under New Jersey contract law. Because many of the agreement’s provisions are ambiguous, interpretation of the contract by an arbitrator is necessary before there can be a final resolution of this dispute. However, to the extent that the procedural posture of this matter permits, we hold that several parts of the arbitration agreement may be unenforceable based on unconscionability doctrine if interpreted by an arbitrator unfavorably to the consumer as described herein.
I.
We begin with the facts as presented by the federal court, although we acknowledge the presence of factual disputes between the parties. R. 2:12A-4. The purpose of the certification process is to answer the question of law submitted pursuant to Rule 2:12A, not to resolve those factual differences. See R. 2:12A-1.
Plaintiff Delta Funding Corp. (Delta) is a New York mortgage lender that extends loans primarily to borrowers in the sub-prime lending market. In December 1999, Delta entered into a mortgage loan contract with defendant Alberta Harris, a seventy-eight-year-old woman with only a sixth-grade education and little financial sophistication. The $37,700 loan was secured by a mortgage on Harris’s home in Newark.1 The loan had an annual percentage *36rate of fourteen percent. At the time, Harris owned her home outright and had lived in it for more than thirty years. Delta subsequently assigned the loan to Wells Fargo as trustee.
The loan contains an arbitration agreement that allows either party to elect binding arbitration as the forum to resolve covered claims. The agreement excludes from arbitration “any action to effect a judicial or non-judicial foreclosure or to establish a deficiency judgment," as well as a number of similar actions. The agreement provides that “[tjhere shall be no right or authority for any Claims to be arbitrated on a class action or class-wide basis.” In respect of costs, the agreement further provides that
[a]t your -written request, we will consider in good faith making a temporary advance of all or part of the filing, administrative and/or hearing fees in connection with any Claim you initiate as to which you or we seek arbitration. At the conclusion of the arbitration, the arbitrator will decide who will ultimately be responsible for paying the filing, administrative and/or hearing fees in connection with the arbitration. Unless inconsistent with applicable law, each party shall bear the expense of that party’s attorneys’, experts’ and witness fees, regardless of which party prevails in the arbitration.
The agreement also provides for an appeal procedure within arbitration and states that “[t]he costs of ... [any such] appeal will be borne by the appealing party regardless of the outcome of the appeal.”
Under the agreement, Harris is permitted to select the American Arbitration Association (AAA), J.A.M.S./Endispute (JAMS), or the National Arbitration Forum (NAF) as the forum for any claim. The agreement also contains a severability clause, which states that “[i]f any portion of this Agreement is deemed invalid or unenforceable under any law or statute consistent with the [Federal Arbitration Act], it shall not invalidate the remaining portions of this Agreement or the Credit Transaction, each of which shall be enforceable regardless of such invalidity.”
*37When Harris, whose only source of income was Social Security payments, was unable to make the required loan payments, Wells Fargo instituted a mortgage foreclosure action in New Jersey Superior Court. Harris responded with an answer and counterclaim, as well as a third-party complaint against Delta, alleging violations of the Truth in Lending Act (TILA), 15 U.S.C.A. §§ 1601 to -67, the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C.A. §§ 2601 to -17, and the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -135. Thereafter, Delta filed a petition in federal district court seeking to compel arbitration of Harris’s affirmative claims against Delta. Harris filed a motion for summary judgment contending that the arbitration agreement was unconscionable and unenforceable. In March 2004, the district court denied that motion for summary judgment and granted Delta’s motion to compel arbitration. Delta Funding Corp. v. Harris, 396 F.Supp.2d 512 (D.N.J.2004). The state court presiding over the foreclosure action then dismissed Harris’s third-party complaint against Delta, which had been held in abeyance.
Harris appealed to the United States Court of Appeals for the Third Circuit. A three-judge panel of the Third Circuit issued a petition order to this Court pursuant to Rule 2:12A-3, in which the panel certified the question: “Is the arbitration agreement at issue in this case, or any provision thereof, unconscionable under New Jersey law, N.J. Stat. Ann. § 12A:2-302, and if so, should such provision or provisions be severed.” Delta Funding Corp. v. Harris, 426 F.3d 671, 675 (3d Cir.2005). Harris submitted a brief urging that we grant certification, but asking that we remove the reference to N.J.S.A. 12A:2-302 because her unconscionability claim is based on the common law. See R. 2:12A-2.
We granted certification, reformulating the question as follows: “Is the arbitration agreement at issue, or any provision thereof, unconscionable under New Jersey law, and, if so, should such provision or provisions be severed?” 185 N.J. 255, 883 A.2d 1055 (2005). Briefs were received from the parties; in addition, numerous groups filed submissions as friends of the court. In support of *38Harris, amici briefs were received from Legal Services of New Jersey, the Attorney General on behalf of the New Jersey Division of Consumer Affairs, the American Civil Liberties Union of New Jersey, the New Jersey Institute for Social Justice, New Jersey Citizen Action, the New Jersey Public Policy Research Institute, the National Association of Consumer Advocates, AARP, the Center For Responsible Lending, and-Seton Hall School of Law Center for Social Justice. The United States Chamber of Commerce, the New Jersey Business and Industry Association, and the American Financial Services Association filed amicus briefs in support of Delta.
II.
We address first the procedural posture of this matter. Because we have been asked by the Third Circuit to answer a discrete question of state law, our inquiry is limited. Under federal arbitration law, it is ordinarily the role of an arbitrator and not the courts to interpret ambiguous provisions of an arbitration agreement. Green Tree Fin.Corp. v. Bazzle, 539 U.S. 444, 451-53, 123 S.Ct. 2402, 2407, 156 L.Ed.2d 414, 422-23 (2003) (plurality opinion); PacifiCare Health Sys., Inc. v. Book, 538 U.S. 401, 406-07, 123 S.Ct. 1531, 1535-36, 155 L.Ed.2d 578, 584 (2003). That general rule is especially applicable where the arbitration agree ment contains “sweeping language concerning the scope of the questions committed to arbitration.” Bazzle, supra, 539 U.S. at 453, 123 S.Ct. at 2407, 156 L.Ed.2d at 423. Most of the disputed provisions in the instant arbitration agreement are, to some degree, ambiguous. To the extent that the unconscionability of those provisions ultimately turns on how the arbitrator resolves the ambiguities, we are unable to determine whether the provisions are, in fact, unconscionable.2 For purposes of answering the question of state law posed by the Third Circuit, we address how *39the ambiguous provisions, if interpreted and applied in a manner detrimental to Harris, could be unconscionable. In doing so, we identify general principles of New Jersey contract law that the Third Circuit and the arbitrator can then apply to the agreement.
III.
In today’s companion decision, Muhammad v. County Bank of Rehoboth Beach, 189 N.J. 1, 28, 912 A.2d 88, 104, 2006 WL 2273448 (2006), we recognized the basic premise that when a party to an arbitration agreement argues that the agreement is unconscionable and unenforceable, that claim is decided based on the same state law principles that apply to contracts generally. The Federal Arbitration Act (FAA), 9 U.S.C.A. §§ 1 to -16, expresses a “liberal federal policy favoring arbitration agreements.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1,24, 103 S.Ct. 927, 941, 74 L.Ed.2d 765, 785 (1983). New Jersey’s public policy similarly favors enforcement of valid agreements to arbitrate. See Martindale v. Sandvik, Inc., 173 N.J. 76, 83-86, 800 A.2d 872 (2002) (citing New Jersey’s Arbitration Act, N.J.S.A. 2A:24-1 to -11). The FAA, however, permits courts to refuse enforcement of an arbitration agreement to the extent “such grounds ... exist at law or in equity for the revocation of any contract.” 9 U.S.C.A. § 2. Generally recognized contract defenses, such as duress, fraud, and unconscionability, can justify judicial refusal to enforce an arbitration agreement. Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 686-87, 116 S.Ct. 1652, 1656, 134 L.Ed.2d 902, 908-09 (1996); Muhammad, supra, 189 N.J. at 12, 912 A.2d at 94; Martindale, supra, 173 N.J. at 85-86, 800 A.2d 872.
The defense of unconscionability, specifically, calls for a fact-sensitive analysis in each case, even when a contract of adhesion is involved. Muhammad, supra, 189 N.J. at 15-16, 912 A.2d at 97. This Court has recognized that contracts of adhesion necessarily involve indicia of procedural unconscionability. Id. at 15, 912 A.2d at 96. We have identified, therefore, four factors as *40deserving of attention when a court is asked to declare a contract of adhesion unenforceable. Rudbart v. N. Jersey Dist. Water Supply Comm’n, 127 N.J. 344, 356, 605 A.2d 681, cert. denied, 506 U.S. 871, 113 S. Ct. 203, 121 L.Ed.2d 145 (1992).
[I]n determining whether to enforce the terms of a contract of adhesion, [we] look[] not only to the take-it-or-leave-it nature or the standardized form of the document but also to [ (1) ] the subject matter of the contract, [ (2) ] the parties’ relative bargaining positions, [ (3) ] the degree of economic compulsion motivating the “adhering” party, and [(4)] the public interests affected by the contract.

UbicL]

The Rudbart factors focus on the procedural and substantive aspects of a contract of adhesion in order to determine whether the contract is so oppressive, Martindale, supra, 173 N.J. at 90, 800 A.2d 872, or inconsistent with the vindication of public policy, Muhammad, supra, 189 N.J. at 25, 912 A.2d at 102, that it would be unconscionable to permit its enforcement. Courts generally have applied a sliding-scale approach to determine overall uneonscionability, considering the relative levels of both procedural and substantive uneonscionability. See Sitogum Holdings, Inc. v. Ropes, 352 N.J.Super. 555, 565-66, 800 A.2d 915 (Ch.Div.2002); see also Muhammad, supra, 189 N.J. at 14 n. 2, 912 A.2d at 96 n. 2 (noting appropriateness of sliding-scale analysis for contracts of adhesion).
In this matter, Harris alleges certain facts surrounding her signing of the contract that suggest a high level of procedural uneonscionability. We do not resolve those disputed facts, nor do we rely on them in deciding the uneonscionability question before us. It is sufficient to note that the arbitration agreement is in a consumer contract of adhesion where Delta, as a financial institution, possessed superior bargaining power and was the more sophisticated party in the transaction. Delta Funding Corp., supra, 396 F.Supp.2d at 516. Although that level of procedural uneonscionability does not, by itself, render the arbitration agreement unenforceable, it must be taken into account as we turn to *41the “public interests affected by the contract.” Rudbart, supra, 127 N.J. at 356, 605 A.2d 681.
TV.
In addition to Harris’s broad assertion that the arbitration agreement as a whole is unconscionable and unenforceable, an argument that we find unpersuasive for reasons explained infra, several discrete provisions of the agreement are alleged to raise uneonscionability concerns because they have the effect of limiting the substantive statutory rights and remedies available to a consumer. Related to that assertion is the claim that it is unconscionable for an arbitration agreement to include a “cost-shifting” provision that allows an arbitrator unfettered discretion to allocate the entire cost of arbitration to a consumer. Because we find that the provisions relevant to those claims can be applied in a manner that is unconscionable and unenforceable under New Jersey law, we address them first in responding to the Third Circuit’s inquiry.
A. Hearing-level costs
The arbitration agreement states that “[a]t the conclusion of the arbitration, the arbitrator will decide who will ultimately be responsible for paying the filing, administrative and/or hearing fees in connection with the arbitration.” It is beyond dispute that Harris would be entitled to costs if she prevailed on her CFA or TILA claims. An award of attorney’s fees and costs to prevailing plaintiffs is mandatory under both statutes. N.J.S.A. 56:8-19; 15 U.S.C.A. § 1640(a)(3). If, however, Harris did not prevail in arbitration (or if she prevailed only on her RESPA claim and the arbitrator declined to make a discretionary award of costs as allowed under RESPA, 12 U.S.C.A. § 2607(d)(5)), then Harris could be forced to bear the entire cost of the arbitration.3
*42It is well understood that fee-shifting provisions can deter a litigant from pursuing a claim. See Dare v. Freefall Adventures, Inc., 349 N.J.Super. 205, 221-24, 793 A.2d 125 (App.Div.) (refusing to enforce mandatory fee-shifting provision against a recreational sports participant), certif. denied, 174 N.J. 43, 803 A.2d 638 (2002); N.J. Coal. of Health Care Prof'ls, Inc. v. N.J. Dep’t of Banking and Ins., Div. of Ins., 323 N.J.Super. 207, 263, 732 A.2d 1063 (App.Div.) (noting that “imposing counsel fees in favor of an insurance company may chill resort to the dispute resolution process”), certif. denied, 162 N.J. 485, 744 A.2d 1208 (1999). The prospect of having to shoulder all the costs of arbitration could chill Harris and similarly situated consumers from pursuing their statutory claims through mandatory arbitration.4 Other courts that have analyzed the allocation of arbitration costs under federal law, have taken into consideration the possible “ ‘chilling effect’ ” that certain cost provisions can have both on an individual claimant and on similarly situated litigants. Morrison v. Circuit City Stores, Inc., 317 F.3d 646, 657-67 (6th Cir.2003) (finding cost-splitting provision unenforceable); see also Scovill v. WSYX/ABC, Sinclair Broad. Group, Inc., 425 F.3d 1012, 1019-21 (6th Cir.2005) (finding cost-shifting provision unenforceable under Morrison).
Although the public policy of our State would permit an arbitration agreement to shift costs and attorney’s fees to a consumer who brings “frivolous” or “bad faith” claims, see N.J.S.A. 2A:15-59.1 (recognizing public policy against frivolous and bad faith litigation and establishing penalties for same), no such limitation is evident in the cost-shifting provision applicable *43to Harris. Delta claims that arbitrators rarely, if ever, shift costs to a consumer. However, contract unconscionability must be decided based on the contract as written because the language of the agreement is what consumers must consider when assessing whether to pursue a statutory-rights claim against Delta.5 Delta drafted the arbitration agreement giving the arbitrator unfettered discretion to shift the entire cost of arbitration to Harris. The agreement as written, and as yet uninterpreted by an arbitrator, could force Harris to bear the risk that she will be required to pay all arbitration costs. That risk is unconscionable in that it is a deterrent to the vindication of her statutory rights.
The fact that, under the agreement’s terms, Delta will consider, in “good faith,” advancing any costs to Harris does not alter our analysis. Even if Delta elected to advance the costs of the arbitration to Harris, the advance is merely a loan. Harris ultimately could still be saddled with the entire cost of arbitration. That creates a substantial and unreasonable deterrent to the vindication of the statutory rights of Harris and others who are *44similarly situated. A contract of adhesion that contains such a term, which effectively would deter the vindication of a consumer’s statutory rights, would be unconscionable and unenforceable if interpreted and applied in the manner described above.
B. Attorney’s fees
Harris’s arbitration agreement states that “[u]nless inconsistent with applicable law, each party shall bear the expense of that party’s attorneys’, experts’ and witness fees, regardless of which party prevails in the arbitration.” “ ‘[B]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral rather than a judicial, forum.’ ” Martindale, supra, 173 N.J. at 93, 800 A.2d 872 (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628, 105 S.Ct. 3346, 3354, 87 L.Ed.2d 444, 456 (1985)). Although this requirement has its genesis in federal arbitration law, it is equally applicable in determining unconscionability under New Jersey law. Just as defendants may not enforce exculpatory waivers that seek a release from a statutorily imposed duty, McCarthy v. NASCAR, Inc., 48 N.J. 539, 543, 226 A.2d 713 (1967), defendants may not limit a consumer’s ability to pursue the statutory remedy of attorney’s fees and costs when it is available to prevailing parties. See Muhammad, supra, 189 N.J. at 19, 912 A.2d at 99 (finding class-arbitration bar that effectively acts as exculpatory waiver unconscionable).
The CFA and TILA provide mandatory attorney’s fees and costs to prevailing parties. Plainly, those remedies are recoverable under Harris’s arbitration agreement. On the other hand, under RESPA whether a prevailing party will be awarded attorney’s fees and costs is discretionary. The arbitration agreement’s clause that requires parties to bear their own fees and costs, no matter who prevails, “[u]nless inconsistent with applicable law,” suggests that the arbitrator may not have the power to award attorney’s fees when that statutory remedy is merely discretion*45ary.6 The possibility of an award of fees to a prevailing party serves to encourage pursuit of RE SPA’s protections. To the extent that this provision in Harris’s consumer contract would prevent her from recovering discretionary attorney’s fees and costs under RESPA, it is unconscionable.
C. Appeal costs
The arbitration agreement states that
if the amount in controversy exceeds $50,000, any party can appeal the award to a three-arbitrator panel administered by the same arbitration administrator which shall reconsider de novo any aspect of the initial award requested by the appealing party____ The costs of such an appeal mil be borne by the appealing party regardless of the outcome of the appeal.
[ (Emphasis added).]
Like the attorney’s fees provision discussed above, the appeals provision is unconscionable to the extent that it would bar Harris from being awarded costs if she prevailed on her appeal.7 If Harris appeals and loses, she has no statutory entitlement to the remedy of costs. As such, the fact that the appeals provision requires her to bear her costs in that circumstance does not abridge Harris’s substantive statutory remedies. To the extent that Harris would be required to incur the entire costs of taking an appeal, however, the appeals provision would be unconscionable. The same conclusion in respect of the unconscionability of the hearing-level costs provision applies to the allocation of costs related to appeals available within the arbitral forum.
D. Post-interpretation by arbitrator
As noted, the arbitration provisions are subject to interpretation, but only by an arbitrator. Once that occurs, if the agreement *46is held to permit the shifting of arbitration costs to Harris, then the unconscionable cost-shifting provision must be severed from the agreement. In that eventuality, Delta, which previously offered to pay all of Harris’s arbitration costs, would be responsible for the entire costs of arbitration. Cf. Jones v. Household Realty Corp., No. C-3-03-280, 2003 WL 23750601, *5-6, 2003 U.S. Dist. LEXIS 25882 (S.D.Ohio Dec. 17, 2003) (slip op. at *16-18) (finding cost-splitting provision to be unconscionable and severing offending provision). In Jones, the court similarly ordered the defendant to pay “the entire cost of arbitration” based, in part, on the defendant’s stipulated offer to pay such costs. Id. at *6, 2003 U.S. Dist. LEXIS at *17. Because a severance of the potentially cost-shifting provision from Harris’s agreement will not result in a cost-splitting arrangement, we need not address whether a cost-splitting arrangement would be unconscionable. We do, however, note the concerns that courts have expressed over cost-splitting arrangements. See Morrison, supra, 317 F.3d at 657-67.
That said, if an arbitrator were to interpret all of the disputed provisions in a manner that would render them unconscionable, we have no doubt that those provisions could be severed and that the remainder of the arbitration agreement would be capable of enforcement. The arbitration agreement’s broad severability clause supports that result.
V.
Harris advances several other arguments in support of her claim of unconscionability. We dispense with those arguments, beginning with her criticism of the class-arbitration waiver, and then addressing her broad-based challenges that are, in our view, essentially attacks on the general nature of arbitration.
A.
In respect of the arbitration agreement’s class-arbitration waiver, we note initially that Harris is not even seeking to bring a class claim. Furthermore, under New Jersey law, the *47class-arbitration waiver in her arbitration agreement is not unconscionable per se. In Muhammad, supra, we found a class-arbitration waiver unconscionable in the context of low-value consumer claims. 189 N.J. at 19-20, 912 A.2d at 99. Muhammad is distinguishable from the instant case, as Harris is seeking more than $100,000 in damages, and it is unclear whether that includes application of statutory multipliers. The plaintiffs potential damages in Muhammad, supra, including statutory damage multipliers, totaled less than $600 in a complicated matter. 189 N.J. at 21-22, 912 A.2d at 100. Harris’s claim is not the type of low-value suit that would not be litigated absent the availability of a class proceeding. Harris has adequate incentive to bring her claim as an individual action. Not only are her damages substantial, but the fact that her home is at stake in the foreclosure proceeding makes it likely that she would contact an attorney. The same cannot be said of low-value claims where individuals have little, if any, incentive to seek out an attorney. Moreover, all of the statutes under which Harris seeks relief provide for attorney’s fees and costs to prevailing plaintiffs. Those remedies, in combination’with the substantial damages that Harris seeks, render the class-arbitration waiver enforceable in the context of this litigation. See Muhammad, supra, 189 N.J. at 21 n. 5, 912 A.2d at 100 (directing courts to consider the availability of attorney’s fees when “substantial damages” are at stake).
B.
The arbitration agreement excludes any foreclosure actions that may be brought against Harris. Thus, foreclosure must proceed in court pursuant to the arbitration agreement. Indeed, that is hardly surprising in that the foreclosure of mortgages is a uniquely judicial process. “The broad statutory framework set forth in N.J.S.A. 2A:50-1 to -68, establishes the basis for foreclosure of mortgages.” Highland Lakes Country Club & Cmty. Ass’n v. Franzino, 186 N.J. 99, 106 n. 2, 892 A.2d 646 (2006); see also R. 4:64-1 to -8 (establishing rules specific to foreclosure *48proceedings including R. 4:64-5’s limitation on joinder of claims in foreclosure). Although Harris is able to raise potential defenses against Wells Fargo, the foreclosing party, in the foreclosure proceeding, as a result of the arbitration agreement she is forced to bring her third-party counterclaims against Delta in arbitration. Harris’s defenses to the foreclosure action track her affirmative claims against Delta; thus, she is forced to litigate those substantively similar claims in two different forums. That result is burdensome; however, it is not unconscionable.8
Other courts that have found similar provisions not unconscionable have noted the unique nature of the judicial remedies of foreclosure and similar actions. See Walther v. Sovereign Bank, 386 Md. 412, 872 A.2d 735, 749 (2005) (stating that “foreclosure proceedings ... do not act solely to protect the interests of the mortgage lender against a defaulting debtor but instead provide protections for both sides.”); see also Conseco Fin. Servicing Corp. v. Wilder, 47 S.W.3d 335, 343 (Ky.Ct.App.2001) (stating that claims involving security interests “have come to be heavily regulated by statute, allowing for streamlined procedures and effective protections for both sides.”) (footnote omitted); Lackey v. Green Tree Fin. Corp., 330 S.C. 388, 498 S.E.2d 898, 905 (S.C.Ct.App. 1998) (stating that “Qjudicial remedies for the recovery of property, such as the replevin action, and the foreclosure action, provide specific procedures for protection of collateral and the parties during the pendency of the proceedings. These protections relate to both parties, and are facilitated by the enforcement procedures specified in the law.”) (footnote omitted). We acknowledge that *49contrary determinations have been reached by other courts. See, e.g., Taylor v. Butler, 142 S.W.3d 277, 284-87 (Tenn.2004), cert. denied, 543 U.S. 1147, 125 S.Ct. 1304, 161 L.Ed.2d 108 (2005); Wis. Auto Title Loans, Inc. v. Jones, 714 N.W.2d 155, 171-74 (Wis.2006).
Harris’s burden of having to litigate in two forums is alleviated by the fact that attorney’s fees and costs are available to Harris under the CFA if she successfully asserts CFA-based defenses in the foreclosure action. As the district court observed, the Appellate Division has stated that “for the purposes of eligibility for payment of reasonable attorneys’ fees and costs, the [CFA] makes no distinction between a person who raises the Act’s provisions in an affirmative claim and one who pleads it as a defense,” BJM Insulation & Constr., Inc., 287 N.J.Super. 513, 516, 671 A.2d 603 (App.Div.1996). Although we do not address whether attorney’s fees and costs would be available in all contexts where the CFA is raised as a defense, we find the Appellate Division’s analysis relevant here. Because of the arbitration clause, Harris is compelled to litigate essentially identical CFA claims in court and in arbitration. In that circumstance, Harris should, under N.J.S.A. 56:8-19, be eligible for attorney’s fees and costs related to the foreclosure proceeding if she successfully asserts defenses based on the CFA in that proceeding.
C.
Finally, we note Harris’s argument that other clauses of the arbitration agreement are unconscionable, specifically the discovery and confidentiality provisions. She also contends that it is unconscionable for an arbitration agreement not to require a record of the proceedings or a reasoned and publicly available award. These claims are, at their core, a form of generalized attack on arbitration as a method of dispute resolution. As such, they are not persuasive.
*50Briefly, it is noteworthy that neither the arbitration agreement,9 nor the rules of the potential arbitration administrators, prevent Harris from obtaining a record of the proceeding or a reasoned award. Both a written award and a record of the proceedings may be obtained upon request of one of the parties. Under the rules of the various administrators, the party seeking the written award or record may be required to pay for such request. Under our approach to costs outlined above, a question may arise as to the continued viability of the cost provisions related to written-award or record requests as applied against litigants such as Harris. Because it is unclear how the arbitrator will ultimately interpret the broad cost allocation provisions of the arbitration agreement, we need not address any specific cost provisions set out in the rules of various arbitration administrators at this time.
Finally, there is nothing in either the arbitration clause or the rules of the three arbitration administrators requiring that arbitration awards be kept confidential. It is not unconscionable to require that the proceedings before the arbitrator be kept confidential when the arbitrator’s written award is not required to be kept confidential.
In conclusion, we add that to the extent that Harris advances other specific arguments in support of her claim of unconscionability, we reject those arguments, including her argument that the arbitration clause should be declared cumulatively unconscionable.
VI.
In describing the arbitration provisions, the Court does not express a view on how an arbitrator will interpret the provisions. We intend only to answer the certified question of law before us based on the limited record presented. Our assumptions as to possible interpretations of the disputed contract terms were neces*51sary in order to address the uneonscionability issues presented by the certified question..

 Harris and the amici who support her in this matter contend that there was substantial procedural unconscionability in this contract's formation. They *36assert that Harris was presented with the arbitration agreement as part of many pages of mortgage documents that were brought to her home for signature at ten o'clock one evening. We do not attempt to resolve this or other factual disputes between the parties.

 The arbitration agreement covers any claims involving "the validity, enforceability or scope of this [arbitration] Agreement." (Emphasis added).

 Delta argues that if Harris brought her claim in the JAMS arbitration forum, the JAMS Policy on Consumer Arbitrations would shield her from incurring any *42more than $125 in arbitration costs. The application and interpretation of the JAMS policy is for the arbitrator to decide.

 That said, the Appellate Division has enforced the customary provisions in mortgage notes that allow a lender, upon default, to recover from a borrower the costs of collection, including attorney's fees. Hatch v. T & L Assocs., 319 N.J.Super. 644, 645, 647, 726 A.2d 308 (App.Div.1999). That situation is distinguishable from a contract in which a consumer asserting affirmative statutory claims may be required to bear the entire costs of arbitration.

 According to Delta, we need not scrutinize the cost provisions of the arbitration agreement because it has offered to pay all of Harris’s arbitration costs, thereby mooting any potential cost issues. We find that argument unpersuasive. As the Sixth Circuit has explained,
[i]n considering the ability of plaintiffs to pay arbitration costs under an arbitration agreement, reviewing courts should not consider after-the-fact offers by employers to pay the plaintiff’s share of the arbitration costs where the agreement itself provides that the plaintiff is liable, at least potentially, for arbitration fees and costs. The reason for this rule should be obvious. Our concern is that cost-splitting provisions will deter potential litigants from bringing their statutory claims in the arbitral forum. When the cost-splitting provision is in the arbitration agreement, potential litigants who read the arbitration agreement will discover that they will be liable, potentially, for fees if they bring their claim in the arbitral forum and thus may be deterred from doing so. Because the employer drafted the arbitration agreement, the employer is saddled with the consequences of the provision as drafted. If the provision, as drafted, would deter potential litigants, then it is unenforceable, regardless of whether, in a particular case, the employer agrees to pay a particular litigant’s share of the fees and costs to avoid such a holding.
[Morrison, supra, 317 F.3d at 676-77.]

 Under a different interpretation of this language, an arbitrator who refuses to consider granting a discretionary award of fees and costs to a party prevailing under RESPA would be acting "inconsistent with applicable law."

 Delta counters that because the arbitration agreement requires the arbitrator to "apply applicable substantive law,” the appeals cost provision does not bar an arbitrator from awarding Harris costs if she prevails on appeal.

 The same conclusion was reached in Cunningham v. Citigroup, No. 05-3476, 2005 WL 3454312, *5-6, 2005 U.S. Dist. LEXIS 33805 (D.N.J. Dec. 16, 2005) (slip op. at *16). In a well-reasoned analysis, the court in Cunningham noted that because "the right to pursue a foreclosure action can only be done through the court system, [an arbitration agreement exempting foreclosure proceedings from arbitration] is more a practical recognition of the limitations of the arbital [sic] forum rather than an unconscionable provision [under New Jersey law].” Ibid.

 The arbitration clause states that “at the timely request of either party, [the arbitrator] shall provide a brief written explanation of the basis for the award."