Costs on appeal are taxed to the Appellee, Tennessee Title Loans, Inc

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Costs on appeal are taxed to the Appellee, Tennessee Title Loans, Inc

Defendant correctly notes that several jurisdictions have reached conclusions different from the result reached by the Tennessee Supreme Court in Taylor v. Butler. Defendant argues that the Taylor decision was not sound and urges this Court to side with those jurisdictions reaching conclusions contrary to Taylor. Specifically, Defendant argues that “the fundamental legal soundness of Taylor must be seriously questioned”; that “the Taylor decision suffers from an obvious practical flaw”; that Taylor suffers from inherent “legal and logical weaknesses”; and finally that Taylor is just wrong because it failed to apply “federal law on the issue of arbitrability.” This Court, however, is not at liberty to reverse decisions of our Supreme Court. If Defendant believes Taylor was wrongly decided, that argument needs to be directed to the Supreme Court.

Wisconsin Auto Title Loans, Inc

We conclude that the arbitration clause at issue in the present case falls squarely within the reasoning of the majority opinion in Taylor v. Butler, supra. The arbitration clause, therefore, is unconscionable and unenforceable. Accordingly, the Trial Court erred when it granted Defendant’s motion to compel arbitration.

The judgment of the Trial Court is reversed and this cause is remanded to the Trial Court for further proceedings consistent with this Opinion and for collection of the costs below.

1. A minority of courts reach the opposite conclusion, holding that agreements to arbitrate which reserve certain judicial remedies to one party are not unconscionable. See e.g., Stout v. J.D. Byrider, 228 F.3d 709 (6th Cir.2000) (upholding an arbitration agreement which exempted from arbitration disputes regarding buyer’s failure to pay because buyer failed to show the agreement to be one of adhesion or sufficiently one-sided as to be unconscionable); Conseco Fin. Serv. Corp. v. Wilder, 47 S.W.3d 335 (Ky.Ct.App.2001) (holding that the arbitration agreement was not unconscionable even [though] it allowed the lender to pursue judicial enforcement of the security agreement). We find the majority view to be more persuasive.

2. The Title installment loans in Wyoming Pledge Agreement indicated that the percentage rate for the interest and fees, stated at a yearly rate, was “%.”

3. It is not clear what is meant by enforcing Plaintiffs’ “payment obligation, in the event of default”. This language certainly would include a lawsuit for monetary damages and likely also would include an action by Defendant to gain possession of the vehicle upon default. In any event, the relevant language unquestionably encompasses at least one and most likely all of Defendant’s primary avenues of available relief in the event of default.

Therefore, the Court has given consideration to the elements of Rule 9 of the Tennessee Rules of Appellate Procedure? [After giving] consideration to these matters, it is the findings of this Court that

While Tennessee has yet to address the issue of whether an arbitration provision in a consumer contract which reserves a right to access to the courts only for the merchant and not the consumer is voidable on the basis of unconscionability, a number of other jurisdictions have addressed such one-sided arbitration provisions.

When entering into the title pledge agreements, Plaintiffs in the present case essentially pledged the title to their vehicles in return for a loan

Upon payment of the amount of the loan, plus interest and the “redemption premium fee,” Plaintiffs would regain title to their vehicles. For example, Plaintiff Dawn Brown borrowed $2, and pledged the title to her vehicle as security. Within thirty days, Brown could redeem her vehicle for the amount of the loan, i.e., $2,, plus an additional $, which represented interest and the “redemption premium fee.” 2 Brown’s only obligation under the agreement if she wanted to keep her vehicle was to pay the $2, within 30 days. According to the agreement, Brown was “pledging the above motor vehicle ? by delivering the Certificate of Title for the vehicle on the condition that it may be redeemed for a fixed price within a stated period of time.” The agreement also stated that Brown could “redeem the vehicle upon paying the Total of Payments at any time within the respective period.”

, 714 N.W.2d at 172-73 (footnotes and paragraph numbering omitted). The Wisconsin Supreme Court then cited numerous cases, including Taylor v. Butler, supra, which have held that one-sided arbitration clauses which allow the party drafting the agreement access to the judicial arena but which relegate the consumer solely to arbitration were unconscionable. See , 714 N.W.2d at 173 n. 56.

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