The arbitration agreements require Plaintiffs to arbitrate any and all claims they may have against Defendant. Defendant, however, is allowed to bypass arbitration altogether and proceed through the court system with regard to any claims against Plaintiffs “to enforce” Plaintiffs’ “payment obligation, in the event of default”. 3 In other words, Defendant can file a lawsuit and refuse to arbitrate any claim based on Plaintiffs’ failure to do the one thing they agreed to do in the contract, i.e., pay a certain amount by a specified date.

Wisconsin Auto Title Loans has by the arbitration provision “saved and excepted” from binding arbitration all its disputes, controversies, and claims against the borrower

In Wisconsin Auto Title Loans, Inc. v. Jones, 714 N.W.2d 155 (Wis.2006), the Wisconsin Supreme Court was confronted with an arbitration clause very similar to the arbitration clause in the present case. The Wisconsin Supreme Court concluded that the arbitration clause was unconscionable, stating:

That Wisconsin Auto Title Loans has chosen to bring only a replevin action in the circuit court in the instant case is of no moment

The arbitration provision in the loan agreement broadly proclaims that any and all disputes, controversies, or claims between Wisconsin Auto Title Loans (or its employees or affiliates) and the borrower-whether pre-existing, present, or future-arising out of the loan agreement must be decided by binding arbitration. A parenthetical phrase “save[s] and except[s]” from binding arbitration Wisconsin Auto Title Loans’ “right to enforce the borrower’s payment obligations in the event of default, by judicial or other process, including self-help repossession.”

Stat. §§ , , and , which limit non-judicial enforcement of actions to take possession of collateral. Wisconsin Auto Title Loans argues that these statutes protect consumers, not lenders. Thus, Wisconsin Auto Title Loans argues that the exception in the arbitration provision requiring that possession of collateral be taken in circuit court actually benefits the borrower. We are not convinced by this justification of the one-sided arbitration provision.

The “save and except” parenthetical in the arbitration provision exempting Wisconsin Auto Title Loans from binding arbitration extends further than allowing Wisconsin Auto Title Loans to bring a replevin action in circuit court. Not only may Wisconsin Auto Title Loans use a circuit court to replevy the loan collateral (the borrower’s automobile), but the arbitration provision also allows Wisconsin Auto Title Loans to go to circuit court to enforce the borrower’s payment obligations in the event of default.

Wisconsin Auto Title Loans could, under the exception to the arbitration provision, use a circuit court to obtain a deficiency judgment. Wisconsin Auto Title Loans is also permitted by the exception to use any other procedure that a lender might pursue to satisfy the borrower’s obligation under the loan agreement. In contrast, the arbitration provision relegates all the borrower’s claims to arbitration. The borrower is required to submit all his disputes, controversies, and claims against Wisconsin Auto Title Loans to binding arbitration.

The issue is the substantive unconscionability of the arbitration provision, which “saves and excepts” all claims of Wisconsin Auto Title Loans from arbitration.

The exception to the arbitration provision is far too broad and one-sided, granting Wisconsin Auto Title Loans a choice of forum-arbitration or the circuit court-for its claims, while permitting the borrower to raise claims only before an arbitrator. The doctrine of substantive unconscionability limits the extent to which a stronger party to a contract may impose arbitration on the weaker party without accepting the arbitration forum for itself?

While we appreciate that a one-sided arbitration provision may not be unconscionable under the facts of all cases, we conclude that the overly one-sidedness of the arbitration provision at issue in the instant case renders the arbitration provision substantively unconscionable. Many courts have reached a similar conclusion of unconscionability when one-sided arbitration provisions require the weaker party to arbitrate.