SER Ocwen Loan Servicing v. Hon. Carrie Webster, Judge

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA

September 2013 Term

FILED
November 13, 2013
No. 13-0151 released at 3:00 p.m.
RORY L. PERRY II, CLERK
SUPREME COURT OF APPEALS
OF WEST VIRGINIA

STATE OF WEST VIRGINIA ex rel.

OCWEN LOAN SERVICING, LLC,

Petitioner

V.

THE HONORABLE CARRIE WEBSTER,

JUDGE OF THE CIRCUIT COURT OF

KANAWHA COUNTY, WEST VIRGINIA;

ROBERT L. CURRY AND TINA M. CURRY, INDIVIDUALLY,

AND ON BEHALF OF A SIMILARLY SITUATED CLASS,

Respondents

Petition for a Writ of Prohibition

WRIT GRANTED

Submitted: September 25, 2013

Filed: November 13, 2013

Mychal Sommer Schulz John W. Barrett
Arie M. Spitz Jonathan Marshall
Dinsmore & Shohl LLP Michael B. Hissam
Charleston, West Virginia Bailey & Glasser LLP
Attorneys for the Petitioner Charleston, West Virginia
Attorneys for the Respondents

The Opinion of the Court was delivered PER CURIAM.
 SYLLABUS BY THE COURT

1. “The purpose of the Federal Arbitration Act, 9 U.S.C. § 2, is for courts

to treat arbitration agreements like any other contract. The Act does not favor or elevate

arbitration agreements to a level of importance above all other contracts; it simply ensures

that private agreements to arbitrate are enforced according to their terms.” Syllabus point 7,

Brown v. Genesis Healthcare Corp., 228 W. Va. 646, 724 S.E.2d 250 (2011), overruled on

other grounds by Marmet Health Care Center, Inc. v. Brown, ___ U.S. ___, 132 S. Ct. 1201,

182 L. Ed. 2d 42 (2012) (per curiam).

2. “Under the Federal Arbitration Act, 9 U.S.C. § 2, a written provision

to settle by arbitration a controversy arising out of a contract that evidences a transaction

affecting interstate commerce is valid, irrevocable, and enforceable, unless the provision is

found to be invalid, revocable or unenforceable upon a ground that exists at law or in equity

for the revocation of any contract.” Syllabus point 6, Brown v. Genesis Healthcare Corp.,

228 W. Va. 646, 724 S.E.2d 250 (2011), overruled on other grounds by Marmet Health Care

Center, Inc. v. Brown, ___ U.S. ___, 132 S. Ct. 1201, 182 L. Ed. 2d 42 (2012) (per curiam).

3. “‘A contract term is unenforceable if it is both procedurally and

substantively unconscionable. However, both need not be present to the same degree.

i
Courts should apply a “sliding scale” in making this determination: the more substantively

oppressive the contract term, the less evidence of procedural unconscionability is required

to come to the conclusion that the clause is unenforceable, and vice versa.’ Syllabus Point

20, Brown v. Genesis Healthcare Corp., 228 W. Va. 646, 724 S.E.2d 250 (2011)[, overruled

in part on other grounds by Marmet Health Care Center, Inc. v. Brown, ___ U.S. ___, 132

S. Ct. 1201, 182 L. Ed.2d 42 (2012) (per curiam)].” Syllabus point 9, Brown v. Genesis

Healthcare Corp., 229 W. Va. 382, 729 S.E.2d 217 (2012).

4. “‘The doctrine of unconscionability means that, because of an overall

and gross imbalance, one-sidedness or lop-sidedness in a contract, a court may be justified

in refusing to enforce the contract as written. The concept of unconscionability must be

applied in a flexible manner, taking into consideration all of the facts and circumstances of

a particular case.’ Syllabus Point 12, Brown v. Genesis Healthcare Corp., 228 W. Va. 646,

724 S.E.2d 250 (2011)[, overruled in part on other grounds by Marmet Health Care Center,

Inc. v. Brown, ___ U.S. ___, 132 S. Ct. 1201, 182 L. Ed.2d 42 (2012) (per curiam)].”

Syllabus point 4, Brown v. Genesis Healthcare Corp., 229 W. Va. 382, 729 S.E.2d 217

(2012).

5. “‘A contract of adhesion is one drafted and imposed by a party of

superior strength that leaves the subscribing party little or no opportunity to alter the

ii
substantive terms, and only the opportunity to adhere to the contract or reject it. A contract

of adhesion should receive greater scrutiny than a contract with bargained-for terms to

determine if it imposes terms that are oppressive, unconscionable or beyond the reasonable

expectations of an ordinary person.’ Syllabus Point 18, Brown v. Genesis Healthcare Corp.,

228 W. Va. 646, 724 S.E.2d 250 (2011)[, overruled in part on other grounds by Marmet

Health Care Center, Inc. v. Brown, ___ U.S. ___, 132 S. Ct. 1201, 182 L. Ed. 2d 42 (2012)

(per curiam)].” Syllabus point 11, Brown v. Genesis Healthcare Corp., 229 W. Va. 382, 729

S.E.2d 217 (2012).

6. “Procedural unconscionability is concerned with inequities,

improprieties, or unfairness in the bargaining process and formation of the contract.

Procedural unconscionability involves a variety of inadequacies that results in the lack of a

real and voluntary meeting of the minds of the parties, considering all the circumstances

surrounding the transaction. These inadequacies include, but are not limited to, the age,

literacy, or lack of sophistication of a party; hidden or unduly complex contract terms; the

adhesive nature of the contract; and the manner and setting in which the contract was formed,

including whether each party had a reasonable opportunity to understand the terms of the

contract.” Syllabus point 17, Brown v. Genesis Healthcare Corp., 228 W. Va. 646, 724

S.E.2d 250 (2011), overruled on other grounds by Marmet Health Care Center, Inc. v.

Brown, ___ U.S. ___, 132 S. Ct. 1201, 182 L. Ed. 2d 42 (2012) (per curiam).

iii
 7. “‘Substantive unconscionability involves unfairness in the contract itself

and whether a contract term is one-sided and will have an overly harsh effect on the

disadvantaged party. The factors to be weighed in assessing substantive unconscionability

vary with the content of the agreement. Generally, courts should consider the commercial

reasonableness of the contract terms, the purpose and effect of the terms, the allocation of

the risks between the parties, and public policy concerns.’ Syllabus Point 19, Brown v.

Genesis Healthcare Corp., 228 W. Va. 646, 724 S.E.2d 250 (2011)[, overruled in part on

other grounds by Marmet Health Care Center, Inc. v. Brown, ___ U.S. ___, 132 S. Ct. 1201,

182 L. Ed. 2d 42 (2012) (per curiam)].” Syllabus point 12, Brown v. Genesis Healthcare

Corp., 229 W. Va. 382, 729 S.E.2d 217 (2012).

8. “‘As a general rule each litigant bears his or her own attorney’s fees

absent a contrary rule of court or express statutory or contractual authority for

reimbursement.’ Syl. Pt. 2, Sally–Mike Properties v. Yokum, 179 W. Va. 48, 365 S.E.2d 246

(1986).” Syllabus point 2, State ex rel. Hicks v. Bailey, 227 W. Va. 448, 711 S.E.2d 270

(2011).

9. “In assessing whether a contract provision is substantively

unconscionable, a court may consider whether the provision lacks mutuality of obligation.

If a provision creates a disparity in the rights of the contracting parties such that it is

iv
one-sided and unreasonably favorable to one party, then a court may find the provision is

substantively unconscionable.” Syllabus point 10, Dan Ryan Builders, Inc. v. Nelson, 230

W. Va. 281, 737 S.E.2d 550 (2012).

10. “A court in its equity powers is charged with the discretion to determine,

on a case-by-case basis, whether a contract provision is so harsh and overly unfair that it

should not be enforced under the doctrine of unconscionability.” Syllabus point 9, Dan Ryan

Builders, Inc. v. Nelson, 230 W. Va. 281, 737 S.E.2d 550 (2012).

v
Per Curiam:

In this proceeding seeking a writ of prohibition, the petitioner, Ocwen Loan

Servicing, LLC (“Ocwen”), asks this Court to prevent the circuit court of Kanawha County

from enforcing its order that denied Ocwen’s “Motion to Compel Individual Arbitration and

Dismiss, or Alternatively, Stay Matter.” In denying Ocwen’s motion, the circuit court first

concluded that the arbitration agreement was unenforceable under a provision of the Dodd-

Frank Act that proscribes the inclusion of arbitration agreements in connection with

residential mortgage loans. See 15 U.S.C. § 1639c(e)(1) (2010) (Cum. Ann. Pocket Pt.

2013). Additionally, the circuit court found the arbitration agreement to be both procedurally

and substantively unconscionable on various grounds. After considering the briefs and

appendix record submitted on appeal, oral arguments presented by the parties and the

relevant law, we conclude that the Dodd-Frank Act does not apply to a mortgage loan

executed prior to its enactment. In addition, we find the arbitration agreement is neither

procedurally nor substantively unconscionable. For these reasons, we grant the requested

writ.

I.

FACTUAL AND PROCEDURAL HISTORY

In October 2006, Respondents Robert and Tina Curry (“the Currys”) obtained

an adjustable rate mortgage loan from Saxon Mortgage, Inc. In connection with the loan, the

1

Currys executed a deed of trust on the real property being purchased and separately executed

an arbitration rider. The arbitration rider stated that it was “incorporated into and shall be

deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed.”

Petitioner Ocwen Loan Servicing, LLC (hereinafter “Ocwen”), ultimately

began servicing the Currys’ home mortgage loan. After the Currys apparently defaulted on

the loan, Ocwen assessed a number of fees including: (1) a “statutory mailings” fee of

$210.94; (2) a “skip trace/search” charge of $50.00; (3) an “FC thru service” charge of

$550.00; and (4) a “title report fee” of $300.00.

In November 2011, the Currys filed a complaint against Ocwen in the circuit

court of Kanawha County alleging violations of the West Virginia Consumer Credit and

Protection Act. The action was brought on the Currys’ own behalf and as a putative class

action.1 Ocwen responded by filing a “Motion to Compel Individual Arbitration and

Dismiss, or Alternatively, Stay Matter” in January 2012. The Currys filed an opposing

motion and Ocwen filed a reply. Thereafter, the circuit court held a hearing in February

1
In that action, the Currys asserted three claims related to Ocwen’s assessment
of allegedly unlawful fees in connection with its servicing of loans. First, the Currys claim
that Ocwen threatened to charge debt-collection expenses in violation of West Virginia Code
§§ 46A-2-115(s), 127(g) and 128(c). Second, they claim that Ocwen falsely represented the
amount of its claims against the Currys and others in violation of West Virginia Code § 46A­
2-127(d). And finally, they claim that Ocwen attempted to collect attorney’s fees in violation
of West Virginia Code § 46A-2-127(g). The relief sought by the Currys includes civil
penalties, actual damages, compensatory damages, interest, and attorney’s fees and costs.

2

2012. On January 7, 2013, the circuit court entered an order denying Ocwen’s motion based

upon that court’s conclusions that the arbitration agreement is unenforceable under the Dodd-

Frank Act or, alternatively, that it is unconscionable under West Virginia law. Ocwen then

filed the instant petition for writ of prohibition on February 20, 2013, seeking to prevent

enforcement of the circuit court’s January 7, 2013 order. On April 10, 2013, this Court

issued a rule to show cause. We now grant the requested writ.

II.

STANDARD OF REVIEW

Ocwen comes to this Court seeking a writ of prohibition to prevent the circuit

court from enforcing an order that denied Ocwen’s motion to compel arbitration. With

regard to the extraordinary remedy of a writ of prohibition, this Court has explained that “[a]

writ of prohibition will not issue to prevent a simple abuse of discretion by a trial court. It

will only issue where the trial court has no jurisdiction or having such jurisdiction exceeds

its legitimate powers. W. Va. Code, 53-1-1.” Syl. pt. 2, State ex rel. Peacher v. Sencindiver,

160 W. Va. 314, 233 S.E.2d 425 (1977). We have, however, observed that “[a] petition for

a writ of prohibition is an appropriate method to obtain review by this Court of a circuit

court’s decision to deny or compel arbitration.” State ex rel. Johnson Controls, Inc. v.

Tucker, 229 W. Va. 486, 492, 729 S.E.2d 808, 814 (2012).2 Five factors will be considered

2
We recently have held that “[a]n order denying a motion to compel arbitration
(continued...)

3

in a case such as this where it is alleged that the circuit court exceeded its legitimate powers:

In determining whether to entertain and issue the writ of
prohibition for cases not involving an absence of jurisdiction but
only where it is claimed that the lower tribunal exceeded its
legitimate powers, this Court will examine five factors: (1)
whether the party seeking the writ has no other adequate means,
such as direct appeal, to obtain the desired relief; (2) whether the
petitioner will be damaged or prejudiced in a way that is not
correctable on appeal; (3) whether the lower tribunal’s order is
clearly erroneous as a matter of law; (4) whether the lower
tribunal’s order is an oft repeated error or manifests persistent
disregard for either procedural or substantive law; and (5)
whether the lower tribunal’s order raises new and important
problems or issues of law of first impression. These factors are
general guidelines that serve as a useful starting point for
determining whether a discretionary writ of prohibition should
issue. Although all five factors need not be satisfied, it is clear
that the third factor, the existence of clear error as a matter of
law, should be given substantial weight.

Syl. pt. 4, State ex rel. Hoover v. Berger, 199 W. Va. 12, 483 S.E.2d 12 (1996). Our

consideration of this original jurisdiction proceeding will be guided by the foregoing

principals.

III.

DISCUSSION

The two grounds upon which Ocwen urges this Court to grant the requested

2
(...continued)
is an interlocutory ruling which is subject to immediate appeal under the collateral order
doctrine.” Syl. pt. 1, Credit Acceptance Corp. v. Front, 231 W. Va. 518, 745 S.E.2d 556
(2013).

4

writ of prohibition are that the circuit court erroneously applied the Dodd-Frank Act to the

Currys’ mortgage, and that the circuit court wrongly found that the arbitration agreement was

unconscionable. We address each issue in turn.

A. Applicability of Dodd-Frank Act

In denying Ocwen’s Motion to Compel Arbitration, the circuit court ruled, in

part, that the arbitration agreement was unenforceable under the Dodd-Frank Act. The

Dodd-Frank Act provides, in relevant part, that:

No residential mortgage loan and no extension of credit
under an open end consumer credit plan secured by the principal
dwelling of the consumer may include terms which require
arbitration or any other nonjudicial procedure as the method for
resolving any controversy or settling any claims arising out of
the transaction.

15 U.S.C. § 1639c(e)(1).

The first issue before this Court in determining whether to grant prohibition

is whether the Dodd-Frank Act applies to invalidate an arbitration agreement executed in

2006, when the general effective date of the Act was July 22, 2010, and some provisions did

not become effective until a later date.3

3
The circuit court found that the above quoted provision of the Dodd-Frank Act
took effect on July 22, 2010, the general effective date of the Dodd-Frank Act. In this
regard, the circuit court explained:

(continued...)

5

 3
(...continued)
The Dodd-Frank Act took effect on July 22, 2010. See
Pub. L. No. 111-203, 124 Stat. 1390, § 4 (general effective
date). Section 1414 of the Dodd-Frank Act – the provision
banning mandatory arbitration clauses in residential home
loans – was part of Title XIV of the Act, which contains several
amendments to the Truth in Lending Act. Title XIV has a
separate effective date provision, § 1400(c), that only applies to
those portions of Title XIV that require administrative
regulations to be implemented. This special effective date
provision reflects the fact that Title XIV envisions a broad new
swath of regulations, including regulations issued by a new
agency created by the Dodd-Frank Act, the Consumer Finance
Protection Bureau (CFPB). See Congressional Research
Service, Rulemaking Requirements and Authorities in the Dodd-
Frank Wall Street Reform and Consumer Protection Act at 54­
57, 85-87 (Nov. 3, 2010) (listing 28 different sections in Title
XIV that either require or permit regulations). Section
1414 – the provision at issue here – is a notable exception
because it does not require any regulations to be promulgated.
In fact, unlike the 28 different sections in Title XIV that
mandate or discuss rulemaking, §1414 never mentions any
regulations. The Court therefore concludes that §1414’s
effective date is governed by the Dodd-Frank Act’s general
effective date, not §1400(c). Section 1414 thus took effect on
July 22, 2010.

Ocwen, on the other hand, argues that the relevant provision of the Dodd-Frank
Act did not become effective until January 21, 2013, at the earliest. In this regard, Ocwen
opines that

[s]ection 1414 of the Dodd-Frank Act was enacted as part
of Title XIV of the Act. Title XIV, entitled the Mortgage
Reform and Anti-Predatory Lending Act (see Dodd-Frank Act
§ 1400), contains an express provision establishing when its
amendments become effective. Subsections (c)(2) and (c)(3) of
Section 1400 specifically provide as follows:

(continued...)

6

 3
(...continued)
(c) REGULATIONS; EFFECTIVE DATE. . .

....

(2) EFFECTIVE DATE ESTABLISHED BY
RULE-Except as provided in paragraph (3), a
section, or provision thereof, of this title shall
take effect on the date on which the final
regulations implementing such section, or
provision, take effect.

(3) EFFECTIVE DATE -A section of this title
for which regulations have not been issued on the
date that is 18 months after the designated
transfer date shall take effect on such date.

Id. (emphasis added).

The “designated transfer date” set forth in the Act (see
Dodd-Frank Act § 1062) was July 21, 2011. See 75 Fed. Reg.
57252,57,253 (Sept. 20, 2010). As such, the provisions of
Section 1414 of the Dodd-Frank Act (and all of Title XIV) were
scheduled [to] take effect on one of two possible dates: (1) the
date of “implementation” pursuant to the issuance of “final
regulations;” or (2) if no regulations are issued, the date “18
months after the designated transfer date,” or January 21, 2013.
See Dodd-Frank Act § 1400(c). As of the date of the entry of
the Circuit Court’s Order, no final regulations implementing
Section 1414’s pre-dispute arbitration agreement provision had
been promulgated. As such, Section 1414’s provision regarding
predispute arbitration agreements did not become effective until
January 21, 2013, at the earliest.

(Footnote omitted). Because of the manner in which we resolve this issue, it is not necessary
for us to determine the specific effective date of Section 1414 of the Dodd-Frank Act, which
is codified at 15 U.S.C. § 1639c.

7

 Petitioner Ocwen argues that the Dodd-Frank Act does not preclude

enforcement of arbitration agreements entered into prior to its enactment. Respondents

Currys argue that the circuit court correctly applied the Dodd-Frank Act to find the

arbitration agreement they executed in 2006 was unenforceable.

The United States Supreme Court has directed generally that “a court must

apply the law in effect at the time it renders its decision, unless doing so would result in

manifest injustice or there is statutory direction or legislative history to the contrary.”

Landgraf v. USI Film Prods., 511 U.S. 244, 249, 114 S. Ct. 1483, 1488-89, 128 L. Ed. 2d

229 (1994) (quoting Bradley v. School Bd. of Richmond, 416 U.S. 696, 711, 94 S. Ct. 2006,

2016, 40 L. Ed. 2d 476 (1974) (internal quotations and additional citation omitted)).

On the other hand, the Supreme Court has further declared that “retroactivity

is not favored in the law, and . . . congressional enactments and administrative rules will not

be construed to have retroactive effect unless their language requires this result.” Landgraf,

511 U.S. at 264, 114 S. Ct. at 1496, 128 L. Ed. 2d 229 (quoting Bowen v. Georgetown Univ.

Hosp., 488 U.S. 204, 208, 109 S. Ct. 468, 471, 102 L. Ed.2d 493 (1988) (internal quotations

omitted)). On the topic of retroactivity, the Supreme Court has explained

the presumption against retroactive legislation is deeply rooted
in our jurisprudence, and embodies a legal doctrine centuries
older than our Republic. Elementary considerations of fairness
dictate that individuals should have an opportunity to know what

8

 the law is and to conform their conduct accordingly; settled
expectations should not be lightly disrupted. For that reason, the
“principle that the legal effect of conduct should ordinarily be
assessed under the law that existed when the conduct took place
has timeless and universal appeal.” Kaiser, 494 U.S., at 855, 110
S. Ct., at 1586 (SCALIA, J., concurring). In a free, dynamic
society, creativity in both commercial and artistic endeavors is
fostered by a rule of law that gives people confidence about the
legal consequences of their actions.

It is therefore not surprising that the antiretroactivity
principle finds expression in several provisions of our
Constitution. The Ex Post Facto Clause flatly prohibits
retroactive application of penal legislation. Article I, § 10, cl. 1,
prohibits States from passing another type of retroactive
legislation, laws “impairing the Obligation of Contracts.” The
Fifth Amendment’s Takings Clause prevents the Legislature
(and other government actors) from depriving private persons of
vested property rights except for a “public use” and upon
payment of “just compensation.” The prohibitions on “Bills of
Attainder” in Art. I, §§ 9-10, prohibit legislatures from singling
out disfavored persons and meting out summary punishment for
past conduct. See, e.g., United States v. Brown, 381 U.S. 437,
456-462, 85 S. Ct. 1707, 1719-1722, 14 L. Ed. 2d 484 (1965).
The Due Process Clause also protects the interests in fair notice
and repose that may be compromised by retroactive legislation;
a justification sufficient to validate a statute’s prospective
application under the Clause “may not suffice” to warrant its
retroactive application. Usery v. Turner Elkhorn Mining Co.,
428 U.S. 1, 17, 96 S. Ct. 2882, 2893, 49 L. Ed.2d 752 (1976).

Landgraf, 511 U.S. at 265-66, 114 S. Ct. at 1497, 128 L. Ed. 2d 229 (footnotes omitted)

(emphasis added).

The Landgraf Court went on to note that

[t]he Constitution’s restrictions, of course, are of limited

9

 scope. Absent a violation of one of those specific provisions,
the potential unfairness of retroactive civil legislation is not a
sufficient reason for a court to fail to give a statute its intended
scope. Retroactivity provisions often serve entirely benign and
legitimate purposes, whether to respond to emergencies, to
correct mistakes, to prevent circumvention of a new statute in
the interval immediately preceding its passage, or simply to give
comprehensive effect to a new law Congress considers salutary.
However, a requirement that Congress first make its intention
clear helps ensure that Congress itself has determined that the
benefits of retroactivity outweigh the potential for disruption or
unfairness.

Landgraf, 511 U.S. at 267-68, 114 S. Ct. at 1498, 128 L. Ed. 2d 229 (footnote omitted).4

4
The Landgraf Court further explained with regard to retroactivity that

[a] statute does not operate “retrospectively” merely
because it is applied in a case arising from conduct antedating
the statute’s enactment, see Republic Nat. Bank of Miami v.
United States, 506 U.S. 80, 100, 113 S. Ct. 554, 565–566, 121
L. Ed. 2d 474 (1992) (THOMAS, J., concurring in part and
concurring in judgment), or upsets expectations based in prior
law. Rather, the court must ask whether the new provision
attaches new legal consequences to events completed before its
enactment. The conclusion that a particular rule operates
“retroactively” comes at the end of a process of judgment
concerning the nature and extent of the change in the law and
the degree of connection between the operation of the new rule
and a relevant past event. Any test of retroactivity will leave
room for disagreement in hard cases, and is unlikely to classify
the enormous variety of legal changes with perfect philosophical
clarity. However, retroactivity is a matter on which judges tend
to have “sound . . . instinct[s],” see Danforth v. Groton Water
Co., 178 Mass. 472, 476, 59 N.E. 1033, 1034 (1901) (Holmes,
J.), and familiar considerations of fair notice, reasonable
reliance, and settled expectations offer sound guidance.

Landgraf, 511 U.S. at 269-70, 114 S. Ct. at 1499, 128 L. Ed. 2d 229 (footnote omitted).
(continued...)

10

Notably, there is nothing within the Dodd-Frank Act expressly stating that

15 U.S.C. § 1639c(e)(1) is to be given retroactive application. See Pezza v. Investors Capital

Corp., 767 F. Supp. 2d 225, 231 (D. Mass. 2011) (“Equally unclear is whether Congress

intended Section 1414 of the Act ‘ADDITIONAL STANDARDS AND REQUIREMENTS’

to be applied retroactively. Section 1414 amended Section 129C of the Truth in Lending

Act, 15 U.S.C. § 1601 et seq., by restricting the use of predispute arbitration provisions for

certain residential mortgage loans and extensions of credit[.]”).

Nevertheless,

[e]ven absent specific legislative authorization,
application of new statutes passed after the events in suit is
unquestionably proper in many situations. When the intervening
statute authorizes or affects the propriety of prospective relief,
application of the new provision is not retroactive. . . .

We have regularly applied intervening statutes conferring
or ousting jurisdiction, whether or not jurisdiction lay when the
underlying conduct occurred or when the suit was
filed. . . . Application of a new jurisdictional rule usually “takes
away no substantive right but simply changes the tribunal that is
to hear the case.” Hallowell, 239 U.S., at 508, 36 S. Ct., at 202.
Present law normally governs in such situations because
jurisdictional statutes “speak to the power of the court rather
than to the rights or obligations of the parties,” Republic Nat.
Bank of Miami, 506 U.S., at 100, 113 S. Ct., at 565 (THOMAS,
J., concurring).

Landgraf, 511 U.S. at 273-74, 114 S. Ct. at 1501, 128 L. Ed. 2d 229.

4
(...continued)

11

 Acknowledging the apparent conflict between applying jurisdictional rules

retrospectively and the general rule against retroactive application of a statute in the absence

of clearly expressed congressional intent, the Supreme Court elaborated that

In Bruner [v. United States, 343 U.S. 112, 117 n.8, 72 S. Ct.
581, 584 n.8, 96 L. Ed. 786 (1952)], we specifically noted:

“This jurisdictional rule does not affect the general
principle that a statute is not to be given retroactive effect unless
such construction is required by explicit language or by
necessary implication. Compare United States v. St. Louis, S.F.
& T.R. Co., 270 U.S. 1, 3 [46 S. Ct. 182, 183, 70 L. Ed. 435]
(1926), with Smallwood v. Gallardo, 275 U.S. 56, 61 [48 S. Ct.
23, 23–24, 72 L. Ed. 152] (1927).” 343 U.S., at 117, n. 8, 72
S. Ct., at 584, n. 8.

Landgraf, 511 U.S. at 274 n.27, 114 S. Ct. at 1502 n.27, 128 L. Ed. 2d 229.

In summary, the Supreme Court reiterated that

[w]hen a case implicates a federal statute enacted after
the events in suit, the court’s first task is to determine whether
Congress has expressly prescribed the statute’s proper reach. If
Congress has done so, of course, there is no need to resort to
judicial default rules. When, however, the statute contains no
such express command, the court must determine whether the
new statute would have retroactive effect, i.e., whether it would
impair rights a party possessed when he acted, increase a party’s
liability for past conduct, or impose new duties with respect to
transactions already completed. If the statute would operate
retroactively, our traditional presumption teaches that it does not
govern absent clear congressional intent favoring such a result.

Landgraf, 511 U.S. at 279-80, 114 S. Ct. at 1504-05, 128 L. Ed. 2d 229.

12

 Subsequent to Landgraf, the Supreme Court succinctly stated the relevant test

for determining whether a statute may be applied retroactively as follows:

This Court has worked out a sequence of analysis when
an objection is made to applying a particular statute said to
affect a vested right or to impose some burden on the basis of an
act or event preceding the statute’s enactment. We first look to
“whether Congress has expressly prescribed the statute’s proper
reach,” Landgraf, supra, at 280, 114 S. Ct. 1483, and in the
absence of language as helpful as that we try to draw a
comparably firm conclusion about the temporal reach
specifically intended by applying “our normal rules of
construction,” Lindh v. Murphy, 521 U.S. 320, 326, 117 S. Ct.
2059, 138 L. Ed.2d 481 (1997). If that effort fails, we ask
whether applying the statute to the person objecting would have
a retroactive consequence in the disfavored sense of “affecting
substantive rights, liabilities, or duties [on the basis of] conduct
arising before [its] enactment,” Landgraf, supra, at 278, 114
S. Ct. 1483; see also Lindh, supra, at 326, 117 S. Ct. 2059. If
the answer is yes, we then apply the presumption against
retroactivity by construing the statute as inapplicable to the
event or act in question owing to the “absen[ce of] a clear
indication from Congress that it intended such a result.” INS v.
St. Cyr, 533 U.S. 289, 316, 121 S. Ct. 2271, 150 L. Ed.2d 347
(2001); see Martin v. Hadix, 527 U.S. 343, 352, 119 S. Ct. 1998,
144 L. Ed. 2d 347 (1999) (quoting Landgraf, supra, at 280, 114
S. Ct. 1483).

Fernandez-Vargas v. Gonzales, 548 U.S. 30, 37-38, 126 S. Ct. 2422, 2428, 165 L. Ed. 2d 323

(2006).

Because the Dodd-Frank Act neither expressly or impliedly states that 15

U.S.C. § 1639c(e)(1) is to be given retroactive application, we must begin our analysis with

the second query. Therefore, “we ask whether applying the statute to the person objecting

13

would have a retroactive consequence in the disfavored sense of ‘affecting substantive rights,

liabilities, or duties [on the basis of] conduct arising before [its] enactment[.]’”

Fernandez-Vargas, 548 U.S. at 37, 126 S. Ct. at 2428, 165 L. Ed. 2d 323 (quoting Landgraf,

511 U.S. at 278, 114 S. Ct. at 1504, 128 L. Ed. 2d 229; and citing Lindh v. Murphy, 521 U.S.

320, 326, 117 S. Ct. 2059, 2063, 138 L. Ed.2d 481).

While only one court has addressed the issue of whether 15 U.S.C. § 1639c(e)

applies retroactively,5 courts have addressed the retroactivity of other Dodd-Frank Act

provisions prohibiting arbitration clauses. One court very recently observed that “[t]here is

a split in authority among the district courts that have considered retroactive application of

the Dodd-Frank amendments governing arbitrability.” Weller v. HSBC Mortg. Servs., Inc.,

Civil No. 13-cv-00185-REB-MJW, 2013 WL 4882758, at *3-4 (D. Colo. Sept. 11, 2013).

Two district courts have addressed whether to retroactively apply a provision

of the Dodd-Frank Act prohibiting predispute arbitration agreements in the context of

whistleblower protection,6 and have concluded that the provision did not undermine

5
See Weller v. HSBC Mortg. Servs., Inc., Civil No. 13-cv-00185-REB-MJW,
2013 WL 4882758 (D. Colo. Sept. 11, 2013).
6
The Dodd-Frank Act

amended the whistleblower protections of the Sarbanes-Oxely
Corporate and Criminal Fraud Accountability Act of 2002 to
(continued...)

14

substantive rights, but was merely jurisdictional in that it required the parties to submit their

dispute to an arbitral forum rather than a judicial forum. See Wong v. CKX, Inc., 890

F. Supp. 2d 411 (S.D.N.Y. 2012); Pezza v. Investors Capital Corp., 767 F.Supp.2d 225

(D. Mass. 2011). The Circuit Court of Kanawha County relied upon these cases in finding

that the arbitration agreement was unenforceable under the Dodd-Frank Act.

The Pezza Court observed that

The difficulty here is that Section 922 of the Act appears
to fall, at least arguably, within the scope of two competing
types of statutes referred to in Landgraf. The first type involves
statutes “affecting contractual or property rights.” Id. at 271,
114 S. Ct. 1483. Section 922 of the Act voids contractual
arbitration provisions agreed upon by the parties. An agreement
to arbitrate is treated like any other contract. See 9 U.S.C. § 2
(“an agreement in writing to submit to arbitration an existing
controversy arising out of . . . a contract . . . shall be valid,
irrevocable, and enforceable, save upon such grounds as exist at
law or in equity for the revocation of any contract.”). The
Supreme Court has found this is “[t]he largest category of cases
in which [it] ha[s] applied the presumption against statutory

6
(...continued)
provide that “[t]he rights and remedies provided for in this
section may not be waived by any agreement, policy form, or
condition of employment, including by a predispute arbitration
agreement” and concomitantly that “[n]o predispute arbitration
agreement shall be valid or enforceable, if the agreement
requires arbitration of a dispute arising under [the Sarbanes-
Oxley whistleblower protection provision].” 124 Stat. at 1848,
codified at 18 U.S.C. § 1514A(e)(1) & (2). See also Wong v.
CKX, Inc., 890 F. Supp.2d 411, 421 (S.D.N.Y.2012).

Weller, 2013 WL 4882758, at *2 n.6.

15

 retroactivity,” on the ground that this type of statute relates to
“matters in which predictability and stability are of prime
importance.” Landgraf, 511 U.S. at 271, 114 S. Ct. 1483.

....

The second type of statute relevant for purposes of this
analysis are those “conferring or ousting jurisdiction.”
Landgraf, 511 U.S. at 274, 114 S. Ct. 1483. Section 922 of the
Act confers, by voiding arbitration agreements, jurisdiction to
the courts, rather than to a Financial Industry Regulatory
Authority (“FINRA”) arbitration panel. The Supreme Court has
recognized that, even absent specific legislative authorization,
jurisdictional statutes may be applied in suits arising before their
enactment without raising concerns about retroactivity. Id. The
rationale is that this type of statute “takes away no substantive
right but simply changes the tribunal that is to hear the case.”
Hamdan v. Rumsfeld, 548 U.S. 557, 577, 126 S. Ct. 2749, 165
L. Ed. 2d 723 (2006) (quoting Hallowell v. Commons, 239 U.S.
506, 508, 36 S. Ct. 202, 60 L. Ed. 409 (1916)). In other words,
present law governs in such a case because statutes conferring
or ousting jurisdiction “speak to the power of the court rather
than to the rights or obligations of the parties.” Landgraf, 511
U.S. at 274, 114 S. Ct. 1483 (quoting Republic Nat’l Bank of
Miami v. United States, 506 U.S. 80, 100, 113 S. Ct. 554, 121
L. Ed. 2d 474 (1992)).

Pezza, 67 F. Supp. 2d at 232-33.

The Pezza court further recognized that

Courts have refused to apply retroactively state statutes
voiding certain arbitration provisions on the basis that such
statutes affected contractual rights and therefore has retroactive
effect. See Andrews v. Commoloco, Inc., No.2003/0066, 2009
WL 2413684, at *2 (D. VI. Aug. 4, 2009) (refusing to apply
retroactively a Virgin Islands statute that rendered unenforceable
contractual waivers unless made knowingly and voluntarily

16

 because such “statute would have retroactive effect,” in
particular with respect to the enforceability of the arbitration
provision containing such waiver); M.A. Mortenson/Meyne Co.
v. Edward E. Gillen Co., No. 03-5135, 2003 WL 23024511, at
*3 (D. Minn. Dec. 17, 2003) (declining to apply retroactively
Illinois statute invalidating arbitration provisions in building and
construction contracts because this statute “substantively affects
a contract term that the parties expressly agreed to” and “thus
directly impairs the parties’ substantive right to contract.”).

Pezza, 767 F. Supp. 2d at 233. Nevertheless, the Pezza court ultimately concluded that

[w]hile Section 922 affects the validity of the arbitration
clause, a contractual term agreed upon by the parties, I am of the
view that this section principally concerns the type of
jurisdictional statute envisioned in Landgraf. As the Supreme
Court held, “[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.” Gilmer v. Interstate/Johnson Lane Corp., 500
U.S. 20, 26, 111 S. Ct. 1647, 114 L. Ed. 2d 26 (1991) (quoting
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473
U.S. 614, 628, 105 S. Ct. 3346, 87 L. Ed. 2d 444 (1985))
(alteration in original); Rodriguez de Quijas v. Shearson/Am.
Express, Inc., 490 U.S. 477, 486, 109 S. Ct. 1917, 104 L. Ed. 2d
526 (1989) (“resort to the arbitration process does not inherently
undermine any of the substantive rights afforded to petitioners
under the Securities Act.”); Desiderio v. Nat’l Ass’n of Sec.
Dealers, Inc., 191 F.3d 198, 205-06 (2d Cir.1999) (“the
substantive rights found in the statute are not in any way
diminished by our holding that arbitration may be compelled in
this case, since only the forum–an arbitral rather than a judicial
one–is affected, and plaintiff’s rights may be as fully vindicated
in the former as in the latter.”); St. Paul Fire & Marine Ins. Co.
v. Employers Reinsurance Corp., 919 F. Supp. 133, 139
(S.D.N.Y.1996) (applying retroactively Kansas Arbitration Act
which provides that arbitration clauses in reinsurance contracts
are valid, enforceable, and irrevocable because this statute
“affects only a procedural right” and “the parties’ substantive
rights remain amply protected.”); Pitter v. Prudential Life Ins.

17

 Co. of Am., 906 F. Supp. 130, 134 (E.D.N.Y.1995) (holding that
the 1993 amendments to the NASD Code imposing mandatory
arbitration of employment disputes “deal, after all, only with the
forum where employment claims will be heard. They do not
alter the substantive rights conferred by Congress on
employees.”).

The parties do not claim that a different substantive result
will obtain merely because Pezza’s claim will be heard by a
court rather than by a FINRA arbitration panel. Consequently,
I conclude that Section 922 of the Act should also be applied to
conduct that arose prior to its enactment.

Pezza, 767 F. Supp. 2d at 233-34. See also Wong, 890 F. Supp. 2d at 422-23 (finding Dodd-

Frank Act applied to bar arbitration clause in employment contract executed in 2006 based

upon finding that “[t]he ban on the arbitration of Sarbanes–Oxley whistleblower claims

primarily affects the jurisdiction of the court to hear the substantive claim. Accordingly, the

statute at issue here more appropriately falls within the [category of statute that confers or

ousts jurisdiction] because it–despite altering a provision of a contract–‘principally concerns

the type of jurisdictional statute envisioned in Landgraf,’ Pezza, 767 F. Supp. 2d at 233, and

does not affect the substantive rights of either party.”).

Other courts have reached the opposite conclusion, finding that an arbitration

provision may not be applied retroactively because

arbitration is primarily a contractual matter governed by the law
of contracts . . . . They thus have concluded that the right to
insist on arbitration is not just a matter of where the claims may
be heard but a question of vested, contractual rights, which may
not be retroactively withdrawn absent clear congressional intent

18

 to that effect. . . .

Weller, 2013 WL 4882758, at *4 (citing Blackwell v. Bank of Am. Corp., No. 7:11-cv-02475­

JMC, 2012 WL 1229675 (D.S.C. April 12, 2012), incorporating No. 7:11-2475-JMC-KFM,

2012 WL 1229673 (D.S.C. March 22, 2012) (Rep’t of Mag. Judge); and Henderson v. Masco

Framing Corp., No. 7:11-cv-02475-JMC, 2011 WL 3022535 (D. Nev. July 22, 2011)).

Similar to the case sub judice, the United States District Court in Weller was

asked to decide whether a provision of the Dodd-Frank Act7 should be applied retroactively

to bar enforcement of an arbitration agreement executed in 2006 in connection with a

residential home mortgage. Criticizing the Pezza and Wong courts as having “too blithely

disregard[ed] the presumption against retroactivity and the need for predictability and

stability attendant on preserving established contractual expectations,” Weller, 2013 WL

4882758, at *4, the Weller court opined that the decisions reached by the Pezza and Wong

courts

disregard the very essence of the substantive/jurisdictional
distinction as described by the Supreme Court itself: that
“jurisdictional statutes speak to the power of the court rather
than to the rights or obligations of the parties.” Id. at 1502
(citation and internal quotation marks omitted). An arbitration
agreement creates a right, one that under the FAA is
“irrevocable,” see 9 U.S.C. § 2, and one which the Supreme
Court has insisted by placed on equal footing with other contract
rights, see AT & T Mobility LLC v. Concepcion, ___ U.S. ___,

7
The Weller court examined 15 U.S.C. § 1639c(e)(3), whereas this Court is
asked to resolve whether 15 U.S.C. § 1639c(e)(1) may be applied retroactively.

19

 131 S. Ct. 1740, 1745, 179 L. Ed. 2d 742 (2011) (“[C]ourts must
place arbitration agreements on an equal footing with other
contracts, and enforce them according to their terms.”).

Weller, 2013 WL 4882758, at*4. Accordingly, the Weller court found “that the Dodd-Frank

amendments, codified at 15 U.S.C. § 1639c(e)(3), do not operate retroactively to nullify Mr.

Weller’s arbitration agreement.” Id., at *5. See also Blackwell v. Bank of Am. Corp., No.

7:11-2475-JMC-KFM, 2012 WL 1229673, at *4 (D.S.C. March 22, 2012) (Report of Mag.

Judge) (rejecting Pezza analysis and concluding that “the Dodd-Frank Act amendments do

not apply retroactively to the plaintiff’s [Sarbanes-Oxley Act] claim), incorporated by No.

7:11-cv-02475-JMC, 2012 WL 1229675 (D.S.C. April 12, 2012). Another court addressing

this issue similarly reasoned that:

this court notes three important points regarding the retroactivity
of congressional statutes. First, as has been mentioned above,
“[r]etroactivity is not favored in the law.” Landgraf, 511 U.S.
at 264 (quoting Bowen v. Georgetown Univ. Hosp., 488 U.S.
204, 208 (1988)). Second, for this reason, there is typically a
“presumption against statutory retroactivity.” Id. at 270. Third,
“[t]he largest category of cases in which . . . the presumption
against statutory retroactivity has [been applied] involve[s] new
provisions affecting contractual or property rights, matters in
which predictability and stability are of prime importance.” Id.
at 271. Supreme Court precedent has explicitly indicated on
numerous occasions that the right of parties to agree to
arbitration is a contractual matter governed by contract law. See
AT & T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1752–53
(2011); Rent-A-Ctr., W., Inc. v. Jackson, 130 S. Ct. 2772, 2776
(2010).

After reviewing the relevant case law, this court finds
that the Dodd-Frank Act’s SOX [(Sarbanes-Oxely)] provisions
are not retroactive. At the time Henderson and Masco agreed to

20

 the dispute resolution policy in 2007, they had the right to
contract for the arbitration of SOX claims. See Guyden v.
Aetna, Inc., 544 F.3d 376, 384 (2d Cir.2008); Boss v. Salomon
Smith Barney Inc., 263 F.Supp.2d 684, 685 (S.D.N.Y. 2003).
Further, Henderson and Masco’s right to arbitrate SOX claims
was reflected in their agreement, as the dispute resolution policy
states that the arbitration provisions apply to “violation[s] of any
federal . . . law.” Doc. # 9, Exhibit B. The court does not see,
therefore, how a retroactive revocation of the parties’ right to
arbitrate SOX claims would not “impair rights [the parties]
possessed when [they] acted.” Landgraf [v. USI Film Prods.],
511 U.S. at 280, [114 S. Ct. at 1505, 128 L. Ed. 2d 229]. A
retroactive application of Dodd-Frank’s SOX provisions would
not merely affect the jurisdictional location in which such claims
could be brought; it would fundamentally interfere with the
parties’ contractual rights and would impair the “predictability
and stability” of their earlier agreement. Id. at 271. For these
reasons, the court concludes that Henderson’s right to arbitrate
his SOX claim is not retroactively barred. Accordingly, the
court finds that Henderson’s SOX claim falls within the
provisions of a valid arbitration agreement, and, recognizing the
FAA’s mandatory enforcement of such valid arbitration
agreements, the court shall grant Henderson’s motion to compel
arbitration.

Henderson v. Masco Framing Corp., No. 7:11-cv-02475-JMC, 2011 WL 3022535, at *4

(D. Nev. July 22, 2011).

Based upon the foregoing discussion, this Court is of the opinion that the more

reasoned approach is that which acknowledges arbitration as primarily a contractual matter

and that retroactive application of the Dodd-Frank Act to render a properly executed

arbitration agreement unenforceable would “fundamentally interfere with the parties’

contractual rights and would impair the ‘predictability and stability’ of their earlier

21

agreement.”8 Henderson v. Masco Framing Corp., No. 7:11-cv-02475-JMC, 2011 WL

3022535, at *4 (quoting Landgraf v. USI Film Prods., 511 U.S. at 271, 114 S. Ct. at 1500,

128 L. Ed. 2d 229). Accordingly, we conclude that retroactive application of the Dodd-Frank

Act to the arbitration agreement at issue in this case would improperly impair the parties’

fundamental right to contract. The circuit court’s conclusion to the contrary was in error.

B. Enforceability of Arbitration Agreement

In finding the arbitration agreement is not enforceable under state law, the

circuit court ruled that the agreement was both procedurally and substantively

unconscionable.9 Ocwen argues that the circuit court’s determinations were incorrect and,

8
During oral argument, the Currys directed this Court’s attention to Gordon v.
Pete’s Auto Service of Denbigh, Inc., 637 F.3d 545 (4th Cir. 2011), in support of their
position that the Dodd-Frank Act should be applied to void the arbitration agreement to
which they agreed by contract. Gordon involved an amendment to the Servicemembers Civil
Relief Act that granted servicemembers a private right of action. Because Gordon does not
address contract rights, we find the opinion does not aid in our decision of this case.
9
This Court has established that

[w]hen a trial court is required to rule upon a motion to
compel arbitration pursuant to the Federal Arbitration Act, 9
U.S.C. §§ 1-307 (2006), the authority of the trial court is limited
to determining the threshold issues of (1) whether a valid
arbitration agreement exists between the parties; and (2) whether
the claims averred by the plaintiff fall within the substantive
scope of that arbitration agreement.

Syl. pt. 2, State ex rel. TD Ameritrade, Inc. v. Kaufman, 225 W. Va. 250, 692 S.E.2d 293
(2010).

22

therefore, enforcement of the order should be prohibited. The Currys assert that the circuit

court did not err in this regard.

The arbitration agreement at issue in this case is governed by the Federal

Arbitration Act, 9 U.S.C. §§ 1-14 (hereinafter “the FAA”). The FAA requires that a court

interpreting an arbitration agreement apply the same principals that would be applied to any

other contract:

The purpose of the Federal Arbitration Act, 9 U.S.C. § 2,
is for courts to treat arbitration agreements like any other
contract. The Act does not favor or elevate arbitration
agreements to a level of importance above all other contracts; it
simply ensures that private agreements to arbitrate are enforced
according to their terms.

Syl. pt. 7, Brown v. Genesis Healthcare Corp., 228 W. Va. 646, 724 S.E.2d 250 (2011)

(“Brown I”), overruled on other grounds by Marmet Health Care Ctr., Inc. v. Brown, ___

U.S. ___, 132 S. Ct. 1201, 182 L. Ed. 2d 42 (2012) (per curiam). Thus,

[u]nder the Federal Arbitration Act, 9 U.S.C. § 2, a
written provision to settle by arbitration a controversy arising
out of a contract that evidences a transaction affecting interstate
commerce is valid, irrevocable, and enforceable, unless the
provision is found to be invalid, revocable or unenforceable
upon a ground that exists at law or in equity for the revocation
of any contract.

Syl. pt. 6, Brown I, 228 W. Va. 646, 724 S.E.2d 250. In keeping with these directives, West

Virginia courts apply the following contract standard when evaluating an arbitration

agreement for unconscionability:

23

 “A contract term is unenforceable if it is both
procedurally and substantively unconscionable. However, both
need not be present to the same degree. Courts should apply a
‘sliding scale’ in making this determination: the more
substantively oppressive the contract term, the less evidence of
procedural unconscionability is required to come to the
conclusion that the clause is unenforceable, and vice versa.”
Syllabus Point 20, Brown v. Genesis Healthcare Corp., 228
W. Va. 646, 724 S.E.2d 250 (2011)[, overruled in part on other
grounds by Marmet Health Care Center, Inc. v. Brown, ___
U.S. ___, 132 S. Ct. 1201, 182 L. Ed.2d 42 (2012) (per curiam)].

Syl. pt. 9, Brown v. Genesis Healthcare Corp., 229 W. Va. 382, 729 S.E.2d 217 (2012)

(“Brown II”). We will address separately whether the circuit court erred in its determination

that the instant arbitration agreement is both procedurally and substantively unconscionable.

In doing so, we are mindful that

“[t]he doctrine of unconscionability means that, because
of an overall and gross imbalance, one-sidedness or
lop-sidedness in a contract, a court may be justified in refusing
to enforce the contract as written. The concept of
unconscionability must be applied in a flexible manner, taking
into consideration all of the facts and circumstances of a
particular case.” Syllabus Point 12, Brown v. Genesis
Healthcare Corp., 228 W. Va. 646, 724 S.E.2d 250 (2011)[,
overruled in part on other grounds by Marmet Health Care
Center, Inc. v. Brown, ___ U.S. ___, 132 S. Ct. 1201, 182
L. Ed.2d 42 (2012) (per curiam)].

Syl. pt. 4, Brown II, 229 W. Va. 382, 729 S.E.2d 217.

1. Procedural Unconscionability. The circuit court based its finding of

procedural unconscionability on the following rationale:

24

 [T]he Plaintiffs are unsophisticated consumers, with little
knowledge of financial matters and who were not represented by
counsel when they signed several pages of legal documents in
connection with their loan transaction. Ocwen, by contrast, is a
large national corporate loan servicer. This situation is nearly
identical to the circumstances deemed procedurally
unconscionable in Arnold v. United Cos. Lending Corp., [204
W. Va. 229,] 511 S.E.2d 854 [(1998), overruled in part by Dan
Ryan Builders, Inc. v. Nelson, 230 W. Va. 281, 737 S.E.2d 550
(2012)], where the court found that the relative position of the
parties, a national corporate lender on one side and an
unsophisticated consumer on the other, were “grossly unequal.”
Id. at 861; see also Richmond Am. Homes, 717 S.E.2d at 922
(affirming Circuit Court’s finding of procedural
unconscionability where lender was a large national corporation
with legal counsel advising it in the drafting of its contracts). In
addition, the fact that the arbitration agreement contains
boilerplate language describing it as “voluntary” does not
change the procedural unconscionability analysis. The inclusion
of such language in a form contract does not detract from the
fact that [it] nevertheless [is] a contract of adhesion–one drafted
by the part of superior strength and presented to consumers who
have “little or no opportunity to alter the substantive terms.” Id.
at 921 (internal quotation marks omitted).

Ocwen argues that the circuit court erred in finding the arbitration agreement

is procedurally unconscionable. In support of this argument, Ocwen contends that the

agreement is not procedurally unconscionable because it is not a contract of adhesion.

Ocwen argues that the arbitration agreement was voluntary, as evidenced by the following

statement that advised the Currys that they were free to reject arbitration: “THIS IS A

VOLUNTARY ARBITRATION AGREEMENT. IF YOU DECLINE TO SIGN THIS

ARBITRATION AGREEMENT, LENDER WILL NOT REFUSE TO COMPLETE THE

25

LOAN TRANSACTION BECAUSE OF YOUR DECISION.” In the alternative, Ocwen

argues that even if it is determined that the arbitration agreement is a contract of adhesion,

it is not procedurally unconscionable. According to Ocwen, there is no evidence to support

the circuit court’s conclusions that the Currys were unsophisticated consumers who had little

knowledge of financial matters and were not represented by counsel. Ocwen postulates that

these conclusions were mere supposition by the circuit court. The Currys, arguing in favor

of the circuit court’s finding of procedural unconscionability, merely restate the circuit

court’s conclusions regarding the Currys lack of sophistication, financial knowledge and

legal representation. In addition, the Currys point out that

“[a] contract of adhesion is one drafted and imposed by
a party of superior strength that leaves the subscribing party
little or no opportunity to alter the substantive terms, and only
the opportunity to adhere to the contract or reject it. A contract
of adhesion should receive greater scrutiny than a contract with
bargained-for terms to determine if it imposes terms that are
oppressive, unconscionable or beyond the reasonable
expectations of an ordinary person.” Syllabus Point 18, Brown
v. Genesis Healthcare Corp., 228 W. Va. 646, 724 S.E.2d 250
(2011)[, overruled in part on other grounds by Marmet Health
Care Center, Inc. v. Brown, ___ U.S. ___, 132 S. Ct. 1201, 182
L. Ed. 2d 42 (2012) (per curiam)].

Syl. pt. 11, Brown II, 229 W. Va. 382, 729 S.E.2d 217.

We first note that

[p]rocedural unconscionability is concerned with
inequities, improprieties, or unfairness in the bargaining process
and formation of the contract. Procedural unconscionability

26

 involves a variety of inadequacies that results in the lack of a
real and voluntary meeting of the minds of the parties,
considering all the circumstances surrounding the transaction.
These inadequacies include, but are not limited to, the age,
literacy, or lack of sophistication of a party; hidden or unduly
complex contract terms; the adhesive nature of the contract; and
the manner and setting in which the contract was formed,
including whether each party had a reasonable opportunity to
understand the terms of the contract.

Syl. pt. 17, Brown I, 228 W. Va. 646, 724 S.E.2d 250. Furthermore, insofar as the Currys

claim the arbitration contract is one of adhesion, we note that, while contracts of adhesion

require greater scrutiny, they are not per se unconscionable:

“[f]inding that there is an adhesion contract is the beginning
point for analysis, not the end of it; what courts aim at doing is
distinguishing good adhesion contracts which should be
enforced from bad adhesion contracts which should not.” State
ex rel. Dunlap v. Berger, 211 W. Va. 549, 557, 567 S.E.2d 265,
273 (2002) (quoting American Food Management, Inc. v.
Henson, 105 Ill. App. 3d 141, 61 Ill. Dec. 122, 434 N.E.2d 59,
62–63 (1982)), cert. denied, 537 U.S. 1087, 123 S. Ct. 695, 154
L. Ed. 2d 631 (2002).

Grayiel v. Appalachian Energy Partners 2001-D, LLP, 230 W. Va. 91, 103, 736 S.E.2d 91,

103 (2012).

Based upon our examination of the arbitration agreement, we find no basis

upon which to conclude that it is procedurally unconscionable. The arbitration agreement

contained a plainly worded statement, placed conspicuously above the signature line in all

caps, that advised the Currys that they could reject the arbitration agreement and the lender

27

would not refuse to complete their loan due to such refusal. Furthermore, in response to

Ocwen’s argument that the circuit court’s conclusions pertaining to procedural

unconscionability were not supported by the record, the Currys have failed to direct this

Court’s attention to any evidence in the record to support the circuit court’s finding that they

lacked sophistication and financial knowledge to a degree that rendered the contract

unenforceable. Finally, the Currys have cited no authority to support the proposition that a

consumer executing an arbitration agreement in connection with a mortgage loan must be

represented by a lawyer for the contract to be enforceable. For these reasons, we find the

circuit court erred in refusing to enforce the arbitration agreement on the ground that it was

procedurally unconscionable.

2. Substantive Unconscionability. The circuit court additionally concluded

that the contract was substantively unconscionable.

“Substantive unconscionability involves unfairness in the
contract itself and whether a contract term is one-sided and will
have an overly harsh effect on the disadvantaged party. The
factors to be weighed in assessing substantive unconscionability
vary with the content of the agreement. Generally, courts should
consider the commercial reasonableness of the contract terms,
the purpose and effect of the terms, the allocation of the risks
between the parties, and public policy concerns.” Syllabus Point
19, Brown v. Genesis Healthcare Corp., 228 W. Va. 646, 724
S.E.2d 250 (2011)[, overruled in part on other grounds by
Marmet Health Care Center, Inc. v. Brown, ___ U.S. ___, 132
S. Ct. 1201, 182 L. Ed. 2d 42 (2012) (per curiam)].

Syl. pt. 12, Brown II, 229 W. Va. 382, 729 S.E.2d 217.

28

 The circuit court’s conclusion that the arbitration agreement is substantively

unconscionable was based upon four different grounds: (1) it contains a class action waiver,

(2) it restricts attorney’s fees, (3) it lacks mutuality, and (4) it limits discovery. We will

address each ground individually.

i. Class-Action Waiver. The circuit court concluded that the arbitration

agreement is substantively unconscionable because it takes away from the Currys “the right

to pursue class-wide claims.” In reaching this conclusion, the circuit court found that the

recovery sought by the Currys is relatively small and may deter them from pursuing a remedy

if they are deprived of a class option and must bear the risk of substantial costs to vindicate

their rights.10

Ocwen argues that it has been established in State ex rel. Richmond American

Homes of West Virginia, Inc. v. Sanders, 228 W. Va. 125, 717 S.E.2d 909 (2011), and State

ex rel. AT & T Mobility, LLC v. Wilson, 226 W. Va. 572, 703 S.E.2d 543 (2010), that the

mere existence of a class action waiver in an arbitration agreement does not render the

agreement unconscionable. In addition, Ocwen submitted, as supplemental authority, a

recent decision by the United States Supreme Court in American Express Co. v. Italian

10
The circuit court observed that the Currys claim that Ocwen assessed them
just over $1,100 in unlawful charges.

29

Colors Restaurant, ___ U.S. ___, 133 S. Ct. 2304, 86 L. Ed. 2d 417 (2013), wherein the

Court upheld a class-action waiver in an arbitration agreement. Ocwen characterizes the

Currys’ arguments in this regard as mere speculation about the “risk” that arbitrating their

claims might result in a less than full exercise of their state statutory rights. Ocwen further

argues that the Currys’ case is not a “small damages/high costs” case insofar as the damages

they seek equal at least $19,510.94. Finally, Ocwen notes that under the arbitration

agreement, the Currys are obligated to pay only $125 toward an initial filing fee. All other

arbitration fees and costs are to be paid by Ocwen.11

The Currys simply argue that enforcing a class action waiver in an arbitration

agreement may deter litigants from pursuing claims due to the high costs of obtaining a

relatively small recovery. Thus, they contend, enforcing class action waivers would allow

those committing illegal activity to remain “unpunished, undeterred, and unaccountable.”12

11
With respect to fees, the arbitration agreement provides:

FEES OF ARBITRATOR. In any arbitration that
pertains solely to the Loan, Borrower shall not be required to
pay more than $125 in initial filing fees to the arbitrator. The
Lender shall pay any balance of such initial fees. In addition,
the Lender shall pay all other fees and costs of the
arbitration. . . .
12
Quoting State ex rel. Dunlap v. Berger, 211 W. Va. 549, 563, 567 S.E.2d 265,
279 (2002).

30

 This Court previously has considered arbitration agreements that contain class

action waivers and found that the inclusion of such a waiver does not automatically render

the arbitration agreement unenforceable. In State ex rel. Richmond Am. Homes of W. Va.,

Inc. v. Sanders, 228 W. Va. 125, 140, 717 S.E.2d 909, 924, we concluded that “the circuit

court erred in its finding that the class action waiver rendered Richmond’s arbitration

provision unconscionable and void.” In reaching this conclusion, we observed that

[i]n [AT & T Mobility LLC v. Concepcion, ___ U.S. ___, 131
S. Ct. 1740, 179 L. Ed. 2d 742], the Supreme Court examined a
California rule that, in certain circumstances, automatically
invalidated an arbitration clause if it contained a class action
waiver. The Supreme Court concluded that such a per se rule
abrogating arbitration clauses impairs the rights of parties to
contract and, if they so choose, arbitrate rather than litigate a
particular dispute. The California rule was therefore found to be
preempted by the FAA.

State ex rel. Richmond Am. Homes, 228 W. Va. at 139-140, 717 S.E.2d at 923-24 (footnote

omitted). See also State ex rel. AT & T Mobility, LLC v. Wilson, 226 W. Va. 572, 579, 703

S.E.2d 543, 550 (2010) (per curiam) (“Standing alone, the lack of class action relief does not

render an arbitration agreement unenforceable on grounds of unconscionability under this

Court’s decision in [State ex rel. Dunlap v. Berger, 211 W. Va. 549, 567 S.E.2d 265

(2002)].”). More recently, the United States Supreme Court again addressed the impact of

class action waivers on arbitration agreements and, based upon the right to contract, rejected

the notion that parties may not agree to waive their right to a class action remedy. See

American Express Co. v. Italian Colors Rest., ___ U.S. ___, 133 S. Ct. 2304, 186 L. Ed. 2d

31

417.

Notably, in Italian Colors, the Supreme Court expressly considered “whether

a contractual waiver of class arbitration is enforceable under the Federal Arbitration Act

when the plaintiff’s cost of individually arbitrating a federal statutory claim exceeds the

potential recovery.” ___ U.S. at ___, 133 S. Ct. at 2307, 186 L. Ed. 2d 417.13 In resolving

this issue, the Italian Colors Court first observed that

[The FAA] reflects the overarching principle that arbitration is
a matter of contract. . . . And consistent with [the FAA], courts
must rigorously enforce arbitration agreements according to
their terms, . . . including terms that specify with whom the
parties choose to arbitrate their disputes, . . . and the rules under
which that arbitration will be conducted . . . . That holds true for
claims that allege a violation of a federal statute, unless the
FAA’s mandate has been overridden by a contrary congressional
command.

___ U.S. at ___, 133 S. Ct. at 2309, 186 L. Ed. 2d 417 (internal quotations and citations

omitted).

The Italian Colors Court found no contrary congressional command that would

require the rejection of the class-arbitration waiver. In reaching this conclusion, the Court

13
The plaintiffs in Italian Colors asserted that “the cost of an expert analysis
necessary to prove the antitrust claims would be ‘at least several hundred thousand dollars,
and might exceed $1 million, while the maximum recovery for an individual plaintiff would
be $12,850, or $38,549 when trebled.’” American Exp. Co. v. Italian Colors Rest., ___ U.S.
___, ___, 133 S. Ct. 2304, 2308, 186 L. Ed. 2d 417 (2013).

32

declared:

The parties here agreed to arbitrate pursuant to [the] “usual
rule[]” [that litigation is conducted by and on behalf of the
individual parties only] and it would be remarkable for a court
to erase that expectation.

Nor does congressional approval of [Fed. R. Civ. P.]
Rule 23 establish an entitlement to class proceedings for the
vindication of statutory rights. To begin with, it is likely that
such an entitlement, invalidating private arbitration agreements
denying class adjudication, would be an “abridg[ment]” or
“modif[ication]” of a “substantive right” forbidden to the Rules,
see 28 U.S.C. § 2072(b). But there is no evidence of such an
entitlement in any event. The Rule imposes stringent
requirements for certification that in practice exclude most
claims. And we have specifically rejected the assertion that one
of those requirements (the class-notice requirement) must be
dispensed with because the “prohibitively high cost” of
compliance would “frustrate [plaintiff’s] attempt to vindicate the
policies underlying the antitrust” laws. Eisen v. Carlisle &
Jacquelin, 417 U.S. 156, 166-168, 175-176, 94 S. Ct. 2140, 40
L. Ed. 2d 732 (1974). One might respond, perhaps, that federal
law secures a nonwaivable opportunity to vindicate federal
policies by satisfying the procedural strictures of Rule 23 or
invoking some other informal class mechanism in arbitration.
But we have already rejected that proposition in AT&T Mobility,
[___] U.S., at ___, 131 S. Ct., at 1748 .

___ U.S. at ___, 133 S. Ct. at 2309-10, 186 L. Ed. 2d 417.

Having determined that there was no contrary congressional command that

would require rejection of a class-arbitration waiver, the Court then considered whether any

judge-made exception to the FAA would require such rejection. In this regard, the Court

addressed whether the class-arbitration provision should be invalidated as preventing “the

33

‘effective vindication’ of a federal statutory right.” Italian Colors, ___ U.S. at ___, 133

S. Ct. at 2310, 186 L. Ed. 2d 417. The Court explained that

[t]he “effective vindication” exception to which
respondents allude originated as dictum in Mitsubishi Motors
[Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 105
S. Ct. 3346, 87 L. Ed. 2d 444 (1985)], where we expressed a
willingness to invalidate, on “public policy” grounds, arbitration
agreements that “operat[e] . . . as a prospective waiver of a
party’s right to pursue statutory remedies.” 473 U.S., at 637, n.
19, 105 S. Ct. 3346 (emphasis added). Dismissing concerns that
the arbitral forum was inadequate, we said that “so long as the
prospective litigant effectively may vindicate its statutory cause
of action in the arbitral forum, the statute will continue to serve
both its remedial and deterrent function.” Id., at 637, 105 S. Ct.
3346.

Italian Colors, ___ U.S. at ___, 133 S. Ct. at 2310, 186 L. Ed. 2d 417. The Court further

declared that

the fact that it is not worth the expense involved in proving a
statutory remedy does not constitute the elimination of the right
to pursue that remedy. . . . The class-action waiver merely limits
arbitration to the two contracting parties. It no more eliminates
those parties’ right to pursue their statutory remedy than did
federal law before its adoption of the class action for legal relief
in 1938, see Fed. Rule Civ. Proc. 23, 28 U.S.C., p. 864 (1938
ed., Supp V); 7A C. Wright, A. Miller, & M. Kane, Federal
Practice and Procedure § 1752, p. 18 (3d ed. 2005). Or, to put
it differently, the individual suit that was considered adequate to
assure “effective vindication” of a federal right before adoption
of class-action procedures did not suddenly become “ineffective
vindication” upon their adoption.

A pair of our cases brings home the point. In Gilmer [v.
Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S. Ct. 1647,
114 L. Ed. 2d 26 (1991)], we had no qualms in enforcing a class
waiver in an arbitration agreement even though the federal

34

statute at issue, the Age Discrimination in Employment Act,
expressly permitted collective actions. We said that statutory
permission did “‘not mean that individual attempts at
conciliation were intended to be barred.’” Id., at 32, 111 S. Ct.
1647. And in Vimar Seguros y Reaseguros, S.A. v. M/V Sky
Reefer, 515 U.S. 528, 115 S. Ct. 2322, 132 L. Ed.2d 462 (1995),
we held that requiring arbitration in a foreign country was
compatible with the federal Carriage of Goods by Sea Act. That
legislation prohibited any agreement “‘relieving’” or
“‘lessening’” the liability of a carrier for damaged goods, id., at
530, 534, 115 S. Ct. 2322 (quoting 46 U.S.C. App. § 1303(8)
(1988 ed.))—which is close to codification of an “effective
vindication” exception. The Court rejected the argument that
the “inconvenience and costs of proceeding” abroad
“lessen[ed]” the defendants’ liability, stating that “[i]t would be
unwieldy and unsupported by the terms or policy of the statute
to require courts to proceed case by case to tally the costs and
burdens to particular plaintiffs in light of their means, the size
of their claims, and the relative burden on the carrier.” 515
U.S., at 532, 536, 115 S. Ct. 2322. Such a “tally[ing] [of] the
costs and burdens” is precisely what the dissent would impose
upon federal courts here.

Truth to tell, our decision in AT&T Mobility all but
resolves this case. There we invalidated a law conditioning
enforcement of arbitration on the availability of class procedure
because that law “interfere[d] with fundamental attributes of
arbitration.” [___] U.S., at ___, 131 S. Ct., at 1748. “[T]he
switch from bilateral to class arbitration,” we said, “sacrifices
the principal advantage of arbitration – its informality – and
makes the process slower, more costly, and more likely to
generate procedural morass than final judgment.” Id., at ___,
131 S. Ct., at 1751. We specifically rejected the argument that
class arbitration was necessary to prosecute claims “that might
otherwise slip through the legal system.” Id., at ___, 131 S. Ct.,
at 1753.

The regime established by the Court of Appeals’ decision
would require—before a plaintiff can be held to contractually
agreed bilateral arbitration—that a federal court determine (and

35

 the parties litigate) the legal requirements for success on the
merits claim-by-claim and theory-by-theory, the evidence
necessary to meet those requirements, the cost of developing
that evidence, and the damages that would be recovered in the
event of success. Such a preliminary litigating hurdle would
undoubtedly destroy the prospect of speedy resolution that
arbitration in general and bilateral arbitration in particular was
meant to secure. The FAA does not sanction such a judicially
created superstructure.

___ U.S. at ___, 133 S. Ct. at 2311-12, 186 L. Ed. 2d 417 (internal citation and footnote

omitted). Accordingly, the Italian Colors Court reversed the Court of Appeals’ decision

invalidating the arbitration agreement on the ground that it did not permit class arbitration

of a federal-law claim.

Given the Supreme Court’s analysis in Italian Colors, and this Court’s prior

decisions in State ex rel. Richmond American Homes of West Virginia, Inc. v. Sanders, 228

W. Va. 125, 717 S.E.2d 909, and State ex rel. AT & T Mobility, LLC v. Wilson, 226 W. Va.

572, 703 S.E.2d 543, we find the circuit court erred in concluding that the class action waiver

rendered the instant arbitration agreement substantively unconscionable.

ii. Attorney’s Fees. The circuit court additionally found that the

arbitration agreement was substantively unconscionable because it prevents the Currys from

recovering reasonable attorney’s fees under the West Virginia Consumer Credit and

36

Protection Act (“WVCCPA”).14 The arbitration rider contains the following provision

regarding attorney’s fees:

In no event shall either party be responsible for any fees or
expenses of any of the other party’s attorneys, witnesses, or
consultants, or any other expenses, for which such other party
reasonably would have been expected to be liable had such other
party initiated a suit in the courts of the jurisdiction in which the
Borrower resides regarding a similar dispute.

Ocwen argues that the restriction on attorney’s fees is not unconscionable and,

in the alternative, if it is determined to be unconscionable, then it is severable. Ocwen

submits that the availability of actual damages and statutory penalties under the WVCCPA,

and the fee-shifting provisions contained in the arbitration agreement,15 provide the Currys

with sufficient incentive and opportunity to vindicate their statutory rights in arbitration.

14
The WVCCPA provides that:

[i]n any claim brought under this chapter applying to
illegal, fraudulent or unconscionable conduct or any prohibited
debt collection practice, the court may award all or a portion of
the costs of litigation, including reasonable attorney fees, court
costs and fees, to the consumer. On a finding by the court that
a claim brought under this chapter applying to illegal, fraudulent
or unconscionable conduct or any prohibited debt collection
practice was brought in bad faith and for the purposes of
harassment, the court may award to the defendant reasonable
attorney fees.

W. Va. Code, § 46A-5-104 (1994) (Repl. Vol. 2006).
15
See note 11, supra, for the arbitration agreement’s fee provision.

37

Moreover, Ocwen points out that the restriction on attorney’s fees is not unfairly one-sided

and does not support a “presumption of unconscionability,” because the provision impacts

the Currys and Ocwen equally. Ocwen further notes that the WVCCPA does not guarantee

an award of attorney’s fees, but merely permits a trier of fact to grant reasonable attorney’s

fees. Finally, Ocwen contends that if the attorney’s fee provision is deemed to be

unconscionable, the provision is severable from the arbitration agreement because the deed

of trust, into which the arbitration agreement is incorporated, contains the following

severability clause: “In the event that any provision or clause of the Security

Instrument . . . conflicts with Applicable Law, such conflict shall not affect other provisions

of this Security Instrument . . . which can be given effect without the conflicting provision.”

Ocwen complains that the circuit court failed to address the severability clause or Ocwen’s

argument regarding the same.

The Currys contend that they are entitled to seek attorney’s fees under the

WVCCPA; therefore, the arbitration agreement’s provision restricting them from obtaining

an award of attorney’s fees deprives them of that right. Furthermore, the Currys contend that

the circuit court correctly found that “the dual effect of the arbitration agreement’s class-

action waiver and its disclaimer of any liability for attorney’s fees is to prevent consumers

such as the Plaintiffs from effectively vindicating their statutory rights.”16

16
Insofar as we have held in this opinion that a class action waiver does not
(continued...)

38

 Notably, under the circumstances presented in this case, the arbitration

agreement does not deprive the Currys of a mandatory right or entitlement to receive

attorney’s fees should they prevail in their WVCCPA claim. This is because the WVCCPA

merely grants the court discretion to award attorney’s fees, it does not mandate such an

award. Furthermore, the court’s discretion in this regard extends to granting attorney’s fees

to either a plaintiff or a defendant under the proper circumstances.17 Additionally, we note

that the arbitration provision mutually applies to both parties by specifying that neither party

shall be responsible for the other party’s attorney’s fees. In other words, the arbitration

agreement simply implements the traditional American rule, which states that “‘[a]s a general

rule each litigant bears his or her own attorney’s fees absent a contrary rule of court or

express statutory or contractual authority for reimbursement.’ Syl. Pt. 2, Sally–Mike

Properties v. Yokum, 179 W. Va. 48, 365 S.E.2d 246 (1986).” Syl. pt. 2, State ex rel. Hicks

v. Bailey, 227 W. Va. 448, 711 S.E.2d 270 (2011). Finally, as discussed above in connection

with our discussion of procedural unconscionability, we note that the contract was not a

contract of adhesion, as demonstrated by the conspicuous statement, in all capital letters

above the signature line, advising the Currys that the arbitration agreement was voluntary and

16
(...continued)
render a contract unconscionable, we summarily reject this portion of the Currys’ argument.
17
See supra note 14 for language of attorney’s fees provision of the WVCCPA.

39

the Lender would not refuse their loan should they choose to reject arbitration.18

Under these circumstances, where the contractual provision does not deprive

a party of a mandatory right to receive attorney’s fees, where the provision applies equally

to both parties in making them responsible for their own attorney’s fees, and where the

contract was not one of adhesion, we decline to find the requirement that neither party be

responsible for the other’s attorney’s fees to be unconscionable.19

18
See Section B.1. supra.
19
In reaching this conclusion, we expressly decline to address the circumstance
where a statutorily provided mandatory right to attorney’s fees is abrogated by a contract
provision. As the Currys point out, in dicta in the case of State ex rel. Dunlap v. Berger, this
Court commented that

We do observe that, entirely independent of the
arbitration issue, a provision in a contract of adhesion that
would operate to restrict the availability of an award of attorney
fees to less than that provided for in applicable law would, under
our decision today, be presumptively unconscionable. For
example, if Friedman’s purchase and financing agreement had
stated: “attorney fees may not be awarded to the Buyer in a
dispute with the Seller in any forum,” that would be a
presumptively unconscionable provision, if the dispute were one
where a prevailing party is entitled to attorney fees under state
laws for the benefit and protection of the public.

211 W. Va. 549, 567 n.15, 567 S.E.2d 265, 283 n.15 (2002) (emphasis added). Additionally,
we note that there appears to be a split of authority regarding the issue of whether a contract
term restricting the award of attorney’s fees is unconscionable. Compare Quilloin v. Tenet
HealthSystem Philadelphia, Inc., 673 F.3d 221, 230-31 (3rd Cir. 2012) (stating “[p]rovisions
requiring parties to be responsible for their own expenses, including attorneys’ fees, are
generally unconscionable because restrictions on attorneys’ fees conflict with federal statutes
(continued...)

40

 iii. Mutuality. The arbitration agreement contained the following

provision excluding some of Ocwen’s claims from arbitration:

EXCLUSION FROM ARBITRATION. This agreement
shall not limit the right of lender to (a) accelerate or require
immediate payment in full of the secured indebtedness or
exercise the other Remedies described in this Security
Instrument before, during, or after any arbitration, including the
right to foreclose against or sell the Property; (b) exercise the
rights set forth in the Uniform Covenant labeled “Protection of
Lender’s Interest in the Property and Rights Under this Security
Instrument” contained in this Security Instrument, or (c)
exercise of the right under the terms of this security Instrument
to require payment in full of the indebtedness upon a transfer of
the Property or a beneficial interest therein. Should borrower
appear in and contest any judicial proceeding initiated by Lender
under this Exclusion, or initiate any judicial proceeding to
challenge any action authorized by this Exclusion, without
asserting any counterclaim or seeking affirmative relief against
Lender, then upon request of Borrower such judicial
proceedings shall be stayed or dismissed, and the matter shall
proceed to arbitration in accordance with the section entitled
“Arbitration of Disputes.” Any dispute that could otherwise
have been asserted as a counterclaim or grounds for relief in
such a judicial proceeding shall be resolved solely in accordance
with the section entitled “Arbitration of Disputes.”

19
(...continued)
providing fee-shifting as a remedy.”), with James C. Justice Companies, Inc. v. Deere & Co.,
No. 5:06-cv-00287, 2008 WL 828923, at *4 & *5 (S.D.W. Va., March 27, 2008) (observing
“15 U.S.C. § 15(a) provides, in relevant part, that a party ‘shall recover threefold the
damages by him sustained and the cost of suit, including a reasonable attorney’s fee.’ Thus,
the Dealership Agreement and 15 U.S.C. § 15 are in conflict[,] and concluding that plaintiff
“has offered no evidence that paying its own attorney’s fees and costs in arbitration would
prevent it from effectively vindicating its rights under the Sherman Act. Therefore, [this]
Court cannot conclude that the Dealership Agreement’s limitation on attorney’s fees and
costs is inconsistent with the policies of the Sherman Act.” (emphasis added)).

41

Based upon the foregoing provision, the circuit court found that

the [arbitration] agreement lacks mutuality, the “paramount
consideration” in assessing substantive unconscionability.
Richmond Am. Homes, 717 S.E.2d at 921. In particular, the
arbitration agreement confines all of the plaintiffs’ potential
claims arising from the loan to arbitration. The Plaintiffs’
lender, however, excluded many of its most important remedies
from arbitration, including the right to accelerate payments, to
foreclose, and to exercise the nonjudicial remedies outlined in
the parties’ note. Moreover, if the lender brings a judicial
proceeding to exercise the rights it excluded from arbitration,
the Plaintiffs are prevented from asserting any counterclaim or
seeking any other affirmative relief and instead must proceed to
arbitration. In other words, the agreement vests the Plaintiffs’
lender with a significant amount of discretion and then excludes
many of its most important remedies from arbitration. All of the
Plaintiffs’ rights and remedies, however, are subject to
mandatory arbitration.

Ocwen contends that the circuit court erred in finding the arbitration agreement

lacks mutuality and characterizes it as an enforceable bilateral agreement. According to

Ocwen, West Virginia law does not require complete mutuality. Instead, the law requires

only that “[a]greements to arbitrate must contain at least a modicum of bilaterality.”20

Finally, Ocwen asserts that the limited exceptions contained in the arbitration agreement to

allow it to accelerate payments and foreclose per applicable state law do not render the

agreement unfairly one-sided or unconscionable.

20
Quoting State ex rel. Richmond Am. Homes of West Virginia, Inc. v. Sanders,
228 W. Va. 125, 137, 717 S.E.2d 909, 921 (2011) (internal quotations and additional
citations omitted).

42

 The Currys argue that the arbitration agreement lacks mutuality because the

lender carved out its most important remedies from arbitration, including the right to

accelerate payments and foreclose, while confining all of their potential claims to arbitration.

This Court has recently observed that “[s]ome courts suggest that mutuality of

obligation is the locus around which substantive unconscionability analysis revolves. In

assessing substantive unconscionability, the paramount consideration is mutuality.

Agreements to arbitrate must contain at least a modicum of bilaterality to avoid

unconscionability.” State ex rel. Richmond Am. Homes of West Virginia, Inc. v. Sanders, 228

W. Va. 125, 137, 717 S.E.2d 909, 921 (internal quotations, citations and footnotes omitted).

Accordingly, we have held that

In assessing whether a contract provision is substantively
unconscionable, a court may consider whether the provision
lacks mutuality of obligation. If a provision creates a disparity
in the rights of the contracting parties such that it is one-sided
and unreasonably favorable to one party, then a court may find
the provision is substantively unconscionable.

Syl. pt. 10, Dan Ryan Builders, Inc. v. Nelson, 230 W. Va. 281, 737 S.E.2d 550 (2012).

Nevertheless, we have cautioned that a lack of mutuality does not absolutely

render a contract unconscionable by “emphasiz[ing] that a one-sided contract provision may

not be unconscionable under the facts of all cases. ‘The concept of unconscionability must

be applied in a flexible manner, taking into consideration all of the facts and circumstances

43

of a particular case.’” Dan Ryan Builders, 230 W. Va. 281, ___, 737 S.E.2d 550, 559-60

(quoting Syl. pt. 12, in part, Brown I, 228 W. Va. 646, 724 S.E.2d 250). Thus, we have held

that “[a] court in its equity powers is charged with the discretion to determine, on a

case-by-case basis, whether a contract provision is so harsh and overly unfair that it should

not be enforced under the doctrine of unconscionability.” Syl. pt. 9, Dan Ryan Builders, 230

W. Va. 281, 737 S.E.2d 550.

In this case, the exclusions from arbitration reserved by Ocwen grants it the

ability to utilize the court system to protect its security interest in the Currys’ home. Other

courts addressing such clauses have found that they are not unconscionable. For example,

in Baker v. Green Tree Servicing LLC, No. 5:09-cv-00332, 2010 WL 1404088 (S.D. W. Va.

Mar. 31, 2010), the district court upheld an arbitration agreement based, in part, upon its

finding that

[t]he lender’s ability to foreclose or repossess a home
when the buyer defaults is not a new or additional remedy given
to the lender by the contract. Instead, it is a remedy
independently available to the lender by virtue of law, and the
contract does no more than preserve that right . . . .

Id. at 4. Similarly, in Miller v. Equifirst Corp. of WV, No. 2:00-0335, 2006 WL 2571634

(S.D. W. Va. Sept. 5, 2006), the district court upheld an arbitration agreement that reserved

the right of the lender to seek redress of certain claims in court, including foreclosure, while

44

requiring the borrower to arbitrate.21 In deciding to uphold the arbitration provision, the

Miller court observed that “[t]he exception for proceedings related to foreclosure is one that

is not only common in arbitration agreements but quite necessary in order to effectuate

foreclosure and a retaking of the subject property by lawful processes, where needed, without

breach of the peace.” Miller, No. 2:00-0335, 2006 WL 2571634, at *11. Other courts have

reached similar conclusions. See Torrance v. Aames Funding Corp., 242 F. Supp. 2d 862,

872 (D. Or. 2002) (“The claims that defendant may litigate are basically claims asserting its

security interest. These claims are heavily regulated by statute, allowing for streamlined

procedures and effective protections for both sides. It does not strike this court as

unreasonable, much less oppressive, to forego arbitration of such claims. Therefore, the

Agreement to Arbitrate is not rendered unconscionable simply because defendant is not

required to arbitrate all claims.”); Conseco Fin. Servicing Corp. v. Wilder, 47 S.W.3d 335,

21
The exclusion clause at issue stated:

EXCLUSIONS FROM ARBITRATION. This arbitration
agreement shall not apply to rights of [sic; or] obligations under
the loan documents that allow the Lender to foreclose or
otherwise take possession of property securing the loan,
including repossession, foreclosure or unlawful detainer. Nor
shall it be construed to prevent any party’s use of bankruptcy or
judicial foreclosure. No provision of this agreement shall limit
the right of the Borrower to exercise Borrower’s rights under the
Uniform Covenant labeled “Borrower’s Right to Reinstate”.
Subject to these limitations, this arbitration agreement will
survive the pay-off of the loan.

Miller v. Equifirst Corp. of WV, No. 2:00-0335, 2006 WL 2571634, at *9 (S.D. W. Va. Sept.
5, 2006).

45

343 (Ky. Ct. App. 2001) (concluding that exceptions in arbitration agreement allowing lender

to litigate enforcement of its security interest “are not unreasonable. Arbitration is meant to

provide for expedited resolution of disputes, but the claims the agreement permits [lender]

to litigate–basically claims asserting its security interest–may be litigated expeditiously.

Such claims have come to be heavily regulated by statute, allowing for streamlined

procedures and effective protections for both sides. It does not strike us as unreasonable,

much less oppressive, to forego arbitration of such claims.” (footnote omitted)); Walther v.

Sovereign Bank, 386 Md. 412, 436, 872 A.2d 735, 749 (2005) (“We agree with these other

jurisdictions and their findings that the act of a mortgage lender in providing certain

exceptions for itself in the arbitration agreement, such as the ability to pursue foreclosure

proceedings in a judicial forum, does not in and of itself make the arbitration agreement

unconscionable where the mortgage-debtor/borrower is not provided with identical

exceptions to the arbitration agreement.”); Lackey v. Green Tree Fin. Corp., 330 S.C. 388,

401, 498 S.E.2d 898, 905 (S.C. Ct. App. 1998) (“Green Tree retained the option to use

judicial or non-judicial relief to enforce a security agreement relating to the manufactured

home, to enforce the monetary obligations secured by the manufactured home, or to foreclose

on the manufactured home. Secured transactions allow lenders to take greater risks because

their ability to protect a loan is enhanced by the legal right to recover and sell the collateral

in the event of default. Judicial remedies for the recovery of property, such as the replevin

action, and the foreclosure action, provide specific procedures for protection of collateral and

46

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. Thus, we conclude

this clause does bear a reasonable relationship to the business risks.” (footnote omitted)).

Finally, it is noteworthy that Ocwen’s exercise of any of its rights under the

“Exclusion from Arbitration” clause is tempered by the portion of that clause allowing the

Currys to compel Ocwen to arbitrate:

Should Borrower appear in and contest any judicial proceeding
initiated by Lender under this Exclusion, or initiate any judicial
proceeding to challenge any action authorized by this Exclusion,
without asserting any counterclaim or seeking affirmative relief
against Lender, then upon request of Borrower such judicial
proceedings shall be stayed or dismissed, and the matter shall
proceed to arbitration in accordance with the section entitled
“Arbitration of Disputes.”

Based upon the foregoing discussion, we conclude that the circuit court erred

in relying upon the “Exclusion from Arbitration” provision as a basis for finding the

arbitration agreement to be unconscionable.

iv. Limitation on Discovery. The arbitration agreement included the

following notice in all capital letters above the signature line:

NOTICE: BY SIGNING THIS ARBITRATION RIDER
YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING
OUT OF THE MATTERS DESCRIBED IN THE

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 “ARBITRATION OF DISPUTES” SECTION ABOVE
DECIDED EXCLUSIVELY BY ARBITRATION, AND YOU
ARE GIVING UP ANY RIGHTS YOU MIGHT HAVE TO
LITIGATE DISPUTES IN A COURT OR JURY TRIAL.
DISCOVERY IN THE ARBITRATION PROCEEDINGS MAY BE
LIMITED BY THE RULES OF PROCEDURE OF THE
SELECTED ARBITRATION SERVICE PROVIDER.

(Emphasis added). This notice was one of the grounds upon which the circuit court relied

in finding substantive unconscionability, as evidenced by the court’s comment that “[t]he

agreement also informs the Plaintiffs that the rules of procedure applicable to arbitration may

prevent them from conducting meaningful and full discovery.”

Ocwen argues that the arbitration agreement does not expressly limit the

discovery available to either party in arbitration. Rather, the agreement provides that

discovery may be limited by the applicable rules of procedure. Ocwen submits that it is well-

settled that discovery limits in arbitration do not support a finding of substantive

unconscionability. See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 31, 111 S. Ct.

1647, 1655, 114 L. Ed. 2d 26 (1991) (“by agreeing to arbitrate, a party ‘trades the procedures

and opportunity for review of the courtroom for the simplicity, informality, and expedition

of arbitration.’” (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S.

614, 628, 105 S. Ct. 3346, 3354, 87 L. Ed. 2d 444 (1985))). The Currys do not address this

issue.

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 Initially, we note that the extent to which discovery may or may not be limited

is unclear from the arbitration agreement, which merely clarifies that the extent of discovery

will be governed by the arbitration forum selected. In addition, there has been no claim made

that any limitation on discovery would apply solely to the Currys. Thus, we may presume

that any such limitation would apply equally to Ocwen and the Currys. Finally, assuming

that discovery would, in fact, be limited by the arbitration forum selected, we note that

several courts have enforced such limitations. See In re Cotton Yarn Antitrust Litig., 505

F.3d 274, 286-87 (4th Cir. 2007) (“While discovery generally is more limited in arbitration

than in litigation, that fact is simply one aspect of the trade-off between the ‘procedures and

opportunity for review of the courtroom [and] the simplicity, informality, and expedition of

arbitration’ that is inherent in every agreement to arbitrate. . . . [T]he plaintiffs bear the

burden of showing that the terms of the arbitration agreement would preclude them from

effectively vindicating their statutory rights. . . . The plaintiffs’ arguments about the

discovery limitations attendant to arbitration proceedings fall well short of satisfying their

burden.” (quoting Mitsubishi Motors Corp.)); Morrison v. Circuit City Stores, Inc., 317 F.3d

646, 673 (6th Cir. 2003) (“In this case, although Morrison has asserted that the discovery

allowed under the Circuit City arbitration rules is more limited than that generally allowed

in federal district court, she has failed even to attempt to show that such restrictions prevent

either her or any other claimants from presenting their claims.”); Amisil Holdings Ltd. v.

Clarium Capital Mgmt., 622 F. Supp.2d 825, 829-30 (N.D. Cal. 2007) (“[I]n Gilmer [v.

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Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S. Ct. 1647, 114 L. Ed. 2d 26 (1991)], the

Supreme Court indicated that a challenge to arbitration on the basis that it provides for only

limited discovery is not likely to succeed. . . . In the instant case, [the plaintiff] has not

adequately demonstrated why arbitration under the AAA rules would deny it a fair

opportunity to present its claims.”); Coast Plaza Doctors Hosp. v. Blue Cross of California,

83 Cal. App.4th 677, 689-90, 99 Cal. Rptr. 2d 809, 818-19 (Cal. Ct. App. 2000) (“Limited

discovery rights are the hallmark of arbitration. . . . The fact that an arbitration may limit a

party’s discovery rights is not “substantive unconscionability.” If it were, every arbitration

clause would be subject to an unconscionability challenge on that ground.” (footnote

omitted); In re Poly-America, L.P., 262 S.W.3d 337, 358 (Tex. 2008) (declining to find

limitation on discovery per se unconscionable and commenting “at this point in the

proceedings, without knowing what the particular claims and defenses–and the evidence

needed to prove them–will be, discerning the discovery limitations’ potential preclusive

effect is largely speculative. The assessment of particular discovery needs in a given case

and, in turn, the enforceability of limitations thereon, is a determination we believe best

suited to the arbitrator as the case unfolds.”); Cottonwood Fin., Ltd. v. Estes, 339 Wis. 2d

472, 485, 810 N.W.2d 852, 859 (Wis. Ct. App. 2012) (“Any limits will apply equally to both

parties. Further, the arbitration provision prohibits the application of any rules of evidence,

which simplifies and expands the presentation of evidence, acting as a counterweight to any

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limits on discovery. See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 31, 111

S. Ct. 1647, 114 L. Ed. 2d 26 (1991).”).

In light of the foregoing discussion, and to the extent that the United States

Supreme Court already has acknowledged that the simplified procedures sought in arbitration

necessarily limit the formalities of discovery, we find no difficulty in concluding that, under

the facts herein presented, the circuit court erred in finding the arbitration agreement to be

unconscionable on this ground.

IV.

CONCLUSION

For the reasons explained in the body of this opinion, we find the circuit court

erred finding the arbitration agreement to be unenforceable and in denying Ocwen’s motion

to compel arbitration. Accordingly, we grant the requested writ of prohibition and direct the

circuit court to enter an order compelling arbitration.

Writ Granted.

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