A federal court in Ohio rejected a homeowner's arguments that an arbitration agreement accompanying her note and mortgage was unconscionable and compelled arbitration of the dispute.

In Price v. Taylor, No. 3:08CV420, 2008 WL 3200624 (N.D. Ohio Aug. 6, 2008), Price bought a home. After filing for bankruptcy because her loan payments ballooned, Price refinanced her house with Intervale Mortgage Corporation (Intervale). An arbitration agreement accompanied Price's loan with Intervale.

Price later sued Intervale, and Intervale moved to stay litigation pending arbitration pursuant to the arbitration agreement. Price opposed the motion and moved that the Court allow the parties to conduct discovery on issues of unconscionability, mutuality, limitations on remedies, and costs of arbitration.

The Court rejected Price's arguments and granted Intervale's motion to stay litigation pending arbitration.

In opposing the motion, Price argued that the arbitration agreement lacked mutuality because "it exempts from arbitration certain claims which [Price] alleges only [Intervale] would bring," and thus was substantively unconscionable. The Court rejected this argument because there was adequate consideration for the agreement and under Ohio law, a valid arbitration agreement does not fail for lack of mutuality so long as consideration supports the contract.

Price also argued that arbitration would be prohibitively expensive because the agreement required her to pay costs for claims in excess of the loan amount that she received. The Court rejected this argument because Price failed to produce any evidence of prohibitive costs, other than merely pointing out cost provisions that she found unfair.

Finally, Price argued that the agreement was unconscionable because it limited her ability to bring a class action or act as private attorney general. The Court held that limitations on remedies in arbitration agreements are invalid if they violate a plaintiff's statutory rights. However, the Court held that Price did not point to any statutory remedies which would be unavailable in arbitration. Accordingly, the Court held that the agreement was not unconscionable in limiting Price's ability to bring a class action or act as private attorney general.