Lytle v. CitiFinancial Services, Inc.
Citation | 810 A.2d 643,2002 Pa. Super. 327 |
Parties | Robert E. LYTLE and Judith Lytle, Appellants, v. CITIFINANCIAL SERVICES, INC., f/k/a Commercial Credit Plan Consumer Discount Company, Appellee. |
Decision Date | 24 October 2002 |
Court | Superior Court of Pennsylvania |
Robert M. Firkser, Media, for appellant.
Marilyn Heffley, Philadelphia, for appellee.
BEFORE: McEWEN, P.J.E., JOHNSON, and JOYCE, JJ.
OPINION BY McEWEN, P.J.E.:
¶ 1 This appeal from an order dismissing, in response to the preliminary objections of CitiFinancial Services, Inc., f/k/a Commercial Credit Plan Consumer Discount Company (hereinafter "CitiFinancial"), the class action complaint filed by Robert and Judith Lytle, presents substantial questions concerning, inter alia, the extent to which federal law requires state courts to allow the use of a pre-dispute arbitration clause in a consumer contract to circumvent state consumer protection statutes.1 While the contentious nature of this issue inspired us to review all of the relevant decisions in this evolving contest in order to resolve the question2 presented, the procedural posture of this case requires that we vacate the order of dismissal and remand the record to permit the trial court, in the first instance, to receive and entertain evidence on certain defenses interposed by the parties.
¶ 2 Appellants, Robert and Judith Lytle, husband and wife who resided in Delaware County, Pennsylvania, applied to Appellee CitiFinancial for a loan to be secured by a mortgage on their residence. The record presently before this Court consists only of the class action complaint filed by the Lytles, the preliminary objections filed by CitiFinancial, and the Lytle's response to those objections. The record does not provide any information concerning the process by which appellants applied for and obtained approval of the loan at issue in this litigation, or any information concerning fees paid or documents exchanged prior to settlement on the loan, or what information, if any, concerning the terms of the loan, was provided to the Lytles when they applied for the loan or at any other time prior to settlement on May 28, 1997. Settlement apparently occurred on May 28, 1997, at which time the Lytles executed a mortgage, as well as a security agreement and note3 which obligated them to make 180 payments of $1,455.15 each, commencing July 2, 1997, in return for a loan in the amount of $121,236.53 at the annual percentage rate of 12%.
¶ 3 The esteemed Judge Harry J. Bradley has provided a succinct recitation of the facts contained in the pleadings:
¶ 4 The preliminary objections which prompted dismissal of the complaint provided:
PRELIMINARY OBJECTION TO ALL COUNTS OF THE COMPLAINT PURSUANT TO PA.R.CIV.P. 1028(6)
8. Act 6 prohibits class certification of this action. See 41 P.S. § 504 (1999).
¶ 5 The trial court, in direct response to the preliminary objections, dismissed the complaint with prejudice and directed the parties to proceed to arbitration. Appellants claimed in their response to the preliminary objections, and now argue on appeal to this Court that this ruling was error as the arbitration provisions of the loan contract are unenforceable under Pennsylvania law.
¶ 6 The relevant portions of the Note executed by the Lytles on May 28, 1997, provided, inter alia:
READ THE FOLLOWING ARBITRATION PROVISION CAREFULLY. IT LIMITS CERTAIN OF YOUR RIGHTS, INCLUDING YOUR RIGHT TO OBTAIN REDRESS THROUGH COURT ACTION.
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