Articles about Binding Arbitration

Home sweet crooked house

By Sarah Max, CNN/Money senior writer

New home buyers and builders bicker about leaky roofs, cracked patios and other building defects.

June 10, 2004 - BEND, Oregon - Problems with your brand new house?

Get in line.

In booming markets, such as Las Vegas, Los Angeles and Phoenix, there is a backlog of court cases to hear homeowners' complaints of leaky roofs, cracked foundations and warped siding.

New homes accounted for more than one in six of a record six million home sales recorded in 2003, according to the National Association of Realtors.

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D. R. Horton, Inc. v. Green, 120 Nev. Adv. Op. 63, 96 P.3d 1159 (Nev.

2004)

1

CONTRACTS – UNCONSCIONABILITY – ARBITRATION CLAUSE

Summary

Appeal from a district court order denying a motion to compel arbitration.

Disposition/Outcome

Affirmed. A contractual arbitration provision is procedurally and substantively

unconscionable when it is inconspicuous, one-sided, and fails to advise the homebuyer

that upon signing, significant rights under Nevada law are waived.

Green testified that he only read the first page of the agreement, because the

second page was “all fine print.” Horton’s agent told Green it was a standard contract.

The Velickoffs testified that they read both pages of the agreement, including the

arbitration clause, but did not understand that the provision constituted a waiver of their

right to a jury trial or affected their rights to a construction defect claim under NRS

Chapter 40.

The district court also held that the clause was procedurally and

substantively unconscionable because it operated to waive the right to a jury trial without

mentioning the right and failed to inform homebuyers of the costs associated with

arbitration and the difference in arbitration fees and filing fees of suits foiled under

Chapter 40.

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HOBB Resources on Binding Arbitration

Public Citizen Calls for 12 States to Investigate Insurers’ Use of
Questionable Arbitration Firm

Insurance Commissioners Asked to Probe Firm Led by Disbarred Lawyer Consumer Group Also Seeks Investigation of Homebuilder Insurer

DENVER – Public Citizen has asked state insurance commissioners to investigate whether insurance companies have been improperly requiring homebuyers to arbitrate disputes using Construction Arbitration Services (CAS), a private firm that hears cases over defects in new homes. In letters released today, Public Citizen describes how CAS is co-owned by a former lawyer who was disbarred for stealing client funds and operates in apparent violation of 12 states’ laws.