National homebuilder powerhouse Taylor Morrison suffered a setback on its attempts to force buyers into arbitration when they allege building code violations. In the Second District Court of Appeals, the case of Reginald Anderson v. Taylor Morrison of Fla., Inc., 42 Fla. L. Weekly D1232 (Fla. 2d DCA May 31, 2017), dealt with the builder's attempts to enforce an arbitration agreement contained in its form Purchase and Sale Agreement against the buyers who were alleging defects in the home they purchased.
The Court determined that the Taylor Morrison contract attempted to limit or circumvent statutory protections for the buyers under Florida law, so the contract itself violated public policy and was not enforceable against the buyers alleging the construction defects. In reaching this conclusion, the Second District stated that a contract violates public policy where it "defeats the remedial purpose of a statute or prohibits the plaintiff from obtaining meaningful relief under the statutory scheme." Anderson v. Taylor Morrison of Fla., Inc., 42 Fla. L. Weekly D1232.
It appears, based on this ruling, that Taylor Morrison will have to go back to the figurative drawing board in order to find a way around statutory protections for buyers of its homes.
If you have a question about or a dispute with a builder regarding a home or other purchase and sale contract, or are experiencing construction defects, the experienced construction litigation attorneys at Icard Merrill may be able to help you.
Icard Merrill Attorney Worth Graham recently wrote an article on securities arbitration and litigation as a primer for attorneys and clients alike. The article can be found here and was also featured in a recent edition of the Sarasota County Bar Association's Docket, which you can find here.
The article is a great read for those either curious to learn some introductory information about the workings of securities arbitration and litigation or for attorneys trying to spot issues outside of their practice area for referral to an experienced attorney. Give it a read and, if you are in need of advice regarding securities law, contact the attorneys of Icard Merrill's securities arbitration and litigation department today.
Arbitration clauses exist in plentitude all around us in most people’s everyday lives—they are in your contract with your builder, enclosed with a great many products you buy, and even in your workplace—but they generally go unnoticed unless and until something goes awry. In those instances, people are often surprised to find that they have (usually without any real knowledge or consideration) waived their right to have a dispute heard before a judge or jury. Instead, they are forced to take their case before a private arbitrator (in many-but not all-instances that person is an attorney in the field) and potentially pay to have their case heard.
Compelling arbitration has long been required where an arbitration agreement is found to be valid, to concern the issue presented, and to have not been waived. This is outlined in the recent case of All-S. Subcontractors, Inc. v. Amerigas Propane, Inc., and codified in Florida under Chapter 682. 41 Fla. L. Weekly D1859 (Fla. 1st DCA August 11, 2016). In All-S. Subcontractors, Inc., the seller of propane affixed a “Terms and Conditions” flyer to its invoices which contained an arbitration provision. It appears under the facts of the case that customers were neither expected to sign nor specifically told of this provision other than by attachment to a propane invoice.
Later, when a class action was sought by consumers against the propane seller, the seller attempted to force the parties to arbitrate based on that “Terms and Conditions” pamphlet attached to invoices. The lower court agreed, but was reversed on appeal by the 1st DCA, which found that the class action initially rested on an invoice from several years prior to the first time the “Terms and Conditions” were ever attached to invoices.
For consumers, the scary part of this case’s holding is the possibility by implication that, had the invoices in question been from after the period of time when the “Terms and Conditions” pamphlet started being attached to invoices, the dispute could have been forced into arbitration even absent any proof of actual knowledge by the consumers that they had waived their right to a judge or jury hearing their dispute.
This lesson is an old one and serves many people well—read your contracts and ensure you both understand and agree to the terms in them before you sign (or take delivery of the goods in instances such as that of the All-S. Subcontractors, Inc. case wherein no one was required to sign the agreement).
If you have questions about a contract or are facing arbitration, consult with the experienced litigators of Icard Merrill today.