 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
Harrington v. Pulte Home Corp.9/27/2005
lure of the arbitration clause to disclose that they were relinquishing the right to a trial by jury and the failure to disclose the costs of arbitration. They further contend that the potentially applicable fees for arbitration through the AAA, as required by the arbitration clause, are substantively oppressive and unconscionable in their own right. Appellees submitted in the trial court virtually identical statements from five of the homeowners to the effect that they were unaware of the arbitration provision when they signed the contract, arbitration had not been explained to them, they did not understand they were waiving the right to trial by jury, they did not understand the high costs and fees for arbitration and could not afford them, and that being forced to pay such costs would prevent them from obtaining any remedy for their injuries.
The superior court denied appellants' motion, ruling as follows:
The Court specifically finds that the arbitration clauses in each of the Purchase Agreements . . . which are adhesion contracts . . . are unenforceable clauses because [they are] contrary to the reasonable expectations of the [appellees] and under the circumstances are unconscionable. The Court specifically finds that the arbitration provision is defective because of the lack of conspicuous and express language of a waiver of the fundamental right to a jury trial [citing Broemmer v. Abortion Services of Phoenix, Ltd., 173 Ariz. 148, 840 P.2d 1013 (1992)] and does not constitute a knowing, intelligent, and voluntary waiver of same . . .; and because of the lack of notice that AAA arbitration can involve substantial fees which they must pay and which the Court specifically holds should be included in an arbitration clause (and which in the Court's view, should also be in bold or other conspicuous type just as the waiver of the right to a jury should be).
A formal order was entered. Appellants timely appealed. We have jurisdiction pursuant to Arizona Revised Statutes ("A.R.S.") section 12-2101.01(A)(1) (2003).
Discussion
Appellants contend the trial court erred by denying their motion to compel arbitration on the basis that it violated the appellees' reasonable expectations and was unconscionable. As discussed below, reasonable expectations and unconscionability have been held by the Arizona Supreme Court to constitute separate theories of relief. Infra 39. We address some preliminary matters and then address each primary issue in turn.
1. Preliminary Matters
a. Choice of Law
Appellants assert that the Federal Arbitration Act, 9 U.S.C. §§ 1-16 (1999) ("FAA"), applies to the arbitration clause in this case and mandates application of the arbitration clause. While we agree that the FAA applies, that statute has been construed to permit the application of state law to void arbitration clauses under certain circumstances. Specifically, the United States Supreme Court has held that states may regulate arbitration clauses "under general contract law principles and they may invalidate an arbitration clause 'upon such grounds as exist at law or in equity for the revocation of any contract.'" Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 281 (1995) (quoting 9 U.S.C. § 2) (emphasis added). This authority is limited:
What states may not do is decide that a contract is fair enough to enforce all its basic terms (price, service, credit), but not fair enough to enforce its arbitration clause. The Act makes any such state policy unlawful, for that kind of policy would place arbitration clauses on an unequal 'footing' directly contrary to the Act's language and Congress' intent.
Id.<
Page 1 2 3 4 5 6 7 8 9 10 11 12 Arizona Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|