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Harrington v. Pulte Home Corp.9/27/2005
inate the dominant purpose of the transaction." Id. The dominant purpose of the transaction in this case is the purchase of a home. The arbitration clause here does not undercut this basic purpose. The Averett case, 177 Ariz. 531, 869 P.2d 505, illustrates this point. In Averett, an insured entered an insurance contract, purchasing increased limits to $500,000. Id. at 533, 869 P.2d at 507. An exclusion left the limits for family members at the prior, standard level of $30,000. Id. at 532, 869 P.2d at 506. The dominant purpose of the contract in Averett was to provide increased insurance coverage, but the clause at issue in Averett eliminated that purpose as to family members. Id. at 532-34, 869 P.2d at 506-08. The supreme court accordingly remanded for a fact finder to consider whether the clause was outside the insured's reasonable expectations. Id. at 535, 869 P.2d at 509. Here, the presence or absence of an arbitration clause does not eliminate the dominant purpose of the transaction: the purchase of a home.
Factor (6) is whether the clause "can be understood if the customer does attempt to check on his rights." Darner, 140 Ariz. at 394, 682 P.2d at 399. The arbitration clause specifically refers to "the Construction Industry Arbitration Rules of the American Arbitration Association (AAA) and the Federal Arbitration Act." Had there been any question about whether those rules permitted a jury trial, simply reviewing them would have answered that question.
Finally, factor (7) is whether there are any other relevant facts not included in the prior categories. The underlying premise of a reasonable-expectations argument is a claim by the party seeking to invoke the doctrine that the party would not have entered the contract had he or she known the clause was present. Though not dispositive, there is no affidavit asserting that, had appellees known of the arbitration clause in the contracts, they would not have entered the purchase contracts for the homes.
Considering all of the factors, it is clear to us on this record that the reasonable-expectations doctrine does not prohibit application of the arbitration clause in these contracts.
Appellees, however, attempt to avoid the conclusion that they did not satisfy the Darner criteria by relying on Broemmer, 173 Ariz. 148, 840 P.2d 1013. Appellees claim that the language in Broemmer referring to the lack of a "conspicuous or explicit waiver of the fundamental right to a jury trial or any evidence that such rights were knowingly, voluntarily and intelligently waived" means that the arbitration clause here was outside their reasonable expectations. Id. at 152, 840 P.2d at 1017. Appellees advance two related arguments: First, that any arbitration clause must conspicuously or explicitly waive the right to jury trial in order to be valid, and second, that any waiver of the right to jury trial must be knowingly, voluntarily and intelligently made. We reject these arguments.
c. Must Jury Rights be Conspicuously or Explicitly Waived?
Appellees' first argument is that the lack of a conspicuous and explicit waiver of their jury trial rights removed the arbitration clause from their reasonable expectations. As noted above, appellees do not assert that, as a matter of fact, they did not understand that an agreement to arbitrate all disputes was a substitution of arbitration for court proceedings. Their factual claim was that they were not aware that the contract contained such a provision. Indeed, an agreement to submit disputes to arbitration is necessarily an agreement to forego dispute resolution by a jury. Madden v. Kaiser Found. Hosp., 552 P.2d 1178, 1187 (Cal. 1976). As the Madden court observe
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