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Class Action Not a Way Around Arbitration Requirement in Homeowner Warranty Agreement
Description Appeals court held that a homeowner warranty agreement that required arbitration of all disputes is a binding contract. The fact that plaintiff asserts that he wishes to bring a class action suit against the home builder, and would be prevented from doing so by going to arbitration, is not relevant.
Topic Alternate Dispute Resolution
Key Words Arbitration; Consumer Warranty; Class Action
C A S E   S U M M A R Y
Facts Stein bought a house from Geonerco in 1996 that came with a 25-year manufacturer's warranty on the siding. Stein also signed a 10-year warranty agreement with Geonerco in which he agreed to submit any unresolved disputes to binding arbitration. After being in the house a couple years, Stein complained to Geonerco about the siding. It did some work on the siding, but Stein was not satisfied. He sued Geonerco under the Consumer Protection Act. Geonerco moved to compel arbitration, but the trial court rejected the motion. Geonerco appealed.
Decision Reversed. The duty to arbitrate arises from the contract. The courts will look to what is written in the contract, not make subjective guesses about the meaning of what is written. A contractual dispute is arbitrable unless the court can say with assurance that no interpretation of the arbitration clause could cover the particular dispute. The contract included a warranty covering all claims, disputes, demands, controversies and differences between the parties, including claims regarding the siding. This was not a contract of adhesion that was forced on the buyer. Rather, the Stein's lender required him to obtain the warranty. The fact that arbitration precludes Stein from bringing a class action suit against Geonerco is not relevant, nor is it relevant that the contract was silent as to class action suits, nor is Stein entitled to class arbitration. His rights are protected by the existing procedure.
Citation Stein v. Geonerco, Inc., - P.3d - (2001 WL 138871, Ct. App., Wash., 2001)

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