HOBB Community

Binding Arbitration History  
In 1994 the National Assoc. of Home Builder (NAHB) and the American Arbitration Association (AAA) entered into a joint venture to write arbitration rules and builders put arbitration clauses in their contracts.  For the past 9 years NAHB’s members continued to supply AAA with excessively expensive binding arbitration business while homebuilders consistently receive favorable binding arbitration decisions from AAA.  AAA document: "...AAA created the Construction ADR Task Force, comprised of 55 representatives of the construction industry and its advocates... with a goal of improving AAA services and helping the AAA be more responsive to the needs of the construction industry."

Construction Arbitration Services (CAS) is another success story of big business binding arbitration and is perhaps the fastest growing arbitration service in the country. Home Buyers Warranty (HBW), is one of the most popular warranty companies amongst builders, however; it has an official record of denying 86% of all claims, then rushing homeowners to CAS for binding arbitration. HBW as well as other 3rd party warranty companies habitually use CAS, whose sole purpose, emphasized by its name “Construction Arbitration Services,” is to conduct arbitration for the home construction industry nationwide.
“Arbitration Used by Home Builders to Subvert Consumer Laws”
http://www.hobb.org/index.php?option=content&task=view&id=330 (http://www.hobb.org/index.php?option=content&task=view&id=330)

I would like to direct people to the following website:www.peopleslawyer.net. You will see an icon that will direct you all sorts of information on MBA. (mandatory binding arbitration) The site is a wealth of information.

Just a note-The People's Lawyer is from Texas so if you are reading anything that pertains to the law, do not forget certain laws vary state to state.

In the United States Court of Appeals for the Eighth Circuit, (Appeal from the United States District Court for the Western District of Missouri), review Stark vs EMC, No. 03-2366, in this Case, "Arbitration. To the extent allowed by applicable law, any claim... shall be resolved by binding arbition in accordance", etc. In this case the law allowed punitive damages, binding arbition did not, Stark prevailed and received punitive damages. Dates: Submitted January 15, 2004, Filed August 26, 2004.

We purchased a home in 2003 and our sales contract not only has the binding mandatory arbitration clause but an additional clause about not going to the media, BBB, putting signs up or pretty much anything else that our First Amendment Rights allow us.

We had the media out to our home after going through the TRCC process in 2004.  We are currently suing our builder, the developer, the engineer who designed our subdivision, and the excavation company who did not bring in the dirt to build our pad at the designated height.  Our home sits 1.93 feet below where it should be, putting us a foot below street level.

Suprisingly, the builder cancelled 3 arbitration meetings, requested mediation (which all 3 homeowners attended individually) and now we are in the discovery and deposition process with a court date in November of this year.

We have our $2,000 check (their fine if we don't arbitrate or if we violate any other portion of their "binding" contract) collecting dust.

I would direct you to the link to read more of our contract but Janet, you have moved it.  It also has a photo of what happens to our properties when it rains (because we are so far below street level).

Another caveat of our binding arbitration contract.  It stipulates the kangaroo arbitration service featured in the HOBB articles but it also mandates we go to Dallas County.  Our home and our lawsuit are both in Tarrant County.  We don't think it will hold up in court if they try to get the judge to order arbitration.

Speak up! Share your experience and comments on binding arbitration here.
See another outstanding chatboard regarding the injustices, inequality and bias of Binding Arbitration.
Go to: Counsel.Net, Attorney Network – Business Law Chatboard
http://counsel.net/chatboards/business/topic731/6.28.06.14.00.59.html (http://counsel.net/chatboards/business/topic731/6.28.06.14.00.59.html)

In the long history of arbitration, it is clear that its intent was to resolve disputes between two or more parties who mutually agreed that it was beneficial to all parties to abide by a neutral arbiter.

Mandatory binding arbitration placed upon consumers by business, where one party forces the other to resolve a dispute by arbitration is clearly counter to the intent of the U.S. constitution, where its creators intended to create a rule of law that provided assurance of fair and equitable rights to every citizen. If arbitration is not consensual, it’s rape.