Off the Kuff
Building influence
Here's an interesting article from the This Week section of the Chron regarding an acrimonious and public battle between a disgruntled homebuyer named Jordan Fogal and the builder who constructed her house, Tremont Homes... Let's start with the baseless attack on civil juries, something that I've noted before. Just once, I'd like to see a reporter ask someone who offers such an opinion if they hold similar feelings about juries in criminal trials... Attacking juries like this is cynical, dishonest, and really quite insulting, since after all everyone reading this is a potential juror. That this now seems to be a standard talking point for the homebuilding industry certainly doesn't give me any faith in their preferred system of arbitration...But what really gets me is the last quoted sentence. The lawyer for the builders is also an arbitrator for the AAA, which is the group used to rule on these builder/buyer disputes.

Off the Kuff
Building influence
Charles Kuffner 
January 29, 2005

Here's an interesting article from the This Week section of the Chron regarding an acrimonious and public battle between a disgruntled homebuyer named Jordan Fogal and the builder who constructed her house, Tremont Homes. The basics of the feud involve claims of defects with the house, a demand to have it bought back by Tremont, and a refusal to use binding arbitration, which is a standard part of most new-home contracts. I'm in no position to judge who's right and who's wrong, but I think the following illustrates pretty clearly why many people don't trust the arbitration process, and why I have a fair bit of sympathy for them.

[William S. Chesney, III, a lawyer for Tremont] said groups like [Homeowners for Better Building, or HOBB] have a skewed view of the arbitration process and in doing so, convince people like [Jordan] Fogal that what they need to do is force builders into buying back a home instead of getting to the bottom of the problem and fixing it.

"It's customary, if not exclusive, to have arbitration provisions both for homeowners and builders to get quicker and more expedient resolutions to what would otherwise be a 2-3 year court process," Chesney said. "HOBB thinks 12 people on a jury is better than an independent arbitrator. (Fogal) found HOBB, and HOBB said, 'This is the position you need to take,' so she did.

"When she started having some problems, she quickly went to 'buy back my $360,000 house.' "

Said [Charles Turet, another lawyer for Stature and Tremont], "HOBB likes the emotion of 12 people who don't have any real knowledge of the situation over an impartial arbitrator who isn't going to be swayed by the emotional argument and is just going to look at facts and determine the best and easiest way to solve the situation."

Turet, along with being a lawyer for Tremont and Stature, is also an arbitrator for [American Arbitrators Association, or AAA].

Let's start with the baseless attack on civil juries, something that I've noted before. Just once, I'd like to see a reporter ask someone who offers such an opinion if they hold similar feelings about juries in criminal trials. It's not as if prosecutors haven't played on the odd emotion or two in search of convictions, yet somehow no one credible seems to think that we ought to scrap that system in favor of judge-only trials. Attacking juries like this is cynical, dishonest, and really quite insulting, since after all everyone reading this is a potential juror. That this now seems to be a standard talking point for the homebuilding industry certainly doesn't give me any faith in their preferred system of arbitration.

But what really gets me is the last quoted sentence. The lawyer for the builders is also an arbitrator for the AAA, which is the group used to rule on these builder/buyer disputes. If you were brought up on criminal charges, how much faith would you have in getting a fair trial if the judge were an assistant district attorney? Yet here we have an attorney for the homebuilders who also rules on disputes involving homebuilders. Why should anyone outside the industry have any reason to trust this? Remember, restricting access to the courts is something that builders have actively lobbied for, and one of the extra rewards they got for their efforts (and campaign contributions) was a seat on the Texas Residential Construction Commission, the governing body that sets the rules for how these disputes get resolved (see here and here). So again I ask, why should anyone trust this?

As I said, for all I know in this particular instance, the buyer has been irrational and the builder has acted in good faith every step of the way. Without knowing for sure that that's the case, though, it's hard for me to sympathize with the builder.

Posted by Charles Kuffner on January 29, 2005