The Supreme Court of Texas.
The November 29 Docket
Centex Homes and Centex Real Estate Corp. v. Buecher

In Centex Homes and Centex Real Estate Corp. v. Buecher the issue is whether homeowners can waive, by contract in buying a new home, the implied warranties of habitability and "good and workmanlike" construction for the house where the language in the contract is "clear and free from doubt." The homeowners sought in a class action to prevent Centex from enforcing the waiver included in their sales documents. The trial court dismissed the class action, but the court of appeals reversed, reasoning that policy considerations giving rise to implied warranties prevented their disclaimer in this case by a preprinted standard from waiver.

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Case Background Information:

Dec 16, 2001 Texas. The Home Buyer Beware State. The deception of new home warranties and the lack of consumer protection for new homeowners instills nothing but false hope.  You "hope" your home does not have a serious defect, because if it does you will soon learn the meaning of the Lone Star in our state flag.  You will find yourself fighting this battle alone.

May 10, 2001 Posted to the Centex Page: No. 04-99-00337-CV Michael M. BUECHER, et al.,  Appellants v. CENTEX HOMES, a Nevada Partnership, and Centex Real Estate Corporation d/b/a Centex Homes, Appellees. "It would be incongruous if public policy required the creation of an implied warranty, yet allowed the warranty to be disclaimed and its protection eliminated merely by a pre-printed standard form disclaimer or an unintelligible merger clause."

Dec 8, 2000:  Posted in Centex in the News: Owners, Builder Clash Over Waived Implied Warranty "If Centex wins this case, then the buyer of a toaster oven, a VCR or a microwave will have more legal rights to seek repairs than the  uyer of a brand spanking new home," says Janet Ahmad of San Antonio, president of Homeowners for Better Builders. 

Feb 18, 2001TEXAS HOMEBUILDERS NO LONGER GUARANTEE WELL-BUILT HOMES Buecher et al, v. Centex Homes Prepared by Texas Watch, Austin, Texas Texas Watch:  888-738-4226 danlambe@texaswatch.org

Feb 18, 2001Press Release November 28, 2000 "Supreme Court to hear arguments on whether new home builders in Texas can evade responsibility to new home buyers"For Immediate Release For More Information Please Contact: Dan Lambe 512-381-1111 Cris Feldman 512-472-9770

Feb 18, 2001 Posted a PDF Copy of the Amicus-Curiaesupplied to the Texas Supreme Court for Centex Homes v. Buecher in support of Centex. A review of this amicus is also available.

Feb 15, 2001 Posted a Review of the Amicus-Curiae supplied to the TexasSupreme Court for Centex Homes v. Buecher in support of Centex.

Feb 15, 2001 Posted a Review of the Residential Warranty Corporation 10 Year Warranty. This is the warranty provided by Centex in Texas. If you have any comments, or if you found I have not represented the facts correctly, please contact me at john.cobarruvias@hobb.org so I may correct it.

Jan 18, 2001: Posted to the Centex and Supreme Court page:The Home Boysí Hold  On the High Court "The justices [Texas Supreme Court] also took $363,338 from Centexís law firms, Baker & Botts and Bracewell & Patterson, which put two ex-justices on the case (Eugene Cook and Joe Greenhill). Justice Nathan Hecht took $5,000 from Bracewell in the past two months alone." Texans for Public Justice.

Comments on the Supreme Court Hearing:

The Chief Justice Phil Hardberger of the 4th Court of Appeals said it best, "The burden on the home builder is not great: only that the home be built in a workmanlike manner and be fit for human habitation."  The relief sought by Centex Homes from the Texas Supreme Court is a bold and shocking display of their intent to produce a substandard home, and not be held accountable. The very idea that any builder would subject himself to the public ridicule of such a request is astonishing. Centex attorneys had the humiliating task of explaining to the highest court why their client thinks it is too high a standard to build a home that is fit for human habitation. 

COURT RULING WOULD HAVE THE EFFECT OF AMENDMENT TO STATE LAW

Our Texas Legislature had a specific intent when they passed the state law of an "Implied Warranty."  The intent of our Legislature was to provide protection to the home buyer from predatory business practices by unethical home builders and to hold them to a minimum standard of "Good Workmanship of Habitability."  Centex is asking the Texas Supreme Court to clearly change the intent of that law, rather than having it amended by the State Legislature.

NO INTENT OR INCENTIVE TO PRODUCE A QUALITY PRODUCT

The home-building industry generally advocates and promotes contractual requirements that openly display their indifference to delivering a quality product. Evidence of  this is that most home builders include this shameful statement in their contracts to build a home: "...Builder makes no warranty, express or implied as to quality, fitness for a particular purpose, merchantability, HABITABILITY or otherwise..." Centex has gone a step farther with its no shame policy. Their take- it-or-leave-it unilateral contract agreement requires that unless the buyer agrees to give up his or her right of implied warranties of good and workmanlike construction and habitability, they will not sell them the house.  Now Centex is shamefully asking the Texas Supreme Court to give their endorsement of the practice of substandard home building with little or no warranty.

CENTEX ATTORNEYíS ARGUE: IMPLIED WARRANTY STANDARD IS TOO HIGH. 

Centex attorneys argue that the home buyer does not need an Implied Warranty if they are provided a "Limited Warranty."   The key word is "LIMITED."  If the Supreme Court rules in favor of Centex it will be the end of any semblance of a home warranty as we know it today that is already a mockery.  The limitations imposed and exclusions are innumerable.  Such basic household items as kitchen sinks are excluded.  As a result, the builder installs the cheapest substandard (sometimes rejected) product, knowing it will not last the first year.  To avoid responsibility under the warranty, builders provide what appears to be helpful homeowner maintenance booklets or brochures after closing, with such titles as, "Landscaping and Foundation Care." What appears to be a helpful guide for home maintenance is in reality a disclaimer of responsibility for builder liability of defects and even foundation failures.

JUST WHEN WE THINK WEíVE HEARD IT ALL.

Centex now incorporates a number of safeguards in their standard unilateral contract that deprive the buyer from certain Constitutional Rights.  Their contracts contain a Binding Arbitration Clause, which deprives the home buyer of their Constitutional right to a trial by jury. Amazingly, Centex incorporates a "Declaration of Covenants, Conditions and Restrictions" in their contact that also restricts the home buyer's  Constitutional Right of Free Speech.  It reads as follows:

"PICKETING AND DEMONSTRATION - picketing, protest marches, sit-in demonstrations, protest speeches, or other forms of public protest...Owner, by acceptance of the deed to any Lot, shall be deemed to have accepted the foregoing prohibitions as REASONABLE LIMITATIONS on his or her CONSTITUTIONAL RIGHT TO FREE SPEECH..."

Buying a Centex Home means no Implied Warranty for Good Workmanship and Habitability,  no Constitutional Right to a trial by jury, and Restriction of Constitutional Right to Free Speech.  If the Texas Supreme Court affirms Centex's request, it will send a message across the country.  Then all other builders will follow their lead.  What will become of "THE AMERICAN DREAM?"

This hearing must have been attended by 50 lawyers, which was 50 lawyers too many. I was in absolute shock to hear the attorney from centex saying with a straight face to the Justices of the Supreme Court of Texas:

"Homeowners have a wave of consumer protection available" and
"Builders in Texas must build to stringent building codes" and
"Homeowners have many methods of remedies available" and
"Homeowners are provided a 10 year warranty"

After the hearing we were showing the media  pictures of a centex homeowner protesting. This is what we here in Texas call a 10 year warranty. This is what centex and their attorneys drive their homeowners to. This, I guess, is the "wave of protection" she mentioned Well, Texas style homeowner protection comes in the form of a 2 by 4....with a sign stuck to it. 

We also had a crowd gathered when we showed the Declarations of Covenants signed by Damon Lyles, Division President Centex Real Estate Corp, that specifically prohibits protesting and picketing and describing this as "reasonable limitations on his or her constitutional rights of free speech"!  Not only does Centex have a binding arbitration clause in this man's contract which removes your constitutional right to a civil trial, they also make you sign away your rights to free speech! 

Centex 's attorneys were not happy with our attendance, the fact that we set the record straight with the media, and will continue to do so, and the fact that I stuck my finger at one and told them "DO NOT INTERRUPT ME!". I personally believe that in just one short week, Centex homes and their attorneys have surpassed every other builder as the poster child for what is wrong with homebuilders in Texas. You can't sue them. You can't protest them. And now, if the Supreme Court agrees, you can't expect your home to be habitable. This is SHAMEFUL.

All we have ever asked was for a builder like centex to "take responsibility for their actions" and yet in the great State of Texas where the slogan "Era of Responsibility" was born, I think someone, somewhere, sometime,thought it was an "ERROR IN RESPONSIBILITY" ie "It ain't ma fault. I didn't do nuttin."

This is SHAMEFUL and should not be tolerated. During the next Texas Legistlature, I hope we use Centex Homes as a prime example of what happens when you misinterpret the slogan "Era of Responsibility".

On a side note, the chambers was guarded by a Texas State Trooper. After listening to our comments, he told use he too had a Centex home! And the siding was coming apart!!!!!  I told him to include our discussion in his letter to Centex and the fact that he was guarding their attorneys backends during the hearing. While the Centex attorneys received a buttload of money for their "performance", Janet, Laura, and I got a thank you from a State Trooper.

And that folks, made the trip  worthwhile!

By Laura Munoz, HomeOwners for Better Building, Austion: Coming Soon!