Gordon Rees Scully Mansukhani appellate team David Gersten and Eric Thompson obtained a crucial appellate victory for a firm client, the largest home construction company in the United States. The Florida Third District Court of Appeal reversed the trial court in a resounding victory for builders and developers who use arbitration provisions in their deeds.
The plaintiff, a homeowner’s association, sued on behalf of all of its members against the builder client for claimed construction defects to the stucco and other exterior features of individual homes, including individual front entryways. The builder moved to dismiss the complaint and compel arbitration pursuant to an arbitration provision contained in both the recorded special warranty deed as well as in the purchase agreement entered into with each original homeowner. The trial court denied the motion, finding that there was no agreement between the builder and the association requiring the latter to arbitrate. The builder, faced with a potential class action lawsuit by all of the homeowners, appealed.
The appellate court wrote that the association could not evade the arbitration provision agreed to by its members as the affected property was part of the members’ homes (not the association’s property). The appellate court also held that the homeowners were the real parties in interest, not the association. The appellate court also rejected the association’s argument that the arbitration provision was void as against public policy.
After the opinion issued, the association’s lawyer withdrew from the entire case.