Do you know what an arbitration clause is? This section of a contract could lead you to signing away your constitutional right to sue a company in a court of law. Home Warranty Administrator of Florida Inc. and Choice Home Warranty thought they had included just such a clause in their contract with a New Jersey homeowner. However, the homeowner alleged otherwise, and Stephen Sullivan—a trial attorney here at Keefe Law Firm—helped her argue the point.
Can You Sue if a Warranty Company Commits Fraud?
Back in 2015, a New Jersey homeowner filed a proposed class action lawsuit in Middlesex County Superior Court. She alleged that the defendants (Home Warranty Administrator of Florida Inc., Choice Home Warranty and related parties) had violated New Jersey’s Consumer Fraud Act and Truth in Consumer Contract, Warranty and Notice Act.
Armed with these and several other charges, the homeowner went to court where she was met by opposition from the defendants. They claimed that she waived her right to a jury trial by signing a contract that contained an arbitration clause. This clause said any claims would be “exclusively” remedied by the American Arbitration Association, leading the defendants to file a motion to have the case dismissed or sent to arbitration. There was just one problem.
Language in the contract did not specify that the homeowner was giving up her right to a jury trial. Saying that arbitration was the ‘exclusive’ remedy to future claims was not enough in the eyes of the court. The Middlesex County Superior Court ruled to let the case continue and later a New Jersey state appeals court would uphold that decision.
Keefe Law Firm attorney Stephen Sullivan says that if a person is waiving his or her rights, “the language has to be concise… and understandable to the average lay person.” That’s why it can be so important to consult an attorney before signing your name to any contract.