TorteDeForm

Kia Franklin

BMA = fair? Certainly not for the Gilberts…

Wow. In three words, this is shoddy, shady, and shameful. It is also yet another example of why private arbitration is such a darling to the big business industry, and such a menace to... well, everyone else.

Matt Melamed and Paul Bland blog over at CL&P blog about some seriously suspect business on the part of an arbitrator, in a case filed by homeowners against a construction company that really went overboard with their horrible business practices.

Shoddy work: The contractors committed some major offenses, outlined in further detail by Melamed and Bland. They installed a shower improperly, on purpose, because they hadn't budgeted enough. The leakage from the shower caused significant damage to walls and floors. Speaking of floors, the contractors installed those improperly as well, violating national guidelines. Oh yes, and the front doors also leaked, causing water damage to the doorframes and floors. Oh, and the bedroom doors also leaked, but the company said they could fix this by just sealing the bedroom doors shut. (Er... what?) The list (really) goes on. Check out the CL&P post.

Shady Arbitrator: The arbitrator provided by CAS, Ben DeVries, ignored reliable testimony from both sides and awarded the family only $114,000 to fix $200,000 in clearly established damages. The arbitrator also took and held onto all the evidence "for safeguarding." But what happened when the plaintiffs tried to appeal? Shame, shame, shame...

Shameful Conduct: The arbitrator destroyed the evidence submitted at arbitration, as Melamed and Bland point out, "AFTER the plaintiffs had told him in writing that they planned to appeal the award and AFTER DeVries had promised to safeguard the evidence"... and, I might add, AFTER the Louisiana District Court ordered him not to! So now... CAS and DeVries both face a motion for contempt. As they well should!

And now, for some comic relief: "In response [to the contempt motion], CAS has graciously offered . . . a free arbitration proceeding." Laughable! Um.... thanks, but no thanks? Why send people through kangaroo court, when we know what individuals are going up against in these pseudo-judicial proceedings? Time and again we hear about cases like this, and shake our heads. Perhaps we think of them as off the wall cases that are ridiculous but not necessarily indicative of a larger problem. Let's change the way we think! Sometimes the public courts fail to produce fair outcomes, but the difference is that through our public courts we actually have accountability systems in place to fight those unfair outcomes--we have access to court records, an appeals process, and judges are actually required to follow the law.

Compare that to what the Gilberts got through arbitration... We need to ban pre-dispute binding mandatory arbitration contracts between corporations and individuals.

Kia Franklin: Author Bio | Other Posts
Posted at 6:15 PM, Sep 23, 2008 in Arbitration
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Comments

I am so glad to see this case exposed! I almost got stuck arbitrating with CAS during a construction defect case w/a builder. The clause was in a separate warranty policy that I didn't even see until after closing because the builder buys the policy in most cases. I was able to get out of arbitration because I found out from a consumer org in time, that FHA and VA buyers do not have to arbitrate w/warranty co's. They may use the courts, too. By retaining my right to sue, I had leverage that I would not have had with arbitration as my only recourse. That allowed me to hang onto the case and eventually settle and recover my damages. The regulation is in the Code of Federal Regulations, Title 24, Section 203.204(g)and can be found here: http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=5c571d2a713abf1744f87b3e3a531944&rgn=div8&view=text&node=24:2.1.1.2.4.1.89.67&idno=24 You can also find it on Cornell Law School's site or of course in a law library, etc. I wish every lawyer that considered taking homeowners' cases knew this regulation. I can only imagine how many FHA and VA buyers don't have to arbitrate, but end up in it anyway, because so few know about this law. The National Association of Home Builders has tried to do away with it, so use it while you can, they may yet succed in courting HUD into making it so no one has this protection. Of course if the Arbitration Fairness Act passes, it should all be a moot point.

Posted by: Cindy | September 23, 2008 8:43 PM

I forgot to add the second link of the NAHB trying to remove this protection from arbitration for at least some home buyers; scroll down to single family FHA: http://banking.senate.gov/01_11hrg/112901/curtis.htm

Posted by: Cindy | September 23, 2008 8:48 PM

Thank you for sharing this!

Posted by: Kia | September 25, 2008 5:01 PM