Does An Arbitration Agreement In A Home Purchase Contract Protect A Developer From A Personal Injury Lawsuit?
Arbitration agreements are often used by corporations to try and avoid personal injury litigation. For example, nursing homes often demand residents sign such agreements as part of their admissions paperwork. Even when arbitration may prove to be grossly unfair to an injured party, Florida courts will often uphold them as a matter of law.
Florida Appeals Court Says Woman Can Sue Developer for Bicycle Accident
That said, a demand for arbitration must relate to the underlying subject of the agreement. Even when an arbitration agreement is written in broad and sweeping terms, there still needs to be a “nexus” between the claim being raised and the contract. Put another way, not every legal claim between two parties is necessarily governed by an arbitration agreement.
Take this recent decision from the Florida Fourth District Court of Appeals, Dewees v. Johnson. The plaintiff in this case purchased a house from the defendant, a real estate developer. The purchase contract for the property contained an arbitration agreement. The agreement stated that “all post-closing claims, disputes, and controversies” must be resolved by arbitration. An attached warranty for the workmanship on the home also contained a clause requiring arbitration “of any and all claims, disputes, and controversies” between the builder and the seller.
Eighteen months after signing the purchase contract, the plaintiff was injured in a bicycle accident. The accident occurred as the plaintiff was riding through the planned community, which was still under construction by the defendant. According to the plaintiff, the roads going through the development were uneven and that caused her accident.
The plaintiff filed a lawsuit against the defendant seeking compensation for her accident-related injuries. In response, the defendant moved to compel arbitration. The defense argued the plaintiff’s personal injury claims fell within the scope of the arbitration agreements referenced above. A trial judge granted the defense motion to compel arbitration as to the developer only. (The plaintiff named other defendants who were not parties to the arbitration agreement.)
On appeal, however, the Fourth District held the developer was not entitled to arbitration on these facts. The appellate court held there was “no significant relationship between her claims against the developer and the Purchase Contract” for the house. To put it simply, the arbitration agreement only covered disputes arising from the construction of the plaintiff’s house. It did not broadly cover any possible legal claim the plaintiff might have against the defendant. In this case, her personal injury lawsuit had nothing to do with her house. Rather, they implicated the defendant’s duty to keep its roads “in a safe and reasonable manner for invitees and its duty to warn pedestrians and bicyclists using the incomplete roadways of unknown and inherent hazards.”
Contact a Florida Accident Attorney Today
Seeking compensation following an accident often requires victims to navigate a proverbial legal minefield. An experienced Boca Raton personal injury lawyer can help guide you through the process and advocate for your rights in court. So if you need to speak with an attorney, Contact Leifer & Ramirez today to schedule a free consultation.