HOUSTON - Yesterday, the First Court of Appeals remanded a construction defect case with instructions for the trial court to order the parties into arbitration and stay the proceedings.
The lawsuit was brought by Rodney Goff and filed against Taylor Morrison of Texas and Taylor Woodrow Communities-League City.
According to the opinion, in December 2014 Goff signed a purchase agreement for the purchase of a new home to be constructed by Taylor Woodrow in the Mar Bella subdivision of League City, which was completed in August 2015.
Three years later, Goff sued Taylor Woodrow and Taylor Morrison, alleging that testing had revealed elevated levels of mold and mold-related toxins in his home. Goff claimed that the home was defectively constructed, causing moisture problems, which led to mold growth.
He also alleged that the defendants had been aware of mold issues in other Mar Bella homes constructed by Taylor Woodrow before he had purchased his home, but they failed to disclose the issues to him.
According to the opinion, Goff signed a contract with the defendants containing an arbitration agreement. Among the agreement’s terms was a provision delegating to the arbitrator the authority to determine gateway issues of arbitrability, including enforceability of the arbitration agreement.
Court records show the defendants filed a motion to compel arbitration. Goff responded by asserting that certain provisions in the arbitration agreement were unconscionable, including the delegation provision, thus rendering the arbitration agreement unenforceable.
“The trial court signed an order severing and modifying the language of the delegation provision, giving the trial court, rather than the arbitrator, the right to determine questions of arbitrability, including enforceability,” the opinion states. “Concomitantly, the trial court severed other provisions in the arbitration agreement based on Goff’s arguments that the provisions were unenforceable—a question that had been reserved for the arbitrator in the language severed from the delegation provision.”
One of the severed provisions required arbitration with the American Arbitration Association. Rather than with the AAA, the trial court ordered arbitration with an arbitrator to be agreed upon by the parties, the opinion states.
“Given its function when viewed in the context of the record, the trial court’s order effectively denied Taylor Morrison’s and Taylor Woodrow’s motion to compel arbitration of gateway issues of arbitrability,” the opinion states. “Because … the trial court abused its discretion in denying Appellants’ motion to compel arbitration, we reverse the order and remand to the trial court.”
Appeals case No. 01-21-00404-CV