HOUSTON - The Texas Supreme Court on Friday reversed an appeals court that affirmed Lennar Homes of Texas’ motion to compel arbitration in a lawsuit over an exploding garbage disposal.
In 2022, the 14th Court of Appeals concluded that a trial court did not abuse its discretion when it denied Lennar Homes’ motion in the personal injury lawsuit.
Court records show Mohammad Rafiei filed suit against Lennar Homes, alleging that he was severely injured when a garbage disposal in his home exploded. Rafiei and his wife purchased the home from Lennar in 2018. The sales contract for the house contained an arbitration provision.
Lennar Homes filed a motion to compel arbitration, which was denied by the trial court, court records show.
On appeal, Lennar Homes argued that Rafiei failed to establish the affirmative defense of unconscionability.
The 14th Court of Appeals affirmed the denial, finding that the trial court could have concluded that the arbitration agreement and the delegation clause within the arbitration agreement were both unconscionable.
“Arbitration is intended to be a lower cost, efficient alternative to litigation,” the opinion states. “Yet the evidence in this case establishes the opposite.”
In its petition for review, Lennar argued the court of appeals erred when it held that the delegation provision in Lennar’s arbitration agreement was unconscionable.
The Supreme Court found the trial court had no evidence before it from which to conclude that the plaintiff could not afford a hearing in arbitration to determine whether the agreement overall is cost prohibitive.
“Without such evidence, it could not conclude that the arbitral forum is an inadequate and inaccessible substitute to litigation such that the delegation provision is unconscionable and unenforceable,” the opinion states.
“We therefore reverse the judgment of the court of appeals.”
Case No. No. 22-0830