D.R. Horton, Inc. v. Green

120 Nev. 549, 96 P.3d 1159 (2004)

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D.R. Horton, Inc. v. Green

Nevada Supreme Court
120 Nev. 549, 96 P.3d 1159 (2004)

  • Written by Alexander Hager-DeMyer, JD

Facts

Michael Green and John and Tracy Velickoff (buyers) (plaintiffs) entered into home-buying agreements with D.R. Horton, Inc. (Horton) (defendant). The sale agreements were two-page form agreements in very small font. The front page contained the transactional information and signature lines for the parties. A mandatory arbitration clause was included on the back page in smaller font than that used on the front page and with no distinctive features to draw attention to it. The clause required arbitration of all related claims and stipulated that if a buyer initiated any legal action before arbitration, Horton would charge the buyer $10,000 in damages. Additionally, each party would be responsible for his own arbitration costs, as well as half of any shared costs between the parties. Green read only the first page of the agreement before signing because Horton’s agent assured him that the agreement was a standard contract. The Velickoffs read the full contract but did not understand that the provision waived the right to a jury trial and other statutory rights. None of the buyers understood that the provision would require them to fund half of all arbitration costs and that the expenses could be more than for a traditional lawsuit. A dispute arose regarding construction defects, and the buyers filed suit in Nevada state court. Horton moved to compel arbitration and enforce the arbitration provision, but the trial court denied Horton’s motion, finding that the arbitration clause was adhesive and unconscionable. Horton appealed to the Nevada Supreme Court.

Rule of Law

Issue

Holding and Reasoning (Per curiam)

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