Alan Secures Favorable Ruling in Novel Issue Involving Arbitration in Homeowner v. Contractor Case

Posted by Alan Fanger

On March 28, 2013, a judge in the Norfolk Superior Court sided with Alan and his client in a novel issue involving the right to state-sponsored arbitration of a homeowner v. contractor dispute.

All licensed home improvement contractors are considered, by the terms of their license, to consent to arbitration of any disputes arising from written contracts with homeowners if the homeowner so elects. The mandatory arbitration takes place under the auspices of the Commonwealth’s Executive Office of Consumer Affairs (ECOA) and is generally a cost-effective, speedy way of resolving such disputes. Contractors typically wish to avoid ECOA-sponsored arbitration, which they consider to be homeowner-friendly.

In the case involving Alan’s client, the contractor was not a licensed home improvement contractor (HIC), but rather was a licensed construction supervisor (CS), so technically the arbitration rules did not apply. But Alan nonetheless sought to compel arbitration on the grounds that when he applied for the building permit for the subject work, the contractor represented to the municipality that he was a home improvement contractor. The contractor also failed to provide his CS number in the contract with the homeowner.

Alan argued that the failure of the contractor to identify whether he was an HIC or CS in the contract was unfair, inasmuch as this did not properly give his client the opportunity to determine whether she would have arbitration rights in the event of a dispute. Alan also argued that since the contractor led the municipality to believe that he was an HIC, his client should not have had any different belief.

The court agreed with Alan’s arguments, and ordered the dispute to arbitration through the ECOA.

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