Haynes v. Fincher
| Decision Date | 17 November 1999 |
| Docket Number | No. A99A1951.,A99A1951. |
| Parties | HAYNES et al. v. FINCHER et al. |
| Court | Georgia Court of Appeals |
OPINION TEXT STARTS HERE
Charles R. Floyd, Jr., Deborah M. Floyd, Peachtree City, for appellants.
Alfred L. King, Jr., Jonesboro, for appellees.
The central issue in this case is whether an arbitration provision contained in a builder's warranty is enforceable. We find that the provision is enforceable and therefore affirm the trial court's grant of summary judgment to the builder.
In March 1995, William and Annie Haynes contracted to buy a house to be built by Donald Fincher. Among other things, the contract provided that a builder's warranty from the Residential Warranty Corporation would be delivered to the Hayneses at the closing of the sale of the house. Fincher built the house, and the closing was held in November 1995. At the closing, the Hayneses applied for the builder's warranty, which Residential eventually issued. The Hayneses' signed application provides that the warranty consists of that application and the warranty program booklet. The application further states that by signing the application the Hayneses acknowledged that they had read the booklet.
The introduction to the booklet stresses that the warranty program provides for the settlement of disputes by binding arbitration. And a subsequent section in the booklet establishes that any disputes the buyers have with the builder may be submitted to binding arbitration governed by the procedures of the Federal Arbitration Act.
About eight months after the closing, the Hayneses initiated arbitration proceedings against Fincher under the warranty program, claiming numerous defects in their newly constructed home. An arbitrator was appointed and a hearing was held at which the parties presented their evidence and arguments. The arbitrator then issued a final award, finding the builder responsible for some, but not most, of the claimed defects. The Hayneses did not appeal that award pursuant to the arbitration appeal procedures allowed by the warranty program.
Instead, several months after the arbitrator's award, the Hayneses sued Fincher and his company, Tara Construction Company, as well as the company of his former building partner, for breach of contract, negligence and fraud. Fincher and Tara moved for summary judgment, asserting that the warranty provided for binding arbitration which had already been held. The trial court granted the motion. The Hayneses appeal from the grant of summary judgment to Fincher and Tara.
1. The Hayneses argue that the binding arbitration provision contained in the warranty program is not an enforceable agreement because neither they nor Fincher initialed it as required by OCGA § 9-9-2(c)(8). The argument is without merit because that Code section requires parties to initial arbitration clauses only in home sale or loan contracts.1 The builder's warranty which the Hayneses obtained from Residential is not a home sale or loan contract, and therefore OCGA § 9-9-2(c)(8) does not apply to that warranty. Consequently, the absence of the parties' initials beside the warranty's arbitration provision is not fatal to that provision.
The Hayneses' attempt to avoid their agreement to be bound by the warranty's arbitration provision is unpersuasive. It is undisputed that the Hayneses applied for the warranty; the face of their application plainly states that the warranty consists of the application and the warranty program booklet, and that by signing the application they acknowledge having read the warranty booklet; the booklet clearly provides that disputes may be resolved by binding arbitration under the Federal Arbitration Act; the Hayneses sought the benefit of such dispute resolution by requesting arbitration pursuant to the warranty program; they participated in the arbitration which they had started; and they obtained a final arbitration award that they did not challenge under the arbitration appeal procedures.
Based on these facts, there is no question that the Hayneses agreed to the warranty program's binding arbitration provision. And contrary to the Hayneses' arguments, such an agreement is valid and enforceable.2 The Hayneses have shown no error.
2. The Hayneses contend that the arbitration provision in the warranty program is unenforceable because Fincher fraudulently misrepresented to them his ability to procure the warranty. The contention is without merit because even if we assume there is some evidence that Fincher misrepresented his ability to get the warranty, the warranty was in fact procured and is in effect. In order to establish fraud, plaintiffs must show that they have been damaged by the alleged misrepresentation.3 Because the warranty was actually...
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