Tag Archives: Contracts – Enforcement

Subrogation Waiver Unconscionable in Residential Fuel Delivery Contract

This entry was posted by Ryan A. Bennett on March 26, 2024.

In a matter of first impression, the Superior Court of Connecticut (Superior Court), in American Commerce Ins., Co. v. Eastern Fuel Corp., No. CV-206109168-S, 2024 Conn. Super. LEXIS 380, held that a waiver of subrogation provision in a consumer fuel service/delivery contract violated public policy. The Superior Court overruled the motion for summary judgment filed by Eastern Fuel Corporation (Eastern) and determined that the clause was impermissible as the contract was entered into by two parties with unequal bargaining power.

American Commerce Insurance Company (American) provided property insurance to Arlene and James Hillas (the Insureds) for their home in Woodbridge, Connecticut. The Insureds hired Eastern to service their heating system on or around October 25, 2018. The service work at the property included inspecting the oil filters and flushing the fuel lines. On November 1, 2018, when the Insureds turned the heating system on for the first time that season, the two oil tanks on the property were allegedly full. After a series of deliveries, claims that the oil levels were lower than expected, discovering oil staining on the floor and Eastern’s replacement of the oil lines, Eastern delivered another 429 gallons. However, after the delivery, additional leaks were discovered relating to the oil line replacements. Ultimately, the Insureds submitted a claim to American and American paid in excess of $59,000 for the damage incurred.

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This entry was posted in Connecticut, Contracts, Public Policy, Subrogation, Uncategorized, Waiver of Subrogation and tagged Connecticut, Contracts - Enforcement, Public Policy, Subrogation, Unconscionable, Waiver of Subrogation.

Not So Fast: Washington Court Finds the One-Year Limitations Period in a Residential Construction Contract Is Unenforceable

This entry was posted by Gus Sara on December 5, 2022.

In Tadych v. Noble Ridge Constr., Inc., No. 100049-9, 2022 Wash. LEXIS 545, the Supreme Court of Washington (Supreme Court) considered whether the lower court erred in enforcing a one-year accelerated limitations period clause in a construction contract. The Supreme Court considered the extent to which the provision hindered the plaintiffs’ statutory rights – as set forth in Wash. Rev. Code § 4.16.310 – which provides homeowners with a six-year repose period for construction defect claims. The court found that the contractual provision’s shortening of the time period from six years to one year was a gross deprivation of the plaintiffs’ statutory rights and was unfairly one-sided in favor of the defendant. As such, the court held that the provision was substantively unconscionable and, thus, unenforceable.

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This entry was posted in Construction Defects, Contracts, Statute of Limitations-Repose, Washington and tagged Construction Contracts, Construction Defects, Contracts, Contracts - Enforcement, Statute of Limitations - Repose, Washington.

Too Costly to Be Fair: Texas Appellate Court Finds the Arbitration Clause in a Residential Construction Contract Unenforceable

This entry was posted by Gus Sara on November 16, 2022.

In Cont’l Homes of Tex., L.P. v. Perez, No. 04-21-00396-CV, 2022 Tex. App. LEXIS 7691, the Court of Appeals of Texas (Appellate Court) considered whether the lower court erred in refusing to enforce an arbitration clause in a construction contract between the parties. The Appellate Court considered the costs of the arbitration forum required by the contract in the context of the plaintiffs’ monthly household income. The court also compared the arbitration cost to the estimated cost of litigating the dispute. The court held that the arbitration clause was substantively unconscionable on the grounds that the arbitration costs were not affordable for the plaintiffs and not an “adequate and accessible substitute to litigation.” The Appellate Court affirmed the lower court’s decision denying the defendant’s motion to compel arbitration. Continue reading →

This entry was posted in Arbitration, Construction Defects, Contracts, Texas and tagged Arbitration, Construction Contracts, Construction Defects, Contracts, Contracts - Enforcement, Texas.

Public Policy Prevails: Homebuilders and Homebuyers Cannot Agree to Disclaim Implied Warranty of Habitability in Arizona

This entry was posted by Ryan Bennett on October 26, 2022.

In Zambrano v. M & RC II LLC, et al., 2022 Ariz. LEXIS 309, the Supreme Court of Arizona held that a homebuilder and homebuyer could not waive or disclaim the implied warranty of workmanship and habitability. While the court would normally enforce a contract between two parties – even if one side made a “bad deal” – they will not do so if the contract’s terms are against public policy. Continue reading →

This entry was posted in Arizona, Construction Defects, Contracts, Public Policy, Warranty - Construction and tagged Arizona, Construction Defects, Contracts - Enforcement, Implied Warranty of Habitability, Public Policy, Warranty - Construction.

In All Fairness: Illinois Appellate Court Finds That Arbitration Clause in a Residential Construction Contract Was Unconscionable and Unenforceable

This entry was posted by Gus Sara on July 19, 2022.

In Bain v. Airoom, LLC, No. 1-21-001, 2022 Ill. App. LEXIS 241, the Appellate Court of Illinois (Appellate Court) considered whether the lower court erred in enforcing an arbitration clause in a construction contract between the parties and, as a result, dismissing the plaintiff’s lawsuit. The Appellate Court found that even if the arbitration clause was enforceable, the appropriate action would have been for the court to stay the lawsuit, as opposed to dismissing the case entirely. The Appellate Court then considered the language of the arbitration clause and found that several provisions were substantively unconscionable, which rendered the entire arbitration clause unenforceable. The Appellate Court reversed the lower court’s decision compelling arbitration and reinstated the plaintiff’s complaint. Continue reading →

This entry was posted in Arbitration, Construction Defects, Contracts, Illinois and tagged Arbitration, Construction Defects, Contracts, Contracts - Enforcement, Illinois.

Where-Forum Art Thou? Is the Chosen Forum Akin to No Forum at All?

This entry was posted by William L. Doerler on May 19, 2022.

Many courts enforce forum selection clauses in contracts between parties. In W. Bay Plaza Condo. Ass’n v. Sika Corp., No. 3D21-1834, 2022 Fla. App. LEXIS 1637 (W. Bay Plaza), the Court of Appeal of Florida, Third District (Court of Appeal) answered the question of whether a mandatory forum selection clause in a manufacturer’s warranty was enforceable as to a condominium association, who was a non-signatory. The trial court enforced the forum selection clause – calling for litigation in New Jersey rather than Florida – and the Court of Appeal affirmed the ruling. Continue reading →

This entry was posted in Construction Defects, Contracts, Florida, Privity, Warranty – Express and tagged Condominiums, Construction Defects, Contracts - Enforcement, Florida, Forum-Venue, Privity, Warranty – Express.