UPDATE: Jordan Fogal Responds To Your Comments
“We always wondered what life would be like in our sixties, our credit is ruined; we have stored, sold, and given away years of our memories; and for the last three years we have been holed up in a third story apartment.
My husband Bob and I are senior citizens. Like so many others, we lost our home to foreclosure… not because of sub-prime loans… but because of defective, substandard housing – protected by an arbitration clause. We bought a new house so we wouldn’t have to worry about repairs. The first night my husband decided to try out the Jacuzzi tub on the third floor. When he pulled out the stopper, 100 gallons of water crashed though the ceiling. We had been in our new home all of six hours… all I could do was scream as I watched the ceiling fall on our dining room table, water pouring down the walls, filling up the chandelier, and splashing on the new hardwood floors, then finally flooding the garage below…”
After that, we found out we were trapped, as our investment attacked itself and us. All the upstairs lights blew; and when we tried to replace the bulbs, they broke off their rusted bases. The windows were installed upside down, and with the first rains came the leaks. The shower wall fell out, and a disgusting smell permeated our home. Mold grew up out the carpet; and black, spider web tentacles crawled up our walls. We pleaded with our builder for 29 months to please fix our house, but they had taken out insurance against any responsibility – they had inserted an arbitration clause in our earnest money contract. They had also knowingly committed fraud by covering up the defects before they sold to us.
The arbitration clause kept us hostage, since we could not afford over 150,000 dollars to repair our new home. The builders told us that if we continued to complain, their lawyers would take care of us in arbitration. Tremont Homes / Stature Construction, our builder, filed on us with AAA, the American Arbitration Association.We knew they would not have threatened us with arbitration if it was fair. Come to find out, they had already entered into a contractual agreement with AAA; they were partners. All the burden of proof was on us. We endured 8 months of deadlines and demands while our builder never complied. When we told AAA we couldn’t afford the costs, this demented collection agency emailed us blank forms for our credit card information so they could charge the costs as they accrued.
Our case was dismissed from arbitration because the arbitrator was not paid by us, or the builder. After nearly 8 months of torment, I thought that I could now go to court. We filed a suit, charging the builder with fraud. His attorneys dragged us through 10 hearings before the judge ordered us to return to arbitration and said that we must file a counter claim {which is much more expensive than a regular claim}. The judge said, no matter what his personal feelings, the legislature favored arbitration; and he could not rule from the bench. This time we were ordered to pay. We had to paid $9300.00 to AAA and the arbitrator, and an additional $1687 dollars before the arbitrator would issue her verdict, thirty days later by mail… She did not even have to face us. We were granted the ruling of fraud, because of the builder’s own sworn testimony, used in other cases against their subcontractors, where they used our house as the example of the most defective. All totaled, arbitration cost us in excess of $30,000, not including our legal fees. On October 30, 2006, after four years of anguish, our award was a grand total of $26,088. This did not even reimburse us for the down payment on our home.
Arbitration is like a jail sentence: Your money is taken from you; an agency has complete control over your life. You are bound by legal handcuffs into a secret kangaroo court held behind closed doors, and the rules of law no longer apply. We had 187 documents, a PowerPoint presentation, pictures, witnesses, and expert testimony. The builder walked in laughing, with his attorneys and a little white binder with 37 pages… they didn’t even need that.
Arbitration is a demeaning and abhorrent substitute for justice. We were sworn to tell the truth. We do not understand why lying was overlooked in arbitration, or when civil becomes criminal, and why a ruling of fraud doesn’t nullify a contract?
Everything is upside down in arbitration; the perpetrator files on the victim. Many victims of arbitration come out in shock; many are under gag orders, referred to as secrecy agreements so they cannot tell what has been done to them. They will only repeat a pat statement… we reached an amicable settlement with our builder… How can arbitration be fair – sending an individual up against a multimillion-dollar corporation?
Though Jodran Fogal is a 61-year-old conservative grandmother from Texas, she refused to cast any ballots for Republicans last election, due to their support of mandatory binding arbitration. That’s how mad she is.
Read a recent Mother Jones article about Jordan Fogal’s story to hear Tremont Homes’ side , such as it is.
Now Jordan is on a quest. She stands outside Tremont Homes building sites with lemons and big signs warning prospective homebuyers. She’s spread her story through the local papers. She pens scathing articles about the evils of mandatory arbitration, and the layers of bureaucracy and indifference that keep them in place. She’s testified before Congress. She still has not received her satisfaction, and will not rest until she does. Because of the terms of her contract, and the absurdly unfair structure of mandatory binding arbitration when applied to consumer disputes, she may not get it until the Federal Arbitration Act is significantly altered to go back to what it was originally meant for, an expedited way for businesses to deal with one another, entities of similar size and complexity. Until then, as long as Tremont keeps making more lemons, that’s more fuel for her slingshot.
RELATED: Home Sour Home [Mother Jones]
Written Testimony Submitted by Jordan Fogal To The Subcommittee on Commercial and Administrative Law “Mandatory Binding Arbitration Agreements: Are They Fair For Consumers?” Tuesday, June 12, 2007, 10:30 a.m [judiciary.house.gov]
“ARE YOU NEXT? The Many Levels of Texas Bureaucracy” by Jordan Fogal [Homeowners For Better Building]
Podcast Series: Arbitrating Away The American Dream (Vol 1)
Podcast Series: Arbitrating Away The American Dream (Vol. 2) — “The Stupid People”
Why an Ultra-Conservative Texas Grandmother Doesn’t Support the GOP [Alternet]
Pissed? Learn how to support the Arbitration Fairness Act.
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Wow, this is terrible… Alert the media!
Seriously, if they even got on the local news, the masses could see the extent of their damage. That way they can get advice on how to handle their arbitration and/or court proceedings without havig to rely on a judge who hasn’t even seen the damage, or depending your income on an arbitrator who will never see the house at all.
Media, media, media
Nothing is built to last anymore, look at the shoddy bridges that keep falling.
Just like every other thread around here that gets derailed, why are some trying to turn this into a treatise on Christians and Republicans? I’m sorry if the Neocons in office have turned you against actual, real Christians and/or Republicans. The sooner you and others wake up out of the left/right paradigm, the better off we all will be.
@THEDREAMINGTREE:
Nice cheap shot on bridges that have lasted much longer than they were
designed for. Its easy to take the name calling route instead of having
a real discussion. Just a typical liberal.
In Indiana where I live a county building inspector would come in at various times. When the builder would get to a certain point everything stopped until it was inspected. Because sometimes it would take the inspector over a week to arrive I was kind of irritated by the delays, but after reading this, I’m glad. I’m guessing 75% of the problems with this home would not have been discovered with only an inspection upon completion.
@thedreamingtree: Christians and Republicans have managed to turn me against themselves without help from commenters on Consumerist, thanks. A pox on both their houses, double where they overlap, and triple on the adherents of other religions and Democrats.
Anyway, to get back on topic, I live in Houston and my boyfriend works as an artist for a real estate brokerage. We sit with the floorplans and a glass of wine and laugh ourselves silly. Workmanship is so shoddy we are sure we could do better with a Home Depot line of credit, a D-I-Y book or three, and our own four hands. Those Katrina cottages, along with some “sweat equity,” are looking better and better.
I live in those same homes in this woman and trust me this place truly is quite messed up
Too bad Mike Holmes is Canadian. He’d have a field day if he ever moved the show to the U.S.
@JeanNaimard: Oh please. Since when did “more government bureaucracy” solve any problem? We already have enough laws and regulations on the books to deal with problems like this…. it is the effective ADMINISTRATION of those laws and regs that we need, not more government assholes with a mandate, sitting around taking up space and sucking the lifeblood out of everything around them.
@mikeluisortega: And what he said.
@hc5duke: And what he said.
Ah Texas, America’s Punch Line.
Violence looks pretty reasonable if justice cannot be had through law.
And can we get a Mod to take care of the profanity above please? Yeesh.
@Namilia: “*wonders to this day how on earth he managed to be re-elected with the shit he’s done to our country*”
Answer: Diebold.
@elf6c: A$$hole.
Feel better?
@junkmail: He’s done a few specials in the US.
Jordan Fogal is a hero. May I suggest a Consumerist Hall of Fame for those individual citizens who rise up against corrupt mega-corporations that are clearly at fault for being a buncha bastards?
Regardless of whether or not she wins (and I hope she does get justice someday) she should still be commended for putting up the thankless, good fight.
when i bought my home, new, 5 years ago, we didn’t hire an inspector at closing but I was able to catch quite a few things before the completion of construction and spent a healthy amount of time during the walk-through filling up sinks and bathtubs and making them fix even the most slight mis-painted area or nick in the wall. I made sure all the doors opened, closed, locked(were available)and swung properly.
The house is still a entry level starter home built as cheaply as possible but it has not major defects other than being a cheaply built starter home.
You get what you pay for. While my gut wrenched reading this and my sympathy pours out for these victims I can definitely see where they could have done a little better as consumers to watch out for their own interest.
The first thing I did in my home inspection was go fill up the jacuzzi tub and run the jets, let it drain and did it again.
Not testing or inspecting a home before you buy it is like not test driving a new car before you buy it…luckily, new cars have a decent warranty for stuff that breaks like this. Even more-so a reason why people should do as Ronald Reagan did with the Russians…”Trust, but verify”
I know someone briefly talked about this earlier in the comments, but can anybody tell me why they didn’t file a ginormous claim with their insurance company and let THEM duke it out with the builders….in COURT? The Fogals have an agreement to binding arbitration, but the insurance company doesn’t. I mean, isn’t that what insurance is for? Defects in workmanship or not – the house was ruined.
And not to be a tart here, but the woman obviously has enough money to keep her hair colored and her acrylic nails done perfectly….just saying…
According to the Intertubes, a gallon of water weighs about 8.34 pounds. That means 834 pounds of water came crashing through the ceiling. If the ceiling had fallen on the dining room table, and someone had been sitting at the dining room table, it’s safe to say that he or she would have suffered some serious injuries, or died, simply because some bastard contractor and homebuilder tried to save a few bucks.
This story is shocking.
I really do feel for the buyer. I do.
But…
Look, if you’re going to be buying THE ONE HOME, the one you will live in, raise a family, retire in, the one that will be the centerpiece of your later years, do you not think it’s somewhat prudent, to INSPECT the house before you buy it?
Yes, the dude is telling you it’s BRAND NEW, to NOT WORRY, that it will be ALL RIGHT, just sign here. So what? You gonna just trust some guy, some motherfucker you have never ever met before, with half a million of your dollars?
You’re too cheap to spend $1500 on a good neutral home inspector? Too busy to run the hot tub before the sale? Don’t care to have an electrician check the wiring? Then you suffer and all your life is good for then is a sob story to get some pity on The Consumerist.
So can you buy or build a home without entering into an arbitration agreement? I understand that you don’t have to sign the papers, but does any builder or seller offer a sell without the arbitration?
@JeanNaimard:
Do you actually have a point or are you just spouting crap for no reason? These people bought a 3 story house, I’m assuming they had money at one point or another.
@warf0x0r:
You entered a contract with either Honda of America, your financial institution, or both. That arbitration clause probably won’t hold water.
@quantum-shaman:
Yeah, when they ban you.
Till then, please take your potty-mouthed troll act elsewhere. The grownups are talking.
…. what can you say…. that is seriously f’ed up.
OT…they are making grandmothers a lot nicer looking these days.
Always, ALWAYS, get your house inspected by an independent building inspector, before you sign the papers. It’s the best $300+ you’ll spend in the home-buying process.
This couple has my sympathy; like them I learned that the hard way.
how the hell can something like this happen in our country????????this story is a bummer…………..
@ChrisC1234:
Very smart, so would I. BUT a lot of people assume that it’s brand new and they don’t need to.
@Black Bellamy:
Home inspection doesn’t have to cost $1500 (though it would still be worth it even if it was).
My father is a home inspector(Precision Home Inspection) in NJ, and he usually bills around $500. I don’t think he’s charged over $1000 for even giant mansions and commercial buildings.
It sounds like the homeowners may have a malpractice case against their attorneys.
@speedwell:
i totally agree. those Katrina cottages are awesome. i have a dream of someday building my own house, from the ground up.
when i live in Houston, i was appalled at the sheer amount of building going on in every goddamn nook and cranny of that god forsaken city. not only were they everywhere, they were ugly as sin.
as far as i can tell, however, the inner loop of Houston is fairly liberal, as Texas goes…then again, i lived in Montrose, which is pretty much the gayborhood.
Any time you see the word arbitration in an agreement, read it well. Arbitration can be a fair way to resolve conflicts, if the consumer is treated equally and has the opportunity to select the arbitrator. However, even in the best of cases, a typical arbitration will not designate a “winner” and a “loser.” Most arbitrators will simply split the baby then send you on your way.
@ BK88:
The fact that you would call me a liberal shows how much attention you really pay to anything. Who did I call a name? No one.
@lookatmissohio: Heh, yeah it is.
You aren’t kidding about the nook and cranny crap, either. The other day I was trying to find a through street between Richmond and Westheimer back behind the Wal-Mart on Dunvale. Tucked back in where I thought there was nothing but low-income apartments full of saggy-diapered children and loud rednecks, bars full of winos, shabby taquerias, and questionable dance parlors, was a group of those insane “city condos” that are three stories high, ornamented, stuccoed, Palladian-windowed, gated, and too close together for a cat to get between. They probably went for a few hundred thou apiece and were built worse than your childhood treehouse. They looked like diamonds in a pile of something that would offend comrade JayP71 if I was to say it right out loud.
And don’t get me started on the “naked” apartment building down there on the corner of Richmond and Sage. My blood pressure goes up every time I see it. Basically it is a high-rise that they ran out of money before they got the glass put on, so they painted it a strange shade of pinkish, yellowish ivory. It looks like an erect… sorry, JayP, hide your eyes, there’s no pretty way to say this….
Man, when we buy, we’re so buying an old house. I hate these companies.
To all those saying “tough, you should have got home inspection”. Yes, they should, BUT: What kind of world do we live in where you buy a product costing hundreds of thousands, it is proven defective within hours of changing hands, you have ample evidence of defects but yet the seller/builder is not held responsible to make compensation/repairs? It’s just common sense – if it was any product other than a house, the manufacturer would be held liable, no matter what the ins and outs of the law say, it should be no different here – if the law says otherwise, it needs changing.
This is obviously awful, but I have to wonder about: “the windows were installed upside down.” Maybe I don’t understand window installation, but isn’t that something that would be obvious, even without a home inspection?
@warf0x0r: I signed an arbitration agreement not to sue my dealer for the car I bought — but I did lots of research and the guy I worked with came highly recommended and he and I both knew I was an informed buyer. No problems. But I wouldn’t do that for someone I didn’t know in and out. This guy had a long, long track record of working with people.
That said … could you not sue the carmaker for putting defective parts on a vehicle, if that was actually the case?
@JayP71:
All people should pay for an inspection, no matter if the house is new, was built by your dad, etc.
It is worth every penny. Home inspectors are skilled at finding issues most folks don’t even know about.
My friends new condo was a BRAND NEW building. His inspectors found bad pipes and 2 outlets that were sub-par and violated local ordinances. Had he not sprung for the inspections, he would have been screwed.
If you can afford a house, you can afford an inspection.
Every time.
@bonzombiekitty: yeah? Missed those. That guy’s my hero.
@Buran: Honestly I don’t know, I doubt I’ll have any problems but it was interesting to note that nobody made mention of this like it was no big deal when clearly this system is being heavily used against consumers to benefit organized business. I think that whomever inserts the clause should have to disclose, ideally verbally that you are bound to arbitration in this purchase so that you can make a decision. I’d probably walk away every time I was notified that I’d be limited to arbitration.
We successfully arbitrated a dispute with our builder through the AAA. We treated the arbitration as if it were a lawsuit, hiring an attorney, obtaining expert witnesses and preparing a very thorough case. Once it was done, we still had to pursue the builder in court to enforce our arbitration award. He declared bankruptcy and we received pennies on the dollar.
I feel for this homeowner. Her arbitration award seems ridiculously low, and I have to wonder if she isn’t entitled to an award of attorney fees under the arbitration clause (probably not).
If you didn’t know there was an arbitration clause in the contract, you had bad representation when you signed it. Two. Just sue them. Fuck arbitration, if you didn’t know it was in the contract, the contract isn’t valid. You know, contract law, etc. Stop whining and buy a house that isn’t pink.
@masonreloaded: What kind of world do we live in where you buy a product costing hundreds of thousands, it is proven defective within hours of changing hands, you have ample evidence of defects but yet the seller/builder is not held responsible to make compensation/repairs?
The kind of world that conservative grandma Jordan Fogal voted for. Now that the “pro-bidness” policies that she favored with her political support have come to nip her in the pocketbook, she cries foul.
Ye reap what ye sow.
As someone who knows the case extremely well I would like to thank all of you who have made constructive comments about Jordan’s fight.
Some of the issues you have raised in your questions come from the fact that you live in different states with different laws. Jordan’s situation is specific to Texas. Someone who has not gone as far as she has with this issue (even lawyers) do not understand this situation as it is in Texas. (see The Great State of Texas where no one cares)
Now for what she has not mentioned, or what the consumerist may have been forced to edit.
One of the partners in the company is now a federally convicted felon, (Norman Chapa) for attempting to illegally import Chinese labor. I am guessing to work on the construction of new homes. Was illegal Mexican labor getting too expensive for them? (On numerous occasions they have been unable to find their labor records so I am only supposing it was illegal labor.) The Houston City council continues to give this company money to build affordable housing under various company names, as well as for streets, water and sewer, which has run into the millions of dollars over the past five years. (Public records)
The city council, upon being notified by Jordan Fogal about the funds being given to a convicted felon during a public city council meeting, held up the contract for two weeks. Just long enough for Mrs. Fogal not to attend the next public city council meeting to remind them about what they were doing. (If I remember correctly the city gave a Tremont subsidiary $250,000 that day.)
If you look into the city councils campaign contributions you will notice what looks like a pattern of when contributions are made and when money is awarded to this company.
Perry Homes contributed 5 million in campaign contributions in 2006, do you think that they are getting nothing for this money? Tremont is just piggy backing on Perry’s money in many cases, and contributing on the local level when necessary.
Housing Lobbyist is murdered in his home after attending party with Tremont owners (see Houston Chronicle) still unsolved at this time. (Not saying they did it, but it is curious don’t you think?)
County Judge Robert Echols (also Homeland security advisor for the city of Houston) appoints Tremont owner Jorge Casimiro to Harris county Housing Authority, after his company is fired from building the Bunker Hill police station. (Houston is in Harris County, See Houston Chronicle about the police station)
Jorge Casimiro’s company also buys Judge Echols house. (Public records)
Texas has a new agency for the “protection” of home buyers. It is called the Texas Residential Construction Commission, or as we say in Texas “Tricky”. The most interesting thing about the TRCC is that its scope, rules and authority were written by Perry Homes in house lawyers, to quote Representative Coleman, “Only in Texas can you buy your own government agency and regulate yourself.”
Both district attorneys as stated by their assistants (County and City) do not see housing fraud or civil perjury as criminal cases nor does the Attorney General for the State of Texas.
So in Texas, according to the district attorney and Attorney General, you can commit housing fraud, and mortgage fraud, commit perjury in civil suits and in arbitration without any consequences. So for any unscrupulous builder Texas is absolute paradise.
Meanwhile, while some of these homes where being built, the company’s management had their girlfriends living in them. It made it very convenient, considering they were married at the time.
What is just as interesting about this whole situation is that Jordan does not get sued. She has said many of the things I have written hear in public and private and written it in her flyers, but because it is all true they will not sue her.
For those of you who think the media is the answer to this outrageous set of circumstances, I agree. However they don’t have the guts to run a story like this even though it has everything the public would watch or read; sex, corrupt officials, payoffs, and murder.
All of the above is easy to verify, Jordan has done most of the leg work for any reporter who wants to win a Pulitzer, but the local media won’t run it even when they know it’s the truth, they have told Jordan this repeatedly.
Now here is the worst part, the financial crisis of august 2007, is from bad loans, and foreclosures. However no one talks about the number of foreclosures due to poor construction and housing fraud. Companies like Tremont have their own Mortgage Company so they can approve anyone they want to for what ever amount and then sell the loans off to a major financial institution and get away clean. This is the easiest form of bank robbery in the world.
Now that the financial institutions are catching hell for their stupidity, and people are losing their jobs, will the enormity of the process be revealed. The people who bought all these loans for their companies, were never going to admit they bought bad loans cooked up by fly by night mortgage companies, nor where they going to admit they did not review the documentation well enough to see the clues for mortgage fraud.
Only now will their work be reviewed and all the loans purchased traced back to the originators will this show what a criminal enterprise it has been for the past several years.
And be ready, because if this gets bad enough the government will start thinking about bailing them out, so not only does the homeowner get screwed, but our tax dollars will go to support the situation which allows it to continue.
@pinkbunnyslippers:
Hey Pink Bunny, the insurance company will not sell you a policy which covers builder defects in a new home. Insurance company told Mrs. Fogal sorry not covered.
However Tremont has since tried to sue their roofing company for the construction defects using Mrs. Fogals house has the prime example.
Tremont has also filed suit against their own insurance company for the same issues.
@jrford8:
If Consumerist will print my first post, you will see that the district attorney will not prosecute these types of crimes in the city of Houston, and the Attorney General for Texas said the same thing
@ArtDonovansDrunkenLovechild:
2/10 Warrenties in Texas are not worth the paper they are printed on, in this case I believe Mrs. Fogal was told her problems were not covered.
@slowinthefastlane:
I would like to see you try and sue the city inspector department of any major city over a single residential unit, second of all if you could get Mrs. Fogal to write you about the city inspectors response to her outcry it would only make you wonder how much they got paid by the builder.