Consumerist
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.
Comments
Godspeed, Mrs. Fogal...
These builders - and so many like them - need to face the music, and that'll never happen under binding arbitration. The consumer never wins. I was actually sick to my stomach reading that story.
Wow. Just wow. I really don't even know what to say to that.
I applaud them for not committing a series of homocides.
Hate to hear about what this unscrupulous company has done. They should have read what they were signing -- BUT -- the builder has got to accept responsibility for this and pay for a new, properly built home.
@R3PUBLIC0N: No no, that's too easy. We need Cartman justice. Smear shit all over the exec's homes and offices.
Just echoing sentiments already said...sick, sick, sick.
Should have called uncle Tony Soprano to go "talk" to the contractors.
Tremont Homes contact us page
Oh, God.
@SybilDisobedience: I have to join the club on this one. Just the opening paragraph was bad enough.
I recommend reading the "home sour home" related article link for more on this story.
Welcome to the free market paradise of the Republic of Texas. How in the world did this house even pass a plumbing, electrical or building inspection? Or do they have so much freedom in Texas that they don't observe model building codes?
Snark aside, maybe the Fogals should have bitten the bullet early on and invested in a good lawyer. 'Binding arbitration' or not, I don't know of any legal document that can indemnify someone for the results of criminal misconduct. And yes, I do think that is what this was.
my god. yeah im sick after reading that too. we are going to be building in a few years. my first and last house i hope. this scares the sh*t out of me.
Wow! It is unbelievable how much power corporations have these days ....
We lament stuff made in China, but some of our own American products are equally as shoddy and dangerous....
Thanks for reporting this and a special thanks to Jordan Fogal for being a crusader.
Is there any way to get the names and contact information of the company executives for a follow-up article? (I'm serious).
Believe me, I'm 100% on the side of these unfortunate home owners, but why didn't they bother checking all the windows and faucets--and doing an incredibly thorough walk-through and inspection--before buying the house?
Not to worry, in the end those Tremont people will get what's coming to them.
This hits pretty close to home for me. I'm a Texas resident, for better or worse (and it just keeps getting worse, if you're not a white Christian Republican in these parts!). Anyway, we bought our 1st home less than a month ago. We chose a well-established old neighborhood (the house was built in 1958), but we did look at a few new houses. We rejected them purely for aesthetic reasons - too cookie-cutter - but I shudder to think if we'd settled for one, the trouble we might be in now.
@trai_dep: already posted here... Conveniently no phone numbers are given but google returns the following:
12751 1/2 High Star Dr, Houston - (281) 564-6686
9602 Mills Rd, Houston - (281) 890-3468
12941 Rose Landing Dr, Houston - (281) 890-3807
and plenty more here
@f3rg:
my parents refused to sign all of the final paperwork for months and had a 200 item long checklist for them to wade through before she would give her approval. I think they did about 10 items themselves (plastic screw covers on doorway windows, etc) and did sign the final paperwork with a small handful of minor items left.
The only thing they got stuck with was some minor basement and water issues until we got it landscaped and proper drainage.
It was semi-successful with friends in a different market--but the whole extensive walk through did get the most important issues fixed for them.
Id you go to the State of Texas web site and do a little searching you'll find this:
Tremont Homes Inc.
Builder #7401
5225 Katy Freeway Suite 500
Houston, TX 7700
713-521-9344
Registered Agent: Thomas Thibodeaux
I am a builder and I get really pissed off when I see shit like this. In both Florida and Louisiana where I am licensed they have a new home warranty as enacted by the legislatures. It sets standards and penalties for things like this. It also allows for licenses to be revoked and bond money paid to the homeowners in the event the builder fails to repair problems. However I have been told that in Texas all you have to do is register as a builder, no license required.
@f3rg:
How many people would pay for a home inspection on a brand new house? If they didn't hire an inspector how would they know what was wrong? I might catch this, but I'm a pretty good handyman. How would someone that didn't know what they were looking at realize what had been done?
This story just disgusts me. I hope there is a nice toasty little corner of hell reserved for the builders that did this.
Why didnt the Waranty or Insurance cover this stuff. Its why I tell people to get the best HOI they can afford. This builder needs to make everything right, and arbitration is completely unfair to the consumer usually. Im surprised they asked you to pay though, most arbitration clauses Ive seen stip that the builder will pay for the cost (cause its cheaper then lawyers fees).
I am blown away by the audacity of both the builder and our court systems. After reading your horrendous dealings with the builder, I promise I will NEVER EVER again complain about MERITAGE HOMES here in Texas.
We have had a year and a half of new home problems, ranging from door being too small to allow dryers into a laundry room and for doors to shut, to range hoods being installed on an opposite wall from the stove! But y'all win!
Meritage Homes is NOT the devil I once thought they were.
Was no home inspection done before buying?
If it were me, I would have move out my momentoes and burnt the baby down. Problem solved...
@JayP71: I, for one, DID pay for a home inspection for a brand new house. While they did not find anything major wrong, it was well worth the cost. Even just having a relative with construction knowledge would've discovered many of these things.
I really feel for these people, but this is exactly the reason for home inspections. And being that they were in their sixties, it's probably not the first house they've bought (and would've KNOWN about the ability for having home inspections).
Also... with as screwed up as Louisiana is, there are a few things that our corrupt politicians CAN do for the good of the people. All new houses here come with a 10 year warranty against major defects (and lesser ones for things like appliances and A/C).
What an incredible tale! I hope it has a happy ending for your sake and mine.
Remind me to never buy a house in Texas.
Seems they should be able to sue the government agency who issued the Certificate of Occupancy. An actual inspection (as is supposed to be done before this is issued) would have exposed many of these issues beforehand.
@ ARTDONOVANSDRUNKENLOVECHILD
You'd be hard pressed to find a homeowner's policy (open peril or named peril) that doesn't specifically exclude defects in workmanship.
It's sad to say, but they would almost have been better off if they just said they accidentally let the bathtub overfill.
This is America. Land of the free. Freedom for the rich because the poor cannot buy their freedom.
Do not ever count on this ever being reversed, because the anglo-saxons have the concept of "the State is Evil, Bad, Wicked™" so much ingrained in their culture that they will never allow themselves to vote for powerful governments that will look after their best interests.
After all, this would be so un-american…
I just bought a '07 Honda Civic and while reading the materials that I'd been sent home with I discover that Bridgestone/Firestone's pamphlet for the tires that I recieved on the car state that by purchasing the car I waive my right to sue them and must go through arbitration if anything happens save for personal injury and property damage... so basically if the tire blows out and the car is totaled... arbitration... *sigh*.
It's possible an inspection was done...lots of times, though, the inspectors work with the builders.
Why did she try taking the matter to a civil court? Binding arbitration can't possibly be used for a criminal case. Talk to the DA.
Uhhhhh, you guys bought a house that you couldn't afford. You signed a contract you didn't understand. You didn't supervise the construction and you didn't do the research and homework you should've done. Sounds like you bought something, and gave your trust over to the seller.
While I am sorry (I really am, this is horrible) and I do despise the people that did this (they should be keel hauled or something), the truth is that you trusted people that you did not know and made rash and poor decisions. Sorry again.
@Smashville:
That's exactly what I was about to say. We had a couple of inspectors recommended to us by the seller...but we went with a friend of ours who's a contractor. He caught a LOT of things (nothing major, but some real nuisances) that we, the untrained eye, would never have spotted - until we had a problem with them a couple of months down the line. Best money we could've spent; it more than pays for itself just for the piece of mind it brings.
I live in Texas, and I have to say that Texans would vote for Kim Jong Il if he was running on the Republican ticket. No wonder we live in a consumer-hostile, corporate-friendly fiefdom. Thanks a lot, you brainless idiots who come out of the woodwork on election night.
And yeah, if this was me and I was dropping off the Maslow hierarchy, I'd surely go after the Tremont bastards at their own homes.
Good for Consumerist for covering this. How about a Digg insertion?
@JeanNaimard: You say that as if there are no poor Anglo-Saxons. Besides..generalization is never fair to everyone. There's always an exception.
And its not so much the State is Evil, Bad and Wicked as the Bush Administration is Wicked. *wonders to this day how on earth he managed to be re-elected with the shit he's done to our country* :P
@doctor_cos: That's not the way it is. For starters, code compliance ultimately lies with the contractors doing the work.
While it's the job of inspectors to enforce code compliance within their jurisdiction, they aren't liable if they don't find every code violation. This is why we have things like registered engineers and architects, and licensed electricians and plumbers. The inspector gets to start with the presumption that things are done professionally, and find errors from there. If the reverse were true, any yahoo could wire your house and you could count on the inspector to find all of the mistakes.
Second, and this is a common misconception: The vast majority of the Fogals' problems as described in the article aren't even covered by model building codes. Ergo, if it's not in the code, no inspector has the authority to point it out as a problem...even if it is. Not every imaginable source of leaky roofs and windows and mold-spawning synthetic stucco make it into the code. The code is primarily a minimum safety standard and doesn't cover issues of durability and workmanship nearly as much.
@timmus: It is the same here in North Carolina. Is Texas considered part of the so-called "Bible Belt"? Most of the people are so closed-minded and have no patience to listen to reason. There are some out there that are open minded, but generally they are hard to find especially in rural areas. Anything that contradicts the Bible or Republican beliefs is not tolerated well in most situations (although there is a city near where I live where it is more liberal, but not in the small town where I live which is too small to make it on most maps).
If more of America would actually vote, perhaps things would change. As long as the power remains in the hands of a few though, we cannot expect things to get better as they will act in their own interest only. The biggest voting demographic today are the baby boomers, and most of them are rich. Unfortunately though, after the Florida recount and similar events it seems a good deal of voters have lost faith in our voting system.
@zaka: Get over yourself, this is ridiculous:
Change the terms and tell me if this makes sense:
Why blame these people for not being experienced general contractors? At some point in their life even the biggest genius posting on the internet has to trust in the expertise or skills of someone else.