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]

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