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I signed a contract to have a company build me a pool and

Customer Question
the company built me a...
I signed a contract to have a company build me a pool and the company built me a pool. But, after 80% of the work had been done and there was water in the pool, they wrote me a check for $5800 for the work not completed and said they were done. I argued and said they don't get to unilaterally decide how much the work they chose not to do was worth. (Example: In the contract, they were supposed to build a stone bar around the hot tub. They didn't, and when I called to get another contractor, they quoted me $7500 for the bar alone). I told them I would see them in court, but they pointed me to the contract, and said it has to go to arbitration, not court.
Point 13, in fine print on the back of the contract states:
"Arbitration: Any controversy of claim arising out of or relating to this contract, or the breach thereof, shall be settled in arbitration in accordance with the terms of this contract pursuant to the Rules of the Commercial Arbitration Association, and judgement upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof."
However, on the front of the contract, in Bold and Large font, is states:
"This agreement is subject to arbitration under the commercial arbitration rules of the American Arbitration Association. Please Initial________"
I did not initial this provision.
Do I have to go to arbitration or can I sue in Small Claims court?
Can you provide any case laws in Texas that, if I did file in small claims, I could argue that its where it should be, since I did not give my consent (by initially the blank) to that provision.
Small claims court is cheap (for me), I can represent myself. Arbitration is expensive, both in time and money.
Submitted: 1 year ago.Category: Real Estate Law
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8/25/2016
Real Estate Lawyer: Richard, Lawyer replied 1 year ago
Richard
Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 55,806
Experience: 32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
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Real Estate Lawyer: Richard, Lawyer replied 1 year ago

The fact that you did not initial the arbitration provision on the front gives you a basis for claiming that the arbitration provision is not applicable. So, it gives you a basis for filing your suit in small claims court and letting the judge decide. BUT, what you want to raise the stakes for your contractor by letting him know that if forced to either file the suit (or arbitration if the judge rules against you on that issue), you are going to be filing this claim not only as a breach of contract case, but also as fraud and deceptive trade practice causes of action based on his clear intention to simply do the easy part of the contract with no intention to complete the job, which will entitle you not only to your damages, but also an additional amount equal to multiple times your actual damages as punitive damages. That should provide plenty of incentive to comply with your demands; but, if it does not, file your suit. Even if you have to file the suit, that's likely all you will need do. In my experience, he will settle this to your satisfaction without a hearing rather than risk punitive damages and the fraud and/or deceptive trade practice judgments being on the record. The fraud cause of action will cause him to have to disclose this and make it difficult to borrow money or get bonded.

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Customer reply replied 1 year ago
I'm actually in small claims court now, and the judge has asked for a brief from the lawyer representing the pool contractor on how other courts/cases in Texas have handled this issue where a provision requests an initial, but it's not initialed, but another paragraph on the back, bound by the signature restates the provision.Judge said, "If you hadn't put the blank on the front, asking for consent to go to arbitration, I would have already sent you arbitration, but the fact that the blank was provided, but not initialed, leaves me in a quandary as to how to rule."The opposing attorney has to provide the brief to the court on Monday, and the judge will put us back on the docket to hear my arguments, and then he will rule on this. I need some specific case laws to reference regarding what happens if checks/initials aren't given- is this consent or dissent (when not checked/initialed) if there is no mark on a specfic provision?RE: deceptive trade practices, etc got them back out here, begrudgingly, and they built the stuff that was left on the contract, but they took every shortcut they could to reduce their costs... and never paid for any of my expenses that took on to minimize my losses- example 2 the chlorinator they supplied would not keep chlorine in the pool and they did not provide "pool school", so I had to contract to another company to maintain. They added an additional 300 worth of chemicals to get the algea out, and installed an additional $800 worth of hardware/equipment to keep the water balanced so this wouldn't happen again... Huge mistake, it's been a big pain in my rear....
Real Estate Lawyer: Richard, Lawyer replied 1 year ago

Thanks for following up. Given their actions regarding their cost cutting, you might add a cause of action for gross negligence which will also open the door to recover punitive damages.

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Customer reply replied 1 year ago
Can you point to some cases that are worth reading on this subject, so I can substantiate my arguments to hear it in small claims as opposed to arbitration? I'm certain the opposing counsel's brief will be biased and contain cases where other cases ruled in the contractor favor. I need them to support my position
Real Estate Lawyer: Richard, Lawyer replied 1 year ago

I wish I could, but that's outside the scope of what I can provide within this forum. Researching case law is time consuming and not efficient to provide within JustAnswer. I'm sorry. I might add that given the judge's directive to the other side to produce the brief, the burden has been put on them rather than you. I will be happy to opt out if you'd like so you can seek another expert who might be able to help you with the research. Just let me know.

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Customer reply replied 1 year ago
Please do, put it back in the queue, and don't hesitate to flag it as high need for detail. I do need the case law for this to be a useful service for me... I appreciate your support, but unfortunately, I was already aware of the knowledge you provided.
Real Estate Lawyer: Richard, Lawyer replied 1 year ago

Will do. I wish you the best.

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Real Estate Lawyer: Stacy Adkins, Lawyer replied 1 year ago
Stacy Adkins
Stacy Adkins, Lawyer
Category: Real Estate Law
Satisfied Customers: 158
Experience: Law Clerk for 7 years
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Hi, I'm willing to take a look and see if I can find you a case or two on point for your issue. Please bear with me as I conduct some research.

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Real Estate Lawyer: Maverick, Lawyer replied 1 year ago
Maverick
Maverick, Lawyer
Category: Real Estate Law
Satisfied Customers: 6,425
Experience: 20 years professional experience
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Welcome! My name is Maverick. Please give me a few minutes to analyze and/or research your inquiry and I will be back.

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Real Estate Lawyer: Maverick, Lawyer replied 1 year ago

This is the closest case that I found that speaks to this issue. It is an opinion from the Tex. Sup. Ct. that basically held that a forum-selection clause can be enforced even if it’s on a page never shown to the other side and never initialed by the other side.

It states in relevant part:

“[a] party who signs a document is presumed to know its contents,” including “documents specifically incorporated by reference.”  257 S.W.3d at 232.   Scott Riddell claims not to have seen page one of the contract containing the forum-selection clause at the time he signed it.   There is specific evidence demonstrating that he knew or should have known of the existence of the clause when he signed the contract.   Most notably, Scott Riddell signed page four of the contract.   A clause two lines above his signature noted:  “This document, 4 pages in total, constitutes the entire agreement for services ․” (emphasis in original).   Furthermore, each of the three pages that Riddell claims he saw and endorsed states that the respective pages are “2 of 4,” “3 of 4,” and “4 of 4.” Even assuming that Riddell was not shown page one of the contract, the statements on pages two through four of the contract put him on notice that page one existed;  he could have asked for the missing page.   See In re U.S. Home, 236 S.W.3d at 764 (explaining that a party cannot avoid a contract clause by simply failing to read it and that if a party was not prevented from reading a contract provision, then there is no evidence of fraud).  

I know this is not the answer you wanted to hear, but I am assuming that you are wanting a professional and honest answer.

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Real Estate Lawyer: Maverick, Lawyer replied 1 year ago

Please see answer above.

Note: (1) Just Answer’s site disclaimers apply to all levels of service; (2) Most follow-up questions are answered with in the hour; however, if I am not signed on, please allow up to 24 hours; and (3) If we are done, please assign a feedback rating so Just Answer will compensate me for your question. Thank you for using Just Answer.

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Customer reply replied 1 year ago
This is a different argument. In your profession, (Real Estate) aren't there check boxes where you can choose to invoke certain parts of a contract by checking the the box, and leaving them outside the scope, if you do not check them? That's more along the lines of what I'm looking for... Isn't there case law, that says, if you provide an option to initial, does this mean you don't want to invoke that part of the contract? And, if the contractor who designed the form, won't take it unless that box is checked, then they could have refused to sign the contract themselves and it would not have been a legal document.
Customer reply replied 1 year ago
Oregon case, so its not Texas, but....HARNISCH v. COLLEGE OF LEGAL ARTS INC LLC is the opinion I'm looking for.
This is in my favor.
http://caselaw.findlaw.com/or-court-of-appeals/1568903.html
Real Estate Lawyer: Maverick, Lawyer replied 1 year ago

There may be such case law in TX as well; but I am not finding it using the free legal databases. I looked again and still have come up empty handed. I can use Westlaw to try to find a case similar to the OR case you found or use a law library if that fails; but my fee for doing so would be $300.00

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Customer reply replied 1 year ago
I'll pass for now. I want to read the brief first, before I spend this amount of money....
Real Estate Lawyer: Maverick, Lawyer replied 1 year ago

Okay, this question should remain open for you till then...

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Real Estate Lawyer: Maverick, Lawyer replied 1 year ago

One thing that you may want to look further into is WHY there are two references to arbitration in your agreement. It appears to me that the purpose of this reference [see below] may be to show that you merely had NOTICE of the arbitration clause at Pt. 13; not that you consented to it or failed to.

"This agreement is subject to arbitration under the commercial arbitration rules of the American Arbitration Association. Please Initial________"

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